What’s Opal Next Gen? Operator tapped to stay on longer as $568m upgrade hits hurdles

The NSW government has extended by two years a crucial contract with the private operator of the state’s ageing Opal ticketing system for public transport amid delays to a tender for a complex $568 million upgrade.

Dubbed Opal Next Gen, the project to upgrade the system will require the replacement of 22,000 electronic Opal readers on buses and at train stations, light rail stops and ferry wharves, as well as changes to back-office billing.

The ageing Opal ticketing system is “reaching end of life”.Credit: Rhett Wyman

Global transport technology company Cubic has had a $1.3 billion contract to run the Opal ticketing system for trains, light rail, buses and ferries in greater Sydney for the past 14 years. That deal was to expire in September this year.

Transport for NSW confirmed that it has extended Cubic’s contract to operate Opal until September 2026 under existing terms and conditions. The cost of the extension will be revealed in the next few months.

However, two years after ambitious plans to upgrade Opal were unveiled, Transport for NSW has yet to put the project out to tender. So far, it has spent $41.5 million on research, trials, and preparations for the tender process.

Just over a week ago it told the market that it expects to release by the end of July requests for companies to deliver a new account-based ticketing system.

Transport for NSW had previously planned for the Opal upgrade tender to be released to market in late 2023.

Under its latest plans, the agency will also put out to tender a separate package to deliver “end-to-end” support for the state’s 5000-strong bus fleet, which will include new back-office equipment to improve the tracking of buses and better predict when they will turn up at stops.

The planned contract for the bus fleet will involve installing new driver consoles, passenger counters and computer and communications systems.

Coalition transport spokeswoman Natalie Ward said the Opal system was a state-critical asset, and a lack of transparency on the upgrade was concerning.

“When government and technology upgrades mix, it is always risky. Delays and a lack of detail say this could be a disaster waiting to happen,” she said.

A spokesperson for Transport Minister Jo Haylen said the government was confident the Opal network would meet passengers’ needs as it gradually transitioned to a new ticketing system.

“Natalie Ward’s desperate scaremongering about Opal Next Gen shows that the Liberals have nothing serious to say about public transport,” she said.

Senior transport officials have warned since at least early 2022 that the existing system’s hardware is “reaching end of life” and needs to be replaced to ensure fares are collected.

Infrastructure NSW, which advises the government, will review the transport agency’s tender documents for the Opal project before they are released to market.

The agency said it undertook market-sounding as part of the tender process in late 2022. It was followed by a “request for information” from the industry in the middle of last year “to provide further information”.

The modernisation of the ticketing system was first announced in June 2022 by the previous Coalition state government, which described the upgrade as “like a Netflix for transport”, allowing commuters to order ride-share or e-scooters as well as using it for public transport.

Signalling that it is set to bid for the Opal upgrade, Cubic said it looked forward to reviewing the tender when it was released, adding it was positioned to bring new developments to benefit the state.

“As the developer of the Opal card system, we would like NSW commuters to continue to enjoy a system that is on par with New York, London and other major cities,” it said in a statement.

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