Tolling of road users is a widely-used mechanism for funding road infrastructure and, like fuel levies, an equitable instrument to charge on the basis of utilization. It is not without controversy though, and toll operators and concessionaires are often criticized for unfair secondary taxation and a constriction of road users’ rights of access to a public good. In a good many instances, public perception and opposition have halted and even terminated bankable toll projects.
These observations are pertinent to the title of this article. A toll operation is intended to be a sustainable, if not profitable, enterprise: the concessionaire or operator must protect and grow revenues, improve efficiencies and cap operating expenses, whilst providing exceptional service to the road user. Like any business, a toll road needs customers to stay in business, and it needs customers who see value.
Electronic toll collection (ETC), meaning cashless toll collection that obviates the need for vehicles to stop at a paypoint, achieves some of these business objectives. ETC is certainly cheaper to operate than a staffed booth and the cost per transaction is lower. It improves road user safety and reduces waiting times at toll plazas. In open road tolling (ORT) projects, waiting is eliminated as vehicles pass electronic readers at highway speeds.
The engineering and technology required to establish a tolling operation are often not the challenge. The growing number of ETC operations testifies to this. The worldwide ETC market (presently USD7 bn per annum) is expected to grow to USD11 bn by 2023 (www.marketsandmarkets.com, November 2018). More than 100 million drivers in China are equipped with ETC devices to pay automatically when driving on the country’s highways (www.technode.com, August 2019).
So, what are the critical success factors then?
Public participation is key
Toll roads impact road users and local communities. Perhaps farmers have to take a detour to reach their fields, commuters have to travel farther to find transport, communal lands are expropriated or sub-divided, and the environment is polluted. Stakeholders need to be consulted, convinced and included. Too often, we have seen road authorities believing that it is sufficient to issue a legal or regulatory decree.
Every customer is different
The road user community, like any market, is made up of individuals with varying expectations and needs. Tariffs may have to be discounted to accommodate a community now compelled to use a tolled facility for daily trips. Long-distance, high volume freight carriers will respond to an incentive. Effective adjunct services (traffic information messaging, road safety measures, relaxation facilities, environmental protection, road patrols and emergency services) are needed to complete the package. Essentially, to attract and retain the customer requires frequent communication and a differentiated, focused marketing message.
Information is the lifeblood
Information and communications technologies make it possible to have real-time visibility of traffic patterns, user habits and trends, toll operations and incidents. For operational planning and incident response purposes this is critical, and advances in data analytics and AI will make these management functions ever more intelligent. For example, predictive models can be applied to make pro-active changes to toll lane configurations (e.g. the balance of dedicated- and mixed payment lanes during peak hours), thus greatly improving a road user’s service experience.
Start with a larger picture in mind
Several initiatives are underway in Africa to integrate immigration and customs unions into single regional markets. The smooth, fast movement of people and goods across borders are important elements and benefits of this ideal. But, it will require the interoperability of toll (and overloading control) systems. The choice of tagged- versus tag-less payment, the choice between active and passive tags, use of mobile phone technology, implementation of satellite tolling and number plate recognition, are all important aspects of planning. Also, these technologies make it possible to extend ETC to shopping malls, paid parking, gated communities and border control.
A culture of trust and service
A toll operator is in charge of a public good, the commercial motive (in the case of a concessionaire) notwithstanding. The paying public must be satisfied that their interest is being served with integrity and goodwill, and the comments above about quality and transparency are pertinent. In ETC systems, the use of road users’ personal financial information is fraught with risks and pitfalls. Compliance with regulatory requirements and industry standards (such as pay card protocols and interfaces to banking systems) is important, as is the protection of users’ information. In South Africa, as in many other countries, the protection of personal information is now the subject of legislation.
Effective transport systems are imperative for growth and prosperity, nowhere more apparent than in developing economies. Funding of infrastructure projects is a challenge for governments, as evidenced by the proliferation of public-private partnerships (PPPs). The early identification of critical issues to consider, such as those outlined above, will not only significantly reduce the commercial and economic risks associated with toll operations, but will also improve relations with stakeholders and road users.