a new article in afr about tcard

Contrat secrecy hits smartcards.

Julian Bajkowski
The Australian Financial Review | 08 Apr 2008 | Page: 33 | Information
Two of Australia's foremost public transport experts have delivered a chilling warning that commuter
smartcard projects worth more than $1 billion in Sydney and Melbourne will remain doomed to failure
unless state governments expose highly secretive procurement contracts to public scrutiny.
The claims, made by Monash University's chair of public transport Graham Currie and University of
Melbourne senior lecturer in transport and land use planning Paul Mees, have come as political
bloodletting over botched smartcard projects in NSW and Victoria continues unabated.
Last week Victoria's highest paid public servant, Transport Ticketing Authority head Vivian Miners, quit
his job just hours before he faced a parliamentary inquiry into problems associated with Melbourne's
Myki transport smartcard that is running two years late.
At the same time the NSW government is locked in litigation with its former transport ticketing software
provider, ERG Group, over the termination of the company's contract to provide the Tcard system that
was meant to integrate public transport ticketing across greater Sydney.
The NSW government had originally committed to provide the system in time for the Sydney 2000
Olympic Games
Mr Mees said that turf wars inside transport bureaucracies in Australia's two largest cities had now
become so bad that a wholesale clean-out was needed before real progress in improving public transport
could be made.
A key impediment was that transport administrators now inherently worked to benefit their own
organisations rather than looking at how to make public transport more appealing and easier to use for
commuters.
This had meant that east coast governments now sought to impose complex smartcard systems that
looked clever rather than making things simpler for travellers.
"The management structures in Melbourne and Sydney cannot be reformed because the resistance to
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Contract secrecy hits Tcard, Myki
Julian Bajkowski
Subject to Copyright. See Copyright information at the end of this article.
change and the lack of dynamism is too deeply entrenched," Mr Mees said. "They almost need to start
again, the management of the show needs to be replaced with something from scratch in both cities."
Mr Currie said although smartcards were an important factor in providing commuter convenience, the
way contracts were now structured by governments meant that those charged with delivering new systems
could not speak out about problems, making it next to impossible to see who was at fault.
"We never get to see inside those contracts, how they are run," Mr Currie said. "That story has never been
told."
The end result of the disputes that had now engulfed two states was that sorely needed improvements to
transport networks had now been put on hold.
"There are a lot of broken eggs now, there is litigation," Mr Currie said. "What happens immediately from
that is nothing: everyone runs for the trees, nobody ever finds out what is going on."
Both academics said Sydney's transport network remained the most fractured because NSW had
effectively abandoned any attempt to create an integrated ticket system that could be used across
busses, trains, ferries and trams.
Most Australian cities had moved to such a fare structure decades ago in order to streamline payments
through the introduction of tickets that remained valid for a set time within a specified number of zones.
Europe has had them for a century.
"In Sydney the [integrated ticket] project is dead," Mr Currie said. "Buses are a major issue. It's a stupid
use of resources for everyone to wait while you go past [and pay] the driver."
Another reason for the pain suffered by commuters is the amount of money that now flows into the
coffers of state transport agencies, an amount colloquially known as the "cash box" that has now
exceeded $400 million a year in both NSW and Victoria.
The Tcard and Myki projects were originally budgeted to cost about one year's fare revenue, with their
providers taking a cut from each fare and any further payments made with the devices.
The lucrative nature of the contracts made for a bitter contest as global companies slugged it out
through intense lobbying and litigation in both states.
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Contract secrecy hits Tcard, Myki
Julian Bajkowski
Subject to Copyright. See Copyright information at the end of this article.
In Sydney ERG's successful 2001 bid immediately became the subject of legal action from losing parties
including Cubic Systems, the state's incumbent ticketing provider.
Both Cubic and French Defence giant Thales are understood to be ready to submit proposals to the NSW
government as soon as it exits litigation with ERG. Cubic has also provided Brisbane's new transport
smartcard.
The NSW termination has hit ERG hard, with the company forced to suspend trading on the Australian
stockexchange after it became the subject of a damages case now being heard before the Supreme
Court of NSW and which could take as long as two years to come to judgement.
The company said on Friday it hoped to recommence trading after it finalised restructuring
arrangements with key backer, Duncan Saville, who was owed around $100 million. It is unclear how
many of ERG's 1000 employees will lose their jobs.
In Melbourne, Mr Miner's tenure as Myki's chief has been the subject of accusations from the state
opposition following a series of damaging leaks from the state's Audit Office as it scrutinised how the
TTA was managing its contract with provider Kamco, a consortium that is led by Keane Micropayments.
Since resigning, Mr Miners has publicly accused parties associated with losing bids for the Myki project of
running a deliberate and orchestrated campaign to destabilise the project for their own commercial
benefit.
Mr Currie said governments were often too ambitious in their time frames for public transport projects.