is this the start of a recovery

ERG LIMITED 2003-02-20 ASX-SIGNAL-G

HOMEX - Perth

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Global transit smart card leader ERG Limited (ERG) today announced
that its Integrated Transit Solutions Ltd (ITS) subsidiary has signed
contracts with the New South Wales Government to supply, install and
operate an integrated smart card based ticketing system for the
entire Greater Sydney commuter transport network.

The total value of the contract is approximately $320 million;
however, incorporating CPI escalation over the term of the contract,
ERG is expected to ultimately receive $370 million. The contract
value comprises approximately $94 million to supply the system and
approximately $276 million to operate the system for ten years.

The agreement covers all SRA commuter rail, State Transit and private
operator buses, State Transit and private operator ferries, as well
as Sydney's light rail and monorail. The transport network handles
approximately 630 million passenger journeys each year with revenue
collections of approximately $800 million.

Under the contract, work will commence immediately to design and
supply all components of the integrated ticketing system and ITS will
then operate the system on behalf of transport operators for a
minimum period of ten years following the initial installation. The
project includes the installation of ERG's proven MASS
(multi-application smart card solution) central computer processing
system.

It is expected that the first commuter smart card travel will be
available on inner city services in late 2004, with current plans to
convert most of Greater Sydney's commuter transport services to smart
card ticketing during 2005. At that time it is expected there will be
2 million smart cards on issue. The system is expected to be fully
operational in 2006.

According to ITS Chairman and ERG CEO, Peter Fogarty, the Sydney
project will be an important contributor to ERG's long-term recurring
revenues. it will be the largest smart card system in Australia and
will rank as one of the largest in the world.

"We have been working to build a portfolio of large scale mass
transit ticketing projects that will generate annuity like revenue
streams.

"We look forward to working with the NSW Department of Transport, the
Government and private transport operators in creating one of the
world's leading reference sites for a large scale, fully integrated
smart card system," Mr Fogarty said.

According to ERG's Asia Pacific Managing Director, Rob Noble, Sydney
will join a growing list of major cities such as Gothenburg, Hong
Kong, Las Vegas, Manchester, Rome, San Francisco, Singapore, Toronto
and Washington DC that have chosen ERG's technology.

"This growing portfolio of reference sites is clear evidence that
ERG's technology and delivery are considered at the forefront of the
international market," Mr Noble said.

The smart card contract also includes a separate agreement which
gives ERG's ITS the right to work with the Government to extend the
use of the transit smart card to other applications potentially
including vending, venue ticketing, parking, fast food outlets and
tolling. This follows similar initiatives in Hong Kong and San
Francisco, where customers appreciated the extra utility offered by
the smart card for other similar transactions. Additional revenue
generated from this agreement will be shared between ITS and the
Government.

"There are significant opportunities for the use of smart cards
beyond the immediate transit applications. In addition, we see scope
to add the transit application to other smart cards Sydney commuters
may use in the future," Mr Noble added