Hi, Has anyone read this? Maybe I missed it. Thought it might be...

Hi, Has anyone read this? Maybe I missed it. Thought it might be of interest.

MBTA eyes deal with troubled company (Apr 2007)
News item:


MBTA eyes deal with troubled co.: Struggling Aussie firm would be in charge of Charlie
By Casey Ross
Boston Herald Reporter
Thursday, April 26, 2007 - Updated: 04:45 AM EST

The MBTA is on the verge of awarding a critical contract involving its new CharlieCard to a financially shaky Australian firm that has struggled with delays and huge cost overruns on major transit projects around the world, the Herald has learned.
T officials are negotiating a possible deal with cash-strapped ERG Group, which could soon be in charge of sales and customer service inquiries about the CharlieCard despite significant performance problems in recent years.
Records obtained by the Herald show that ERG, which has struggled with delays on projects in Australia, San Francisco and elsewhere, has seen its stock price plummet in the past six years from $27 per share in Australian currency to a mere 15 cents today.
The company has also incurred significant losses on its balance sheets. “Shareholders funds have been eroded (over the last five years) by approximately $577 million,” according to the company’s 2006 financial report.
One ERG project in Sydney, Australia, is more than seven years late, while another in San Francisco has seen its price tag nearly double, from $79 million in 2003 to $150 million today.
But transportation insiders say the company’s performance has improved dramatically in recent months, with officials in Great Britain and the United States applauding ERG’s work.
“We’re very happy,” said Greg Garback, a Washington D.C., transit official who said the company has effectively managed its customer service center.
T officials declined to discuss negotiations with ERG, saying only that the company submitted the lowest bid and was deemed to be qualified to handle the work.
James Carroll, the chief financial officer for ERG, acknowledged past troubles but said the company has a new management team and has completed several high-cost projects in the United States and New Zealand. “There is no reason to doubt our capacity to deliver on the contract in Boston,” he said.
ERG submitted a bid of $6.9 million for the T contract, which entails managing CharlieCard sales through retail stores and corporate pass accounts, among other services.
ERG’s initial bid was about $5.9 million, but T officials found an error in the company’s math that caused the authority to calculate the bid at $6.9 million, according to T records. That bid is far below the $8.4 million offering of the next lowest bidder, Affiliated Computer Services, and it is also well below the T’s estimated price of $13 million.

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