NTT Data loses myki deal to Conduent in $1.7bn shakeup

American business services provider Conduent will replace NTT Data as the operator of Victoria’s public transport ticketing system from December after securing a $1.7 billion contract to run and expand the system.

The new contract, which will run for 15 years, will see the current card-based ticketing system replaced with an account-based system that allows Victorians to pay with debit and credit cards, as well as connected smart devices, for the first time.

Trials of the new technology on not only the metropolitan Metro and tram services currently served by myki but regional V/Line trains and buses are expected to begin next year, with the full transition to be complete before the Commonwealth Games in 2026.

Image: Vrieselaar

Announcing the contract on Monday, Transport minister Ben Carroll said the new ticketing system would be a “real step change for Melbournians”, who have had to pay with a physical card or, since 2019, a Google Pay-based digital card.

“This is a very important moment for Victoria and public transport. For the past sixteen years, we have had a card-based ticketing system under Myki. We will now reach the 21st century with account-based ticketing,” he said.

NTT Data has been the incumbent operator of the myki system since 2010, when it acquired Kamco – the company that was contracted to develop myki in 2005 under a contract that was originally worth $944 million but which grew to $1.5 billion over its life.

Despite the cost blowout under Kamco, NTT Data was handed back the contract in 2016 at a cost of $700 million – a re-tender that was later characterised as a “missed opportunity” by the state’s auditor.

With the $100 million-a-year contract set to expire in November 2023, the state government went looking for a provider to replace NTT Data in 2021, with upgrades like card and smart device payments – which have been available in New South Wales since 2018 – top of mind.

Last week, NTT and Conduent, as well the operator of the ticketing systems in NSW and Queensland, Cubic, were revealed as the three companies vying for the multi-billion dollar deal at a time of significant Budget pressures.

Minister Carroll, who doubles as the Industry and Innovation minister, on Monday said Conduent “offered a superior package” with “very good value for money” and had a “proven track record” of delivering ticketing systems across the globe.

Formerly part of Xerox, Conduent formed as an independent public company in 2017. It debuted on the New York Stock Exchange with approximately US$6.7 billion in annual revenue, according to the company.

The new contract with Conduent will involve an “overhaul” of hardware, with some existing myki readers to be replaced or upgraded. It also appears that Conduent will manage the cloud system that will host the data.

“The state will have control through our Privacy Act, but naturally when it comes to a ticketing system and the back of house, just like your Apple account… that will continue to be managed through the cloud,” Minister Carroll said.

Asked whether the government was locking itself in with a 15 year contract, Minister Carrol sought to draw a distinction with the original myki system built by Kamco from 2007 and the off-the-shelf solution the government had selected in 2023.

“We are now not building the system and being a world-first. Indeed, we are taking a system that has been tested in Paris, Dubai, Montreal and New Jersey and bringing that system here to Melbourne,” he said.

“So, we’re not the first respondent for this new system. We aren’t the test bed. This is an off-the-shelf system. Its good value for money. It’s been through a thorough two-year procurement process.”

Do you know more? Contact James Riley via Email.

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