Consultant says going cashless would save Maine Turnpike $15m/year, recover capital costs in 3 years

December 15, 2010

A consultant's report says conversion of the Maine Turnpike to all-electronic tolling (AET) would have an upfront cost of around $40m but produce annual savings of around $15m, paying for itself in less than three years, while putting the toller on a sounder financial footing. The report "Costs/Benefits of Converting to AET on the Maine Turnpike" was prepared for the south Maine based Think Again! group which has been urging all-electronic near the city of York, as opposed to the Turnpike Authority's plan for a new $35m all-modes barrier toll plaza nearby.

Daryl Fleming of eTrans Group researched and wrote the report with help from colleagues in his small consulting outfit. Fleming, an engineer based in Alpharetta GA but grew up in Maine. He has been involved in systems design and operations analysis for toll operators in many states and Canada for thirty years.

He says of their approach to the Maine study: "We tried to be conservative in every assumption, to err on the side of overestimating costs and underestimating savings, yet despite this the net savings from converting to AET are still impressive."

Present operating costs of the toll collection system with 280 toll collection staff is $26m/yr out of toll revenue of about $101m from 73m transactions or 26% of revenue and 36c/transaction.

By contrast all the functions of toll collection can be fulfilled, without cash, by a staff of 80 to 120, depending on the season, the eTrans report states.

Another $5m/year can be saved immediately through reduced maintenance costs of cash systems, lowered "leakage" of cash, and adjustments to fees.

All-electronic would enable an immediate reduction in toll operating costs to $16m, and a further reduction to $11m over time, the eTrans Group report says. Collection fees or penalties, Fleming says can be set to eliminate any net expense from uncollected image based tolls.

Capital cost of AET conversion is put at an average of $385k/lane and with 90 toll lanes that comes to about $35m.  Fleming adds $5m as one-off "mobilization" cost for total upfront cost of $40m.

The report says capital cost estimates include all road-side equipment  - 36 gantries and 90 lanes -  five large variable message signs to provide information to motorists), 6 retail centers at service plazas and other locations, full upgrade of existing ETC back-office systems, communications (WAN / LAN), power, design, installation, testing and administrative functions that would be incurred by vendor, as well as the cost of 1 year warranty on all systems and provision for contingency, risk and profit.  

Operating costs include maintenance of front end systems and customer service and back office systems as well.

The report points out there are other benefits from all-electronic beyond those quantified - improved travel times through toll points, improved safety (traditional toll plazas are accident 'hot spots'), lesser emissions and energy use, and toll plaza pavement that can be returned t0 planting, wetlands and the like.

a copy of the report:

TOLLROADSnews 2010-12-15

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