Electronic Toll Collection (Pty) Ltd: Utilising technology to solve the realities of transport funding

The heated debate and controversy over e-tolling in Gauteng continues to rumble on as the challenge of effectively implementing and administering operations is considered.

Centurion-based Electronic Toll Collection (Pty) Ltd. develops and operates cashless electronic toll points and a back office and was incorporated back in 2005. The company operates as a subsidiary of Kapsch Trafficshutterstock_128903075Com AG.

There is of course a general consensus that South Africa’s road network needs upgrading and further development, but the question then becomes how is this funded? The solution, accoridng to the Government, is e-tolling.

Introducing debate on the Transport Laws and Related Matters Amendment Bill, Transport Minister Ben Martins said last year that the Bill was essential to enable “the appropriate implementation of the e-tolling system.”

These measures were required to implement the Gauteng Freeway Improvement Project and to facilitate provision of public transport and other projects in Gauteng, he said, adding that the inability to collect revenue would also damage the credit reputation of the South African National Roads Agency SOC Limited (Sanral) with investors, and could negatively affect both Sanral’s and the Government’s international ratings.

For ETC the road has been much longer and started in Austria, as Salahdin Yacoubi, CEO, explained to The SA-Mag last year:

“We are an independent, privately-owned company and we are under contract with Sanral, to deliver the e-tolling collection technology and service. A few years ago the South African Government made the decision to implement the Gauteng Freeway Improvement Project, to widen roads and provide a number of security features.

“Of course this needed funding and the concept of Open Road Tolling was introduced. The aim of Sanral is to develop the programme (initially 201 kilometres of road) and to then introduce two other phases that also includes the construction of new freeways at later dates. It is a very ambitious programme for Gauteng, a very high populated province, which accounts for roughly 40 per cent of the country’s GDP.

“So several years ago the Government went to the international market and requested statements of interest in the project and announced pre-qualification criteria. Our parent company Kapsch TrafficComis the leading international supplier of electronic tolling technology and solutions and is a major force in toll systems in Europe, Australia, Asia, and South America.

“Kapsch led a consortium that pre-qualified in 2008 along with two other high profile international companies and were then able to meet the clear criteria set out to win the contract for the Gauteng development. They were awarded the contract (in a partnership with South African company TMT) with Sanral in 2009 and it was decided to create a local operation which is ETC Pty Ltd today.” 

shutterstock_122404111Kapsch has for many years built an excellent reputation for its specialist technology which is tailored for transportation projects. Having won the contract with Sanral, ETC (Pty) Ltd had to develop suitable technology which could capture and process traffic data and convert financial figures into Rand. The second requirement was to build IT systems which could process vast amounts of data on road users across Gauteng, including the introduction of a call centre, staff training, IT equipment and a fully functional website.

“At this time the primary support we needed from Austria was based around the supply of technology. But we were also starting ETC Pty Ltd from zero and of course it takes time to find premises and recruit and train staff on Day One,” said Yacoubi. “Head office were very helpful providing support in the early days and today we have around 10 people from the overseas group, working on technology and the business side,” he added.

The project covers the design and build of an Open Road Tolling System for the Gauteng Province, and a National Transaction Clearing House and Violations Processing Centre, valued at R1.16 billion. It also includes turnkey operations of the project for five to eight years thereafter. The ETC contract lasts for 8 years and Yacoubi’s team has already developed a large call centre functionality and customer outlets (where road users will be able to interact face to face with ETC staff) to handle the volume of enquiries and transactions. 

In March 2013 the legislative process was reaching its final stages and Yacoubi’s team were preparing themselves for an onslaught of activity, as he confirmed at the time:

“We will be marketing this project in collaboration with Sanral although some of the work will just be from ETC,” he said. “There are between 2.5 and 3 million road users in Gauteng, so we are bracing ourselves for a tidal wave of communication from the end of March, when people will be able to set up accounts, pay to get an e-tag and provide vehicle details.”

Open Road Tolling, or Multi-Lane Free Flow Tolling, involves tolling on large motorways at high speeds. Vehicles do not stop at plazas, but rather get identified by gantries erected over the road and the toll transaction is processed against an account held in a back-office. The toll charges will be applied to all vehicles.

There are no toll gates to stop drivers using the roads, putting an emphasis effective collection and enforcement operations and as Yacoubi explained, toll gates were not really a viable option:

“If we had to slow down or stop traffic we would have created huge congestion. Therefore there are no toll plazas and there is zero interference with the traffic – similar to other big cities like London. The decision on this design ultimately came from Sanral and of course the big challenge will be compliance from the road user.

shutterstock_85325311“In our case, enforcement is an important component to obtain compliance and we now have the legal framework almost finalised to achieve this.”

Whilst opposition and debate on the virtues of e-tolling remain fierce, one aspect that is often overlooked is the element of job creation. As ETC ramped up its operations the project created 500 additional jobs and the company also spent vast sums of money of up skilling:

 “We operate two shifts in our call centre and also at the customer service outlets and we provide lots of training before staff can deal with the public,” Yacoubi stated at the time. “Our screening is very strict but we have found that a lot of people, once trained, become potentially very valuable to larger companies, so staff retention has been a problem.”

Gauteng has proved a challenging project and political debate rumbles on as the Government seeks to reassure the public with a potential review. In the meantime, with the African Continent undertaking vast infrastructure upgrades, ETC’s expertise promises an exciting future:

“Looking at Africa, there is lots of opportunity with the development of the middle classes and a growth in urbanisation. Those are the elements needed to develop this kind of business as they rely on infrastructure and transportation. We have successfully worked in Algeria and we see the successful implementation here in South Africa and believe that this will create other opportunities for the future,” Yacoubi concluded.