Egis and Sanef JV to build first N American toll interoperability hub for ATI - to start by end of year

July 20, 2013
By Peter Samuel

2013-07-19:  an American based joint venture of Egis Projects and Sanef, Secure Interagency Flow LLC (SIF) has a contract with the Alliance for Toll Interoperability (ATI) to build and operate the first full toll transactions matching hub in North America. The hub - or 'HUB' as it is being called - will work from constantly uplisted lists of participating toll operators' accounts to match transactions of others' account holders.

(HUB all-uppercase is an informal 'brand' term being used by ATI.)

Detailed terms of the contract with SIF were accepted by ATI board at a meeting Friday July 19. Tollers who are members of ATI can enroll with the HUB and make transaction processing arrangements with SIF from September.

Actual daily processing of accountholders transactions at the HUB will begin January 1, 2014.

Potentially a boon to tollers and a major breakthrough for seamless electronic toll operations across the continent the HUB project does need to generate a critical mass of participation and patronage to be attractive and viable.  And of course since the transactions potentially clearable through the HUB depend on the number of tollers participating and the numbers of account holders they represent, its attraction will not be great early on - the critical mass issue.

The contract is the result of about six months of back and forth in negotiations between SIF and ATI over a fee schedule that would be attractive to ATI members while also having sufficient transactions volumes and revenues to justify SIF's costs.  SIF was the only one of four participants in pilot hubs to make a detailed proposal in a competitive procurement that began over two years ago. SIF's first proposed fees were unacceptable to ATI but they began a long process of bargaining and haggling only just concluded.

Fees

There's a HUB connection fee upfront of $20,000. That won't be invoiced until fifteen (15) tollers have enrolled the threshold set in effect for the viability of the venture.

Second is a monthly maintenance & operations fee of $1,667 that begins when operations begin next year. Total maintenance and operations fees cap at $300k, after which the monthly fee per toller will decline.

Third the contract spells out a sliding scale of per transaction fees SIF will charge ATI members using the HUB. All transactions are the same - whether video or transponder - and tollers will only pay for successfully matched transactions.

Transaction fees payable to SIG will be:

9c/transaction up to 833.3k/month ATI activity at the HUB

8c 833.3k to 1.25m

7c 1.25m to 1.67m

6c 1.67m to 2.5m

5c 2.5m to 4.17m

4c > 4.17m

Each participant ATI member faces the same fee based on the aggregate activity at the HUB.

Tollers enrolling in the HUB make no commitments to use it exclusively. They choose which transactions to send, and are free to use other clearing methods for other transactions, however they choose. That means they can ease their way in and phase in, or out.

SIF will provide an interface to other hubs.

Once they are enrolled there is no downside in tollers sending transactions to the HUB for clearance since apart from the overheads, fees are only payable on successful matches of transactions and accounts. Unsuccessful ones can be returned to the toller for collection by other methods.

Texas hub

The closest existing arrangement is within Texas where the tollers send transactions to a hub server in Houston at HCTRA. In Dallas NTTA does programming for the Texas Hub and operations are in Austin (CTRMA) a somewhat cumbersome arrangement.  The TxHub has had some operational issues in the past year with sporadic downtime, and need to accumulate unprocessed transactions.

E-ZPass and California internally each do interoperability among their members by the peer-to-peer principle in which every toller does transactions with all the others - very cumbersome and increasingly burdensome as the membership grows because each time a member joins the number of connections to be made grows to the square of the membership.

At least to start with the HUB should be attractive for smaller tollers that are not part of any clearing arrangements and for tolls they often don't even attempt to collect thorough transaction matching with others accountholders. Larger tollers might join just throw the difficult-to-collect ones at the HUB since they only pay a fee for successful matches.

As aggregate volume increases and fees decline it may be attractive for a greater variety of tollers and transactions.

Secure Interagency Flow's contract with ATI is for five years with annual renewals possible. Until 15 toll agencies are enrolled it can be terminated without obligation (a no-harm' termination.) After 6 months it can be cancelled by either party with 90 days notice, terms to be negotiated..

All ATI members are presently tollers but the HUB will process non-toll transactions for member organizations including transit fares, parking fees, fast food charges etc all of course for enrolled account hoilders.

SIF contracts to provide real time transactions processing - E-ZPass do once a day uploads and downloads and Texas hub operates the same way. SIF will have their main servers in New York (Long Island) to start with but probably move them to Northern Virginia, and they promise full backup and redundancy.

Tollers will not be required to do any system or data conversion work to participate. SIF's HUB will handle all conversions of data needed.

Extra services

The SIF-ATI contract provides for a variety of extra services to the basic transactions-account matching that could in future be provided by the HUB on terms to be negotiated:

- funds transfers

- reconciliations

- full back office services

- tag distribution

- account management

- license plate lookup

- enforcement and collections

Secure Interagency Flow LLC is a joint venture between sanef its america Inc (lower case styled) and Egis Projects Inc, two major French international tolling companies in the tolling systems and tollroad concessions and operation. They have done other joint ventures before and have a major all-electronic toll system in Vancouver BC.

Formal announcement of the SIF/ATI HUB is likely next week.

OUR GUESS: the HUB will either be a big success or it will be a flop - if it doesn't get the volumes needed to drive the fees down. And of course it may attract competitive hub services. In any event it is a major achievement of ATI as well as a measure of the value to America of international companies being welcome here.

http://www.tollinterop.org

http://secureinteragencyflow.com

http://www.tollinterop.org/index.php/about-ati/members

earlier reports on interoperability:

http://www.tollroadsnews.com/node/6524

http://www.tollroadsnews.com/node/6219

http://www.tollroadsnews.com/node/6216/

http://www.tollroadsnews.com/node/5385

http://www.tollroadsnews.com/node/5313

TOLLROADSnews 2013-07-20


Leave a comment: