Land Transport Authority

Tender Awarded to Develop Next-Generation Electronic Road Pricing System

News Releases
25 Feb 2016

    The Land Transport Authority (LTA) has awarded the tender to develop the next-generation Electronic Road Pricing (ERP) system to the consortium of NCS Pte Ltd and Mitsubishi Heavy Industries Engine System Asia Pte Ltd.

Next Generation Electronic Road Pricing System

2.  The consortium will develop the next-generation ERP system based on Global Navigation Satellite System (GNSS) Technology, at a cost of $556 million. It is not practical to continue with the current gantry system, which is almost two decades old and will become increasingly expensive and difficult to maintain.

3.  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, which would be fairer to motorists. It will also be able to overcome the constraints of physical gantries, which are costly and take up land space. In addition, off-peak car users can look forward to new policies which LTA is considering, which may allow them to pay only for using their vehicles for short periods rather than the whole day, or for using them only on uncongested roads. A new On-Board Unit (OBU) will replace the existing In-Vehicle Unit (IU), which can also be used to deliver additional services to motorists. For example, LTA will be able to disseminate traffic advisories through the OBU. The OBU can also be used to pay for parking, checkpoint tolls, and usage of off-peak cars electronically.

4.  LTA’s Chief Executive Mr 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. It will also allow us to provide more services for motorists’ convenience, such as disseminating information on traffic advisories and facilitating e-payments.”

Evaluation Process

5.  Three consortia were shortlisted by LTA to participate in the tender for the next-generation ERP system, following an 18-month System Evaluation Test (SET) that concluded in December 2012. All tender submissions were evaluated based on the same set of criteria through a two-envelope process which included quality and price factors, with equal weightage given to the quality and price proposals submitted by tenderers. This two-envelope process ensures that the tender proposals meet the required standards, while allowing LTA to get the best value for money.

6.  NCS Pte Ltd and MHI Engine System Asia Pte Ltd submitted a proposal with the highest quality score and lowest bid price out of the three participating consortia, and were awarded the contract. The consortium has a strong track record in the implementation of road pricing systems. NCS is the contractor responsible for maintaining the current ERP system while MHI Engine System Asia Pte Ltd is a wholly owned subsidiary of Mitsubishi Heavy Industries Ltd, which developed and implemented the current ERP system in 1998.

New system to be implemented in 2020

7.  The new system is expected to be implemented progressively from 2020.  To ensure a seamless transition, there will an 18-month switchover period to transit from the current ERP system to the new system. The government will also bear the one-time IU replacement costs for Singapore-registered vehicles.