I have been using the South Luzon Tollway for the past 45 years, or since the early 1970s when the toll fee for the Nichols-Sucat segment was only one peso. All this time, ever since the south tollway first opened in December 1969, cash has been an acceptable mode of payment for tollway use. Apparently, by some time in the near future, this might no longer be the case, at least for the Skyway.
Based on public announcements by the Skyway operator, “soon” the Bicutan and Sucat exits of the Skyway will be exclusive for electronic toll collection, or limited to those who are using the RFID payment system. Cash will no longer be accepted at these Skyway exits. It is unclear to me, however, why this is being done. No explanations have been offered so far.
I take this plan to mean that if you do not have an RFID, then you cannot use the Bicutan and Sucat exits of the Skyway and will have to use only the at-grade exits for these two destinations. But, if you find it more convenient or practical to use the Skyway for these exits, despite the higher toll fee, then it becomes a simple matter of you getting an RFID.
I do not agree with the plan. The tollway — including the Skyway — while operated privately, is still considered a public road in nature and in character. The tollway operates on the basis of a franchise issued by the government, to allow it to serve the public and to provide services that benefit the public, and always at the convenience of the public.
In this line, can a private tollway operator, operating under the authority granted to it by the government to provide public services, be allowed to set exclusive payment terms? Can the tollway operator discriminate against motorists without RFIDs or cannot afford to make use of RFIDs? Has the Toll Regulatory Board conducted public hearings and has approved the plan to make the Bicutan and Sucat exits of the Skyway exclusive for RFID users?
In addition, has data been presented to indicate whether these particular Skyway exits are used more by RFID or cash-paying motorists? Has research data been made public to indicate improvements in cycle time, if any, if all these exits are made exclusive to RFID? On the other side, has data been presented on how such a plan might negatively impact motorists?
And then there is the issue of the “float.” You see, while RFIDs are given out for free, the way the system works is that motorists must “load” the RFID with toll credit, pretty much like a pre-paid cellphone SIM. In short, the RFID user advances the toll fees, which are then stored in the RFID system as credits in favor of the RFID user/owner.
Every time the motorist goes through a toll booth, the required toll fee is debited from the account. The motorist must reload the RFID before the credit is completely depleted; otherwise, the RFID will be confiscated. And the rule is one car, one RFID. Thus, if you have two cars or more, you need to install an RFID for each car and load each RFID with credits. That is, assuming you have extra cash to advance the toll fee.
Question 1: What is the total float currently enjoyed by the tollway operator by way of all advance toll fee payments currently stored in its RFID system? I reckon this runs to the hundreds of millions of pesos. If so, is the tollway operator earning any deposit interest or placement/investment income from these advanced toll fees?
Question 2: Is the tollway operator actually allowed by law to “derive” income other than toll fees, including interest income on advance toll payments currently stored as credit in the RFID system? Is the Toll Regulatory Board aware of this setup and has actually approved such arrangement?
Question 3: Tollway fees are subject to VAT or value-added tax. Are the toll fees collected in advance as stored credit in RFIDs inclusive of VAT? If so, when is the VAT remitted to the government? Soon after the tollway operator receives the payment from the RFID users loading into his account? Or, only after the stored credit has actually been used and processed and thus considered paid toll fee? When is the advance payment or pre-payment actually receipted?
Question 4: If the prepayments or RFID load are inclusive of VAT, and the VAT is not immediately remitted to the government, isn’t there an additional “float” enjoyed by the Skyway operator by way of government or public money — taxes — that are likewise deposited or invested or placed to earn interest or dividends? Does the interest income on the VAT portion go to the government or the tollway operator? Is this arrangement allowed by government audit rules and by law?
I can just imagine the total amount of prepayments or advance payments to be pooled and collected — and invested — by the tollway operator once all users of the Bicutan and Sucat exits of the Skyway are made to use only RFIDs. Millions of people live in these areas and many of them have vehicles that use the tollway daily.
If the public, particularly those living and working in southern Metro Manila — and the government, including the toll board — are all okay with such an arrangement, then I guess I will have no choice but to accept the plan and bear it. But, I for one, am against the plan of making the Sucat and Bicutan exits of the Skyway exclusive for RFID users.
I believe that tollways should be pay per use. When you pass, then you pay. And motorists should always have the option to pay in cash, as has been the case in the last 49 years, on a per-use basis, at any tollway exit, including Skyway exits. There shouldn’t be any discrimination in the mode of payment. What is important is that toll fee is paid, and not so much as how it is paid.
Moreover, tollway exits should not refuse to accept loose change — 5-, 10-, 25-centavo coins. Money is money, in any form. Yes, I have had the bad experience of being berated by toll booth tellers for paying in these denominations, at one time even being told to use such coins only in SM, rather than for paying toll fees. But there is no law against the use of such coins for toll fees.
Tollway operation is a daily cash operation. Millions of cars pass through toll roads regularly, all paying in cash, if they haven’t paid in advance under the RFID system. There are no “losses” from damaged or unsold product inventory, and there are no issues with respect to Accounts Receivables. There are no debt payments to collect or to write off. I reckon the tollway operator likewise enjoys interest or investment income from “float.”
So, why change the system now? Does the Skyway operator really need to make certain exits exclusive to RFID users? Will this move truly benefit motorists and people using the tollways? As a motorist, I can make the adjustment to RFID. However, there should be more transparency and accountability on why this is being done. There should be clear research data to scientifically prove that the initiative will truly benefit the public.
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council