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The public transport smartcard, myki, is proving a political headache for the State Government. Clay Lucas reports on the much-maligned ticket system.
MYKI. It is meant to be short for "my key". But for Kate Leckey from Creswick, near Ballarat, the $1.35 billion smartcard isn't so much a key to getting around her town as a colossal waste of money. Since mid-year, myki has been operating on buses around Ballarat in what Public Transport Minister Lynne Kosky describes as a smooth roll-out. Soon, Kosky won't say precisely when, myki will come to Melbourne.
"Just wait until the myki circus rolls out in Melbourne," says Leckey in a recent letter to The Age. "When we were being sold the new system of 'trickets' the waste was astounding. Every bus had up to four facilitators with branded windcheaters teaching the dummies how the system works. There were huge caravans for our education — gee, I used to give the driver money and I was given a ticket."
When the new system launches in Melbourne — and some in the industry have said it could be as soon as November 15 — the reaction could be similar if commuter experience mirrors Leckey's. "Kosky will say different, but I want a free ticket for each time I've heard 'it doesn't work' from actual users," the Creswick woman writes.
The contract to build myki was signed in 2005 and since then the Victorian public has received a steady stream of negative stories about the smartcard — from cost blow-outs, to contract friction and schedule delays.
Eighteen months ago a leaked draft of the Auditor-General's report on the tendering of the contract for myki gave some early insight into why things have gone so badly (even though the office tried to explain it away as a rough, early version — the final report eventually exonerating nearly everyone involved in the bungled tender). Nevertheless, the leaked report lays out in excruciating detail how the Government's Transport Ticketing Authority mismanaged the contract.
The US company Keane — operating as Keane Australia Micropayments, or Kamco — won the bid in 2005. "Keane had no corporate experience in developing, implementing and operating a ticketing system," the leaked audit report said. "Keane has barely demonstrated adequate capability." The report also revealed that the Transport Ticketing Authority had employed Keane in 2004 to design crucial elements of the tendering brief.
Perhaps because these were not foundations built on rock, but on sand, little has gone right for the consortium. Keane was to be assisted in physically installing and removing equipment by ERG, the current Metcard operator. Keane dumped ERG earlier this year, and ERG is now suing them in the NSW Supreme Court for $90 million in lost revenue. Cock-ups such as this, and repeated equipment and software problems or failures, explain why the launch date of March 1, 2007, was missed.
After the long delays came the budget blow-out: last June Premier John Brumby announced Keane would receive another $350 million, for reasons that are still unclear.
When former transport minister Peter Batchelor proposed myki in 2003, it had a price tag of $300 million, plus $100 million running costs. At the time, Batchelor castigated the former Kennett government's work in introducing Metcard, describing it as "a debacle from the government's, contractors' and taxpayers' point of view". Now, including running expenses, myki will cost at least $1.35 billion over the next decade. And by the time it is running across Melbourne it will be at least three years late.
Not long after Brumby announced the $350 million blow-out, the public found out that, while Melbourne did not yet have a smartcard, it did have an ad campaign for one. For more than two years now, the ads have been gathering dust on the shelf of Brisbane agency Clemenger Harvey Edge, which was paid $400,000 to create the campaign.
Even now, with myki machines turned on at city train stations, buses and trams, it is still unclear when the smartcard system will be launched.
Certainly the regional trials of myki have not been inspiring, with 10,850 cases of overcharging on buses. And as recently as four weeks ago on buses in Bendigo, the tickets were taking more than one second to register each smartcard, which may result in long delays during rush hour if it is replicated in Melbourne. When the most recent myki problem was exposed, the Premier used a simple line: new ticket systems in Victoria have a poor history in recent decades. He does have a point.
In 1989 came Jim Kennan's disastrous scratch tickets effort. Then there was Metcard, the automated system that now works well. When the Kennett government rolled it out in 1993, however, ticket machines broke often and were easily vandalised. But neither scratchies nor the early years of Metcard have anything on myki for sheer expense, lateness or mismanagement.
Myki's billion-dollar price tag is the equivalent of buying, over the next decade, at least 65 new trains, which could solve the city's current overcrowding problems.
