Tuesday, October 11, 2016

Physical Connectivity in APEC Connectivity: One Excellent Case Study in Chinese Taipei

Mu-Hsiang Yu


According to the 2014 APEC Leaders' Declaration, APEC Leaders recognize comprehensive connectivity and infrastructure development will help open up new sources of economic growth, promote cooperation and mutual assistance and advance prosperity and the spirit of community in the Asia-Pacific region. It also commends the achievements already made by APEC in connectivity and infrastructure development cooperation.

APEC Leaders also endorsed the APEC Connectivity Blueprint for 2015~2025 and agreed to implement the APEC Connectivity Blueprint and achieve the overarching goal of strengthening physical, institutional and people-to-people connectivity by taking agreed actions and meeting agreed targets by 2025.

In 2015 APEC Leaders' Declaration, it affirms to take further action to ensure continued implementation of the above-mentioned Blueprint and to promote regional and sub-regional connectivity in the Asia-Pacific region. Furthermore, it emphasizes the importance of investment in quality infrastructure and connectivity to realize our vision for an Asia-Pacific community.


One Excellence Case for Promoting in APEC: Developing an ETC system in Chinese Taipei

In reality, the APEC Connectivity Blueprint has recognized the importance of quality elements of infrastructure, good practices, and principles, and people-centered investment, as well as PPP financing, as important cross-sectoral issues under "Physical Connectivity".

From the perspective of "Physical Connectivity", Our Electronic Toll Collection (ETC) in Freeway is an excellent case for promoting in APEC.

It's a BOT/PPP project, which is called "Private Sector Involvement in Development of Electronic Toll Collection (ETC) System" cooperated with Taiwan Area National Freeway Bureau (TANFB). It endeavors to reach the objectives of efficient transportation improvement and management by intelligent and smart features of ETC system.

In addition, it attempts to some aspirational targets for Individual pillars of physical connectivity in APEC Connectivity Blueprint. Specifically, those pillars place importance on Public and Private Partnership (PPP), the quality of infrastructure, and good practices and principles such as on sustainability, financial soundness and accountability.

In accordance with TANFB, Taiwan has the world's largest electronic toll road network with ETC coverage of 926 kilometers. Taiwan is also the first in the world with a nationwide ETC network. First launched in 2006 as an optional payment method utilizing infrared separate on board units, the ETC system has culminated nearly a decade of hard work in earning users' trust and achieving operational excellence.

In 2012, it took 10 months to transit from a manual flat-rate pay-per- use to electronic distance-based toll collection on all national freeways by adopting the radio frequency identification (RFID) technology.

The benefits of switching to electronic toll collection are vast, three examples are summarized below:

First, the installation of the system in Taiwan has reduced CO2 emissions by 350,000 metric tons a year-equivalent to the amount of CO2 captured by trees in 45 parks the size of New York's Central Park-and saved 150 million liters of fuel, enough to fill 60 Olympic-sized swimming pools. In terms of bills, the system has created added benefits of NT$2.4 billion (US$73.9 million) per year in carbon reduction and energy conservation according to TANFB estimates.

Secondly, Our ETC system record an average of 14 million transactions per day, with an tolling accuracy rate of 99.97% and detection accuracy of 99.9% respectively, the highest in the world, according to government statistics.

Thirdly, it boosts freeway traffic flows, and the drivers can forget the thing of the past while sitting in their cars in a traffic jam at a toll booth. Hence, It has resulted in time saving over 375,000 hrs/Day after ETC went online. Since then, utilization has also grown from 40 percent to over 94 percent now and 75 percent of all vehicles nationwide enrolled in the system at present.

The above-mentioned benefits and achievements led to our Taiwan- designed ETC system winning the International Bridge, Tunnel and Turnpike Association's Toll Excellence Award in August 31, 2015. For its accident- free implementation, operational efficiency and service quality, the system was also honored by the U.S.-based organization in the category of Customer Service and Marketing Outreach.

Although some of the former workers in Taiwan's tool booths were dissatisfied with the offer and staged protest demonstrations, they were given the choice of a five-month severance package or the option to join private sector (Far Eastern Electronic Toll Collection, FETC) in another capacity at the same pay level as their former position. The system is also named recipient of an Intelligent Transport System award for pioneering advancement at ITS World Congress Oct. 5-9, 2015 in France.


ETC is now moving to export its eTag system overseas in cooperation with System Integration Promotion Alliance (SIPA). FETC has signed an agreement with the Vietnamese government since 2014 under which FETC will advise Vietnam on the installation and operation of an ETC system. Vietnamese officials highly commended Taiwan's ability to execute a "multiple-lane free-flow mechanism" on freeways.

In addition to its project in Vietnam, FETC is also making arrangements with Philippine, Malaysia and Thailand to make technical transfers and operational advisory through "Turnkey Business". [1]

We think that it will be beneficial to promote cooperation and mutual assistance with economies in South-East Asia. Hopefully, we expect to advance prosperity and the spirit of community in the Asia-Pacific region by our quality and intelligent transportation infrastructure.

(Mu-Hsiang Yu is an Assistant Research Fellow of International Affairs Department, TIER)


1.          "APEC Connectivity Blueprint for 2015-2025", APEC Policy Support Unit (PSU), web, 2014, APEC Secretariat.

2.          "2014 Leaders' Declaration" & "2015 Leaders' Declaration", APEC website.

3.          Taiwan Business TOPICS, "Taiwan Economy Boosted by Turnkey Exports", AMCHAM, February 17, 2016.

4.          "Taiwan RFID-based ETC Total Solution-The largest multi-lane free flow and distance-based system in the world", Far Eastern Electronic Toll Collection., Ltd. October 2015.

[1] A turnkey business is an arrangement where the provider assumes responsibility for all required setup and ultimately provides the business to the new operator only upon completion of immediate operation. A turnkey business often already has a proven, successful business and merely requires investment capital and labor.


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