An electronic toll collection (ETC) system on Taiwan’s highways has not met stipulated targets, prompting the National Freeway Bureau to consider terminating its agreement with the contractor and nationalizing the business, the bureau said yesterday.
The bureau said Far Eastern Electronic Toll Collection Co (FETC, 遠東電子收費) has failed to meet previous usage rate targets and would again breach the terms of the contract by not hitting a 60 percent ETC usage rate by the end of this month.
The usage rate measures the percentage of cars driving through tolls on the country’s highways that use the ETC system.
Unless the contractor comes up with a long-term solution by the deadline, it will face a daily fine of NT$500,000 (US$17,444) for not hitting the contractually stipulated target, bureau officials said.
The bureau said it will make a decision on whether to continue operating the ETC system on a build-operate-transfer (BOT) basis by the end of June.
FETC first failed to meet its targets in June last year when the usage rate was below the stipulated 40 percent. It was given a one-year grace period by the government to correct the problem.
In response, FETC launched an incentive plan last November allowing motorists to try the ETC system without having to set up on-board ETC units costing nearly NT$1,200.
The plan, however, has only drawn 70,000 new applicants to date, barely increasing the number of ETC system users, which currently stands at 1.14 million cars.
The company has also suggested many times since 2009 that the government offer a 20 percent discount on tolls for ETC users, but the bureau has never approved the idea.
The agency argued it would not be fair for ETC users to receive preferential treatment at the expense of other motorists and suggested instead that the company distribute ETC units for free to boost the usage rate.
FETC rejected the idea on financial grounds, saying it would cost the company NT$7 billion and create severe financial difficulties.
The system is part of a broader government effort to save energy and reduce carbon emissions, and was also to serve as the basis for a switch of the country’s toll system to a fully-automated, distance--based toll collection system by next year.
Though the ETC usage rate remains below 45 percent, FETC said the environmental benefits of the technology have been obvious.
The system has saved 779 million toll tickets alone, which if stacked would be as high as 179 Taipei 101 buildings, the company said, also pointing to savings of 4.65 million liters of gasoline and 85,000 tonnes of carbon emissions.