The National Freeway Bureau announced on Saturday that it will send a notice on July 1 to Far Eastern Electronic Toll Collection Co (遠通電收) for failing to meet the terms of the agreement stated in its build-operate-transfer contract.
Far Eastern promised in the contract that it would raise the average usage rates of On-Board Units (OBU) at the nation’s toll booths, while the contract also listed specific goals to be achieved at different phases of the contract.
MISSED GOAL
The company has managed to meet the goals set for the first and second phases. However, the third phase goal is to elevate the average usage rate of OBUs to 45 percent by the end of this month. The company has advised the bureau that it cannot meet the stated goal, saying it has so far achieved an average usage rate of only 38 percent.
The bureau’s deputy chief engineer Wu Mu-fu (吳木富) said the notice to be sent on July 1 would advise the company that it has not met the stated goal and ask it to propose a solution to address the situation.
PENALTIES
“If the situation has failed to improve, we could either penalize Far Eastern NT$500,000 per day for failing to meet its target or terminate the contract,” Wu said.
Wu said the bureau would evaluate Far Eastern’s proposed solution and determine a reasonable amount of time for it to be implemented, adding that the solution must not compromise the government’s policy of charging motorists based on the number of kilometers they travel on the nation’s freeways by the end of 2012.
REJECTED PROPOSAL
Earlier this year, Far Eastern proposed that the government should give OBU users discounted toll fees as a way to help raise the average usage rate. That proposal, however, was rejected by the bureau.
Instead, the bureau said Far Eastern should either consider reducing its OBU charges or simply offer free OBUs to motorists.
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