By S&S Co. Advocates & Solicitors · Published 18 February 2026 · Informational content, not legal advice: see our disclaimer
The Toll Framework: Notification, Not Negotiation
Toll rates on national highways operated under BOT or toll-operate-transfer (TOT) structures are fixed and periodically revised under the National Highways Fee (Determination of Rates and Collection) Rules, 2008, as amended, based on a formula tied to the wholesale price index and, for new stretches, project cost per lane-kilometre. Because the fee structure is rules-based rather than individually negotiated for each stretch, most toll disputes concern the correct application of the formula or the timing of a due revision, rather than the underlying rate itself.
Delayed or Withheld Annual Revision
A recurring dispute category is delay in notifying the annual toll revision due each April, which directly affects a concessionaire's projected revenue and, for BOT (Toll) projects in particular, debt service capacity. Concessionaires facing a delayed revision should document the shortfall against the contractually due revision date, since compensation for revenue loss attributable to a delayed notification is generally assessed against that date rather than the date the revision eventually takes effect.
Suspension of Toll Collection for Service Deficiency
Concession agreements typically empower the authority to direct suspension of toll collection, or a reduction in the fee, where the concessionaire fails to maintain the highway to the contractually specified level of service: for instance, unrepaired potholes, non-functional lighting, or incomplete incident-management arrangements. Because suspension is often a step short of termination, authorities frequently use it as an intermediate enforcement tool; concessionaires should ensure their internal maintenance records can promptly rebut a service-deficiency allegation, since the financial impact of even a short suspension period can be significant.
Recovery of Toll Shortfall Where Alternate Routes Are Opened
Where the government constructs a new alternate route that diverts traffic away from a tolled stretch, several concession agreements provide for compensation or a concession-period extension to offset the resulting toll revenue shortfall, but only if the concessionaire notifies the shortfall and its cause within the contractually prescribed timeline and substantiates it with traffic-count data comparing pre- and post-diversion volumes.
Frequently Asked Questions
Can a state government independently reduce toll rates fixed under the central Fee Rules?
Ordinarily, toll rates on national highways are governed by the central Fee Rules and the specific concession agreement: a state government does not have unilateral power to override centrally fixed toll rates on a national highway stretch absent an agreed mechanism in the concession agreement itself.
Is a concessionaire entitled to compensation for every day of a diverted-traffic shortfall?
Not automatically: most concession agreements require the shortfall to be substantiated with comparative traffic data and to exceed a materiality threshold before a compensation or concession-period-extension mechanism is triggered; the specific clause should always be checked.
Can toll collection be suspended without prior notice to the concessionaire?
Most concession agreements require the authority to issue a cure notice and afford the concessionaire an opportunity to rectify the service deficiency before suspension: an authority bypassing this process may expose its suspension order to challenge.
References & Further Reading
This article references the following statutory provisions. Readers should always verify current rules, fees and timelines against the applicable statute and rules as amended, since these are revised from time to time.
- National Highways Fee (Determination of Rates and Collection) Rules, 2008, as amended.
- Model Concession Agreement for National Highways (BOT: Toll), service level and toll suspension provisions.