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ERG Response to Tcard Termination
24 January 2008

ERG’s Board of Directors today described the NSW Government’s decision to terminate the Tcard project as unreasonable, short term, and politically driven.

The Government’s action is bitterly disappointing given that the project, despite its difficulties, was so close to being available for the commuters of New South Wales.

Last month, ERG submitted a deliverable remedial plan, backed by significant further investment in resources and management which could have seen Tcard available progressively over the next 18 months. Instead the Government has decided to condemn the commuters of NSW to many years of long queues and further inconvenience while it works out what to do next.

This project has been plagued by a lack of leadership and disinterest by Minister Watkins and the bureaucrats within his department. This was typified by the complete lack of engagement by the Public Transport Ticketing Corporation in relation to the project over recent months and especially ERG’s remedial plan. Except for some very brief and perfunctory questioning in relation to the Company’s plans the Government chose not to engage with ERG at all in looking at how Tcard could be delivered in a co-operative manner. In addition the Government has shown an unwillingness to control any of the transport operators in relation to Tcard system.

The key thing that distinguishes the Tcard project from so many of ERG’s successful projects around the world is the unwillingness of the government to work with ERG in developing and deploying a world class system. ERG enjoys strong relationships with so many customers around the world.  Unlike the NSW Government, those customers have chosen to work co-operatively with ERG. Complex system developments require a high level of involvement between customer and supplier. Such involvement was frustratingly absent in New South Wales and the results are obvious.

The taxpayers of New South Wales should feel very disappointed with the Government’s decision. Not only has the Government chosen to restart the whole process which will take many years to complete it has more than likely just doubled the price of its next system.  It seems clear to ERG that apart from the complexity of the fare structure, any future supplier will factor in the risks inherent in dealing with the withdrawn and uncooperative attitude of the NSW Government in contracts of this nature. At no stage since the contract commenced in 2003 has any member of ERG’s senior management or Board been permitted to discuss the communication and fare structure difficulties of the project with the Minister or senior bureaucrats. In this context however, we advise that at the operational level in the public service, the company received limited and supportive assistance.   

ERG believes the Government has acted very unreasonably in relation to this decision and is seeking legal advice with respect to it position and proposed claim for compensation. ERG will vigorously defend any claim by the Government in relation to damages.  In this respect it should be noted that since ERG commenced work on this project in 2003 (the year the contract was signed), the NSW government has not paid any material amount to the company.  

It is ironic that at a time where it could be expected that Australian governments would be encouraging Australian companies’ efforts to develop and compete internationally in leading edge technologies the Iemma government is so quick to cut down an innovative Australian company, jeopardise the employment of hundreds of staff across the country and threaten the Company’s capacity to earn hundreds of millions of valuable export dollars and services.

On behalf of the ERG Ltd Board

Colin Henson
Chairman



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