Motorola dragged into Tcard case

Motorola dragged into Tcard case

Summary: 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.

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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 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.

Topics: Government, Emerging Tech, Government AU, Legal, Mobility

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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Talkback

3 comments
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  • I still don't get it.

    I am still trying to work out where $100m can go just for developing a ticketing system. Clearly the tenderer's overheads are far too high and there should have been a discussion about whether the proposed ticketing system was right for Sydney's transport system anyway.

    When you factor in Australia's largest fleet of buses, that being State Transit's fleet; a massive heavy rail network, a fleet of harbour ferries, a privately-owned tram line and umpteen privately-owned bus companies you have to wonder if all this is worth the effort.

    By that I mean, is Sydney's public transport system too big and too complex? Do you end up spending almost $1bn all-up for a system that only collects about that much per year in fares?
    anonymous
  • Ex ERGer

    I hope the discovery process paints the whole picture - it would make for fascinating reading :)
    anonymous
  • Its Totally unbelievable the costs

    I say if you want innovation and working solution, why not publish the specs on a university notice board offer $10 million prize money, and I am sure that some computer and engineering nurds will come up with a working prototype. Its unbelievable how these projects can cost so much and produce so little. Sounds like if a solution was offered for a half the price it wouldn't be acceptable anyway because its too cheap.
    anonymous