News | Sunday, 08 March 2009

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Cash cows on the highway

Private warden companies and Datatrak receive thousands of euros from overspeeding fines as they clutter the islands with more speed cameras

David Darmanin and Matthew Vella
Speed cameras are earning millions of euros for three private companies, a MaltaToday analysis shows, with 58c from each €1 that motorists pay in speeding tickets going into their pockets.
The companies, which service the cameras and process the contravention data, are now expected to earn millions more with the eight new speed cameras installed last month. Two of the companies – Guard & Warden, and Datatrak – received €1.15 million between 2006-2008 from a total of €2 million in speeding fines paid by motorists on just four camera locations: the Mriehel bypass, Mdina road in Zebbug, Burmarrad road, and Xemxija Hill (in operation for only one year).
Guard & Warden, which installs and services the cameras, was paid €851,850 (43% of total revenue); while Datatrak, which issues the fines, was paid €299,415 (15%).
Another €279,840 (14%) was paid to the Malta Transport Authority; while the local councils from the Central and the Mosta joint committees, bagged €560,999 (28%).
The Zejtun joint committee, with just one speed camera in Gudja, received €659,331 from speeding tickets in 2008 alone, its first year of operation.
Of these €329,464 (49%) were paid to Sterling Security, and €59,735 (9%) to Datatrak. The local councils kept €253,720 (38%) while the ADT was paid €76,147 (11%).
Across the five speeding camera locations, Guard & Warden, Sterling and Datatrak took 58% of all speeding tickets paid by motorists in the past three years – not a bad deal at all.

Cash traps
MaltaToday’s analysis of these five speed camera locations has revealed the real picture behind the latest proliferation of speed cameras that has angered many motorists.
There are four parties to this big cash cow: Guard & Warden and Sterling Security are contracted by the local councils, through their joint committees, to provide and service the speed cameras.
The joint committees are then paid a share of the total revenue according to an agreement with either Guard & Warden or Sterling.
Datatrak is the sole company that issues the fines, because it provides the IT infrastructure for the processing of all reports from wardens’ hand-held devices, and the photos snapped by the speed cameras.
And the ADT also takes a €11 cut from each fine – even though it does not provide any service.
Both Guard & Warden and Sterling are now set to make a veritable killing on the eight new speed cameras set up on the Birkirkara bypass, Sta Venera tunnel exits, Mdina Road in Qormi and Tal-Barrani Road in Żejtun with speed limits of only 60km per hour.
This is because the cameras are being installed just a year before their five-year contracts with the local councils expires.
Since 2000, the joint committees have contracted the two companies on five-year contracts for the provision of both wardens and speed cameras.
The councils have agreed to install the speed cameras now, a year before the current contract is up and new companies enter the bidding for the 2010 contracts.
As the Gudja speed camera statistics show, speed cameras deliver the highest revenue in the first year of installation, when motorists are not yet aware of the camera’s presence and are therefore more careless when driving.
Just before competition sets in for the 2010 contracts, both Guard & Warden and Sterling will rake in peak earnings on the eight new speed cameras, before the current contract is up.
“The first year makes up for the next ones with speed cameras – our cost base remains the same as in the following years, and the first year is when the most offences are made. This goes to show that the system works,” said Guard & Warden managing director Kennneth Demartino.
Demartino said his company handles the complete service from the time a photo is taken to the point it is passed on for processing, as well as paying for the camera software and licensing, and replacing cameras when they are vandalised.
“You must keep in mind that the expense to run the system is huge,” he said.
Asked to specify the costs, Demartino said: “I will not divulge our costs. I would be exposing myself to competitors.”
Several attempts were made to reach Sterling Security director David Stubbings for his comments, but this proved futile.

Money for nothing
Traffic expert Hugh Arnett, who was involved in the decision to install speed cameras in Attard and on the Coast Road, called the new speed cameras were “cash traps” because they are placed on busy roads built to take speed.
The ADT claims the speed cameras reduce road accidents and their severity. But the Chamber for SMEs (GRTU) has said the location of the cameras were not chosen on safety grounds as the cameras were located on roads where it was safe to drive up to the national speed limits.
The ADT takes a cut from the speeding tickets of €11 for, it claims on the local enforcement website, its “crucial role in local enforcement” in ensuring no road licence is renewed if there are any outstanding payments for fines.
But an internal report compiled by local councils on the situation of unpaid contraventions has revealed a staggering €11,367,837 in total outstanding payments since 2000.

Hunt for unpaid fines
www.maltatoday.com.mt/2009/02/25/t5.html

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