Sydney's overdue transit card at riskwww.theage.com.auJuly 6,...

Sydney's overdue transit card at risk

www.theage.com.au

July 6, 2006 - 7:15AM
AdvertisementAdvertisement

Sydney's long-overdue Tcard ticketing system is in trouble again.

The integrated ticketing system - already six years late - may not go ahead after the company behind it, ERG Group, was forced to borrow $14 million to prop up its finances, The Sydney Morning Herald reported on Thursday.

Shares in ERG Group - the company designing the ticket to be used on all forms of public transport - have slumped to a record low of eight cents after it announced it expected a financial-year loss of up to $38 million and a blowout in the cost of its main projects.

The state government has set aside another $85 million in this year's budget for the project after already having spent $54 million on the scheme.

Former NSW auditor-general Tony Harris has warned the government should be concerned about ERG's financial state, the Herald said.

"The share price is quite a good indicator of what the market believes the company is worth," the paper quoted Mr Harris as saying.

"It doesn't mean that it will collapse but it is significantly closer to that than it was a year ago."

The paper said the state government had renegotiated its contract to make ERG admit the delays were its fault, the paper said.

If ERG folded, the future of the Tcard contract would be uncertain and the government's already-spent $54 million would be at risk, Mr Harris warned.

During the tech boom, ERG's shares were worth about $26.43.