ISRAEL Old Hughes Unit HTMS Stays Raytheon

ISRAEL

Old Hughes Unit HTMS Stays Raytheon

Raytheon’s HTMS, the Highway (prev. Hughes) Transp Management Systems group based in Fullerton CA is not going Israeli. Staff were told at a meeting Feb 10 at the unit’s offices in Fullerton CA that discussions about a sale to Tadiran, the Israeli electronics giant had been terminated. Discussions and negotiations had been proceeding for several months for the purchase of HTMS by the Israeli company.

There was virtual agreement on price, we’re told – just $6m down. And the new owner was then due to get $10m back as a mobilization advance on toll systems work when (or if) the Derech Eretz deal for building the Cross Israel Highway was finally consummated. HTMS is part of the consortium to build this billion dollar toll road running north-south through central Israel. The group has a concession agreement with the state of Israel to build the road but a financial closing on the deal has been delayed since last summer, and it is unclear when it will get done. (Some say - IF it will get done.) One Israeli partner suffered huge losses in Russia last year and a French partner dropped out.

Hughes was brought into the Derech Eretz consortium as an equity partner but then had second thoughts. Raytheon’s performance has been similar, wanting the approx $50m toll integration work but not a share in risk in operating the road.

HTMS relied heavily on contract employees or consultants, even to the level of Tom McDaniel, chief operating officer, but he and others have been laid off over the past year. Roger O’Connor the lead electronics engineer has departed as have several other senior people.

Those remaining say the unit is down to about 30, but that the plan is to quickly increase staff as soon as the Cross Israel project or 407-Extensions move.

“One of the advantages of being part of a large company like Raytheon is that we can mobilize talent very quickly when we need to,” said a staffer there.

He pointed out that the Fullerton group has a Level 5 certification from the Software Engineering Quality association, apparently a top accreditation gained by no other unit in the US. HTMS has not bid on regular toll system integration work and has only made proposals involving its own mix of ETC and automatic license plate reading.

The price discussed with Tadiran seems to indicate a low present value on the intellectual property rights involved in HTMS systems. Though it is perhaps the most advanced system in the world with the capabilities of doing massive license plate reads and billing – as well as more conventional tolling via electronic transponder – there simply doesn’t seem to be a significant current demand for such systems. Not enough to support the Europeans as well as this American company at present.

“No one much is making money in this business at the moment,” an HTMS staffer said, referring to toll system integration. And new US toll roads are sticking with manned toll booths alongside ETC lanes, rather than making the leap to the full automation of Toronto-Melbourne-Santiago.

A major setback for HTMS was being beaten by the European consortium for tolling on CityLink in Melbourne Australia, the world’s most exciting and advanced new toll project on the world scene after 407 in Toronto. Santiago Chile has a similarly advanced and major inner city automated tolling system in the concessioning works. HTMS has proposals there too. But like Israel the Santiago project has dragged on.

The first toll road to be bid an East-West road only produced one bid (Transroute) which was not compliant so no concession will be granted. The Chile authorities now plan to try and get bids for a north-south toll road, which is said to be easier to finance.

The HTMS group appears set to get work on the planned east and west extensions to 407-ETR, the showpiece of HTMS technology in Toronto, but it has failed to gain any new work on toll roads in the US or elsewhere. Its only revenue is sales of tags to trucks for weigh station clearance in the US and on 407-ETR, and that is barely profitable, officials say.

HTMS tags are an open standard. They are manufactured by the GM sub Delco but a Fusion tag that combines the HTMS system (called ASTMv6) and the northeastern IAG system is being manufactured by Mark IV and used on 407 also. (Contact HTMS 714 446 2255)

Project manager wanted: Canadian Highways is barreling on, confident the financing will come through, and is looking for a project manager for construction of the Cross Israel Highway. Anyone interested should contact the head-hunter engaged by CHIC: Allison Quennelle, Bedford Group 905 338 7008 allison@bedfordgroup.com