Taiwan motorists object to cost of pioneering toll payment system

A freeway toll collection technology being developed in Taiwan has sparked interest across Asia and controversy on the island, but when it is implemented it could set a new mark for the industry.

The Far Eastern Toll Collection (FETC) system will be switched on from January 1, and when that happens it will cover the entire length of Taiwan's national highway system.

The project will not introduce tollways to Taiwan's highways as is the case for many new electronic toll-collection systems. Instead, it will be implemented to gradually phase out the work of more than 1,300 toll booth workers who collect tokens and cash at 22 gates along the length of the island.

The system is being developed under a build-operate-transfer business model set up and operated by FETC, which is 55 per cent owned by mobile phone operator Far Eastone.

Despite having full toll collection rights, FETC does not get to keep the money it collects. It merely takes a commission and the rest goes to the government to pay for road maintenance. It has 18 years to pay for the project and spin a profit before it is handed over to the government.

'The government requires 99.998 per cent accuracy on transactions, and just 1 per cent bad debt will crash the whole project,' FETC president Y.C. Chang said.

With margins so tight and the threshold so high, the company will take a two-pronged approach to the in-car hardware. At the heart of the system is an on-board unit that uses infrared with a range of 15 metres. The choice of infrared is unusual because more than 90 per cent of tags used in toll collection make use of microwave signals, but infrared is cheaper.