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A consortium of NCS and Mitsubishi Heavy Industries (MHI) Engine System Asia has been awarded a S$556m ($395.29m) tender by the Land Transport Authority (LTA) to develop an Electronic Road Pricing (ERP) system in Singapore.

Based on global navigation satellite system (GNSS) technology, the development of the next-generation ERP will facilitate better management of traffic congestion through a distance-based road pricing system.

The satellite-based road pricing system will charge drivers only on the basis of the distance covered by them on a congested road.

The consortium will begin implementing the new GNSS technology from 2020.

LTA expects an 18-month transition period to shift from the present ERP network.

"The next-generation road pricing system will allow us to improve on this, with greater flexibility."

In this period, car owners will have to replace the in-vehicle unit with a new on-board unit (OBU). The cost of replacing it will be fully subsidised by the government.

The OBU can be used to pay for parking and checkpoint tolls.

LTA chief executive Chew Men Leong said: "Since introduction, the road pricing system has been effective in managing traffic congestion.

"The next-generation road pricing system will allow us to improve on this, with greater flexibility.

"It will also allow us to provide more services for motorists’ convenience, such as disseminating information on traffic advisories and facilitating e-payments."

The consortium won the project after defeating ST Electronic, which quoted $853.14m for the project.

Image: An in-vehicle unit (IU) installed in a vehicle will be replaced with a new on-board unit (OBU). Photo: courtesy of Ominae via Wikipedia.