NHA Announces New Toll Tax Rates for Lahore–Islamabad Motorway (M2) Effective August 26, 2025

The National Highway Authority (NHA) has issued a revised toll tax schedule for the Lahore–Islamabad Motorway (M2), which will come into effect on August 26, 2025, and remain valid until August 25, 2026. The updated rates apply to all vehicle classes and reflect the mandatory annual increase stipulated under the motorway’s concession agreement.

Revised Toll Tax Rates for M2

According to the official notification, the new toll rates are as follows:

• Cars, Jeeps, and Taxis (Class 1): Rs. 1,330 (Rs. 3.72 per km)
• Wagons (Class 2): Rs. 2,240 (Rs. 6.24 per km)
• Buses: Rs. 3,130 (Rs. 8.73 per km)

These adjustments represent an annual 10% increase, applied in line with the Build-Operate-Transfer (BOT) agreement signed on April 23, 2014, with Motorway Operations and Rehabilitation Engineering (Private) Limited, a subsidiary of the Frontier Works Organization (FWO).

Why Toll Rates Increase Annually?

The BOT concession model places the responsibility for motorway operations, maintenance, and rehabilitation on the private operator during the agreed concession period. In return, the operator is allowed to collect toll revenue, with a 10% annual escalation clause built into the contract starting from the second operational year.

This mechanism ensures that revenues keep pace with inflation, rising maintenance costs, and operational expenses, while also guaranteeing continued investment in road safety and infrastructure upgrades.

Impact on Motorists

For regular commuters, the new toll rates mean higher travel costs, particularly for commercial transporters such as bus and wagon operators. While private car users will see a moderate increase, the rise in toll for buses and wagons could translate into slightly higher intercity fares for passengers.

However, NHA officials emphasize that the adjustments are essential for the long-term sustainability of Pakistan’s motorway network, ensuring smooth operations, safety, and infrastructure improvements along the strategic Lahore–Islamabad corridor.

Afsheen Gohar

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