Transtasman reports that the Auckland Regional Transport Agency has rejected the Infratil led bid for their integrated ticketing system.
They have chosen Thales a french company.
Insiders (not Infratil) tell me that ARTA was conned by consultants into a highly overspeced solution which will be a fresh build rather than the alternative, an extension of the snapper solution currently in use in Wellington.
Extra cost $30 – $50m. IT jobs exported. Potential for NZ wide solution gone.
Just stupid.
Sorry Trevor but Infratil have really misled you here.
Infratil and Thales were the two main parties tendering for ARTA’s smart-card integrated ticketing solution. As I imagine you know, Infratil owns NZ Bus, which operates about three quarters of all the buses in the Auckland area. They also operate Go Wellington buses and have rolled out their “Snapper Card” system over the past year or so. The Snapper Card was what Infratil wanted to extend to Auckland.
Maybe that would have been a bit cheaper for ARTA, but it would have been inferior to what Thales can offer. Thales have an internationally proven track record for installing and operating smart-card integrated ticketing systems. They even did an integrated system that covers every town and city in the Netherlands.
In my opinion, ARTA chose Thales for two excellent reasons:
1) Internationally proven company. The last thing we want is to see what has happened in Sydney happen here. I think Sydney has spent close to a billion dollars trying to get a smart-card integrated ticketing system but it still didn’t work.
2) The potential for a conflict of interest between Infratil operating the ticketing system and Infratil running 75% of Auckland’s buses. This means that in a system where it will be necessary for operators to reimburse each other according to some sort of formula (as not necessarily the same operator who gets paid for the ticket actually provides the ride) you would have had one of those operators owning and running the ticketing system. If I were Howick and Eastern buses for example, I would certainly not want NZ Bus (Infratil) to have all powers over collecting the money for me. Too much potential for it to go wrong.
ARTA have made and excellent choice here. This means we will end up with a world-class smart-card system – like London’s Oyster Card. I just hope that NZTA stumps up the required money so we can get this project going. National’s stupidity in getting rid of the regional fuel tax has already delayed this project by about a year and probably meant it won’t be ready for the World Cup. Which is unbelievably annoying.
It never ceases to amaze me how Trevor knows so much better than everyone – despite not being involved in the detail, nor being a expert in that field.
They brought in professionals and went thru a full due diligence and evaluation exercise.
For you to say they were conned infers that the consultants had an agenda, and that the entire management were oblivious to their own business needs and requirements.
You will always find people who will complain about the solutions selected or the path taken – but you need to have all the information before spouting off.
Very interesting points you make Jarbury.
Mr Mallard, were you given any of your information by anybody associated with Infratil?
This thread is an absolutely brilliant example of democracy in action, and an informed consumer trumping what seems to a lobbyist attempting to give a politician a self-serving story. Well done Jarbury!
Thanks Tom. If there’s ANYTHING that I know quite a bit about, it is Auckland’s public transport.
Shameless plug: http://www.transportblog.co.nz
Well big slam all political angles. As I made clear in the post I have not discussed this issue with Infratil or any lobbyist working for them or any of the other tender partners. My source is someone who has enormous IT experience and was an early critic of the Police and INCIS. Remember it is IBM it must be best syndrome. Too often we go off shore for solutions that are available here. All those who follow this blog know my level of IT understanding is very low.
Jarbury – it is not hard to design a system to avoid actual conflict of interest. Lots of lawyers have expertise and while we don’t see it often enough so does the Commerce Commission.
I suppose we will have to absorb the cost and wait and see.
I think that it would incredibly messy though – to have part of Infratil delivering the ticketing system and another part running buses. However, I don’t think that was the main reason ARTA went with Thales, I think the main reason was simply that they could offer a far better service.
Snapper has been derided by many as a pretty “dumb” Smart-card. Furthermore, it certainly hasn’t been rolled out to other bus companies or the trains in Wellington. While Auckland needs a smart-card, we need integrated ticketing MORE.
