The NSW Government will pay $16 million a year more on its new electronic ticketing scheme for public transport than it had planned to lay out for its first, failed attempt.
(Credit: NSW Government)
On Sunday NSW Minister for Transport and Roads David Campbell announced that the Pearl Consortium, which included Cubic Transportation Systems and the Commonwealth Bank, was selected to roll out an electronic ticketing system for greater Sydney. The first attempt — the Tcard — was cancelled in 2008 after the former contractor ERG failed to meet project milestones. The private company contract for the original scheme was estimated in 2003 to be $367 million over 10 years. When the contract was cancelled, the government had spent $95 million.
While $1.2 billion is a lot more than $367 million, the latter amount was "only the payment the NSW Government was making to the contractor", according to the minister's office in a statement.
"It did not include any of the predicted government's costs for the extensive retail network, fare box incentives and other government management costs and the management of the payments system," the statement said. The $1.2 billion figure is the total cost of implementing electronic ticketing, including the cost of the contract and government costs.
"The difference in comparable contract costs between the Tcard contract and this new contract is approximately $16 million a year," the statement said.
The office attributed the $16 million a year extra to additional equipment due to extra buses and station facilities since the first failed build was announced. It was also attributed to an increase in patronage and the inclusion of the cost of the payment system which will be managed by the Commonwealth Bank.
"The government believes it is getting value money and the cost is comparable to other major cities," Campbell's office said of the increase.
The state government would not reveal how much of the $1.2 billion the Pearl Consortium would receive because the contract details were still being negotiated.
"The contract details for electronic ticketing are commercial in confidence, and final terms are still being negotiated," the minister's office said.
The government is currently in a court battle with ERG in an effort to recoup its costs from the failed roll-out.
The new successful bidder has also previously been embroiled in legal action with the government. Cubic challenged the government's original awarding of the ticketing contract to ERG at the beginning of the decade.