Victoria hands NTT Data $700m Myki deal

The Victorian government has handed the contract for its controversial Myki smartcard ticketing system back to incumbent NTT Data for another seven years, in a deal worth $700 million.

The state's public transport minister Jacinta Allan today confirmed the long-rumoured renewal, claiming the new deal included safeguards to avoid the kind of cost blowouts and delays that plagued the previous arrangement.

The Myki platform was built by Kamco, which was acquired by NTT Data in 2010, under what was originally a ten-year, $944 million deal. But costs soared to $1.5 billion and the project stalled by three years due to governance issues and poor planning.

Public Transport Victoria went to market last year for a new supplier ahead of the December 2016 expiry of its deal with NTT Data, and shortlisted three bidders: NTT, Accenture, and the operator of Sydney's Opal ticketing system, Cubic Transportation Systems.

But the state's auditor warned the agency was at risk of repeating the same governance and planning issues in the retender that undermined the original business case.

Auditor John Doyle criticised the retender as still not building in the kinds of vendor management oversight and clearly-defined outcomes that would ensure the new contract provided value for money.

The Victorian opposition siezed on the complaints at the time and threatened to refer the Myki retender to either the audit office or the Victorian Ombudsman over the government's alleged failure to push for service improvements.

Allan today claimed the new contract included "stronger performance requirements" and a fixed-price model "where unanticipated costs are borne by the operator – not taxpayers".

PTV paid out $1.4 million in performance incentives to NTT Data between April 2013 and December 2014, without properly monitoring the firm's performance, the audit office revealed last year.

Allan similarly said the state would "immediately" begin investigating new contactless technology that would allow travellers to tap on and off with a phone or credit card.

Opal operator Cubic has pledged to trial contactless credit card payments in NSW from next year and smartphones down the track, while Queensland is preparing to offer credit card and smartphone payments capability on its similarly Cubic-run Go Card network.

"This work will build on significant improvements that have been made to Victoria’s ticketing system over the past 18 months, including 90 minute online top-ups, faster readers on trams and at Victoria’s busiest stations, and the roll-out of tap-and-go payment technology on myki machines," PTV said in a statement.

NTT Data's new contract will commence from January 1 next year.