Trevor,
Happy to organise a show and tell for you down here in Christchurch regarding our integrated ticketing system – that’d be the best integrated ticketing system in the country. And it’s not me just saying that it’s NZTA and MOT amongst otehrs.
I’m not very close to the Auckland tender but I can assure you of one thing – the snapper system is not what we want run out across the country. Jarbury is absolutely right in that it is a ‘dumb’ system.
Just a small point: the Snapper system is neither New Zealand developed nor owned. It was developed in and continues to be owned by a firm in S Korea; it has been licensed to Infratil and adjusted to suit Wellington buses. I gather it’s not used on Tranz Metro services so it hasn’t been tested as an integrated system here and this factor is absolutely critical when it comes to making Auckland’s systemically underfunded (and much abused by commercial interests) public transport system working.
@jarbury – well done, nothing like a few facts to clear the political fog.
Not that I am a fan of taxpayer or ratepayer funding of public transport. I think the amount we subsidise trains in Auckland is an obscene waste of money.
[...] This post was Twitted by bryanspondre [...]
Bryan, when we start to get rid of the utterly enormous subsidies for private vehicles then we can talk about the subsidies provided to public transport.
While I usually post on this blog in favour of Labour, I have to say that this kind of post reminds me why I didn’t vote for them last year. What’s $30-50 million extra to spend on making Auckland’s ticketing system world-class and not just a half-ass job that will have problems for decades into the future due to Infratil’s conflict of interest?
Surely if Labour were concerned about money being wasted on transport then they would be questioning why National is spending $10.7 billion on new state highways over the next decade even though petrol prices are likely to increase significantly over that time, even though we need to reduce our transport sector CO2 emissions and even though traffic on state highways has been falling for the last couple of years.
So why doesn’t Labour do that? Why does Labour focus on what’s really a tiny amount of money being spent on making Auckland’s ticketing system world class? It’s hard not to think that it’s because Labour’s transport policies are stuck in the 1960s almost as much as National’s.
Sigh.
Bit rich mentioning the Commerce Commission in this thread Trevor. May pay to check out the NZ Bus (an Infratil owned company) case history with the Commerce Commission and how it thumbed its nose at issues of monopolisation.
With this sort of background, jarbury’s words are wise.
A similar comparison is Melbourne’s Myki smart card. Rather than use an off the shelf, globally tested solution like Thales’, they decided to effectively develop, test and build a system locally. The end result? Two and a half years behind schedule and 200 million over budget with still no functional system.
@jarbury “Bryan, when we start to get rid of the utterly enormous subsidies for private vehicles then we can talk about the subsidies provided to public transport.”
Yeah right. Do the words petrol tax and road user charges mean anything to you ? When the last time a user of subsidized public transport pay tax (yes,yes I am sure there is GST on fares) ? Every train trip on Auckland’s passenger costs us $10 approx, it would be cheaper for us to give punters taxi chits.
@James, Using the MetroCard as an example of integrated ticketing is not a valid comparison to Auckland’s needs. How many commuter trains are in operation in Christchurch? Can you use your MetroCard (to go round in circles) on the Tram?
Bryan, petrol tax only covers 50% of the cost of local roads. Where does the rest come from? Oh that’s right – council rates. A lot of councils spend up to half of their budgets on roads. That sounds like a big fat subsidy to me.
And buses pay RUCs.
Bryan, would you like the factor all the externalities of car use, which are effectively a subsidy, into your calculations.
Is this the same Thales?
http://www.thalesgroup.com/Markets/Defence/What_we_do/
Snapper is the useless card that is frequently abused by drivers who sign off their trip before telling passengers.
EG, I go one zone to work and the idiot at the wheel signs off, pulls over and says “We’re changing buses now.”
If the driver could say “changing buses, tag off please.”, pull over and then sign off when everyone is off the bus it wouldn’t be a problem.
