CARDS ON THE TABLE IN TICKETING BID
28 September 2008
Garry SHEERAN
TOP-PERFORMING CORPORATES with impeccable Kiwi connections are about to go head-to-head over bus tickets.
Across the Tasman, courts are hearing claims and counterclaims for hundreds of millions of dollars in a wrangle over ticketing.
And one of the last legislative acts of the current government in Wellington was a new law that had implications for - yes, bus tickets.
The electronic ticketing revolution that swept airlines a few years back is about to hit humbler forms of public transport. The holy grail is a single smartcard which, when waved at a small screen, will allow travellers to get on and off any bus, train or ferry in any urban centre in New Zealand.
Snapper Services, a subsidiary of NZX-listed Infratil, fired the opening shots in July when it introduced its controversial "contactless" ticketing smart card for Wellington bus travellers. It is now bidding to introduce its Snapper card into Christchurch as well.
But the public transport ticketing prize is Auckland, where just under 60% of the 100 million annual bus passenger journeys nationwide are made.
The Auckland Regional Transport Authority (ARTA) has a $41 million tender out to create an integrated public transport ticketing system for the region. The total cost of installing and implementing the scheme, due by 2010, is estimated at $150m-$250m.
Infratil wants that one as well to complete its nationwide ticketing dream, and boost its wider ambitions to become a major player in new-generation "contactless" eftpos cards.
Snapper Services chairman Paul Ridley-Smith says the rollout of its Snapper card in Wellington will be "an advantage for us in any other New Zealand installation".
"Our technology is world-class, we have done one implementation, we have observed the wrinkles, and we can take that learning on to the next one," he said.
But listed Australian company Downer EDI, which began life more than 70 years ago as a New Zealand-based construction company, threatens to spoil Infratil's party.
Downer has designed, built and is now operating the hugely successful SmartRider smart card system for Perth's public transport system.
Parties involved in the ARTA round are restricted in what they can say while negotiations continue. But Greg Ellis, who heads the Auckland Integrated Fare Scheme (AIFS) for ARTA told Australia's Computerworld magazine in June that Auckland's new system had been modelled on Western Australia's SmartRider system.
"We looked at smartcard transport models all over the world (and) Perth's system had very few complaints and brilliant co-operation between all involved (agencies)."
He was also quoted by a Western Australian business news service last month as saying that the SmartRider system was "a leading contender" in the Auckland tender process.
Speaking to the Star-Times, Ellis said ARTA was not looking to reinvent the wheel. "We want something we can take off the shelf, adapt it to the Auckland fares model, and implement it with minimum time, risk and therefore cost," he said.
Attempts to introduce an integrated ticketing system in Sydney had "turned into a bit of a mess", and had shown how complex and risky these projects could be.
In Sydney, a new ticketing system had failed to get up and running after four years of development, and this year the NSW government sued electronic ticketing company ERG for $A90m for failing to deliver. ERG in turn is suing the state government for $A250m for terminating its contract.
Earlier this year, Infratil had ERG on course to be the provider of the technology for its Snapper cards now operating in Wellington. ERG's major shareholder is Duncan Saville, who is also a founding director and major shareholder of Infratil.
Ridley-Smith said pressures ERG was under in Sydney meant the Wellington project had to look elsewhere for technology - ultimately acquired from Korean Smartcard Company, which gave Seoul's public transport passengers their T-card smartcards.
Ridley-Smith also said T-card technology was more modern than ERG's, and Snapper Services had been "treated royally by the Koreans as we were their first offshore installation".
Court papers released in Sydney don't point the finger at ERG technology as being the reason for the failure. ERG itself says problems were caused by a lack of co-operation, even obstruction, by myriad bus, train and ferry operators, each with their own fare structures, different fare products (around 500) and computer legacy systems.
The NSW government says it was not obliged under terms of the contract to obtain co-operation of the different operators so new technology could be introduced.
Auckland is clearly not Sydney, but it does have four bus operators besides ferry and rail companies, four existing bus smart cards, a complex of multi-staged fares, and around 120 individual fare products on offer.
And until now it has had a public transport system in which the Auckland Regional Council has no powers to design an integrated network.
It's a situation in which the Sydney experience should set alarm bells ringing over any attempt to introduce a new and costly integrated ticketing system for Auckland.
One of the last acts of this government was to pass the Public Transport Management Act which gives regional councils the powers to co-ordinate transport in their areas.
Infratil's NZ Bus company, the largest bus operator in Auckland, has been active in lobbying against the legislation, claiming bus and other transport operators stood the risk of losing large chunks of business they had built up under existing legislation.
There were even threats that Infratil would exit its $250m bus and ferry services if the new law was passed.
National was uneasy over the new laws, but in the end did not vote against it.
The outcome of the Auckland tender could be known as early as next month, and "we hope it goes well for us", said Ridley-Smith.
AUCKLAND TRANSPORT PROVIDERS
Infratil NZX-listed investment company. Owns Fullers ferry company and NZ Bus, the main city bus operator.
Veolia Transport Auckland A subsidiary of New York-listed French group Veolia Environment Operates Auckland suburban rail services
Ritchies Transport Christchurch-based bus company owned by Ritchie family
Howick & Eastern East Tamaki based bus company owned by Dalbeth family
Birkenhead Transport North Shore-based privately owned bus company
©2008 Fairfax New Zealand Limited.
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