• The roll-out of the satellite-based on-board units is expected to begin only in the second half of 2023, instead of end-2021
• This means the new ERP system — originally slated for roll-out in mid-2023 — will be delayed until 2025
• This is due to a global shortage of microchips that has hit suppliers

SINGAPORE — The installation of the new vehicle on-board units central to the next-generation Electronic Road Pricing (ERP) system will be delayed for at least one-and-a-half years owing to the worsening global shortage of microchips, the authorities announced on Wednesday (Nov 17).

This means that the next-generation ERP system — originally slated to begin operations in mid-2023 — will be delayed until 2025 to allow time for the on-board units to be installed.

The present ERP system will continue operating until then.

The installation of the satellite-based on-board units is now expected to start only in the second half of 2023, instead of at the end of this year.

In a statement on Wednesday, the Land Transport Authority (LTA) and the consortium behind the project — comprising engineering firm Mitsubishi Heavy Industries (MHI) Asia Pacific and information technology company NCS — said that the worsening global shortage of microchips had affected the production of the on-board units.

They noted that the Covid-19 pandemic had boosted the global demand for microchips while affecting its production, after the suspension of operations in major semiconductor manufacturing facilities across many countries.

This has had a severe impact on the production of electronic devices in many sectors, from consumer electronics to industrial machines.

The production of the on-board units has been hit because several of its parts suppliers have indicated that they were not able to meet the required delivery schedules for the units’ critical components.

Mr Naoaki Ikeda, president of MHI Machinery Systems, said that the consortium had identified a few components that have been delayed with an uncertain delivery timeline, and that they had been sourcing for alternatives through their network of suppliers.

“Unfortunately, the global chip supply shortage has been volatile, affecting many products and industries worldwide, including the next-gen ERP,” he added.  

LTA and the consortium said that the shortage was expected to persist through next year, and microchip production was expected to recover gradually, from end-2022 to mid-2023.

“Given the uncertainty in the supply chain and in order for installation to commence only when the on-board unit production is stable and sufficient, the installation exercise is now planned to commence in the second half of 2023,” they said. 

The first on-board unit will be installed for free for existing Singapore-registered vehicles.

LTA and the consortium said that they were working closely with the firms behind the next-generation ERP system to start the production of the units and its installation.

Mr Ng Lang, LTA’s chief executive officer, said: “We would like to seek motorists’ understanding as we work closely with our partners to resolve the production challenges brought on by Covid-19.

“Our priority is to ensure that the installation exercise proceeds smoothly. We will give ample notice to motorists and (the) motor vehicle industry ahead of the installation exercise.”

This is not the project’s first delay. 

Installation of the on-board units was initially slated to start last year before it was pushed back to the end of this year because of the pandemic. 

LTA previously said that the new on-board units would resemble a smartphone with a touchscreen display that can provide real-time road traffic updates as well as the locations of nearby school zones and silver zones to alert motorists to look out for children and seniors.

The touchscreen display, together with an antenna, will be mounted on the windscreen near where the in-vehicle units are now installed.

As the on-board units use satellite navigation technology, the new ERP system will collect data from users. 

Vehicle-specific data will be used for payment, charges and enforcement, while summonses related to non-payments will largely continue to be automatically generated.

With the move to the next-generation ERP system, the present bulky gantries will also be phased out and replaced by smaller ones at the ERP locations.

In 2016, LTA awarded a S$556 million tender to the consortium to build the next-generation ERP system.

The present ERP system was introduced 23 years ago and its infrastructure is nearing the end of its operational life.