Victorian Hansard - Onelink: automatic ticketing

[dbromage@fang.omni.com.au (David Bromage)]

Questions without Notice
24 October 2000

Mr SEITZ (Keilor) -- Will the Minister for Transport inform the house of a
potential liability for Victoria arising out of contractual arrangements
entered into by the former government with the Onelink consortium?

Mr BATCHELOR (Minister for Transport) -- In May 1994 the former Kennett
government entered into a contract with the Onelink consortium to provide
an automatic-ticketing and fare-collection system for Melbourne's public
transport, for which it was to receive around $300 million. The
Auditor-General and others, including Bill Russell, have since criticised
the Kennett government for its indecent haste in entering into the
contract without sufficient planning and evaluation. As all honourable
members know, the fast-tracking has failed miserably. The project was
severely delayed and the system was commissioned three years late.

Against that background I inform the house that in April Onelink lodged a
substantial contractual claim alleging increases to the scope of the
automatic-ticketing project between May 1994 and September 1995 -- the
golden years of Jeff Kennett! It claims that because of variations to the
project it was required to upgrade the capacity of the central computer
system, provide additional change-dispensing facilities and make several
other alterations. Because of the former Kennett government's reckless
maladministration, Onelink now seeks additional payments of some $270
million, which have the potential to blow out the cost of the automatic
ticketing system to almost twice the original sum.

The claim by Onelink comprises $100 million in equipment costs, interest
and preparation charges. In addition, it is seeking $17.4 million a year
to the end of the contract in March 2007 for ongoing service and
maintenance of equipment.

Over the 10-year life of the contract $174 million will be added to the
$100 million claimed for equipment costs. Under the contract the claim for
equipment is capped at $35 million. However, Onelink claims that the cap
does not apply to the $174 million for ongoing service and maintenance of
equipment.

The government has instructed officials to undertake a rigorous and
thorough evaluation of the claim, including monitoring the quantum of any
payment that may ultimately be made to Onelink. Again, it is left to the
Bracks government to untangle the web of contract mismanagement of the
former government. No wonder the Onelink contract was kept secret during
the Kennett years.

Unlike the former government -- its representatives are in the chamber
today -- the Bracks government will do everything it can to protect
Victorian taxpayers and the travelling public.

Clearly the biggest contingent liability facing Victoria is the Kennett
government's legacy of mismanagement as seen in public transport and the
automatic-ticketing fiasco.