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OBU pricing still under debated for freeway
Author:news Time:2007-07-04 10:09:18

A new contract between the government and a company concerning the electronic toll collection (ETC) system on the country's freeways is set to take effect next month. But pricing for the on-board units (OBUs) needed for the toll system remains a major controversy.
Officials of the Taiwan Area National Expressway Bureau under the Ministry of Transportation and Communications (MOTC) and Far Eastern Electronic Toll Collection Co. (FETC) said they have hammered out a deal to charge NT$1,249 per installation of an OBU in a vehicle.

But the FETC will offer a variety of special packages to attract consumers and enable them to have the OBU for non-stop passage through the more than 20 tollgates on the freeways.

With one of the incentives, consumers need pay only NT$680 per OBU within a three-month promotion period, starting on Aug. 1.

People unwilling to pay the cost of an OBU may rent one, executives of the company said.

But the Consumers Foundation and some lawmakers were not pleased by the offers. They continue pushing for installing the OBUs free of charge.

Officials of the foundation said the programs set out in the contract do not qualify as "public interest," because consumers still have to pay for the OBUs after they have already paid income taxes toward building freeways, as well as the additional toll fees whenever they use the freeways.

Legislators of the opposition parties criticized the MOTC for benefiting business conglomerates and failing to take care of public interest.

They said the MOTC officials did not insist on fighting for the best deal for the people.

Under increasing pressure, the MOTC and FETC agreed to extend a program that will fully refund customers if they pay NT$680 and use the OBUs to pass through tollgates at least 100 times in a two-year period.

But the extension will last only for three months.

MOTC officials said they expect the FETC to continue rolling out more attractive incentives to attract more motorists to use the electronic system.

The FETC will face heavy fines if it fails to boost the number of motorists using the ETC tollgates by a specified deadline.

The Supreme Administrative Court ruled to scrap the "priority applicant status" for the FETC to operate the ETC system on the national freeways last year, partly due to procedural defects in the review and bidding process to locate a contractor.

But the FETC regained the same status in a new bidding process earlier this year to operate the system on a BOT (build, operate and transfer) basis.

The firm is entitled to a NT$3.40 commission for each trip whenever a vehicle uses the ETC system.

The FETC expects to give free OBUs to consumers after launching cross-business cooperation projects with companies in the business industries of automobiles, credit cards, and insurance in the future.

About a quarter of a million vehicles in Taiwan have been fitted with the OBUs since the electronic and time-saving toll collection system was inaugurated early last year.

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