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Singapore to implement satellite road toll system from 2020

Land Transport Authority selects NCS and Mitsubishi Heavy Industries Engine System Asia's joint bid of S$556 million (US$395.29 million), which is less than half of ST Electronic's S$1.2 billion quote.
Written by Eileen Yu, Senior Contributing Editor on

Singapore has confirmed plans to implement a satellite-based road pricing system from 2020, which will cost the government S$556 million (US$395.29 million) to roll out.

The Land Transport Authority (LTA) said Thursday it had selected local systems integrator NCS and Mitsubishi Heavy Industries (MHI) Engine System Asia to develop the next iteration of the country's Electronic Road Pricing (ERP) system. The two vendors jointly submitted their bid for the government tender, beating a second qualifying submission from ST Electronic, which quote was more than double at S$1.2 billion (US$853.14 million).

The NCS consortium would begin implementing the new Global Navigation Satellite System-based network from 2020, LTA said, adding that it was factoring in an 18-month transition period to switch from the current ERP network.

During this time, car owners would have to replace the in-vehicle unit for a new on-board unit. The one-time cost of doing so for Singapore-registered vehicles would be fully subsidised by the government.

Existing road toll charges would continue during the transition period, after which, LTA said it would assess phasing in a distance-based pricing model, although a timeline had yet to be established for when this would kick off.

Explaining its decision to deploy the satellite-based network, LTA said it was "not practical" to continue operating the current 18-year-old ERP system, which would be increasingly costly and difficult to maintain.

"This next-generation ERP system will allow for more flexibility in managing traffic congestion through distance-based road pricing, where motorists are charged according to the distance travelled on congested roads," it said, adding that this pricing model would be "fairer" to motorists.

Off-peak car users, who were permitted to drive their vehicle only on weekends and between 7pm and 7am on weekdays, also could enjoy new policies LTA was currently exploring. For instance, these drivers might pay only when they used their cars, or have the option of driving anytime during the day but only on uncongested roads.

The new infrastructure also offered a better alternative to the current system, which encompassed physical gantries that were expensive and occupied land space, it said. According to the regulator, the new on-board unit could be tapped to provide additional services to motorists, such as real-time information on traffic conditions, as well as a payment system for parking.

LTA Chief Executive Chew Men Leong said: "Since introduction, the road pricing system has been effective in managing traffic congestion. The next-generation road pricing system will allow us to improve on this with greater flexibility."

Three bids were shortlisted for the tender after an 18-month system evaluation period, which ended in December 2012. All submissions were evaluated based on several key criteria including quality and price as well as "best value for money" for LTA.

It revealed that the joint proposal from NCS, which is a Singtel-subsidiary, and MHI Engine System Asia scored the highest quality score and lowest bid price. The two companies also were involved in the implementation of the current system.

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