t card, page-8

But for years, experts had grappled with chronic GPS failures in the Sydney CBD. With Tcard, every time a bus travelled into a "dead spot", there was a risk the bus would become invisible. To overcome the loss of data from GPS hiccups, ERG had to build a "dead reckoning" mechanism that relied on an electronic odometer to locate the bus. According to documents obtained by the Herald, ERG failed the milestone.

On that day in March, the State Transit adviser responsible for signing off on the component's design warned his superiors the project could not yet move on. But by 4.30pm, a letter was drafted to grant ERG the milestone.

This year, staff trials of the card on buses based at the Kingsgrove depot turned to farce as consoles repeatedly crashed and failed to print receipts on demand. More than 400 drivers voted to boycott the trial in June, claiming the problems were so distracting they had become a safety risk.

And a key stumbling block up until recently has been GPS failures - a problem exposed three years ago.

As more and more milestones were missed, it became obvious just how ambitious ERG had been when it priced its bid.

The Government has agreed to pay ERG $106 million to install Tcard and $26.1 million a year to maintain and operate the system for 10 years, a total of $367 million.

There have been several amendments to the terms of the deal, but the money has not moved, apart from the Tcard increase. The deal, struck in 2002, has not been increased to account for inflation.

The Government has spent $64 million to fulfil its side of the contract.

As Transport Minister John Watkins is fond of pointing out, ERG has received just $5 million from the Government since the contract was signed, which relates to the school program. None of the rest flows to the company until it achieves a commuter trial.

The trial has been postponed twice. Under the original contract, the full commuter trial was scheduled for March 2005. A bus-only commuter trial is yet to take place and a rail trial is unlikely until well into next year.

The repeated delays have contributed to severe financial woes for ERG. Since listing on the sharemarket in 1984, it has lost a staggering $597 million of its investors' funds. In 2000, the sharemarket valued the company at more than $1 billion. Today, with its share price languishing at 13 cents, its market capitalisation is $110 million.