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City Link's High-Speed Electronic Tolling

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City Link's High-Speed Electronic Tolling CASE PROGRAM 2007-91.1 City Link’s high-speed electronic tolling (A) The tolling systems went live without a glitch at 1 am Monday the 3rd [of January 2000], a national public holiday. Charges now apply at three toll points located at the Tullamarine section, the elevated roadway between Racecourse and Dynon Roads, and the Bolte Bridge… Although fewer motorists were on the road, demand for e-Tags was strong. Since the 23 December announcement [that tolling would begin 3 January] more than 45,000 e-Tags have been ordered, bringing the total sales to date to almost 400,000. The first day of tolling, CityLink’s 132629 hotline fielded more than 20,000 calls. The continued demand throughout the week prompted Transurban to announce the availability of a second hotline for general enquiries… Transurban Managing Director Kim Edwards said the company was pleased with the recent developments and expressed appreciation for the public’s patience during recent delays. “We are thrilled to deliver the completed Western Link to Melbourne’s motorists, who will now get the full benefit of the project’s leading-edge technology and design,” he said. Extract from: fasttrack, Transurban CityLink executive information newsletter, January 2000. In August 2000, Transurban City Link chief executive Kim Edwards announced that his company’s damages claim against the consortium Transfield-Obayashi Joint Venture (TOJV) for delays and difficulties with the 22-km City Link tollway was ________________________________________________________________ This case was prepared from published information by Susan Keyes-Pearce, MBA 1998 and Professor Michael Vitale of the Centre for Management of Information Technology at the University of Melbourne. The case is for the purpose of class discussion, rather than to illustrate either effective or ineffective handling of a managerial situation. Cases are not necessarily intended as a complete account of the events described. While every reasonable effort has been made to ensure accuracy at the time of publication, subsequent developments may mean that certain details have since changed. This work is licensed under Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence, except for logos, trademarks, photographs and other content marked as supplied by third parties. No licence is given in relation to third party material. Version 7-9-2007. Distributed by the Case Program, The Australia and New Zealand School of Government, www.anzsog.edu.au and also (as Case Study CL418) by Melbourne Case Study Services at the Melbourne Business School, email [email protected]. heading towards $200 million. Some of the troubles related to problems discovered during construction of the $1.7 billion tollway. Most of the issues, however, related to the world-leading system for electronic toll collection, in particular problems with the billing system, which had been developed by the consulting firm CSC Australia. Build, Own, Operate and Transfer Victorians were unused to paying tolls, but the Kennett State Government announced in February 19951 that it would develop a large chunk of roads infrastructure, to be known as City Link, via BOOT (Build, Own, Operate and ultimately Transfer to the State Government). Tolls were integral to the project, and the winning consortium would be required both to collect tolls and to maintain City Link for a period of 34 years. As its name implied, City Link would connect three of the city’s major freeways, each of which had been built with public funds. Construction of City Link would be in two parts: the Western Link, connecting the Tullamarine Freeway to the West Gate Freeway; and the Southern Link, connecting the West Gate Freeway to the Monash Freeway.2 The completed City Link would form one of seven key road and rail transport corridors identified in the comprehensive Transporting Melbourne Strategy.3 Melbourne residents were concerned that tolling would divert traffic to urban roads and off the freeways, diminishing the benefits of the $1.7 billion City Link project. The wider debate over whether private or public funding should be used for the project, was still going when the winning consortium, Transurban, was selected in October 1995. The Transurban consortium involved Transfield Construction, one of Australia’s largest companies, and the Obayashi Corporation, a Japanese company among the world’s ten largest contractors. At the time, Transfield was engaged on the Sydney Harbour tunnel, the Melbourne underground train loop, the Yan Yean water treatment plant, the Gateway Bridge in Queensland, and various developments in South-East Asia. Obayashi too had other projects underway in Australia: the M2 tollway in north-west Sydney, the Blue Mountains sewer tunnel in rural New South Wales, and a $58 million West Australian Government building. These two large and busy companies formed the Transfield-Obayashi Joint Venture (TOJV). The