The secret warnings of Sydney commuters being forced back onto Opal cards

More than half of Sydney’s fare-paying adult commuters could be forced back onto Opal cards and prevented from using mobile phones and credit cards to make contactless payments for public transport trips if financial institutions refuse to keep certifying the rapidly ageing ticketing system.

The warning is contained in a highly confidential business case for a $568 million upgrade of the Opal system, which is at least a year late.

About 25,000 electronic Opal readers across the state’s public transport system are to be replaced.Credit: Nikki Short

Delays to the complex upgrade risk more Opal readers failing and causing greater numbers of commuters to be charged maximum fares because they cannot tap off at the end of trips.

Replacing 25,000 electronic Opal readers across the public transport network is critical to ensuring credit card companies certify the equipment beyond this year, as well as avoiding a situation in which failures eventually lead to the “shutdown of the reader network” within the next eight years.

The business case, which was obtained by the Herald, says a failure to secure a further extension of certification waivers by credit card companies could result in more than half of adults who make contactless payments “being forced back onto Opal cards”.

“If this occurs, it is also highly likely that up to 75 per cent of these customers will need to obtain an Opal card again,” it says.

Dubbed Opal Next Gen, the project to modernise the ticketing system is running at least a year late. The business case puts the cost of a one-year delay at $86 million, two years at $163 million and three years at $237 million.

Other internal documents show Transport for NSW has been targeting September 2027 as a “go-live” date for the ticketing system, which is later than the original plans to complete the upgrade by mid-2026.

The latest target date is also 12 months after a two-year extension of the existing contract with private company Cubic to operate Opal expires. The contract has cost taxpayers $1.345 billion since 2010.

Highlighting the urgent need for the upgrade, Transport for NSW’s business case warns of the increasing risk of Opal reader and software failures, as well as security breaches, due to the system reaching the end of life.

“The risk is exacerbated by the increasing shortage of spare readers and the inability to replace them with off-the-shelf units,” it says.

“Any failure in the system increases the likelihood that [Transport for NSW] could be prevented from collecting fare-box revenue for extended periods, worth [about] $1.8 billion (pre-COVID).”

The risk of third parties targeting vulnerabilities in the system is increasing because of its age, and it could lead to “unintended disclosure of customer information or malicious attacks that would render the system inoperable”.

Citing an increase in reader failures over two years, the business case says there is a risk that more commuters will be unable to tap off at the end of their trip, leading to a rise in people being charged maximum fares and seeking refunds.

If a passenger cannot tap off at a reader, they will be charged the maximum possible fare for their journey based on their Opal card type. It means the holder of an adult Opal card who took a bus for a short trip could be slugged $5.60 instead of $3.20 for a journey of up to three kilometres.

Modelling in the business case, which is dated October 2022 and marked “sensitive”, estimates a $154 million shortfall in fare revenue annually from this financial year due to increasing shortages of readers. Opal, the country’s largest fare collection system, has about 5 million active users.

“Data provided by our vendor indicates currently nine readers per month [are] not repairable and, in forecasts approximately up to 15 readers per month will not be repairable,” the business case says.

It had assumed most of the rollout of Opal Next Gen would occur by June this year.

Transport for NSW said in a statement that it was confident that existing ticketing machines would service the public transport network until the introduction of Opal Next Gen and that there had been “no notable increase in unexpected failure” of readers.

The agency said 0.62 per cent of readers experienced faults in 2022, 0.25 per cent in 2023 and 0.30 per cent in 2024.

“If a passenger believes their fare may have been miscalculated, they can request a fare adjustment,” it said.

Tenders for the Opal upgrade closed in December, more than two years after plans to modernise the system were announced.

Transport for NSW declined to say when it expected to award Opal Next Gen contracts or how many bids it had received.

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