Far Eastern Electronic Toll Collection Co (FETC) could soon face a penalty of up to NT$200 million (US$6.7 million) as it failed again to reach the usage rate for the freeway electronic toll collection (ETC) system agreed to in its contract with the government, the National Freeway Bureau said yesterday.
The bureau said the fine was NT$500,000 daily for each day that the company failed to deliver a daily ETC usage rate of 65 percent from April 15 last year until today.
The notice for the penalty will be sent next month, it said.
Last year, FETC broke its contract by failing to reach a 60 percent ETC usage rate. The company proposed raising the usage rate by replacing the toll-collecting on-board units (OBUs), for which freeway users had to pay, with free eTags to access the ETC system.
The bureau accepted the proposal, but it required the FETC to raise the usage rate to 65 percent, which was the target agreed to for the fifth year of operation, by today.
The FETC started taking applications for eTags nationwide last month. Statistics from the FETC showed about 1.8 million car owners use the ETC system, with approximately 1.2 million using OBUs and 610,000 using eTags.
For now, motorists can access the ETC system with either of the devices. Those using OBUs can switch to free eTags until the end of next month.
The bureau said the company would be asked to give a detailed explanation for the ETC usage rate within a month after it received the official notice from the bureau.
While the introduction of eTags helped raise the usage rate to 55 percent, it still failed to meet the rate stated in the contract, the bureau added.
Whether the FETC has violated the terms of its contract with the government will be determined after the company’s explanation is reviewed, the bureau said.
In response, the FETC said the bureau should not impose a penalty on the company anymore because the company has already spent NT$380 million creating the eTag system and giving out eTags to motorists, adding that the investment could amount to about NT$600 million by the end of this year.
The amount invested in producing eTags has already exceeded the fines it should pay to the bureau for breaking the terms of the contract, it added.
The foundation said it has continued to receive complaints about the ETC system since the technology was first adopted in 2006.
The foundation said that since the eTag is a tool that profits the FETC, there should be no installation fee and it is unreasonable to charge NT$225 for a new installation if the eTag sticker is damaged.
Other unreasonable points include too few designated locations for adding value to the prepaid eTag for free, a fee of NT$5 being leveled for adding value at convenience stores which is set to be implemented in August and further charges for each failed toll collection using the eTag and late payment by the user which elicits a charge of NT$50, the foundation said.
The prepaid mechanism should be changed into monthly payments like that for cellphone fees, so that users can clearly see all the charges listed on a bill, the foundation said.