5 days ago
- Business
- Sydney Morning Herald
Digital upgrade costs are turning Opal into a wild card
The upgrading of NSW's Opal ticketing system for public transport has turned into a runaway train, with costs threatening to surge by up to $171 million to $738 million.
The Herald 's Matt O'Sullivan revealed the cost blowout is also likely to delay the scheduled completion of the work for at least a year.
Dubbed Opal Next Gen, the modernisation of the ticketing system was first announced in mid-2022 by the previous NSW Coalition government, which provided conditional funding for the project over three years. It involves the replacement of thousands of electronic readers and back-office billing. Infrastructure NSW has changed Opal Next Gen from a 'tier-two' to a 'tier-one' project, which means the transport agency now has to be 90 per cent sure its final cost price will fall within budget.
More than eight months after tenders closed, Transport for NSW is yet to announce short-listed bidders for the main contract to overhaul the ticketing system, and another to supply Opal readers and other technology for the state's fleet of buses. The government has been dragging the chain on an Opal upgrade for years, but the new upgrade includes digital transit cards that allow the use of smartphones.
The government had planned to complete the rollout of the new Opal system next year. However, the Herald has previously reported that internal Transport for NSW documents show it has been targeting September 2027 as a 'go-live' date for the ticketing system.
Automatic ticketing has had an unsettled history in NSW. The $1.2 billion contract for the public transport smartcard, it should be remembered, was signed by former Labor transport minister David Campbell but only after years of fruitless persistence with the T-Card. The Barry O'Farrell-led Coalition in 2012 started introducing the Opal card, which is now used almost ubiquitously across Sydney's transport system. For the most part, it has been a great success.
Now comes the realisation that upgrading transport ticketing systems is problematic for state governments.
In Victoria, overhauling the Myki Card system is a major political and financial liability for the Labor government. This year's budget revealed the overhaul was running 18 months late and was already $137 million over budget. The Victorian government and Conduent, the US company installing and operating the new system under a $1.8 billion contract, have been at loggerheads over unexpected costs and technical issues that have put back scheduled completion until 2028.
As noted, in NSW, tenders closed for contracts to overhaul the ticketing system and supply Opal readers and other technology for the state's fleet of buses last year. Transport for NSW secretary Josh Murray said nine companies were in the mix and contracts were expected to be signed early next year, but he did not wish to rush it.
