Severn Crossing Toll

Written Evidence from Cobalt Telephone Technologies

The Severn Crossing Toll – acceptance of payment cards

Executive Summary

This submission assumes tolls will remain in place for the Severn Crossing for the foreseeable future but their collection needs to be more efficient. It proposes:

· Coin-only is insufficient. Proven processes already exist in the UK to allow tolls to be paid by credit and debit cards whilst retaining a free flow of traffic.

· The various benefits of such an approach are sufficiently strong that a deployment of such a process could potentially be structured to avoid any capital outlay or loss of core toll income.

· If clear intent is there, implementation is achievable during 2011.

Introductory credentials

1.1 I write as founder and Commercial Director of Cobalt Telephone Technologies. The company is the leading supplier of web and phone payment solutions to the UK parking industry. From its two UK data centres it centrally hosts payment collection processes for TfL, DRDNI and over 100 local authority customers and holds the highest global accreditation for payment card security (PCI-DSS Level 1). Cobalt is mainly known in the consumer parking market for its RingGo brand of phone parking.

My understanding of the business context

1.2 The two bridges that comprise the Severn crossing take payments from 13 million Westbound vehicles each year. This income stream totals more than £90M with the toll having three pricing tiers £5.50, £10.90 and £16.40 depending on vehicle size. Counting and banking such large amounts of cash and bullion is a process of itself.

1.3 Currently credit and debit cards are not accepted as a means of payment (although a TAG system exists aimed at regular users). It goes without saying that the failure to take casual card payments has created a growing problem for many motorists who arrive at the crossing assuming that a solution other than cash must be in place.

1.4 This tide of unpreparedness creates a delay, & triggers a safety issue as vehicles have to be removed from the main flow or, worse still, take pre-emptive avoiding action. These "NPTs" (cases of non-payment of tolls) are subject to a manual roadside business-process by which they are allowed to continue, providing they undertake to pay the toll within a period of 14 days and pay an additional administration charge of £5. Should payment not be received the NPT case undergoes a progression of stages in which the cost and seriousness increases.

1.5 The existing toll booths are all fitted with cameras that take three pictures of the vehicles passing through the lanes. The cameras are analogue not digital as would be preferred and whilst nominally able to be used for Automated Number Plate Recognition (ANPR) purposes are not connected to suitable hardware. Each existing kiosk, when it takes cash payment, produces a standard till receipt which is thermally printed and passed to the motorist.

A better way - the analogy with RingGo

1.6 RingGo is the UK’s leading brand of phone parking with over 70% market share and two million registered customers. Cobalt Telephone Technologies, which developed and exclusively deploys the service, hosts all the data that is collected onshore and answers all the phone calls from motorists in Hampshire or Berkshire call centres.

1.7 RingGo is deployed as an adjunct to conventional coin-only parking machines. It is offered by local authorities that wish to provide the convenience of card payments, whilst avoiding the cost of upgrading their existing street hardware. This is done by placing signs explaining the service next to, or on top of, conventional machines.

1.8 On the occasion of first time use motorists give their payment card details which are encrypted & stored. There is no subsequent need to give the full card details again.

1.9 RingGo is widely deployed nationally but particularly in the West of England. By the nature of the service, RingGo has to offer its customers an extremely high level of uptime. The RingGo service has not had an outage in the last four years which is testament to the resilience of the twin data centre architecture that underpins it.

1.10 RingGo is advanced and allows different parking tariff rates to be applied to different vehicles based on their characteristics notably including the vehicle’s CO2 emissions. A 4x4 vehicle can therefore be charged more per hour for parking in the same bay as would a small-engined city car. This feature has been deployed by the Borough of Richmond to support its emission-reduction initiatives, demonstrating that such a system can charge vehicle-specific tariffs based on number plate information alone.

1.11 Average transaction values for RingGo are in the order of £4.20. RingGo can be experienced at most railway station car parks across the UK.

Analysis

1.12 The secret to successfully taking credit and debit card payments for the Severn Crossing is not to impede the flow of traffic. Any concept that involves actually plugging-in physical cards and entering PINs is operationally weak. The long heralded "wave and pay" or "tap and go" card technologies are now thought unlikely to become ubiquitous and so can similarly be discounted as a solution path.

1.13 What is required is a "light touch" membership system where the motorist's vehicle registration number is already associated with both their credit card details and their mobile telephone number. RingGo is the UK’s leading example of such a service.

