Indonesia electronic toll booths
Image for representation Reuters

In October 2017, road users in Indonesia can expect a fully operational electronic toll system following the agreement signed by the Public Works and Public Housing Ministry and Bank Indonesia (BI).

The partnership entails a non-cash payment system on toll roads while establishing an electronic toll collection consortium to manage the system. The shareholders of the consortium are of a variety of stakeholders from banking related companies, toll road enterprises, and switching companies. The consortium is tasked to manage electronic payment facilities as well as infrastructure on tolled roads.

BI and the ministry will implement it in four stages during the rollout in October. The four stages are the integration of the toll road system, the integration of toll roads and the establishment of the Electronic Toll Collection Consortium (ETC). It also includes implementation of the Multi Lane Free Flow, which will cut down waiting time for road users.

Antara News quoted BI Governor, Agus Martowardojo, saying the consortium will play a big role in the integration of roll road segments and at the same time improving business model and any technical aspects of electronics.

The establishment of the consortium is in tangent with the government's target to switch payment on tolled roads to non-cash or electronic mechanisms.Currently, 25% of total payments in 35 toll roads in Indonesia are adopting non-cash payment methods. BI has set a target to manage the non-cash system in all toll roads by October.

Agus added that the consortium was a necessary institutional aspect to be established.Other than the institutionalisation, the switch to electronically operated toll roads will change the business model of various participating companies on the highways.

The adoption of the electronic tolls will bring change to the business commission like the bank is required to pay the operator for non-cash payment application of 0.3% will be replaced by a merchant discount rate (MDR) system instead. The MDR will be implemented after the ETC is established.

Additionally, BI will also allow banks to charge an additional commission to customers when reloading electronic money balance used to pay for the toll service. The fee, however, will be regulated by BI in a regulation concerning electronic money.