E-ZPass firm gets 'severance'

Pike okays $1.66 million for the contractor it fired

Wednesday, June 25, 2003

Star-Ledger Staff

The state agreed yesterday to make one more payment to the company it fired from New Jersey's E-ZPass program -- $1.66 million that highway officials say will put an end to a bad deal.

The New Jersey Turnpike Authority approved the payment to the fired contractor, the bankrupt telecommunications giant WorldCom Inc., even as the state is seeking to collect on a $402 million claim against the company stemming from various E-ZPass problems.

"Theses battles are separate issues," Turnpike Executive Director Michael Lapolla said. "There is no basis in law for us to withhold these payments."

After getting its termination notice last July, WorldCom ran New Jersey's E-ZPass program until the end of March, when the job shifted to a new contractor, ACS State and Local Solutions.

But highway officials said WorldCom and its subcontractor, J.P. Morgan Chase, continued to provide work on E-ZPass during the transition from April through the end of this month, resulting in the extra fees.

"It's ridiculous to spend any more money on something that amounted to a disaster," said Ray Neveil, president of the grassroots group Citizens Against Tolls. "It makes no sense to me because (WorldCom) did not do the job they were hired to do."

Julie Moore, a spokeswoman for MCI, formerly WorldCom, declined to comment.

During the transition, WorldCom and Chase performed about $600,000 worth of work on the shutdown of the old customer service and violations centers in Secaucus and about $300,000 for the ongoing maintenance of the electronic toll equipment and the system's fiber-optic cables, state officials said.

"There was no way to do this where they would just shut out the lights and lock the door," Lapolla said.

The $1.66 million payout also includes $773,000 for the state to buy leftover E-ZPass toll booth equipment from WorldCom, officials said.

"It's a pretty good deal for us because we're paying 20 cents on the dollar for this stuff," Turnpike spokesman Joe Orlando said.

In addition to the WorldCom payment, the Turnpike Authority was busy yesterday with other E-ZPass business. The board:

  • Hired the Crisdel Group of South Plainfield for $3.7 million for the construction of Express E-ZPass lanes on the Turnpike at Interchange 18W in Bergen County. Motorists will be able to pay their tolls at close to highway speeds by passing under gantries that will record the transactions. The project is scheduled to be done in December.
  • Purchased 475,000 new E-ZPass tags for $11.5 million to cover the state's needs through the first few months of next year. The windshield tags will be issued to new customers as well as to motorists whose existing gizmos have conked out.
  • Approved the hiring of three collection agencies to go after accused E-ZPass toll cheats who have not paid their $25 penalties. The state expects to refer about 4,000 violations per day to the collection companies starting in mid-July.
  • The McGreevey administration has praised its new contractor, ACS, for making dramatic improvements in the troubled E-ZPass system. ACS is getting about $45 million a year under its 10-year deal with the state.

    Meanwhile, New Jersey has staked its claim, along with other creditors, in the bankruptcy proceedings against WorldCom in court in New York.

    The state maintains WorldCom owes $284 million for tolls and fines lost because of problems with the system, along with $30 million for the cost of completing installation of the equipment and $28.8 million for the cost of repairing work done by WorldCom.

    Joe Malinconico covers transportation. He can be reached at jmalinconico@starledger.com or (973) 392-4230.