I’ve had this happen too many times to count, but I reckon I’ve lost about $30 in the last 6 weeks this way.
More issues with Snapper outlined here: http://www.stuff.co.nz/dominion-post/wellington/2595226/The-problems-with-Snapper
What a ridiculous post by Trevor Mallard.WHo in earth in New Zealand can develop a world class smart card ticketing system. Labour is really doing a terrible job in fighting agsiant National when they had the potential to make some really good points to National and could have a good chance to win the 2011 election (which I still want to see although this post has confirmed with me that I don’t won’t to see Trevor Mallard in goverment again.
@red_jez, actually it is. I don’t deny that Chch has a simpler market in terms of modes, but the Chch system was the first integrated system and continues to be leading edge.
THe point shouldn’t be making a system that fits Auckland, but making one that fits Auckland that is also in line with National requirements. They’re not necessarily the same goals.
And while I’m sure you were’nt serious, FYI: you’ll find the tram isn’t part of the PT system at all – it’s a tourist gimick. But the buses and lyttleton harbour ferries are.
Trevor, you need to make sure any amendment the Nats make to the Public Transport Management Act 2008 don’t mess with integrated ticketing in Auckland – no matter who the supplier is – and that there are in fact some more trains, tracks and stations in Auckland to welcome integrated ticketing. Joyce’s deflection of the Akld trains issue by putting out a presser about PPPs is just that: a red herring. If the gradually phased in fuel tax hadn’t been repealed, we would have traction up there. It’s ridiculous the dependency on cars Aklders are stuck with.
The slow moving and highly confusing development of integrated ticketing for Auckland public transport continues to happen slowly and with great confusion. Consequently it is no surprise that some of the points from the Jarbury blog are incorrect.
1. NZTA’s announcements of last week seem to have covered two distinct points:
a. In the first place they have stipulated certain requirements of any integrated ticketing system which is installed on NZ PT services which receive tax/rate payer funding. The key requirement is that they be “open platform”. In effect this is similar to you being able to use a (say) Kiwibank eftpos card in a shop with a reader provided by ANZ (or vice versa as the case may be).
b. In the second place they said that ARTA’s tender for the development of an integrated ticketing system for Auckland was appropriately conducted and they can now go ahead and negotiate a contract with their preferred bidder, French defence company Thales. However, once that contract is negotiated ARTA will then revert to NZTA for approval and funding, which will presumably be conditional on the project being good value for tax/rate payer funds and consistent with the “open platform” criteria. Time will tell.
2. The Snapper system is quite distinct in several ways from what ARTA/Thales seem to be suggesting:
a. Snapper is an “open” system with many applications outside of PT. For instance you can today walk into a Wellington coffee shop and buy a coffee (or reload your card) at a terminal/reader not provided by Snapper. The existing Thales systems operating elsewhere in the world are understood to be only on PT and are exclusively Thales (ie they only incorporate Thales cars-readers-back office).
b. Snapper is based on the technology of the Korea Smart Card Company. Their cards in Korea are used 35m a day on a vast array of services and for a very wide range of other transactions (NB in NZ there are approximately 105m PT trips taken each year across the whole country). KSCC was selected by Snapper’s establishment CEO Charlie Monheim who is arguably the world’s leading PT expert. He had previously been the Director of Oyster for London Transport and chose to come to NZ because in addition to PT his other passion is mountain climbing. He selected KSCC and determined Snapper’s approach.
c. Snapper’s approach is to take the worlds best PT ticketing (and low-value transactions) system and change it as little as possible to suit NZ needs. KSCC apparently spent $250m developing their back office. There have been some famous fiascos in Australia (Sydney’s A$400m for nothing project and Vic’s ticketing budget now being at A$1.35B being the most salient examples) where the locals have attempted to build their own systems. When Charlie arrived here his first piece of direction was “we are not going to build a system, it is too risky and too expensive”. ARTA is looking to build its own system.
