LogicaCMG and Optus take EDS energy contract

Power retailer Integral Energy has named LogicaCMG and Optus as preferred tenderers for the multi-million dollar IT and telecommunications contracts formerly held for seven years by EDS.

Initial speculation had suggested Optus might be best placed to win both contracts, but Integral Energy announced yesterday that the preferred tenderer for the IT contract for infrastructure and applications services was energy industry specialist LogicaCMG.

The IT and telecommunications contracts are together rumoured to be worth some $10 million to $15 million a year, but Integral Energy has refused to confirm that figure.

Integral Energy is NSW's second-largest state-owned electricity retailer. It supplies power to some 820,000 homes and businesses in a 24,500 square kilometre block covering greater western Sydney, the southern highlands and the Illawarra.

Unconfirmed reports have suggested that LogicaCMG and Optus beat out a range of competitive tenders from the likes of EDS, IBM, Fujitsu-Mincom, a Telstra and KAZ joint venture and Citec.

“We are not disclosing [any] of these details,” a spokeswoman at Integral Energy said.

Greg Forbes, managing director of LogicaCMG's energy and utilities division, said the Integral Energy deal was a “milestone” for the European company in Australia.

Richard Powis, CEO at Integral Energy, suggested that both LogicaCMG and Optus would benefit from a planned network investment that would also encompass its IT & T.

“Over the next five years, Integral Energy plans to invest $1.2 billion to upgrade our electricity network,” Powis said. “IT & T has a vital role to play in this upgrade by supporting our staff.”

The deal adds yet more wattage to LogicaCMG's dominance of IT services for the energy and utilities sector in this country.

LogicaCMG last month extended its services contracts with Tasmanian energy distributor and retailer Aurora Energy and NSW power generator and vendor Eraring Energy. Aurora Energy has resigned until 2007, and Eraring until 2011.

Neither contract had been up for review.

In August, LogicaCMG completed a year-long $6 million project to build a retail gas market system for the Retail Energy Market Company (REMCo), which represents the gas industry in Western and South Australia.

LogicaCMG systems are now used in 75 percent of the parts of Australia that supply gas to the nation's competitive gas market.

EDS was contacted for comment but was unavailable at press-time.