sector, page-2

Good article, as michael irish has said, it's not over until it's over

http://www.smh.com.au/news/national/fight-for-tcards-lost-80m/2007/11/12/1194766588595.html

NSW taxpayers could foot a multimillion-dollar legal bill should the State Government make good its threat to terminate the beleaguered Tcard project because of lengthy project delays.

The smartcard contractor, ERG, yesterday emphasised its determination to recover the $80 million it has invested in the project.

Its "clarification" to the sharemarket came after the Minister for Transport, John Watkins, on Friday revealed a decision by the Public Transport Ticketing Corporation board last month to issue a formal notice to ERG. It also came after the first batch of Tcards was issued to 106 commuters for use in a landmark bus trial.

"The significance of the decision by Public Transport Ticketing Corporation to invite public participation in the Tcard bus trial can not be underestimated," ERG's statement said.

"The Government has consistently provided statements to the press that the technology would not be rolled out before it was proven to work."

ERG has been paid $6 million by the Government.

"With an integrated ticketing system for both bus and rail achievable in public trials in mid-2008, ERG believes it is entitled to fair consideration of the remedial program to complete the contract and recover this amount [$80 million]," said ERG's executive director, Steve Gallagher.

A spokesman for Mr Watkins, Phil Davey, said the bus trial would proceed because "the contract was still on foot". He said: "The commuter field trial had not commenced at the time the notice was issued."

The ticketing corporation's chief executive, Elizabeth Zealand, said the public trial participants were contacted by the project team about a week before the formal notice was issued to ERG eight days ago.

The ticketing corporation has given the Perth-based company just 20 days to complete the milestones that trigger a public trial on the CityRail network - a task that would take at least six months.

But while ERG's software has been plagued by malfunctions, cabinet ministers, heads of department and ticketing corporation project managers have been involved in decisions that have delayed the card's delivery.

The project has been delayed largely by the lack of a proper fares policy to underpin the card and by a decision in 2004 to adapt the technology to improve the Government's oversight of student transport subsidies.

ERG's already slim share price took a 20 per cent hit yesterday, dropping from 12 cents to 9.6 cents, and its management team is now in a fight for its future. Sydney represents ERG's biggest, most ambitious project, and the company would be rocked should its 4 year relationship with the NSW Government come to a bitter end.

The two men at the helm, Mr Gallagher and James Carroll, have flown to Sydney, installed themselves in an office beside their Government client and are working on a plan, which they will deliver on November 30, to save the project.

Since February 2003, when the contract was signed, the Government has spent $64 million fulfilling its side of the deal, much of it going to the state-owned corporation running the program.