3. Snapper must be popular with all PT operators. Snapper’s contract with NZBus will be no more generous/onerous than its contract with any other PT operator. The first users have been NZBus services (Go Wellington and Valley Flyer), but there will be several others not provided by NZBus by the end of the year. Operators will choose Snapper on simple commercial grounds “is it value for money”, ie because its package of costs/benefits is better than the alternatives. NB. Coffee shops which have Snapper have installed it because it makes sense relative to cash/credit cards/eftpos. They are not being in any way compelled to sign up.
4. Quite possibly by early 2010 all PT in Wellington will have Snapper. Come next winter someone will be able to use a Snapper to catch a cab/train/bus/ferry to the Westpac Stadium, get into the Stadium, buy a packet of chips, as ID (several Wellington School already have Snapper chips in their IDs), plus any other low-value transactions you can think of. In the meantime ARTA hopes to have the Thales system being trialed in a pilot in late 2011, after RWC.
On the specific points raised the Jarbury blog:
• Snapper is fully functioning in Wellington. It has 80,000 cards on issue and is effecting over 1,000,000 transactions a month. It is on over 350 buses. It is in 150 merchants. It is in the ID of several Wellington Schools. It is inside Westpac Stadium season passes. It is being installed on all Wellington taxis. It is based on a system which handles 35m transactions a day. It is proven.
• There is a potential for a conflict of interest because Snapper is owned by the same company with owns NZ largest provider of PT. Everyone knows that and knows that it has to be managed. NB. for a smaller PT operator the situation offers a potential windfall benefit, eg. Today in Wellington a Mana bus pulls into the Kirk’s stop on its way to Courtenay Place, at that stop there are 19 people with Snapper tickets and 1 with a Mana ticket. By installing Snapper Mana gains access to 19 more riders. This naturally presents a challenge to NZBus, but is a signal of the confidence Infratil has that a bigger market will result in win/win.
• Snapper is based on a world class system which was chosen by the director of London Transport’s Oyster. It has not required one cent of tax/rate payer funds. It is up and running for the 2009 rugby season at the Westpac Stadium, let alone the 2011 season.
Thanks for the reply Tim. I do accept that the Snapper Card has the potential to be a quality system, perhaps negating the point I made about Thales clearly having a “superior product”. But I have had a look around the Thales website at what their smart-card ticketing systems offer, and there’s certainly everything that Snapper can offer being offered.
So let’s take the quality of the system as moot point – they’re potentially equal.
Which brings us to the conflict of interest issue. This is the one that I think was probably key in ARTA making the decision they did (please note that I do NOT work for ARTA). To be frank, Infratil have done a lot in the last few years to make it difficult for ARTA to trust them: look at issues surrounding the withdrawal of ferry services, the way ARTA has been forced into providing subsidies for services that Infratil considers no longer commercially viable but haven’t even showed ARTA the figures to back that up. Finally, Infratil’s opposition to the PTMA and the pressure they’ve put on Steven Joyce to review/repeal this critical piece of legislation probably didn’t go down well with ARTA either.
So, we have a potentially significant conflict of interest and a long-standing climate of distrust between ARTA and Infratil. I’m not surprised ARTA decided to avoid handing the contract to Infratil.
Anya Z, Aucklanders are dependent on their cars because of the sprawl. Public transport has its place, but is limited to one way return type trips, like work or school commutes. Most other trips require a car.
Jarbury argues that Infratil has a track record of unscrupulous behaviour towards ARATA and is presumably only in Public Transport for the money, hence can’t be trusted in the same way as a French defence company can to develop a ticketing system. However, the “unscrupulous” behaviours referred to did not happen as depicted. Before Infratil acquired NZBus in 2005 the company had threatened to withdraw some bus services. After Infratil became the owner there was a convoluted dispute between Fullers and ARTA over the HalfMoon Bay ferry service, but Fullers did not withdraw any services and ARTA held a competitive tender for them which Fullers won.
