Uh oh, ABTE gets strangled by Dizard/The Post: "PASS-ING THE BUCK: Installation of the E-ZPass system is a year behind schedule on New Jersey roads including the Garden State Parkway. FAILING GRADE FOR E-ZPASS IN N.J. By JOHN DIZARD
Regional transportation experts and Wall
Streeters said they doubt the current
contract to implement E-ZPass on the New
Jersey Turnpike and other area toll roads
can be completed, The Post has learned.
The pessimism surrounding the automatic
toll collection system comes after MFS
Network Technologies, the prime contractor
for the E-ZPass system, failed last week to
meet a key construction deadline and has
stumbled through several management
changes.
As a result, drivers in the state, which has
the densest automobile registration of any
state, can look forward to continued long
lines at toll booths and longer commutes.
E-ZPass was supposed to be up and
running by early 2000 but the delay will push
that date back by at least a year.
A subcontractor which had worked with
MFSNT, a unit of publicly-traded Able
Telecom Holdings, has accused the
company of nonpayment and failure to
deliver key components.
MFSNT has denied all accusations and
said its E-ZPass work was on the road to
completion.
Despite the delay in completing the project,
the executive director of the New Jersey
Turnpike Authority, Edward Gross, said he
and his colleagues in the consortium for the
New Jersey and Delaware E-ZPass system
have decided to keep MSFNT on the job.
At least one lawmaker thinks that's a
mistake.
"This is not so 'E-ZPass,'" says N.J.
Assembly Minority Leader Richard Codey.
"We want the state auditor to examine this
contract. They should send this company
packing on the Turnpike. Obviously, what
has happened to date is indicative of the
incompetence of the company. We're better
off starting all over again."
Wall Street short-sellers are even harsher in
their condemnation of Able Telecom,
MFSNT's corporate parent, and of Gross.
"Ed Gross has put the E-ZPass consortium
at risk by keeping Able on the job," says
Manuel Asensio of Asensio & Co., which
has a short position in the stock. "The
bonding underwriters can refuse to pay if
MFSNT defaults because [Gross] is not
performing the required due diligence."
Short-sellers such as Asensio profit if
Able's stock declines because of problems
with E-ZPass, which represents much of the
company's projected revenues.
In addition, a senior technical official with a
large New York-area transportation agency
claims "MFSNT is well behind in getting the
critical lane controller and violation
processing software together. We're talking
double-digit months. The target was the
beginning of 2000, and that is completely
unrealistic."
The entire E-ZPass implementation has
turned into a morass of legal and non-legal
disputes, delays, management and
technical staff turnover.
Able Telecom bought MFSNT from telecom
giant MCI-Worldcom last year. Able was not
able to post the necessary $200 million
performance bond for the giant E-ZPass
contract; MCI Worldcom had to put up the
guarantee for Able's completion of the
project.
Since the sale, Able has had to go back to
MCI Worldcom for cash advances to
finance its operations and to buy back a
securities issue that was on the verge of
default.
Yesterday, Able shares closed at 67/16, up
1/16, which is well below its 52-week high
of 205/16.
A spokesman for Able told The Post that
the company was innocent of the
accusations leveled against it.
In addition, the company said: "Our
Violation Processing Center is along the
path to working and is in the testing
processs."
Furthermore, it claims it has more than
sufficient working capital to complete the
project.
So far, of the total $234 million actually
budgeted for the project, less than $23
million has gone out in progress payments.
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