Despite protest, E-ZPass can be run by a company with Singapore ties, the N.J. Turnpike Authority says
The decision was denounced by Conduent, a New Jersey company that held the E-ZPass contract on the turnpike for 22 years. "National security" issues were invoked.
An Asian-owned company based in Nashville will be permitted to retain the $1.73 billion contract it won last year to run the E-ZPass electronic toll-collection system on the New Jersey Turnpike and other state roads.
The ruling in favor of TransCore, a subsidiary of a Singapore company, was part of a 105-page finding by a New Jersey Turnpike Authority (NJTA) official that was released Tuesday evening. TransCore also partners with the Pennsylvania Turnpike Commission to provide electronic tolling on that roadway.
The decision is being denounced by Conduent, TransCore’s primary rival for the 11-year contract, partly for what it termed national security issues. The Newark-based company had held the E-ZPass contract on the turnpike for the last 22 years. It will still be in charge during a transition period that ends in October 2027, when TransCore takes over.
“NJTA’s decision is filled with factual errors, misunderstandings, and misleading statements,” a statement from Conduent reads. It added that there are “national security implications of the foreign government ownership of TransCore” that the turnpike authority “dismisses.”
Some New Jersey legislators agree with Conduent’s security concerns, saying that private motorist information gleaned from E-ZPass could be used by foreign entities.
Republican New Jersey State Sen. Mike Testa, who represents parts of Atlantic, Cape May, and Cumberland Counties, introduced a bill in the legislature last month precluding any state contractor from sharing information with a foreign adversary.
“We must do everything we can to ensure it that sensitive information doesn’t fall into the wrong hands,” Testa said in a statement. The bill has been sent to the Senate State Government, Wagering, Tourism and Historic Preservation committee, where it is awaiting consideration, according to Kasey Dearden, Testa’s chief of staff.
Conduent also castigated the New Jersey Turnpike Authority for, among other complaints, snubbing its bid, which came in $250 million under TransCore’s.
After losing to TransCore last September, Conduent officials launched a so-called bid protest — a kind of appeal — to convince the NJTA to reverse its decision.
Turnpike officials held a hearing in January to take up the protest. Thomas Holl, director of law for the NJTA and designated hearing officer, decided the matter, explaining his findings in the report.
According to Holl’s findings, TransCore’s parent company, Science Technologies Engineering of Singapore — a global technology, defense, and engineering group — has as its largest shareholder an investment company named Temasek Holdings.
Temasek is owned by the government of Singapore. Fu Chengyu, a Chinese national with connections to an advisory body to the Chinese Communist Party, had been a member of Temasek’s board. He stepped down last November.
But Holl wrote in his report that Conduent claims “without evidentiary support” that Fu still wields influence with Temasek.
Holl added that “no evidence” was presented to the NJTA of undue foreign influence upon TransCore’s operations by the government of China or any other foreign nation. Holl said the notion that TransCore’s ownership by a Singapore company constitutes data security risks “is meritless and rejected accordingly.”
He added: “Conduent’s arguments on this topic are nothing more than an exercise in speculation and hyperbole — rife with baseless accusations, designed to sow fear and elicit negative public sentiment in an effort to pressure the Authority to overturn its well-reasoned and well-supported decision."
Still, the idea that something nefarious could be concocted among TransCore, Temasek, and China has taken hold among some politicians.
One is former Democratic U.S. Sen. Robert Torricelli of New Jersey, who is a consultant to Conduent, according to news reports. Torricelli said that a company such as TransCore having access to U.S. toll systems is “worse” than any potential threats from TikTok.
“I would rather the Chinese knew what I was watching on TikTok than have the Chinese monitoring my car going up and down the New Jersey Turnpike,” he said.
Last February in a letter to Republican U.S. Rep. Jeff Van Drew, Whitt Hall, the president and CEO of TransCore, wrote: “There is no connection between TransCore, or its parent company … with the Chinese Communist Party.”
Nevertheless, Van Drew said Wednesday that the NJTA made a “bad decision” given the “national security risks involved with awarding this contract to TransCore.” Van Drew represents all of Atlantic, Cape May, Cumberland, and Salem Counties, as well as parts of Gloucester and Ocean Counties.
Commenting on the alleged Singapore-China alliance, Marc Pfeiffer, associate director of the Bloustein Local Government Research Center at Rutgers University, said: “It’s important to remember that Singapore is a separate country from China, and is not an adversary of the United States.
“Also, New Jersey law permits foreign ownership of a company in the United States except for the countries of Russia, Belarus, and Iran.”
In his findings, Holl went on to say that, unlike Conduent, TransCore has entered into a national security agreement with the U.S. government to mitigate any potential security concerns.
On the other hand, he continued, Conduent has proposed that its staffing of IT and software development departments would be outsourced to India and Guatemala, without a corresponding national security agreement in place.
“The hypocrisy … is self-evident,” Holl concluded.
Conduent said in a statement it will appeal Holl’s ruling but added no details.
The NJTA oversees 60 million E-ZPass transactions each year on the New Jersey Turnpike and the Garden State Parkway, as well as on toll roads overseen by six other agencies around the state.
Conduent currently controls nearly half of the U.S. electronic tolling market, with more than $6.4 billion in annual revenue, according to the company’s financial reports.
TransCore reports $7 billion in annual toll revenues worldwide, including a large portion of the U.S. electronic tolling market, according to company documents.