‘Sold a pup’: Victoria turned down Singapore offer to overhaul myki

Victoria turned down an offer to buy Singapore’s well-regarded public transport ticketing technology in favour of a $1.7 billion deal with a US company rivals say does not have the experience to deliver promised improvements to the state’s outdated myki system.

The state opposition on Tuesday called on the Andrews government to suspend the contract announced last month with Conduent Transportation to run myki for the next 15 years, after losing bidder Cubic Transportation System claimed the tender process was flawed and unfair.

Cubic, Conduent and myki’s existing operator NTT Data were the three final bidders for the contract, which the government has said will involve modernising myki so passengers can travel with just a bank card or smartphone rather than a physical smartcard.

The Age can reveal that for its bid, NTT partnered with MSI Global, the commercial arm of the Singaporean government’s Land Transport Authority, and promised to bring its ticketing system to Victoria. MSI has also set up ticket systems in Bangkok, Dublin, Manila, Bangalore and Qatar.

Singapore has one of the world’s best regarded public transport networks and is around four times busier than Victoria’s, handling 6.4 million train and bus passengers per day last year.

MSI senior adviser for ticketing systems Silvester Prakasam said the group and NTT could have rolled out contactless bank card and smartphone payments in Victoria by the end of next year for just $900 million, saving time and money by using existing ticket readers.

Conduent will trial its technology next year after the contract starts on December 1, but won’t roll it out broadly until 2025.

“Our intention was to deliver the same system to Melbourne [as in Singapore] and there’s no reason why we can’t, because you’re a smaller system – all the major building blocks were in place,” Prakasam said.

“They came to Singapore to see the system, we gave them a demonstration … all the evidence that we had a good product and can deliver. So it was very surprising after one year of discussion to hear that what we’ve offered is not adequate.”

Prakasam agreed with Cubic that the tender process was flawed and also questioned if the winner Conduent could deliver what it has promised, given it was better known for providing hardware such as ticket readers rather than whole integrated systems. “[If] they have a total solution ... I have not seen it,” he said.

Cubic – which runs the ticketing systems in Sydney, London and New York – wrote to Premier Daniel Andrews on Friday, saying it had “serious concerns about possible errors in the tender process” that “could impact Victorians for many years to come”.

“We urge you to personally evaluate if the right decision was made, particularly since the selected provider has not yet successfully delivered the technologies and services that the state is seeking,” the letter says.

Public Transport Minister Ben Carroll spruiked Conduent’s experience running almost 400 ticketing systems globally, including in Paris, Dubai, Montreal and its native New Jersey, when announcing the contract.

But Cubic said in its letter that none of those systems accept bank card or phone payments and that Conduent “overstated its experience” while the government procurement team failed to verify claims about its technology by visiting other cities or contacting other transit agencies.

Carroll defended the government’s decision during a parliamentary inquiry into the 2023 budget on Tuesday, saying that losing bidders “may be upset, and that’s just part and parcel of doing business”.

“We have gone for the best and the most reliable, and we are very confident of their track record in 24 countries around the world about account-based ticketing,” he said.

Department of Transport deputy secretary Dean Tighe told the hearing that Conduent operated back-end systems for eight transport networks that ran on contactless payments, including in Adelaide, New Jersey, Lyon, Flanders and Rotterdam.

However, Tighe acknowledged that Conduent did not set up any of those systems in their entirety as it will in Victoria, where it will run back-end software, payment systems, customer accounts, ticket machines and other infrastructure.

“I don’t think anyone’s claims it’s [a] complete [system],” Tighe said.

Opposition Leader John Pesutto on Tuesday called for the state government to suspend the ticketing contract.

“We cannot shy away from the need to investigate flawed processes from the Andrews Labor government,” he said.

Coalition public transport spokesman Richard Riordan accused the government of choosing the “most expensive and the most underperforming” ticketing system.

“The Victorian people have been sold a pup,” he said.

Cubic said in its letter that its bid was $100 million lower than Conduent and claimed the state had “significant discussions and interactions” with Conduent after it submitted its own final bid on April 21, which gave it “a significant opportunity to explain and improve its offer”.

Cubic’s letter is not the first time it has cried foul after losing a contract. It wrote to Victoria’s ombudsman and auditor-general in 2016 alleging it was treated unfairly in a tender process won by the incumbent myki operator, NTT Data.

It also launched unsuccessful legal action against the NSW government in 1999 after it was passed over to introduce a new smartcard system in Sydney.

The premier told media on Tuesday morning that he had been briefed on Cubic’s letter and had no concerns about the tender process.

“There’s been a process run. There’s a probity auditor that’s been deeply involved in that process,” he said, adding that was up to the transport department to decide if the tender decision needed to be reviewed.

Asked why Conduent was still in talks with the government after Cubic had submitted its bid, Andrews said: “I’m not certain they were.”

Our Breaking News Alert will notify you of significant breaking news when it happens. Get it here.