LONDON Transport signed the long-awaited Prestige smartcard fare collection contract with the TranSys consortium on August 13 after what LT's Commercial Director David Bailey described as 'tough and protracted' negotiations.

Worth £1bn over 17 years, the deal has been agreed under the terms of Britain's Private Finance Initiative. TranSys will fund the £200m borrowing requirement and spend £150m on capital equipment over the next five years. LT will make payments according to a formula that transfers risk to the contractor; this is based on travel volume and performance criteria with bonuses for success and penalties for poor availability. All assets procured under the deal will be owned by TranSys until the contract expires in 2015, when they will transfer to LT.

Gates will be fitted at all LU stations that do not already have them 'within about one year', to reduce fraud currently running at around £30m a year. All ticket office machines will be replaced, and passenger-operated ticket machines will be upgraded with touch screen and multilingual capability. TranSys will take over maintenance and support for all gates and ticketing systems within six months.

According to LT's Project Manager Chris Oulds, the first contactless smartcards will appear 'at the end of year four'. Most pre-purchased tickets will become smartcards, but magnetic strip technology will be retained to handle single journey tickets and those issued by Britain's franchised rail companies for through travel. The time-based Travelcard will continue to be sold, but some tickets will use stored value. Future developments are likely to include incentive travel schemes and enhancements that will give the cards electronic purse features.

TranSys groups EDS UK (37·5%) with responsibility for management and operations, Cubic Corp (37·5%) which will handle gates and ticketing, ICL (20%) which will supply technology, computers and training, and WS Atkins (5%), which will provide traffic planning and consultancy.