ERG sues myki vendor for $30m

The Kamco consortium behind Victoria's new integrated ticketing system myki is being sued in the Victorian Supreme Court for $30 million by rival firm ERG Group, which created the existing Metcard system, according to The Age.

The Kamco consortium behind Victoria's new integrated ticketing system myki is being sued in the Victorian Supreme Court for $30 million by rival firm ERG Group, which created the existing Metcard system, according to The Age.

A myki reader
(Credit: Transport
Ticketing Authority)

ERG Group (now Videlli) was taking the consortium to court because Kamco terminated its $106 million contract for the installation and repair of equipment around the myki roll-out, arguing a change in ERG's company structure broke the agreement, The Age reported. ERG said the change made no difference and sued, claiming lost profit of about $30 million.

ERG was also reportedly holding myki equipment hostage until unpaid bills worth $1.8 million were settled.

The Age said Kamco had rejected all allegations made against it, and launched a Supreme Court counter-claim of its own.

ZDNet.com.au has contacted both parties, but had not received a response to queries at the time of writing.

The Victorian State Government said it had assurances that Kamco would deliver myki to Melbourne whatever the outcome of the court action.

Myki spokesperson Jean Ker Walsh told ZDNet.com.au that the state's interests were protected by "various contractual and commercial arrangements" including a "guarantee" from the parent company.

The spokesperson also said Kamco's parent company Keane had recently and publicly "reaffirmed their commitment" to delivering myki "as soon as possible" and to a level the public and government could "expect".

Kamco won the contract to supply myki in 2005.

ERG Group is also in a court battle with the NSW Public Transport Ticketing Corporation. The case started when the NSW Government decided to take legal action against ERG Group subsidiary ITSL for failing to produce a working electronic ticketing system for Sydney after years of work and around $100 million in spent funds. The government hoped to get its costs back.

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