MORE than a decade old, the Transport Department argues, the existing Metcard system has to either be upgraded or replaced. In some ways, this contradicts claims in the quarterly publication Track Record, which has Metcard operating at around 99 per cent reliability. The Metcard system could also have been turned into a basic smartcard system for about $220 million. But the cards to be used on it were prohibitively expensive, and would not have been able to store money.
The Government argued the market was heading towards smartcards with stored value. They would need fewer vending machines, making them cheaper to maintain, it argued, and would allow huge numbers of passengers to board services quickly. (For instance, Transport for London estimates that its Oyster smartcard, introduced in 2003, lets 40 people per minute pass through ticket gates, compared with 15 per minute using magnetised paper tickets.)
A smartcard also allows the State Government to offer more fare options, and crucially off-peak fares can be offered easily as a way of trying to lure passengers away from packed peak-hour services and on to cheaper off-peak services.
Many big cities have smartcard public transport ticket systems, or have considered them. And many cities have decided against installing them, usually on cost grounds.
Victoria's new system could have been installed by Manta.T, a consortium that included the company behind Octopus, Hong Kong's now successful smartcard, launched in 1997. There are 10 million transactions involving Octopus every day, turning over revenue of $11 million daily.
Taiwanese capital Taipei launched its EasyCard in 2000 for trains, buses and city car parks. Singapore has had its successful ez-link card since 2002. There are 10 million of the cards in circulation, and it can be used for public transport and for toll roads. And it is increasingly being used in shops and restaurants.
Closer to home, last month with little fuss the Tasmanian Government launched Greencard on the state's 221 buses. Designed by German firm INIT, the $6 million system is simpler than myki, with more limited functions. But it has advantages: it works and it was cheap. It is also set up without need for passengers to touch off.
Perth launched its $33 million SmartRider card in 2007, and it has been a success; last week it won a transport industry award for excellence in a technology application. Brisbane's Go card was launched last year, and has had some problems with overcharging and unreliable card readers.
Rather than buy an off-the-shelf smartcard system and adapting Victoria's fare structure to suit, the Government opted to start from scratch. Defenders of smartcards also say it is impossible to buy ticket systems "off the shelf" because software must be written according to system requirements. And no two cities have the same tickets or trains, trams and buses.
Despite its problems, when Melbourne launches the first stage of the myki roll-out, it will still be a step ahead of Sydney, which started trying to build a smartcard in 1998 and abandoned its project in 2008.
THE myki system will service Melbourne and regional centres. But it will not be rolled out everywhere. Towns to be excluded include Bairnsdale, Colac, Drouin, Echuca, Horsham, Mildura, Sale, Swan Hill, Stawell, Wangaratta, Warrnambool, Wodonga and Wonthaggi.
Still, the Government has predicted there will soon be 1 million myki cards in operation. Already in Geelong, Ballarat, Bendigo, Seymour and the Latrobe Valley — where myki is now running — 40,000 cards have been sold and 1.8 million trips made.
But the roll-out has had many problems. Early testing in Geelong revealed problems with one in 10 transactions. Then, when the system launched, there was widespread fare dodging, as bus drivers simply waved on board anyone holding a myki card because the readers were taking too long to register cards.
Worst of all, there have been 10,850 admitted cases of overcharging. The money was eventually refunded to those who had a registered card, but such serious errors after years of development and months of testing is concerning.
Part of the problem has been the lack of accountability. No one, it seems, is ultimately in charge of the system. Not the Transport Minister, who points the finger at the ticket authority. Not the ticket authority, which says Keane is responsible. Not Keane, which when things go wrong puts its hands out for extra money.
But, in myki's defence, nearly every city that has introduced a smartcard has had severe teething problems over the years. Two years ago Hong Kong operators had to refund $3.7 million to travellers who had a direct debit set up from their banks. Over seven years, the Octopus system had been automatically debiting some accounts without the permission or knowledge of the card holders. More seriously for smartcard manufacturers, the Netherlands' $1.6 billion public transport smartcard was put on hold briefly last year after researchers at Holland's Radboud University used a cloned smartcard to enter several government buildings and the London Tube.
If the bugs are ironed out of myki in Melbourne, the State Government may nullify this major political headache as an election issue. But if things continue to go wrong — and there is a good chance they will, based on other cities' experience in the early days of smartcard systems — Kosky and Brumby will have to deal with many more frustrated and angry commuters, such as Creswick's Kate Leckey.
Clay Lucas is transport reporter.
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