Today, China TransInfo Technology Corp. announced that its subsidiary, Beijing Zhangcheng Science and Technology Co., Ltd. (”Beijing Zhangcheng”), has signed a contract with the Beijing Transportation Information Center to develop a commercial operation center to provide dynamic traffic-information services to drivers in Beijing. Valued at RMB 6.2 million (approximately $0.9 million), the contract will be classified within the company’s traffic information service business.
The Commercial Operation Center will include the traffic information-service distribution platform, a customized commuting-service demonstration system, and the launch of 500 interactive dynamic navigation terminals, which are expected to be completed by the end of next year. Beijing Zhangcheng must also provide two-years of traffic-information service via the 500 terminals starting in 2011 as part of the contract. After the contracted period, Beijing Zhangcheng will continue to provide traffic-information services at market price.
Last week, the Beijing government announced new measures to ease the city’s increasingly severe traffic congestion. According to the new regulations, Beijing will strengthen the role of traffic information and services to counter traffic congestion and smooth traffic flow. The Commercial Operation Center is expected to help address the city’s mounting urban transportation issues and advance the development of the market for consumer-oriented traffic information services.
“We’re very delighted to participate in the construction of the Commercial Operation Center, especially to provide terminal-based traffic information services,” stated Mr. Shudong Xia, Chairman and Chief Executive Officer of China TransInfo. “Our selection is a strong validation of our technology and service capabilities. The government’s increased investment in traffic information services will continue to support the development of our industry.”
“Since Beijing Zhangcheng’s related platform, system and terminals have almost been finalized and meet the requirements of the Commercial Operation Center, we estimate that this contract can achieve 80% gross margins. In addition, the launch of 500 terminals represents the beginning of our offering paid traffic-information services in the Beijing market. The 500 interactive navigation terminals will also comprise a data source, which we will use to further improve the quality of our traffic-information service.”