erg lodges claim

ERG Lodges Tcard $200m Defence and
Counterclaim
ERG Limited announced today that it has filed a counter claim in the Supreme Court of
NSW for more than $200 million in damages against the Public Transport Ticketing
Corporation (“PTTC”) in respect of a claim brought against ERG and its wholly owned
subsidiary Integrated Transit Solutions Ltd (“ITSL”) in relation to a termination of the Sydney
Tcard project.
In its counter claim lodged with Supreme Court of NSW on Friday 9 May 2008 ITSL has
claimed damages of more than $200 million to recover its losses associated with the supply
and operation of the Tcard system in Sydney plus unspecified damages to recover the lost
opportunity to exploit the Tcard for other commercial purposes.
ERG and ITSL also lodged details of their defence against a claim brought against them by
the PTTC. ERG and ITSL contend that PTTC’s purported termination of the Tcard contract
constituted a repudiation of the contract. ERG and ITSL claim PTTC was not entitled to
terminate the contract as it had itself materially contributed to the delays associated with the
project and it had also failed to act reasonably and in good faith in relation to the Remedial
Plan submitted by ITSL in December 2007 and its decision to terminate the contract.
In order to successfully deliver the Tcard System, ITSL relied upon the PTTC to engage
with the main operators of public transport in Sydney, Railcorp and the State Transit
Authority, to support and co-operate with ITSL. ERG and ITSL contend that PTTC failed to
properly engage the operators, which is evident from the numerous examples of their
conduct in frustrating or preventing ITSL from completing a range of activity associated with
the system delivery in a timely manner.
PTTC and the NSW Government also persistently failed to address the key issue of fare
reform across the NSW public transport system.
ERG and ITSL claim that PTTC had an obligation to act reasonably and in good faith in
relation to ITSL’s Remedial Plan and had the PTTC done so the Remedial Plan would have
provided a satisfactory basis for the project to continue.
ITSL’s Remedial Plan included a number of initiatives including fast tracking the introduction
of the Railcorp smartcard system to address the chaos currently being experienced at ticket
offices at peak times.
12 May 2008
The PTTC was established in 2006 with the objective of providing an integrated ticketing system for
public transport in NSW which the Minister said at the time would be fully operational by November
2010. That will no longer happen and users of public transport in NSW can expect continuing delays
and inconvenience as a result.
ERG’s Chairman, Mr Colin Henson said “ERG strongly believes the Tcard project was terminated by
the NSW Government for political purposes and that PTTC’s conduct lacked reasonableness and good
faith. The project was plagued by disinterest by the Government, lack of leadership by the Minister and
PTTC Executives, and a complete breakdown in the PTTC’s ability to manage the transport operators
to effectively co-operate with ITSL in development, testing, installation and operation of the Tcard
system. ERG has suffered significant loss as a result of this conduct and we will be seeking to recover
this loss through the defence and counter claim lodged on 9 May.”
ERG has sought assurances from the NSW Government that it will stand behind PTTC and meet any
costs and damages awarded against PTTC in the proceedings.
Colin Henson
Chairman