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tate-owned toll-road operator Jasa Marga introduced on Friday a new electronic payment-collection system in the form of an on-board unit (OBU), enabling motorists to drive through toll gates without having to stop to pay the toll.

The new automated collection system was launched at the Kalimalang toll road in Kalimalang, East Jakarta. The system has been jointly developed by Jasa Marga and state telecommunications firm PT Telekomunikasi Indonesia (Telkom).

State-Owned Enterprises Minister Dahlan Iskan, who attended the launch, said he expected the use of the new OBU to significantly reduce the long traffic lines that were found at various toll gates.

Jasa Marga and Telkom claim that the new system will be able to process transactions at a much faster rate than the current one.

'€œIt takes 1.5 seconds to process a payment by one vehicle, much faster than the four seconds needed now,'€ Telkom president director Arief Yahya said.

The new system will require the construction of new toll gates, called T-pass gates, and the installation of an OBU in users'€™ cars.

The new OBU uses microwave technology and does not require a prepaid card to be attached to it. Instead, according to Jasa Marga operations director Hasanudin, the device is linked to users'€™ bank accounts.

'€œAfter purchasing the OBU, customers are required to register the device, along with information about their vehicles and bank accounts. The toll charge will then be deducted automatically from their accounts,'€ Hasanudin said on the sidelines of the launch.

Existing OBUs use infrared technology and are equipped with a prepaid-card slot. The driver'€™s balance on the card is reduced every time they pass through a Jasa Marga automated toll gate.

Telkom plans to produce 10,000 OBUs before year-end, while Jasa Marga is looking to operate 10 T-pass gates to facilitate the new device. Some of the new gates will be located in Pondok Ranji in South Tangerang and Cengkareng in West Jakarta.

Jasa Marga president director Adityawarman said the investment needed for the construction of the T-pass gates would be Rp 500 million (US$41,172) to Rp 700 million each.

'€œExisting automated toll gates will be phased out gradually and be replaced with the T-pass gates,'€ he added.

Jasa Marga previously stated that it was aiming to operate a total of 136 automated toll gates in 2014. As of now, the number of such toll gates stands at more than 100.

The electronic collection system, including the use of existing OBUs on Jasa Marga toll roads, is
operated in cooperation with Bank Mandiri.

Commenting on the impact of the new OBU on its partnership with Bank Mandiri, Adityawarman said Jasa Marga would discuss a '€œnew business model'€ with the state lender and Telkom.

Discussions are necessary because Jasa Marga is tied to an exclusive electronic payment contract with Mandiri, which will expire in 2018. Under the contract, Mandiri acts as the sole prepaid-card provider with its '€œe-money'€ card.

Mandiri president director Budi Gunadi Sadikin said the bank would prefer to stick with the old system because the new one posed a certain risk to the bank.

'€œAs far as I know, transaction settlements with the new OBUs will be carried out after a certain period of time, say a month. For us, this is a bit risky because customers may avoid fulfilling their obligations. We prefer immediate settlements with the prepaid cards rather than deferred settlements,'€ he added.

Meanwhile, the latest data from Jasa Marga shows that the use of electronic toll road payments remains low, even though the service has been around for five years.

Nationwide, the penetration rate stood at 11.9 percent in June, with 14 percent recorded in Greater Jakarta, where Jasa Marga facilitated the movement of 491.4 million vehicles in the first six months of this year.