Transurban consortium was given until 20 October to complete a deal, acceptable to the government, to build City Link. The day before the deadline, Tony Shepherd, the chief executive of Transurban City Link, announced that the consortium had opted for a “state-of-the-art” electronic tolling system rather than the “medieval” cash tolling system originally put forward.4 Toll collection on City Link would be a fully automated, cashless system, with no tollbooths to hinder the smooth flow of traffic. Upon Transurban’s successful bid for the project, TOJV undertook the design and construction of City Link under contract to Transurban. TOJV in turn subcontracted 1 Callick, R., ‘Taking its toll’, the Australian Financial Review, 1 February 1995 p 14 News 2 Then known as the South Eastern Freeway. 3 Announced in September 1996. 4 Brady, N., Walker, D., ‘Toll Threat to $1.7b City Link’, The Age 20 October 1995 p3 News 2 the design and construction of the Western Link to Baulderstone Hornibrook Engineering, and the supply of the electronic tolling system to Translink Systems (TLS), a company jointly owned by Transfield and Transroute of France. Transurban subcontracted the ongoing operation and maintenance of City Link to Translink Operations, also owned by Transfield and Transroute (Exhibit 1). The State Government’s Melbourne City Link Authority and Transurban jointly nominated an independent reviewer to monitor the quality of the construction, design, and implementation of the roadway.5 Electronic toll collection The electronic toll collection process for City Link was designed to electronically read the distance each vehicle had travelled, and automatically deduct the cost of the journey from a prepaid City Link account, linked to an in-vehicle “e-Tag”. The toll collection mechanism designed by Translink systems relied on technology in the vehicle, at the roadside, and in a central location. The in-vehicle “e-Tag” was a small grey transponder attached inside the windscreen of a vehicle. When a vehicle approached one of City Link’s overhead gantries, the gantry reader sent a short-range 5.8GHz microwave signal to the e-Tag, which transmitted its identity number. Overhead sensors read the e-Tag identification number, while cameras scanned the vehicle’s number plate and snapped a photo. The e-Tag beeped to indicate that a valid transaction had occurred. Two beeps indicated that the customer’s City Link account had dropped below the minimum level. Once the transponder and image data was captured, the appropriate toll rate was determined and then further systems came into action. The engine of City Link’s billing system was an application known as the central toll collection system (CTCS), which was developed by consulting firm CSC Australia under contract to Translink Systems. Because toll charges related to the distance travelled until the Toll Cap was reached, and because there were no gantries at road entry and exit points, the computer system had to reconstruct each trip by calculating where a vehicle entered and exited the roadway. Toll rates were different for cars, light commercial vehicles, and trucks. Core interfaces also included links to the bill mailing house and to fines enforcement.6 E-Tag communications were encrypted for security. The other two features that provided clear identification were unique to the toll collection aspect of the City Link project. Firstly, stereoscopic video cameras captured an image of each vehicle to confirm that its characteristics matched recorded data. Secondly, imaging cameras took a snapshot of the vehicle’s number plate. The digital image was then converted to numbers and letters and compared with the e-Tag database to verify that the e-Tag was being used on a vehicle that was linked to that e-Tag. Infrequent or inadvertent users of City Link could pay tolls by buying a Day Pass, which allowed unlimited travel on a nominated day. Day passes could be purchased in advance over the phone, in person at Australia Post Offices, City Link Customer 5 Melbourne City Link Authority http://www.citylink.gov.au/pages/proj-1.html 23/09/99 6 D Tebbutt, ‘Glitches keep the road free’, The Australian, 31 August 1999, p55 Computers-News Features 3 Centres and Shell petrol stations, and over the Internet. Passes could also be purchased until midday on the day following travel, for an additional fee of $1. Only twelve Day Passes were allowed in a given twelve-month period. Infringement notices for use of City Link without payment, either via an e-Tag or a Day Pass, were issued and enforced by the Victorian government. October 1999 City Link opened for travel on 15 August 1999, but by October of that year tolling had not yet begun, largely due to problems with the CTCS. Financial analysts warned that ongoing delays in the introduction of tolls in City Link would reduce Transurban’s share value. Transurban appealed to its 300,000 customers for patience. Incidents such as the incorrect billing of a woman for $1600 before tolling had even begun highlighted problems with the computer system.
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