For SabreERG gets nod for $207m San Francisco systemBy Colin...

For Sabre

ERG gets nod for $207m San Francisco system
By Colin Kruger
November 20, 2003

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The pieces finally appear to be falling into place for ERG, with the group yesterday saying it had received approval for the $US150 million ($207.5 million) San Francisco transport ticketing project, more than four years after it won the contract.

The agreement with the six major public transport agencies in the San Francisco Bay Area also adds five years to ERG's operation-and-maintenance contract for the Regional Translink system, which will now run for 13 years.

The contract win, announced in May 1999, led to the smart card developer introducing a trial system in San Francisco which concluded late last year.

Phase 1 of the project was then agreed to early this year but was challenged in the US courts by long-time ERG rival, Cubic Transportation Systems.

The California Superior Court dismissed Cubic's lawsuit in August, prompting the Bay Area's Metropolitan Transportation Commission immediately to award Phase 1 of the project to ERG.

Yesterday's announcement of the more significant Phase 2 of the project is expected to generate 25 million smart card transactions a month when the system becomes fully operational in about two years time.


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Cubic also took legal action over ERG being awarded the $320 million transport ticketing contract for Sydney in 2001, which then delayed the project until February this year when the NSW Government confirmed ERG's tender.

Paterson Ord Minnett analyst Robert Gee said that current contracts - including Sydney, Seattle, Lazio, Stockholm and San Francisco - guarantee revenues over the next two years of around $300 million for ERG.

ERG closed at $1.44, up 8c.