The crisis over the freeway electronic toll collection (ETC) system appeared to have been temporarily remedied after the Far Eastern Electronic Toll Collection Co (FETC) earlier this month introduced free “eTag” stickers as a way to increase usage of the ETC system.
While the National Freeway Bureau, the government agency overseeing the operation of the ETC system, said the eTag could be an effective way to increase the number of ETC users, similar ideas had already been proposed — some as far back as five years ago.
Rather than vehicles needing to be equipped with a sophisticated on-board unit (OBU) that costs more than NT$1,000, drivers would only need a simple device resembling the toll tags commonly used in the US, which motorists pay very little or nothing to acquire. Furthermore, as an alternative to using infrared technology, the nation could instead have adopted microwave technology, which is used by more countries and could have been a better way to charge freeway users by distance traveled — a policy which will come into effect next year.
Photo: Tseng Hung-ju, Taipei Times
These solutions were jointly unveiled by the FETC and the bureau this month. However, this means that the resources, funding and business partnerships that the FETC has already invested in to develop an infrared system have gone down the drain.
On the same day this was unveiled, Far Eastern Group chairman Douglas Shu (徐旭東) described the solution as “an act of charity.”
However, despite the seemingly viable plan, more challenges lie ahead.
Photo: Tseng Hung-ju, Taipei Times
According to the bureau, the FETC must manage to raise the OBU usage rate from less than 45 percent to 65 percent by June next year or it could face a daily penalty of NT$500,000 for violating the terms of the contract.
That particular requirement would put a gun to the head of the FETC, as the eTags are scheduled to be made available to motorists from February, giving the company only four months to meet the goal.
Meanwhile, the FETC must complete the infrastructure needed to implement the eTag system by the end of this year, meaning that the equipment required to operate the system should be in place and certifiably reliable within six months.
Kurt Lee (李克聰), associate professor of Feng Chia University’s department of transportation management and technology, said the nation was also scheduled to change the format for license plates next year. However, information on ETC users was recorded under the old license plates numbers.
How well the system can be adapted to the meet the imminent changes remains to be seen, he said.
Lee also said the company was switching from an infrared system to a radio-frequency identification (RFID) system — a type of microwave technology — which will also involve changes in the terms stipulated in the build-operate-transfer (BOT) contract.
The bureau would need to review the contract it signed with the FETC to avoid any confusion and doubts that may arise later, he said.
However, Lee disagreed with Hsu’s view that the group’s investment in the ETC system was an act of charity.
“The company apparently did not think it through when it planned to run the ETC system,” Lee said. “It had to look at various aspects, including a price for the OBUs that users would find acceptable. Since day one, it has been taking a position that favors itself and not the general public. Now the company simply has to pay the price for the mistake it has made.”
Aside from the technical -challenges, the company must also win over freeway users, who have long lost faith in the ETC system.
“Didn’t someone [Hsu] say [in 2006] that ‘If you think the OBU is too expensive, don’t use it?’ Why the change of the attitude now?” said a person who went by the handle “Fairy’s Dance” in an online forum. “If he has guts, he might as well hang in there or donate the system to the government. The company violated the terms of the contract, and that is a fact. The government should fine the company and should not give it a break.”
Those opposed to the ETC system operated by the FETC have rallied supporters through Facebook, asking people to collectively demand that the government terminate the contract with the company and look for a new contractor.
The Consumers’ Foundation last week also criticized the bureau’s decision, saying that the government has given the FETC several chances, even though the company had repeatedly failed to meet the usage rates specified in the contract.
However, the bureau said it decided to postpone handing out a penalty because the funds that the FETC would have to invest in building the eTag system would far exceed the fines the company would have to pay.
Meanwhile, Minister of Transportation and Communications Mao Chi-kuo (毛治國) has repeatedly said that turning the system into a state-run operation was an option, but it was one the ministry was trying to avoid because of complicated issues that might ensue.
The price of OBUs has been controversial since the launch of the ETC system five years ago. While the bureau had been urging the FETC to offer free OBUs to increase usage of the ETC system, the company said that the price was not the only factor that affected users’ interest in purchasing the units.
The FETC first introduced a special one-year plan in 2006 that lowered the price of an OBU from NT$1,199 to NT$680, allowing drivers to earn a full refund after using the unit 100 times.
Then, after the FETC failed to raise the OBU usage rate to the 45 percent goal stated in the contract last year, the bureau gave the company another year to boost numbers. In an attempt to achieve this, the FETC then introduced a prepay plan allowing freeway users to experience the ETC system without having to purchase an OBU in advance.
All of these promotional plans only managed to increase OBU user numbers to 1.18 million as of earlier this month — about one-sixth of the nation’s registered vehicles.
Instead of lowering the price of the OBUs, the FETC proposed giving drivers discounted toll fees in return for using the ETC system.
However, the bureau rejected the plan.
Now it seems a change in the technology used in the system could be in the pipeline. That the operator who promoted the infrared system has now chosen microwave technology as its solution to the low OBU usage rate has been called ironic by some: When contractors were bidding to run the ETC in 2003, the FETC was the only company to suggest using an infrared system; the other five bidders were planning to use microwave technology.
Jason Chang (張學孔) of National Taiwan University’s department of civil engineering said the ETC review committee looked at the complete package provided by the bidders, and the choice of technology accounted for only a small percentage of their evaluations.
Chang also said that the dispute over the use of an infrared system or a microwave system was caused by a lack of consideration for the future development of the -intelligent transportation system (ITS) nationwide.
“The government wanted to give both technologies a chance,” Chang said, adding that it would have been less likely to choose the infrared system if it had thought about the ITS industry.
Chang added that a report from the EU had indicated that microwave systems and vehicle-positioning systems would become mainstream technologies for ETS systems after 2009.
While some interpreted the FETC’s proposed solution of a free eTag sticker as a victory for the government, both Chang and Lee indicated that it was a lose-lose situation for the government, motorists and the ETC contractor.
Chang said that the nation had wasted five golden years in the development of the ITS industry.
Dennis Hsu (許定中), a resident of Taipei, owns an OBU that was given to him by his father, who paid NT$680 for it and later received a refund.
Hsu said the new plan made a fool of those who bought OBUs in the first place.
“The company should be spanked,” the 34-year-old said. “They knew they could just use tags. So why didn’t they do so in the first place? They never had the consumer in mind.”
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