Why the new Opal ticketing system is at risk of costing an extra $171m
The state government's infrastructure adviser has put the project under greater scrutiny because of its complexity and scale, forcing Transport for NSW to provide greater contingencies in its funding.
Dubbed Opal Next Gen, it is now budgeted to be a $738 million project, up from $568 million previously. Infrastructure NSW has changed Opal Next Gen from a 'tier two' to a 'tier one' project, which means the transport agency has to be 90 per cent sure the final cost will fall within budget.
The project involves replacing 25,000 electronic readers on buses, at train stations, light rail stops and ferry wharves. Planned features of the new system include allowing concertgoers to use event ticket QR codes to catch public transport, while concession fares will be easier to access for those eligible.
Transport for NSW secretary Josh Murray said the extra contingencies in funding for the project provided surety of having 'enough budget headroom'.
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'When they are at this scale, it means you've got to put aside more in the kitty to have a buffer before you start to get into contracting. This $170 million on-paper change to the project is a requirement of the accounting rules,' he said.
The government had planned to complete the rollout of the new Opal system next year, four years after it was announced. However, the Herald has previously reported that Transport for NSW is now targeting September 2027 as a 'go-live' date for the ticketing system.
More than eight months after tenders closed, Transport for NSW is yet to reveal short-listed bidders for the main contract to overhaul the ticketing system, and another for new bus technology that will offer passengers extra real-time journey information via mobile devices.
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The Age
2 hours ago
- The Age
Why the new Opal ticketing system is at risk of costing an extra $171m
The cost of a complex upgrade to NSW's Opal ticketing system for public transport is at risk of increasing by as much as $171 million to $738 million amid delays of at least a year in completing the project. The state government's infrastructure adviser has put the project under greater scrutiny because of its complexity and scale, forcing Transport for NSW to provide greater contingencies in its funding. Dubbed Opal Next Gen, it is now budgeted to be a $738 million project, up from $568 million previously. Infrastructure NSW has changed Opal Next Gen from a 'tier two' to a 'tier one' project, which means the transport agency has to be 90 per cent sure the final cost will fall within budget. The project involves replacing 25,000 electronic readers on buses, at train stations, light rail stops and ferry wharves. Planned features of the new system include allowing concertgoers to use event ticket QR codes to catch public transport, while concession fares will be easier to access for those eligible. Transport for NSW secretary Josh Murray said the extra contingencies in funding for the project provided surety of having 'enough budget headroom'. Loading 'When they are at this scale, it means you've got to put aside more in the kitty to have a buffer before you start to get into contracting. This $170 million on-paper change to the project is a requirement of the accounting rules,' he said. The government had planned to complete the rollout of the new Opal system next year, four years after it was announced. However, the Herald has previously reported that Transport for NSW is now targeting September 2027 as a 'go-live' date for the ticketing system. More than eight months after tenders closed, Transport for NSW is yet to reveal short-listed bidders for the main contract to overhaul the ticketing system, and another for new bus technology that will offer passengers extra real-time journey information via mobile devices.
Sydney Morning Herald
2 hours ago
- Sydney Morning Herald
Why the new Opal ticketing system is at risk of costing an extra $171m
The cost of a complex upgrade to NSW's Opal ticketing system for public transport is at risk of increasing by as much as $171 million to $738 million amid delays of at least a year in completing the project. The state government's infrastructure adviser has put the project under greater scrutiny because of its complexity and scale, forcing Transport for NSW to provide greater contingencies in its funding. Dubbed Opal Next Gen, it is now budgeted to be a $738 million project, up from $568 million previously. Infrastructure NSW has changed Opal Next Gen from a 'tier two' to a 'tier one' project, which means the transport agency has to be 90 per cent sure the final cost will fall within budget. The project involves replacing 25,000 electronic readers on buses, at train stations, light rail stops and ferry wharves. Planned features of the new system include allowing concertgoers to use event ticket QR codes to catch public transport, while concession fares will be easier to access for those eligible. Transport for NSW secretary Josh Murray said the extra contingencies in funding for the project provided surety of having 'enough budget headroom'. Loading 'When they are at this scale, it means you've got to put aside more in the kitty to have a buffer before you start to get into contracting. This $170 million on-paper change to the project is a requirement of the accounting rules,' he said. The government had planned to complete the rollout of the new Opal system next year, four years after it was announced. However, the Herald has previously reported that Transport for NSW is now targeting September 2027 as a 'go-live' date for the ticketing system. More than eight months after tenders closed, Transport for NSW is yet to reveal short-listed bidders for the main contract to overhaul the ticketing system, and another for new bus technology that will offer passengers extra real-time journey information via mobile devices.
Sydney Morning Herald
2 hours ago
- Sydney Morning Herald
Digital upgrade costs are turning Opal into a wild card
The upgrading of NSW's Opal ticketing system for public transport has turned into a runaway train, with costs threatening to surge by up to $171 million to $738 million. The Herald 's Matt O'Sullivan revealed the cost blowout is also likely to delay the scheduled completion of the work for at least a year. Dubbed Opal Next Gen, the modernisation of the ticketing system was first announced in mid-2022 by the previous NSW Coalition government, which provided conditional funding for the project over three years. It involves the replacement of thousands of electronic readers and back-office billing. Infrastructure NSW has changed Opal Next Gen from a 'tier-two' to a 'tier-one' project, which means the transport agency now has to be 90 per cent sure its final cost price will fall within budget. More than eight months after tenders closed, Transport for NSW is yet to announce short-listed bidders for the main contract to overhaul the ticketing system, and another to supply Opal readers and other technology for the state's fleet of buses. The government has been dragging the chain on an Opal upgrade for years, but the new upgrade includes digital transit cards that allow the use of smartphones. The government had planned to complete the rollout of the new Opal system next year. However, the Herald has previously reported that internal Transport for NSW documents show it has been targeting September 2027 as a 'go-live' date for the ticketing system. Automatic ticketing has had an unsettled history in NSW. The $1.2 billion contract for the public transport smartcard, it should be remembered, was signed by former Labor transport minister David Campbell but only after years of fruitless persistence with the T-Card. The Barry O'Farrell-led Coalition in 2012 started introducing the Opal card, which is now used almost ubiquitously across Sydney's transport system. For the most part, it has been a great success. Now comes the realisation that upgrading transport ticketing systems is problematic for state governments. In Victoria, overhauling the Myki Card system is a major political and financial liability for the Labor government. This year's budget revealed the overhaul was running 18 months late and was already $137 million over budget. The Victorian government and Conduent, the US company installing and operating the new system under a $1.8 billion contract, have been at loggerheads over unexpected costs and technical issues that have put back scheduled completion until 2028. As noted, in NSW, tenders closed for contracts to overhaul the ticketing system and supply Opal readers and other technology for the state's fleet of buses last year. Transport for NSW secretary Josh Murray said nine companies were in the mix and contracts were expected to be signed early next year, but he did not wish to rush it.
