Mayor Cancels Oyster Contract
August 8, 2008 by Staff · Leave a Comment
Boris Johnson has terminated Transport for London’s £100m a year contract with TranSys, the company which operates the capital’s Oyster card.
According to Transport for London (TfL) the Mayor has used a break option to end the existing agreement.
A new contract will be put out to tender and the Mayor and TfL say they expect any future deal to deliver “enhanced services for less money” and lead to savings in the cost of administering the scheme.
Shashi Verma, TfL’s Director of Fares and Ticketing said: ‘Transport for London is committed to delivering value for money across all of its services.
‘As part of this we are looking at more cost effective ways to manage and develop the Oyster card system that we expect will save millions over the next few years.
‘The savings will be reinvested to deliver further improvements in London’s transport system.’
The 17 year contract was awarded to TranSys, owned by EDS International Ltd, Fujitsu Services Ltd. and WS Atkins Consultants Ltd, in 1998.
According to official figures from TfL there are over 6 million Oyster cards in use and thirty-eight million journeys are made each week using the cards.
this article is so biased that it sounds like the oyster system is being got rid of. All they are doing is finding a cheaper operator!!
Hi Richard
I’m not really sure I see how you arrive at the suggestion of bias.
The article expresses no opinion on the decision and makes it clear a new contract will be awarded.
There is no bias in this article at all. Do you read the Evening Standard?
Let me tell you how this will pan out…
The contract will be put out to tender, a new company (or even Transys) will come in at a very competetive price (which the others will privately agree they will not compete with). Then the contract will start and the company will not be able to deliver a quality service at that price. There will be problems as corners are cut everywhere in order to make the contract as profitable as possible for the company involved. The relationship will deteriorate and the contractor will get their notice (although this will be about 2 years notice – as Transys have had).
Finally the system will fall into chaos as the previous operator is on it’s way out and cuts resources to a bare minimum(as it won’t win the next contract). Then the whole thing is put out to tender again. The new operator gets to take over the system ‘in total chaos and run down’.
This is how it works every single time – and yet we still persist in trying to make private sub-contraction work in the public sector. It’s been the same with everything that was outsourced on the tube (the tracks, the maintenance, the cleaning etc.).
Still they never learn do they? The solution is to bring it in house where it can be controlled and managed properly. However this will be rejected as it sounds too much like ’socialism’ or ‘nationalism’.
See you here with the same story in about 5 years time with the new operator. Unless Boris has found a solution to this age old problem (which he hasn’t) then this will not be a money saving move, in fact the upheaval of changing the supplier will be at a great cost to TFL and London.
Interestingly, ‘Red’ Boris rather talked up the sensible (Livingstonian) inhousing of Tramlink, due to the self-evident idiocies contained in the original contract. On the other hand, Oyster has been a PFI its entire life, and has revolutionised ticketing in London. The two recent cockups are newsworthy precisely because they’re so unusual, most of the time it just works.
It’s not the old private-bad-public-good mantra we need here, it’s an actual analysis of what makes successful public-private partnerships work, which I would suggest is the public sector having its thumb on the windpipe rather than its face in the pillow.