Victoria's $700m Myki retender a "missed opportunity"

The $700 million retender of Victoria’s Myki transport ticketing system was a "missed opportunity" to address the mistakes that compromised the previous deal, the state’s auditor-general has found.

The auditor-general first criticised the agency in charge of Myki – Public Transport Victoria – for putting the retender at "significant risk" of repeating past mistakes in 2015.

Governance issues and poor planning with the initial contract for the Myki platform - which was built by Kamco, and acquired by NTT Data in 2010 under a $944 million deal - saw costs climb to $1.5 billion and the delivery timeframe blow out.

The government retendered the platform in 2015 in the lead up to the NTT deal expiring, and last year awarded a new $700 million Myki contract back to the company, with the promise that the deal included safeguards to avoid the blowouts and delays that had plagued the previous deal.

The 2015 audit report gave PTV a list of recommendations to immediately address in order to ensure it didn't make the same mistakes as it did the first time around with the retender.

But in a follow up report [pdf] released today, the auditor-general found that less than half of the recommendations in its original report had been implemented by PTV in the two years since the audit.

While the agency addressed some of the auditor's concerns around performance monitoring, it has yet again failed to complete a post-implementation review (PIR) to assess whether Myki has achieved any of the benefits listed in its original business case.

The agency only appointed external providers to undertake the review in February – seven months after the contract was signed.

The audit found that by not completing the review before awarding the new Myki contract to NTT Data, the agency had missed a significant opportunity to ensure it wouldn't experience the same “significant challenges" as "Myki’s initial build and rollout".

“The delay in conducting the PIR is a significant missed opportunity for PTV to incorporate relevant lessons into the new Myki contract," the auditor-general wrote.

“The PIR would have provided valuable insights into how to refine and update Myki’s original value proposition and assumed benefits, particularly in light of the changes to Myki since the project was first approved in 2004.”

The audit also found that PTV had not developed a benefits management plan for the ticketing service retender before awarding the contract, instead waiting until after it the contract was signed to begin work on the plan.

"PTV should have completed this work before it awarded the new contract in July 2016 so that PTV, bidders for the retender and the state had a clearer understanding of the expected benefits and how to measure them," the auditor-general wrote.