The new operators of Victoria’s long-troubled myki system have sought more money from the state government to deal with technical roadblocks and cost pressures as the state budget strains under the weight of increasing debt.
Trials of an upgraded public transport ticketing system were expected this year, but sources said new operator Conduent was struggling with key deadlines and negotiating variations on its contract with the state government.
Another key public transport contract for Melbourne’s metropolitan rail network has been extended until 2027, pushing back the bidding process until 2026.
Victoria signed a 15-year $1.7 billion contract with Conduent in May last year. The US-headquartered firm took over running myki from its previous operator NTT Data in December.
But two industry sources, speaking anonymously to detail confidential discussions, said teething issues with the takeover had prompted new negotiations with the Department of Transport and Planning.
They said the project was tracking above its allocated budget and discussions were underway about contract variations.
One source said ongoing issues with the system – which is yet to handle mobile payments for iPhones five years after the government put $1 million in to develop the feature – continued to haunt the new operator. This included overly complex IT systems and difficulties with the hardware used to scan myki cards.
Another source said the company had been delayed on some deadlines during the transition from NTT Data.
A spokesman for Conduent declined to comment and referred questions to the Allan government. The government was contacted for comment at 9am on Wednesday but did not respond by deadline.
Conduent will gradually install new ticket validators and other infrastructure across the state’s trains, trams and buses capable of taking contactless payments, meaning passengers can travel just using a credit or debit card rather than having to buy a physical myki smart card.
Currently only Android smartphones can be used to touch on, but the new operator has pledged to deliver this for Apple devices as part of its work.
State budget papers suggest the rollout of the next ticket system may have fallen behind schedule. The 2023-24 budget forecast $183.8 million would be spent this financial year for its public transport ticketing asset renewal project.
But this year’s budget, released last month, estimates it will have spent less than two-thirds of that budget – or $113.7 million – by June 30, which is $70 million less.
Budget papers forecast an $83 million spend in 2024-25. The full rollout of new ticket readers, turnstiles and other infrastructure is estimated to cost $543.6 million and will be completed by mid-2027.
TheAge