These incidents miss the point. Infratil became NZ’s largest public transport operator because of a belief that it could do an excellent job. It could create popular services, deliver value for money and by being successful could grow the company and the value of its investment. Over the last 4 years a huge amount of effort, and a lot of money, has gone into enhancing the services and improving the company. Many of these changes have not been easy and there have been plenty of transition and teething problems, but NZ Bus is getting into shape now. NB if you doubt the cost, have a look at Infratil’s annual report. It sets out NZ Bus’s profit and the amounts invested in it since it was acquired by Infratil. If you doubt the benefit catch the bus on some of the revamped routes.
Snapper was a part of the exercise, a world’s best ticketing system. In part because it was obvious that other operators would be disinclined to use it unless it was absolutely excellent and very good value for money those were goals from the start.
This is a very different situation to that faced by ARTA. Lets say they get financial backing from NZTA, what then? In 2012 (their target roll out date) will they turn up and oblige all Auckland’s public transport operators to take Snapper systems off their vehicles and replace it with the French one? Or willl they offer them in a competitive manner, as Snapper is? What do you think?
It is possible that Snapper fails to deliver, that no operator but NZ Bus signs up. In that situation perhaps ARTA will be justified spending a lot of tax/rate payer funds building its own system. But anyone who looks at what is working in Wellington today is likely to conclude that this is all likely to be a waste of valuable public resources. Recognising that ARTA’s reported investment in the tendering process (before even negotiating a deal) is more than Snapper has cost to get up and fully functioning in Wellington.
So, are you saying Tim that Ritchies, Birkenhead Buses, Howick & Eastern and the operators that run the Manukau to Airport service are queing up to implement Snapper?
Tim, as far as I know the best bus routes in Auckland in recent times – like the new Mt Eden Road service and the Northern Express – are fully contracted by ARTA. The very system that Infratil opposed so vehemently through the negotiations on the PTMA and have subsequently done all they can to get the PTMA overturned or removed.
If I really thought that Infratil were concerned about improving public transport and not just making a bucketload of money then I would have expected them to behave a bit more like Ritchies buses: support the PTMA and focus on growing the public transport pie, rather than just maintaining their piece of the pie.
I do have a problem with the lengthy roll-out time of Thales’ system. Although that hasn’t exactly been made better by Infratil’s squawking to NZTA that ARTA hadn’t gone through correct procedures when awarding the contract. That was back in March, so Infratil’s actions have already set things back by four months.
I am passionate about improving Auckland’s public transport system. I have dedicated my blog do that purpose. While I think Infratil have certainly made a good step forwards through the Snapper Card, their other actions (like opposing the PTMA and the other things I mentioned above) haven’t exactly endeared them to my heart, or led me to believe that they are also passionate about improving public transport. Why aren’t they vocally opposing the changes to the government policy statement that will rip money out of public transport? Why didn’t they fight for the Tamaki Drive bus lanes when Auckland City Council took money out of their public transport budget to turn them into carpool lanes? Why didn’t they embrace the PTMA, knowing that it would lead to a better public transport system with more riders (and therefore potentially greater revenue for them)?
Will other operators such as Fullers, Ritchies, Birkenhead, Howick & Eastern use Snapper? Of course. If it is good enough and the price is right. The real question is “will they be able to?”. If large parts of Auckland PT was using Snapper in 2012 and ARTA then launched its ticket, what then? Would ARTA be happy to allow their (tax/rate payer funded) system to compete on a level playing field?
The absolutely fundamental issue is the relative cost of the ARTA/Thales system. In October 2008 NZTA gave provisional approval for funding of $135m for the ARTA system. Snapper delivered in Wellington in less than a year at no cost to tax/rate payers. Christchurch has indicated it hopes to renew their system for 5 years at a cost of $5.5 million.
