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Victorian Auditor-General reports increased Myki budget

by Pallavi Singhal •
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One of Victoria’s biggest ICT projects is now even bigger.

The Myki electronic ticketing project has an updated budget of $1.55 billion, $32.3 million higher than the $1.52 billion budget reported in June 2012 and nearly $552 million higher than the project’s original 2003 budget of $998.9 million.

The funding increase is attributed to changes to the scope of the project as well as organisational changes within the Transport portfolio, according to the Victorian Auditor-General’s 2012-13 Annual Financial Report of the State of Victoria.

The scope of the Myki project was initially determined by the Victorian Labor Government in 2003, and was altered in 2011 following a change of government. The Auditor-General’s report reveals that it was once again changed in March 2013.

“The latest amendments fundamentally changed the contract and how the state will pay for the myki system,” says the report. Changes include the negotiation of a shorter contract term with supplier Kamco. The contract will now expire in 2016, well ahead of the previous project completion date in 2019.

The report also suggests that a potential change of supplier could be under consideration, with the amended contract introducing “enhanced transitional arrangements within the contract to provide for any potential transfer to a new contractor”.

Kamco has been the primary supplier under the project since the signing of the original $494 million 12-year contract in 2005.

In addition, the agreement now follows a “cost plus reimbursement model, rather than a fixed price arrangement”, and the removal of some services, including call centre operations, from the scope of the deal.

“The total cost of the system under the contract is now not capped, and therefore the total cost to the state is variable,” states the report.

The project may also have been impacted by the dissolution of the Victorian Transport Ticketing Authority (TTA) in June 2013. TTA was responsible for Myki contractor management and public transport ticketing systems. These responsibilities have now been divided between Public Transport Victoria, which is responsible for maintenance of the public transport system and managing Myki contracts and other work-in-progress assets, and VicTrack, which is the owner of Myki assets including software, hardware and vending machine infrastructure.

In contrast to the Victorian Government’s ticketing troubles, the implementation of the NSW Government’s latest electronic ticketing system, Opal, is running smoothly so far. The Opal ticketing system project has been funded for $1.2 billion over 15 years from 2011-12. Opal is being implemented in stages across the State’s various transport systems, with an aim for the system to be available on all ferry services by the end of 2013 and on most train and bus services by 2015.

The implementation of the Opal card was reported as a success so far by Transport Minister Gladys Berejiklian during budget estimates hearings in August 2013.

The Opal card project follows the NSW Government’s previous electronic ticketing failure, the Tcard system. The system was scrapped in 2008 after costing $64 million over five years. The project failure was largely attributed to inadequate work by project vendor ERG (now Videlli).

Related Articles:

Myki budget could rise again, as Victoria enters second round of contract renegotiations

Victoria creates Chief Technology Advocate role and appoints Grantly Mailes

Victoria launches its first whole-of-government ICT Strategy

For more information, please contact the Editor (02) 9955 9896.

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  • VIC
  • IT Services
  • Transport
  • Gladys Berejiklian
  • kamco
  • Myki
  • Opal
  • Public Transport Victoria
  • tcard
  • Victorian Transport Ticketing Authority
  • VicTrack