61% of toll road operators struggle to identify foreign cars in case of violation, finds KPMG survey

61% of toll road operators struggle to identify foreign

Richard Threlfall, Head of Infrastructure, Building & Construction at KPMG UK comments on the "KPMG Toll Benchmarking Study 2015: An evolution of tolling" report.


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With the growing prevalence of Open Road Tolling and Electronic Toll Collection, enforcement of payment to use toll roads has become a major challenge. Foreign and rental cars cause particular difficulties. According to the KPMG Toll Benchmarking Study 2015: An evolution of tolling, only 26 per cent of toll road operators said that they were effective or very effective at identifying the owners of out-of-jurisdiction cars in case of violation.

Richard Threlfall, Head of Infrastructure, Building & Construction at KPMG UK said: “Our report shows the impact of technology in the sector with 91 per cent of respondents offering some form of Electronic Toll Collection and 43 per cent using Open Road Tolling. None of us want to queue at toll booths if we could drive straight through. But the report shows that this creates a challenge for the industry, with 61 per cent of toll road operators surveyed struggling to identify the owners of out-of-jurisdiction vehicles and a further 13 per cent making no attempt at enforcement.

“This creates a significant financial risk for toll operators and is a potential barrier to the further spread of Open Road Tolling, which would be of benefit to motorists. It is clear authorities need to invest in the level of co-operation needed in the effective enforcement of non-payment by drivers of foreign vehicles.”

The KPMG study, based on survey data collected from more than 40 road tolling entities worldwide, went onto highlight how the tolling industry is pursuing efficiency gains through technology enhancements. With limited flexibility to increase toll rates, the only solution to improve margins is to reduce costs, either through sweating assets or by investing in technologies which reduce the cost per transaction. More than 50 per cent of respondents said that they had upgraded their tolling system within the last five years, and a further 45 per cent were looking to undertake a toll system upgrade.

Other views identified to enable improved margins, include:

  • Nearly half of respondents said they expected to see a positive impact from the introduction of toll collection systems based on global positioning (such as GPS or Glonass), with 23 per cent expecting the adoption of such systems to result in cost reductions for the sector.
  • 60 per cent of the respondents advocated a greater rate setting flexibility, saying that increasing rate setting flexibility can best help improve the cost efficiency of their road assets.
  • 58 per cent had no documented methodology to measure collection of costs consistently, creating a significant challenge for measuring cost efficiency.

“The report shows that implementation of technology will be fundamental to achieving further efficiencies in the tolling sector, and the data which is generated is a currently under-exploited source of value for toll road operators. Unfortunately the lack of effective cross-border enforcement will continue to act as a drag on the implementation of Open Road Tolling,” concluded Richard.

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About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff.  The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such. 

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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