Victoria looks for new operator to run Myki

The Victorian government will soon start accepting applications from providers interested in operating the state’s smartcard public transport ticketing system Myki.

Myki was introduced as a replacement for Metcard in the Melbourne metropolitan area and paper tickets for V/Line commuter services when the contract for the ticketing solution was first awarded in 2005.

The system was developed by Kamco under a ten year deal that was initially worth $944 million, but which eventually blew out to $1.5 billion and was delayed by three years.

The state government later renegotiated the contract - which will come to an end next December - with NTT Data after the company bought out Kamco for $1.2 billion in late 2010.

As the NTT Data deal nears its expiry date, Public Transport Victoria, the agency tasked with managing Myki, is seeking an “exceptional” provider to take over the reins.

PTV has made it clear the new operator will need to provide “maximum value for money”.

“Demonstrated expertise in delivering sustained service performance is critical,” the agency wrote in tender documents.

“We are looking for an operator that will meet operational requirements in running the existing system and deliver maximum value for money for Victorian taxpayers.”

The new provider must also have demonstrated experience in running ticketing systems, and will also need to be able to “identify and deliver future technologies that support service improvements and revenue growth”, PTV said.

“While our main focus is the continuity of ticketing services, interested vendors must have the capability to partner with PTV to identify and implement ongoing customer service improvements, revenue growth, and a clear roadmap for possible future system improvements.”

PTV expects to start transitioning to the new provider in July next year in order to complete the handover by December 2016. It will award the successful tenderer a six year contract with one extension option of up to four years.

As at mid last year, Myki had 9.9 million cards in circulation, processing eight million transactions per week. The system contributed $800 million in public transport fares in 2013-14 across its network.

The Myki system is based on open aarchitecture (OA) and predominantly commercial off-the-shelf applications. The smartcard itself is a Mifare DESFire 4KB contactless smartcard.