On those economics it is almost inconceivable that ARTA/Thales will be able to compete, so they will either have a white elephant or they will have to resort to cohesion.
Which leads on to the Jarbury point. He asks “if you are passionate about PT why are you opposed to the Public Transport Management Act”. The reason is simple, because it gives too much power to regional transport agencies, so that white elephant ticketing systems (or any other malconceived idea) could be imposed on operators “take it or go elsewhere”.
Why did Infratil get involved in bus PT? Because we believed it was by far the cheapest solution to urban congestion in Auckland and Wellington. If authorities were being ruthlessly commercial they would fund buses rather than trains or more roads. We believed that the political reluctance to forgo pouring money into rail/road was based on a misplaced conception that bus PT is the “loser cruiser”. If we can make our bus services really popular, it would make it easier for politicians to see them as both a popular and efficient solution to congestion. Thus far we haven’t succeeded, but it is with things like Snapper and services like Wellington’s Airport Flyer or Auckland’s Link that we hope to change perceptions. While bus PT remains “lowest cost provision of least acceptable standard” it is not going to win people away from rail or road.
Hey guys what a great arguement. Wouldn’t see this – two informed articulate people with very different views – having the opportunity in MSM.
@Trevor – true. Have you considered getting an ad agency ?
[...] was clear in the very articulate debate between Jarbury and Tim Brown
[...] outspoken Mallard began the debate by writing on Labour’s newish Red Alert Blog (great to see this blog and forum happening from Labour: where’s Nationals??): “Insiders [...]
I have been observing this debate for a little over a month, but took some time to study the situation before commenting.
I was up in Auckland last week; spent a day and half riding buses. Curiously enough all operators (Ritchies, H & E, Urban Bus, NZ Bus family, Airbus and Pacific Tours) with the exception of Birkenhead use a British system called Wayfarer.
Doing some further research it looks like the core components for an integrated ticketing system for Auckland are ALREADY installed.
A low risk approach which which allows all the operators to issue their own cards as well as accept other operators cards seems to me the least expensive option. The long suffering Auckland commuter can throw out their wallet full of tokens, passes and rely on a single one, issued by any one of the operators and honoured by all. (bringing rail into the equation is a relatively trivial exercise).
Having looked through the ARTA tender documents, most of the features they have specified could be achieved for a fraction of the cost. Some of NZ Bus’ machines would need a retrofit upgrade or a total system upgrade, but that would be a small price to pay compared to the staggering sums that ARTA proposes to spend.
Looking around the country, Hamilton, Duneidin, Invercargill, New Plymouth, Wanganui, Palmerston North, Taupo etc use the same technology as the bulk of Auckland PT operators.
In my opinion, if this information is brought to the attention of NZTA, it is unlikely that they would support what could potentially go down in history as a white elephant, when feature rich and interoperable but hugely underutilised ticketing systems are in place in most of the New Zealand public transport fleet.
It is customary for us to look north to study and adopt best practices where suitable. There is some merit in learning from the experience of others. Britain has created an organisation called the ITSO, which has resulted in a globally respected standard of interoperability of transit cards. http://itso.org.uk/
Most of the ticketing systems in the world, in the name of security create proprietary technologies that gives them control of the $$$ that flow through the system. ITSO seeks to break the stranglehold at least with respect to the UK.
The french kiss referred to in this thread headline may well prove to be the kiss of death for the vision of an interoperable card that works from Cape Reinga to our southernmost public transport fleet.
Not unless – the NZTA princess kisses the frog called “incumbent systems” and proposes a different funding scheme that will help ARTA through its myopia.
Cheers!
Maybe just maybe the best provider won. Being an international company with over 100 sites globally with a proven track record was the clincher. We want to be world class and that costs. With the RWC coming shouldn’t we use leading edge not bleeding edge technology?
How long are we going to put up with second rate cheap options which are considered a laughing stock in the real world.