The NSW Government has decided to take Motorola to court in addition to the ERG Group for the failure of its electronic ticketing system, the Tcard.
The failed system (Credit: Tcard)
The NSW Supreme Court case currently in motion revolves around the NSW Government's decision to take legal action against ITSL, a subsidiary of ERG Group (now known as Videlli), for failing to produce a working electronic ticketing system for Sydney after years of work and around $100 million in funds. The government hopes to get its costs back. ERG Group answered with a counter-claim for $200 million.
During a directions hearing yesterday morning in the court, the barrister acting for the NSW Government's Public Transport Ticketing Corporation, Philip Durack, revealed that his client wished to make a "complaint against Motorola as a guarantor", asking leave to add Motorola as an additional defendant.
Motorola had bought a stake in ERG Limited back in 1997. It took part in ITSL as a joint venture with ERG. The government selected ITSL as a preferred supplier in 2001, but was delayed from starting the project until 2003 because of legal action from former ticketing supplier Cubic. ERG bought back Motorola's stake in 2001.
Justice Hammerschlag scheduled time to consider the matter later this month. Motorola has not yet returned requests for comment.
The Tcard case is currently still in the discovery stage, seeking documents explaining the events which occurred over the course of the contract. The government hopes to prove that ITSL breached its terms of contract, with Durack saying yesterday that documents had come to light which showed "previously unknown breaches of contract by the defendants justifying the termination of the contract".
Meanwhile, ITSL hopes to show that the government didn't act in good faith when it took its steps toward terminating the contract.
Because of the scope of the documents to be considered, the case is unlikely to be heard until 2011.
The government has already begun the search for a new electronic ticketing supplier. It has shortlisted two contenders, Germany's Scheidt & Bachmann and the Pearl Consortium (consisting of Commonwealth Bank, Cubic Transportation Systems Australia and Downer EDI Engineering Power). The government plans to sign a contract in the first quarter of 2010.
There had been a third contender called the Glide Consortium spearheaded by Thales, but it pulled out of the running earlier this year.
The Public Transport Ticketing Corporation is $74 million in debt and has spent $5 million in legal fees over the last 12 months.