Here is the article in Electronicsnews.com.au today.ERG gains...

Here is the article in Electronicsnews.com.au today.

ERG gains Sydney boost

ERG has teamed with Computer Sciences Corporation (CSC) to bid for an upcoming smart card transit project covering the whole of Denmark, including Greater Copenhagen.

The new consortium, Onecard, will know if it has been successful by the end of this year, with the project expected to be rolled out in 2006.

Outgoing CEO Peter Fogarty says ERG will continue to make bids in conjunction with an alliance partner. “There is no shortage of opportunities for ERG and the [smart card] technology is proven in high volume operational environments,” Fogarty told shareholders at the company’s recent AGM. “We are aware of 44 potential prospects within the next 12 months, with an estimated value exceeding $1 billion; however, not all of these projects will eventuate.”

This marks a significant shift in the company’s bidding strategy. “We will only bid for projects with a satisfactory margin and cash requirement—we will not low bid a project simply to gain market share,” chairman Tony Shepherd explains.

Fogarty adds: “In Australia we were not awarded projects in Perth and Brisbane, primarily on the basis of price. Based on the figures reported in the press, we believe our competitors low bid on these projects in order to gain market share. We are not prepared to do that.”

ERG was also unsuccessful with a tender in the Netherlands. “The customer required a performance bond of Euro 100 million. We weren’t prepared to conform with this requirement,” Fogarty says.

The company has received some good news on Sydney’s smart card system, with NSW Transport Minister Michael Costa pledging an extra $8 million for an extensive trial on the private bus system, the Australian Financial Review reports. The trial will replace current school passes with smart cards, enabling the state government to map students’ travel patterns and cut the $112 million in “phantom” rides each year, the AFR said.

“The Sydney system is scheduled to be operational in the inner city late this year, with the bulk of the remainder of the system installed during 2005, reaching full rollout by early 2006, at which time we expect a card base of up to two million smart cards,” Fogarty says. “We will therefore begin earning operating revenues late this year at the earliest while we continue to earn supply revenue until early 2006.”

ERG says it expects to be profitable this year as well as 2005 and 2006. “We have viewed 2003 as a year in which we have ‘got our house in order’,” Sheprherd explains. “We are on the right path, but not yet at our destination.”