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Prestige brings smart cards to London

01 Jul 1999

Passengers on London's metro and bus network are expected to begin using contactless smart cards in August 2002. Robert Preston spoke to London Transport Project Manager Chris Oulds and TranSys consortium Marketing Director Victoria Pender about the 17-year Prestige integrated revenue collection contract

Effective since August 16 1998, the Procurement of Revenue Services (Prestige) contract was awarded by London Transport under the British government's Private Finance Initiative, which aims to attract private capital into public-sector projects and transfer risk. The TranSys consortium of EDS, Cubic, ICL and WS Atkins (panel right) is responsible for the provision of a fare collection system for London Underground compatible with contactless smart cards and existing magnetic stripe technology.

TranSys is financing Prestige, and is investing £150m to develop the system. Payments to the consortium will be made on the basis of output-based service requirements, which according to LT Project Manager Chris Oulds have a total Net Present Value of £1·2bn over the 17-year life of the contract. At the end of this, the assets will pass to LT.

Oulds says LT and TranSys have 'a very good working relationship'. All major project milestones to date have been reached on time or ahead of schedule. The programme to install ticket-operated gates at 154 previously ungated LU stations began on November 22 1998, and the 51st set at Alperton went live on April 5, 19 weeks ahead of schedule. By the end of 1999 almost all of LU's 273 stations will be gated, and Oulds says that the programme is already making inroads on ticketless travel estimated to be costing £30m a year.

By early 2001 all station ticket offices are due to receive new ticket-issuing machines. By reducing transaction times, and doing away with the 'vast paper trail' generated by season ticket renewals, these should enable staff to spend more time advising passengers as to the best route or fare for their journey. With facilities for swiping credit and debit cards, the ticket office machines should also enable faster and more accurate accounting.

LU's Multifare passenger-operated ticket vending machines will also be replaced by early 2001. The Multifare's array of buttons for choosing from a wide range of tickets will give way to a touch-screen menu with foreign language options, and the new machines will accept payment by debit and credit card. Oulds thinks that these machines should reduce queues at ticket offices and make the LU system easier to use, in line with its 'key core value' of being 'a customer-focused organisation'.

Low-risk smart card

All equipment being supplied by TranSys, including hand-held ticket readers for LU revenue protection staff, should have bedded down when contactless smart card capability is retrofitted in 2001-02. As the centrepiece of Prestige, smart cards should be used by the public from August 2002. Oulds is convinced that the robust, flexible and 'deliberately low-risk' system 'will work from day one'.

TranSys Marketing Director Victoria Pender says the cards will have a transaction time at gates of between 100 and 300 ms. With the cards having a memory rather than a microprocessor chip, the gate readers will perform the processing function and keep the transaction time down. Extra functions beyond LT ticketing would require a more complex card and longer transaction times - 'the more you load on there, the longer it takes', says Pender - and rapid throughput is the prime consideration.

Although LT's thinking on the tickets to be introduced with the smart card is 'constantly evolving' and the opportunities appear 'endless', two basic formats will be offered. Time-based tickets such as the Travelcard season and concessionary passes for senior citizens will become smart cards, and there will be a transferrable stored-value ticket able to be recharged when the number of pre-purchased journeys is used up.

LU's current magnetic-stripe ticketing is to be retained for the foreseeable future, however. This is primarily because the 10 commuter Train Operating Companies that offer their customers the Travelcard and other LU through tickets have no firm plans to move to smart cards. To improve revenue protection, all 10 TOCs are either installing or planning to install gates similar to those that Cubic is supplying for Prestige, but longer-term investment decisions are conditioned by the fact that the private sector is operating these commuter services under franchises mostly expiring in 2003 or 2004.

Reporting that initial discussions have generated interest from Connex, LTS Rail and WAGN in particular, Oulds says LT 'has no desire to impose a system' on the TOCs or other operators such as Docklands Light Railway or Croydon Tramlink. But as a founder member of the Transport Card Forum (sponsored by the Department of the Environment, Transport & the Regions) and the Integrated Transport Smart Card Organisation, she sees the Prestige smart card as 'an enabler for integrated transport'.

Seamless living

Fares policy remains very firmly LT's responsibility, but the Prestige contract contains an incentive for TranSys to bring other operators into the system. The consortium will receive payments from LT on the basis of actual smart card usage, and is responsible for developing any commercial applications outside the transport sector. Oulds thinks the smart card has 'unparalleled' growth potential as an agent for 'seamless living', whereby people have 'less hassle in their lives'.

Pender agrees that the smart card offers 'fantastic opportunities in the future', but the primary focus at TranSys is to develop a ticketing system that meets LT's requirements. With the consortium focusing on the delivery of 'the icing on the cake' due in August 2002, she says that development of the smart card for use outside LT is in its early days, but that 'all sensible suggestions will be considered'.

TranSys will be running accounting and management information systems for LT, and the Prestige infrastructure includes station computers and a new central data warehouse that will poll the stations every 24 h. This should allow lost or stolen smart cards to be disabled overnight and make replacement simpler.

Under the Prestige contract, TranSys has since October 1998 been taking over responsibility for LU's existing revenue collection assets. LU and LT staff responsible for maintaining ticket gates, ticket vending machines and managing the PASS network of Travelcard sales agents have transferred to CTS and EDS. A total of 71 staff moved to the private sector in October 1998, followed by 58 in February, and Oulds reports that 'everything went smoothly' with terms and conditions protected by legislation.

TranSys at work

The TranSys consortium was formed as a limited company for the specific purpose of delivering Prestige. Its members are IT services company EDS with a 37·5% share, fare collection manufacturer Cubic Corp (37·5%), IT systems and services company ICL (20%) and consultancy WS Atkins (5%).

TranSys currently has a staff of 12 seconded from these companies, and is implementing Prestige through two major subcontracts. Cubic's British subsidiary Cubic Transportation Systems is responsible for installing and maintaining the assets, and EDS will manage and operate the system. Both CTS and EDS have in turn subcontracted some work to ICL, including the supply of the ticket office machines.

The consortium has borrowed a total of £200m to invest £150m over the first four years of the contract. Both LT and the lenders are watching to see that TranSys hits the milestones for the installation of the new assets, and Marketing Director Victoria Pender sees this as one of the biggest challenges. Once the system is fully operational in 2002, LT will make payments on the basis of reliability and availability targets for the Prestige subsystems - LU equipment, bus ticketing, smart cards and the PASS network of sales agents.

Pender thinks this contractual regime will provide 'a much better deal for LT'. If the consortium fails to meet the targets 'we don't get paid' she says, with serious failures such as that of an entire station's revenue collection equipment requiring penalty payments. The fee TranSys will get each time a smart card is used forms another incentive, and is one reason why the consortium has a Marketing Director: 'we all want people to take these cards and use them', she says.


  • CAPTION: The Prestige hardware being supplied for TranSys by Cubic includes slimline ticket gates - to be retrofitted with smart card capability in 2001-02 - and touch-screen ticket vending machines (rear of picture)