Auckland's worst kept secret: it's Thales

Commercial negotiations for integrated ticketing begin, NZTA backs effort

A consortium led by French company Thales, long rumoured to have won a tender to supply Auckland's integrated ticketing system, has finally been named by the Auckland Regional Transport Authority as its preferred provider.

ARTA will now enter negotiations with the Thales group to deliver the project before going to the New Zealand Transport Authority (NZTA), which will help fund the project. The other companies that tendered for the deal are not entirely out of the picture, however, as final negotiations could still fail bringing an Infratil-led consortium and another led by Downer EDI back into the picture, warns ARTA's CEO, Fergus Gammie.

"This is still a live tender situation," Gammie says, adding ARTA is aiming to go to NZTA in September. That would mean the project, which has been in the planning and evaluation stages for three years at least, will be running nearly a year behind its original schedule.

Thales' partners in the tender are BNZ and Transfield.

Earlier today, ARTA and the NZTA appeared to have cleared one roadblock to the project, which aims to deliver a ticketing system that will allow public transport passengers to use a single smartcard ticket to travel on multiple modes of transport: bus, ferry and train.

NZTA released its report into the procurement process of the project which found little substance in complaints from Infratil's Snapper Card of bias, poor scoping and a predetermined outcome.

Gammie says he is pleased the review found a solid process with good probity and appropriately specified systems. He says he is also pleased that NZTA, which has aspirations of a national integrated ticketing system, is ready to move to the next step.

NZTA says integrated ticketing is a critical component for any well-functioning public transport system, offering flexibility and convenience for passengers and making public transport a more attractive option.

NZTA's approach to the national system is to have one central clearing house for regional systems such as Auckland's. It wants to use open standards and interfaces and alternative funding and financing options to help make both the national and regional systems a reality.

The Auckland tender process will be used to deliver that, it says in a statement released today.

"This approach will provide for a core centralised system that allows for multiple technologies and electronic ticket providers to connect to the central system provided they meet the technical standards defined by the NZTA," the statement says.

"The approach will also provide the potential for individual public transport operators to decide which electronic ticketing or smart card system best meets their business needs. The focus will be on determining the standards while maintaining options, choice and competitive tensions to ensure value for money and improvements in the effectiveness of public transport services in New Zealand."

NZTA's CEO Geoff Dangerfield says the procurement review took a lot longer than he first anticipated.

"We now regard that matter as closed," he says. "We want to focus on how to move forward. It's important to keep the momentum going across New Zealand, he says.

Gammie says Thales is an "excellent provider" of these kinds of systems worldwide with installations in more than 100 cities, including Paris, Oslo and Toronto.

"We required proof and Thales was able to demonstrate that," he says.

He says implementation is expected to take two to three years in a phased rollout.

ARTA was not willing to put a dollar value on the final project ahead of their commercial negotiations with Thales. I was approaching the $100 million mark over ten years, but that has recently been trimmed.

Gammie says the business case behind the project is conservative aiming for a payback of $3 for every $1 invested over ten years. ARTA says the business case for the project is based, for example, on boosted usage of 2.5%. However, lifts of between 5% and 10% are typical for these kinds of projects.

Gammie says a well developed risk management plan is in place for the project. He echoed recent comments by transport minister Steven Joyce that the participants were keenly aware of the potential for cost blowouts in such projects.

He says integrated ticketing project failures, such as one in Sydney, are mostly caused by efforts to automate existing processes. Auckland aims to simplify its fare structures and systems ahead of the rollout.

Gregg Ellis, the programme director of the Auckland project for ARTA, says the primary way to manage risk is to not develop from the ground up. In this cause ARTA specified it was looking for a "commercial-off-the-shelf solution", he says. ARTA asked all tenderers whether such a thing existed and what degree of development was needed, to deliver a "gap analysis" for the project.

Gammie says the customer will benefit hugely from the rollout, with reduced boarding times cutting overall journey times and improving service reliability.

"It will be convenient and easy to use," he says.

While the national project develops, there appears to be a question mark remaining over whether such a centralised clearing house would integrate with Infratil's Snapper card in use in Wellington and backed by ANZ.

Dangerfield says Snapper is a bus-based stored value card rather than a true, multi-modal integrated ticketing system.

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Tags geoff dangerfieldartagregg ellisfergus gammieNZTA

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