How such a payment service might be achieved in practice

1.14 It would be necessary to create the option of a "drive through" lane or lanes which are monitored by digital infra-red ANPR cameras. All cars passing through the gate-line would be photographed and their registration plate (VRM) checked to determine the relevant fee. This would be de-duplicated each night (one day in arrears) in a batch process, making a comparison against pre-payments and post payments. Vehicles that had not paid would become subject to a progressive enforcement process modelled on that used for moving traffic offences under TMA 2004.

Complementary legislative actions required

1.15 It would be necessary to revise the Severn Bridge Act 1992 to allow payment for crossing Westbound as follows:

· in advance by electronic payment method, or at the conventional tolls by cash for the standard price; or

· in arrears (up to midnight on the day after undertaking the crossing) at the standard price plus a "post-payment premium"; and also

· put in provisions to allow the issuing of a penalty charge notice at a suitable existing TMA 2004 charge notice rate, and then apply the same progressive steps, and the same appeals procedure conducted by the Traffic Penalty tribunal (an existing organisation). Marilyn Waldron at DfT, who was central to the drafting of TMA 2004, can advise on the detail.

Traffic engineering issues

1.16 The creation of drive-through lanes alongside tolls (both at Rogiet and Aust) would require highways planning expertise and execution. As with all motorway junctions requiring cognitive decision-making, generous run-on and run-off areas, together with clear signage and road markings, would be vital for safety reasons.

1.17 Digital ANPR camera technology is sufficiently advanced to allow near faultless monitoring of such high volume flows regardless of almost all weather conditions. Such cameras will require DfT approval and suitable regulations already exist in the form of the document Civil Traffic Enforcement Certification of Approved Devices of 28 February 2008.

Communication issues

1.18 Crucial to the success of this approach is the way that the new process is communicated. The key point to stress is that charges have not risen for those who pay cash or pay electronically in advance. The post-payment fee only applies for those who choose to pay in arrears (and for simplicity this is in line with the recently revised - more generous - London Congestion charge policy). The PCN process is simply a necessary backstop.

Safety issues

1.19 It is paramount that the new process does not, in any way, encourage drivers to use their mobile phone or other device to make a payment whilst driving. For this reason it is proposed that the period in which post-payments are accepted (up until midnight on the day following the crossing) be deliberately generous.

Exceptions

1.20 Military vehicles and other exemptions would continue to report to the toll booths.

Commercial issues

1.21 Given the two distinct work streams the project should be awarded in two lots:

· Lot 1: the highway modifications including removal of existing booths to allow free flow lanes, the installation of signage and suitable over-gantries, verticals and ductwork to support the installation of cameras.

· Lot 2: the provision of the ANPR cameras, hosted technologies and the entire business process to register motorists, take pre-payments, post-payments and issue enforcement notices. This lot should be written in terms of outcomes and service levels rather than being prescriptive about the means and methodologies.

I cannot comment on the first of these but I am of the view that Lot 2 could be supplied on a zero capital cost, self-funding basis – that is the contractor should, with a reasonable contract length of say 5+3 years, be able to return the full toll price to the Severn Bridge yet still set-up and run the service, including the enforcement process and inevitable evasion, on the basis of retaining the post payment premiums and enforcement revenue alone. Clearly other financial models could be created.

The speed at which such a process could be implemented, as ever, will be reliant on bureaucratic process elements such as procurement and legislative change, not the practicalities of implementation. Were these constraints not in place this project could be reasonably achieved in six to eight months from conception to launch.

Benefits

· £90M per annum in coins represents not far short of a thousand tonnes of bullion. Reducing the collection, handling, counting, transport and banking of these coins would lead to significant savings;

· Counterfeit pound coins, which the Royal Mint estimates comprise 3% of the national stock, cannot be exchanged or passed-on and are worthless. The crossing company must be subject to considerable losses in this regard;

· The existing workaround process for non-payment of tolls could be eliminated;

· Useful economies of manning could be made; and

· Millions of motorists would be spared the obligation of using an archaic process.

Summary

1.22 Coins are a pre-Christian technology. We live in a digital age. It is arguably a mild national embarrassment that the prime gateway to Wales is operated as it is. The solution is to implement a service in which the credit card, the mobile phone and the vehicle registration are linked in an easily established account so that free-flow transit can be made. Analogous and successful services are already established, secure, familiar to the UK motorist and operate at the scale and intensity required.

September 2010