Law firm advises on $700m ticketing deal

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by Mark Abernethy

In one of the most complex government tender processes in Australia, Allens has advised Public Transport Victoria on the competitive tender for the operation of the $700 million myki ticketing system.

The re-tendering marks the first time in Australia that a government has tendered for the operation of an existing smartcard public transport ticketing system, rather than developing a new one, said Allens after the July 5 announcement.

The existing operator – NTT Data – was the successful bidder in the tender, and will operate the system under a new legal entity and new seven-year contract when the current myki ticketing agreement ends at the end of this year.

The new services contract includes stronger performance requirements through a fixed-price model where unanticipated costs are borne by the operator, not taxpayers.

Allens advised on all stages of the procurement process, as well as drafting the new ticketing contract and other related project documents.

“The Ticketing Services Re-Tender Project is one of the largest and most complex government tender processes in Australia,” said Allens’ lead partner Paul Kenny. “The ticketing services impact virtually all public train, tram and bus operations in Victoria.

“Other jurisdictions which use smartcard ticketing systems may look to enhance existing systems as contracts near expiry,” said Kenny. “The myki tender process and contract will provide a template for future projects of this kind.”

The new myki contract will begin on 1 January, 2017, and comes after some controversy over the performance of the previous myki service contract. The Victorian Auditor-General, in 2015, found that, “the myki system has experienced significant delays in implementation and cost increases, largely as a result of deficiencies in the original governance, project planning and contractual arrangements. This has resulted in a poor outcome for Victoria’s public transport system and users, which has compromised achievement of myki’s original business case objectives and related benefits.”
 

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