TJH aims for 80 per cent cashless by 2028
TransJamaican Highway is seeking to allow debt and credit cards along with CBDC to be used on the toll road.

TransJamaican Highway Limited (TJH) is looking to increase the usage of its T-Tag from 39 per cent to 80 per cent over the next five years as it seeks to cut cash handling costs and improve its operational efficiency.

Based on the 2022 revenue figure of US$65.01 million ($9.75 billion), TJH would have collected US$39.65 million ($5.95 billion) in cash from customers at the Portmore, Vineyards, Spanish Town and May Pen toll plazas. This future shift would aim to have the company only collect about US$13 million ($1.95 billion) in tolls as cash from customers with the remainder being processed via electronic means.

"In fact, by the end of this year, all of our manual lanes will also be able to have tag vehicles pass through them. No longer will we have a set of lanes dedicated only to manual. We'll have all lanes now being able to used by tag customers as well. This is part of our long-term strategy of moving away from manual collections — some of the best toll collectors in the world don't use cash — towards more tag usage. Our goal is to get to about 80 per cent tag usage over the next five years," said TJH Managing Director Ivan Anderson at the company's June 30 annual general meeting (AGM).

Some of the initiatives to facilitate this shift includes allowing customers to purchase T-Tag's via in-lane sales, upgrading the functionality of its mobile application to allow regular and automatic top-ups, allowing the use of debt and credit cards and digital wallet providers like Lynk to be processed at the toll booths. Even with the recent increase in toll rates for Highway 2000 East-West, class one and two T-Tag users didn't see an increase in their toll fares with there now being a discount applied of $15-$70 for any toll plaza relative to those who pay with cash.

ANDERSON...our goal is to get to about 80 per cent tag usage over the next five years.

As part of the initiative which aligns with the digital shift in Jamaica, TJH will be working with TFOB (2021) Limited, which operates the Lynk app, to facilitate payments with their mobile phones. This is against the backdrop of more than 25.88 million transactions in 2022 which was seven per cent higher than 2019.

"We're working with Lynk to see how we can implement Lynk in the lanes. We are also working with our providers NCB and Lynk in establishing a digital wallet both from Lynk's perspective and from the Central bank's digital currency perspective. Hopefully, that is something that we can also implement in the coming year. This will be part of the discussion we had earlier about how we introduce credit card machines into the lane, but it is not expected currently that we'll be our own wallet provider," Anderson explained regarding the use of the BOJ's CBDC Jam-Dex and other digital means.

Anderson also added, "We are also looking at new payment options. This year, we expect to begin to pilot credit card terminals in the lane and pilot terminals which don't need individuals. It doesn't need a customer service representative or a toll collector, an unattended credit card system in the lane. What we're working with our equipment suppliers to look at is for example, you drive into a lane, you just tap your card, the barrier opens, and you go through. We expect that we will begin to pilot that system either late this year or early next year."

These initiatives have become of greater importance following the attacks on security couriers handling cash in 2023.

"The near doubling of security costs has been an increase in the cost for us, but they have not affected our operations significantly. What we've done is to do an audit of all of our cash handling and security operations just to make sure that we're not placed in a situation similar to what we've seen so often recently," Anderson explained regarding the recent increases in cost.

Apart from TJH acquiring the majority interest in Jamaica Infrastructure Operator Limited (JIO), the company grew its consolidated revenue by 18 per cent to US$18.22 million ($2.79 billion) for the second quarter with net profit jumping 344 per cent to US$6.03 million. For the overall six months, TJH's revenue rose 20 per cent to US$36.21 million with its net profit climbing 442 per cent to US$11.01 million (J$1.69 billion). Its operational cash flow also doubled from US$9.78 million to US$19.61 million with the JIO acquisition and amendment to the agreement to add US$12 million to the bottom line every year going forward.

While this would possibly mean more dividend payments, Anderson reminded shareholders about the phase 1C (May Pen to Williamsfield) negotiations and other capital expenditure items to occur in 2023. He also mentioned that the frequency of dividend payments wasn't likely to increase due to the number of returned dividend cheques among the shareholder base which is above 30,000 people. He encouraged shareholders to do a dividend mandate or use so that they would receive their payments to their bank accounts.

TJH's asset base stood at US$295.57 million with its cash position at US$13.51 million. Total liabilities and shareholders equity closed the period at US$244.57 million and US$51 million, respectively. TJH's share price closed Friday at $2.61/US$0.0173 which leaves both securities up more than 80 per cent year to date and well above the initial public offering price of $1.41/US$0.01.

"In our articles, it allows us to purchase shares through a tender process. We have requested that in addition to that method, that we be allowed to purchase shares on the market itself. It's not an attempt to remove excess shares from the market, but as you know, last year, up until December, we thought that our shares were significantly undervalued and if we wanted to put ourselves in a position where if that continued, we could use some of our excess liquidity to repurchase shares," Anderson explained regarding theshare buy-back amendment.

BY DAVID ROSE Observer business writer

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