SmartCard Public Transport Project Cost Blowout

[Mozz]

http://news.theage.com.au/smartcard-project-costs-blowing-out/20071224-1is0.html

Seems to be a common theme

[ozbob]

LOL  I have been in Melbourne this past weekend and the myki problems are big news!

Also front page of the Melbourne Sun today (Dec 24) click here!

$500m smartcard deal with Victorian Government blows out
Article from: Herald Sun

Ellen Whinnett and Nick Higginbottom

December 24, 2007 12:00am

EXCLUSIVE: THE $500 million public transport smartcard tender has been branded a sham amid developer demands for more money.

Opposition Leader Ted Baillieu today slammed the tender process as a fiasco after the Herald Sun revealed taxpayers face a massive bailout for the troubled project.

Consortium Kamco has told the Transport Ticketing Authority it needs a cash injection to get the card operational.

Kamco has also asked for changes to the contract to allow it to receive accelerated payments from the TTA.

"The ticketing fiasco in Victoria continues and John Brumby now has to make up his mind; is he going to hold the winning tenderer to its contract or is he going to walk away?" Mr Baillieu said.

"Now we find the winning tenderer wants more money. It's a sham and John Brumby should acknowledge it and he should say today will he hold the ticketing contractor to their contract price or is tendering and contracting in this state now simply a joke?

"The Government settled on this ticketing proposal and they chose Kamco to run this contract they should be held to their contract sum and John Brumby should make that decision today. John Brumby should be telling Victorians 'no, we've got a contract and we will hold the tenderers to that contract'.

"If he doesn't then every other bidder has got reason to be very peeved, not only because of the fiasco which we've seen last week, but because the contract price wasn't worth the paper it was written on.

``I think business is getting the message that if you want to do business in this state you participate in a dodgy tender and then after you've won it, you lift your price and you cry poor. That's not a way for Government to do business in Victoria. And if that's the message that is getting out _ and it seems to be _ that's going to be a debacle for us all long-term."



The news comes just a week after the Herald Sun revealed investigators in the Auditor-General's office had uncovered serious probity concerns in the awarding of the contract to American IT firm Keane's Kamco consortium - many of which were left out of the final report by Auditor-General Des Pearson.

The tender was let in 2005 and the plastic smartcard known as myki was due to be operational by March this year.

However, continuing computer problems have meant a roll-out won't begin until at least June 2008 - 15 months behind schedule.

The IT company that forms part of the consortium, ERG, is also responsible for the Sydney smartcard, known as the Tcard, which is already eight years behind schedule and not due to be fully operational for at least another two years.

The TTA confirmed talks were under way but both the TTA and Kamco refused to say how much money Kamco had asked for.

TTA spokeswoman Helen McInerney confirmed talks were continuing between TTA and Kamco.

"In any major project there will be a range of discussions held regarding finances and project delivery," she said.

"These sorts of discussions include variations and other normal contract issues.

"From the outset, a range of discussions have occurred between Kamco and the TTA, and these are expected to continue for the duration of the period."

Kamco spokeswoman Margo Nison said she was unable to discuss payments, as the subject was commercially sensitive.

"Progress continues to be made to deliver the right solution to meet Victoria's unique requirements," Ms Nison said.

"Elements of the software development required additional time and the right thing to do is get the solution right. Progress has been made which enabled environmental testing to commence last month.

"Kamco remains committed to working with the TTA to get the ticketing system right."

Opposition transport spokesman Terry Mulder said the Government needed to make a hard decision.

He said they would either have to hand over the money or face the embarrassment of the project going "belly-up".

"Kamco must be held to its original tendered price. If it is handed millions of taxpayer dollars, losing bidders would have every right to be outraged and to claim that they were dudded in the tender process."

During the controversial tendering process, the TTA negotiated back and forward between bidders and, according to reports by the Auditor-General, succeeded in getting the price reduced by 30 to 40 per cent.

There are now real fears within the Department of Infrastructure and the Government that the price may be too low, and the Government may have to stump up millions of dollars to ensure the project stays on track.

The 2005-06 TTA annual report shows that Kamco was paid $10.6 million in fixed service delivery charges and a further $31.4 million for project delivery.

[ozbob]

More from Herald-Sun click here!

Vic, Rival smartcard system is on the carts - for nix

Vic, Rival smartcard system is on the carts - for nix
Article from: 
Ellen Whinnett
December 27, 2007 12:00am

THE technology behind Melbourne's flawed $500 million public transport smartcard is expensive and already out of date, according to the director of a rival ticketing company.

Tony Lotzof, the director of Strictly Tickets, said ticketing systems had already advanced beyond the plastic rechargeable smartcards planned for Melbourne's trains, trams and buses.
Mr Lotzof's company runs a paperless ticketing system.

Instead of buying a rechargeable plastic smartcard, customers can go online or ring a call centre, buy a single ticket, or a weekly or monthly ticket, and have it sent to their mobile phone as a text message.
The tickets can be scanned to ensure they are valid, and the payment system is secure and verified by the Commonwealth Bank's payment gateway, according to Mr Lotzof.

Other companies offer technologies that allow mobile phones to be scanned and used virtually as credit cards.

Mr Lotzof, who expanded his South African company into Australia four weeks ago, focuses mainly on selling tickets to events such as theatre shows, but says he runs a public transport system for between 5000 and 10,000 customers in Johannesburg.

He is trying to get the Victorian Government's attention after Herald Sun revelations the trouble-plagued smartcard is running 15 months behind schedule and heading for a cost blowout.

"I'm happy to work with government officials through the holidays to ensure Victoria has the best available system, rather than one that is technically redundant even before it has launched," Mr Lotzof said.

He said he would offer his technology free as he was so convinced of its superiority over the smartcard systems.

Other industry insiders have privately told the Herald Sun the smartcard technology is already outdated.
Testing on the delayed smartcard has been suspended while staff at the Transport Ticketing Authority are on Christmas holidays.

TTA staff have been testing the system on a bus at Geelong, but the testing has been halted until the new year.
Kamco, the company that won the contract to deliver the project, has told the Government it needs more money to get the smartcard operational.

The Government, which is becoming increasingly anxious about the viability of the project, is yet to decide whether to hold Kamco to the contract or provide the cash injection the company is seeking.
Passengers were due to start testing the smartcard in March, and Public Transport Minister Lynne Kosky said it should begin rolling out in 2008.

When the contract was let in 2005, Kamco and the Government promised the smartcard would go live in March this year -- a deadline long passed because of software problems.