NHAI cautions States against building toll-free roads next to national highways

The National Highways Authority of India (NHAI) will crack down on state governments that builds toll-free competing facilities running parallel to tolled national highways, emboldened by a recent Supreme Court judgement on a case involving Delhi metro rail.

Such a key violation of the state support agreement signed between NHAI, private road developer and respective state government while building national highways in many instances, has triggered concern among private investors as the traffic diversion to toll-free roads hurt the viability of toll roads.

“The state support agreement is very weak,” said the head of a global infrastructure firm that runs toll roads in India. “If state intervention is required to check violations such as building parallel toll-free roads causing traffic diversions and the private developer wants to raise a claim against that, the state support agreement does not get implemented. There is an urgent need to overhaul the state support agreement,” he said.