Myki cards will still be needed by Victorian public transport users until 2027 due to delays to the full rollout of tap-and-go technology, the state’s auditor general has revealed.
A report by the Victorian Auditor-General’s Office (Vago) found a dispute between the state’s transport department and US-based firm Conduent had delayed the project by 18 months, adding $136.8m to its cost.
The longtime public transport campaigner Daniel Bowen said it was “frustrating” Victoria had “fallen so far behind the rest of Australia and a lot of jurisdictions around the world” when it came to contactless payments.
Conduent was awarded a $1.7bn 15-year contract in 2023 to upgrade the Myki system to allow contactless payments via a debit or credit card, smartphone or smartwatch. At the time, the then public transport minister Ben Carroll said the change would bring Victoria into the “21st century” – years after Sydney introduced similar technology in 2017.
However, by June 2024, the Department of Transport and Planning (DTP) and Conduent were in dispute over the contract and rollout schedule, leading to a six-month “standstill”, the auditor general’s report said.
The Vago report, tabled in parliament on Wednesday, found the department had been warned before signing the contract that Conduent’s delivery schedule was “overly optimistic and did not contain enough detail”.
“Ultimately, the schedule was proven to be unrealistic,” the report reads. “DTP did not address these known issues before signing the contract. It instead deferred this work … which contributed to disputes.”
Sign up for the Breaking News Australia emailThe report also referred to the department’s slow handover of source code from the existing Myki system, which Conduent needed to run both the old and new systems during the rollout. According to Vago, there were “issues” over who owned the “intellectual property rights” for the code.
“Partly due to not receiving the source code, [Conduent’s] revised master schedule proposal asked to delay milestones in Phase 1 and Phase 2 by an average of 6.5 months,” the report reads.
The audit revealed the program’s revised timeline sets a target for tap-and-go payments to be enabled across the state for full-fare passengers by early 2026 (phase 2). By mid-2027, concession passengers and all regional areas can use the payments (phase 3).
The new system will be fully operational by mid-2028 – before the Myki system can be retired.
(January 1, 2021)
The government approves the strategy for a new ticketing system
(January 18, 2023)
Contract with original Myki service provider expires and government contracts a new provider
(January 18, 2024)
Contract standstill for six months
(January 18, 2025)
Project reset confirmed and included in state budget. Phase 1: About 23,000 new reader devices installed across the network
(March 18, 2026)
Phase 2: New tap-and-go payments launch for full-fare passengers only
(January 18, 2027)
Phase 3: New tap-and-go payments launch for concession fares and Myki expands to all regional areas
(January 18, 2028)
Phase 4: New system is fully launched
Vago said the program was on track with the revised timeline, but warned there were “upcoming challenges” that could cause more delays.
This included the department having “paused” a secondary contract, held by HCLTech and worth $34m, to develop a system so passengers can use concession fares with tap-and-go payments.
HCLTech told auditors the “risk of further delay has now materialised”, as it had not been given a date to resume work. It warned this would be “directly impacting phase three timelines”.
The transport department’s secretary, Jeroen Weimar, told the auditor the work was paused due to policy changes, including the introduction of free travel for under-18s through the new youth Myki.
Bowen, a former president of the Public Transport Users Association, said applying concessions to contactless systems remained a “complex” issue that other states have also yet to fully implement.
“Could we leapfrog Sydney and get it working before them? I wouldn’t be counting our chickens before they hatch, but it does seem like we’re in a reasonable position to make it work,” Bowen said.
But he said the government was being “cautious” with tap-and-go rollout, describing the 2009 move to the Myki system as a “disaster”.
“They don’t want to push it ahead too quickly because if it goes wrong they’ll have egg on their face,” Bowen said.
Despite the setbacks, some commuters have already begun testing the new technology.
On Monday, passengers on the Craigieburn, Upfield, Ballarat and Seymour lines became the first in the state to ditch their Myki cards as part of a trial.
