Auckland local authorities have trimmed the budget for a new integrated ticketing system for local transport and now plan to borrow to fund the project.
Yesterday, the Auckland Regional Council (ARC) decided to borrow $15 million and deliver what its chairman, Mike Lee, descibes as an "economy model" integrated ticketing system to allow commuters to travel across the city on different modes of transport with a single ticket.
However, the plan still depends on further funding being granted by the New Zealand Transport Agency (NZTA).
"We're putting the ball back in the government's court," Lee told Computerworld yesterday.
The ARC and its subsidiary the Auckland Regional Transport Authority have been in planning mode for integrated ticketing for several years. A tender was released last year and was supposed to be awarded by now, however, the government's decision to eliminate a regional fuel tax effectively pulled funding from a range of ARC and ARTA capital projects, according to a letter from Lee to Minister of Transport Steven Joyce (and copied to Prime Minister John Key) dated 6 May.
In that letter, Lee says the elimination of the fuel tax, pressure not to increase rates and lower income from trading operations could require the ARC to reprioritise its capital spending, including investment in railways, Eden Park, a regional park and the integrated ticketing system.
"For the government to simply remove committed funding without providing a comparable alternative is completely unacceptable," Lee wrote to Joyce. "The government's decision puts the ARC into an untenable position."
He wrote that the ARC needed urgent advice from NZTA on its position regarding the integrated ticketing project.
"The ARC and ARTA have waited some considerable time for NZTA to make a decision on the integrated ticketing project and it needs to do so urgently," he writes.
In the absence of funding, Lee tells Joyce the ARC would fund only legally binding contracts and "basic asset renewals" across a range of capital works in Auckland. Rail station improvements in Manukau, New Lynn and Onehunga, he writes, would grind to a halt. Essential projects, such as the train protection required by ONTRACK's new signalling system, would also not proceed.
"I do not believe that is what the government would wish to see, particularly given the continuing commitment to electrification," he writes.
It now appears some compromises on funding have been reached with NZTA picking up some of the rail expenses.
ARTA spokeswoman Sharon Hunter says ARTA is confident it can deliver a good ticketing solution, despite ARC having to "cut its cloth" on funding.
"In respect of the total, it's a slight cut," she said of overall funding changes to the project.
Hunter was not prepared to comment further on the funding changes, citing an ongoing procurement process as the reason
It is now widely believed that French firm Thales has won the contract to build Auckland's new ticketing system, though no formal announcement has been made.
NZTA spokesman Andy Knackstedt told Computerworld in April that NZTA’s review of the procurement process and associated funding requirements was continuing.
“The NZTA board’s consideration of funding for the implementation on the Auckland integrated ticketing system, has been deferred till the review is complete,” he said.
NZTA is understood to be seeking a system that can be rolled out nationally. However, with Wellington already using Infratil's Snapper card and Auckland opting for a different system, that may have become more complicated.
ARTA had hoped to award the contract before Christmas, but programme director Greg Ellis said in January that the contract was going through statutory hoops.
There were three contenders for the integrated tiocketing system contract – Infratil, Thales and Downer EDI.
Rumours of a Thales win set up a fight with Infratil, provider of Wellington's Snapper transport smart card, which also tendered for the contract. In March, Infratil chief executive Marko Bogoievski told the Dominion Post there had been no formal announcement of the tender winner, "but you can put two and two together like anyone else".
"We are dumbfounded, in this environment, that [ARTA] would consider a much more complex and more expensive option it flies in the face of common sense and a lot of other things," he said.
Infratil executive Tim Brown followed that comment by saying the company had "a high degree of confidence" about NZTA as the gatekeeper of public funds.
"We do not believe this deal will go ahead without their sign-off, and as far as we are aware that sign-off has not been given."