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$700m myki deal to explore new contactless payments

by Justin Hendry •
Free resource

Topics: IT Services; Software; Vic.

Victoria is the latest jurisdiction to investigate new contactless technology for public transport payments, after selecting incumbent supplier NTT Data to continue myki’s operation.

The $700 million, seven-year deal with Public Transport Victoria will deliver enhanced performance and customer experience to the system, including the ability for passengers to touch on and off with their credit card or smartphone, following assessment by the government.

“This is a stronger contract that provides a better deal for Victoria and paves the way for major improvements to myki”, Minister for Public Transport Jacinta Allan said.

NTT Data, along with Accenture and Cubic Transportation Systems (CTS), was shortlisted to replace Kamco – acquired by NTT Data in 2010 – as the supplier of myki in June 2015. CTS is currently responsible for Sydney’s Opal card system and Brisbane’s go card system.

myki faced criticism throughout the course of previous deal. A 2015 audit acknowledged that while governance, contractual arrangements and planning shortcomings had largely been addressed in revisions to the original contract, “significant risks to the state remain.”

The Kamco contract was renegotiated in 2013 and was condensed in scope, with services such as call centre operations removed. The changes also moved the agreement to a “cost plus reimbursement” model rather than a fixed-price arrangement.

The latest contract will see NTT Data bear unanticipated costs using a fixed-price model from January 2017.

The deal is significant for the company, which has only signed 54 contracts worth $9.2 million at a federal level over the last five years, according to Intermedium’s Analyse IT tool. NTT’s NTT Communications, signed 433 contract worth $36.8 million during the same period.

The total contract value for all NTT subsidiaries (excluding Dimension Data and the former Frontline Systems) at the federal level between 2011-12 and 2015-16 is approximately $46.5 million, according to Analyse IT.  

Queensland, New South Wales and the Australian Capital Territory have also begun to consider new contactless public transport payments.

Queensland approached the market in September 2015 for the design, build and operation of its Next Generation Ticketing Solution, which would allow for the use of smartphones and credit and debit cards. The contract was due to be finalised by March 2017, but since the release of the tender, Translink has handed incumbent supplier CTS a three-year contract extension.

The NSW Government has committed to conduct a trial of contactless payments using credit and debit cards in 2017, based on the system CTS developed for Transport for London in 2014. However, before this is implemented, Transport for NSW will need to finalise partnerships and work with the finance and contactless payments sector, according to the Minister for Transport and Infrastructure Andrew Constance.

Following the provision of $3 million in the 2016-17 budget for the beginnings of a new integrated ticketing system, the ACT is developing a feasibility study to identify options to replace or upgrade MyWay. The feasibility study will explore the viability of contactless credit and debit card payments and mobile ticketing solutions.

Related Articles:

Myki supplier shortlist now at three after unfavourable audit

Myki on track to transfer to new supplier

Qld explores next gen ticketing option to replace go card

NSW transport congested with apps

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