VICTORIAN taxpayers face a massive bail-out of the troubled $500 million public transport smartcard after the developers warned they needed more money.
Consortium Kamco has told the Transport Ticketing Authority it needs a cash injection to get the card operational.
Kamco has also asked for changes to the contract to allow it to receive accelerated payments from the TTA.
The news comes just a week after the Herald Sun revealed investigators in the Auditor-General's office had uncovered serious probity concerns in the awarding of the contract to American IT firm Keane's Kamco consortium - many of which were left out of the final report by Auditor-General Des Pearson.
The tender was let in 2005 and the plastic smartcard known as myki was due to be operational by March this year.
However, continuing computer problems have meant a roll-out won't begin until at least June 2008 - 15 months behind schedule.
The IT company that forms part of the consortium, ERG, is also responsible for the Sydney smartcard, known as the Tcard, which is already eight years behind schedule and not due to be fully operational for at least another two years.
The TTA confirmed talks were under way but both the TTA and Kamco refused to say how much money Kamco had asked for.
TTA spokeswoman Helen McInerney confirmed talks were continuing between TTA and Kamco.
"In any major project there will be a range of discussions held regarding finances and project delivery," she said.
"These sorts of discussions include variations and other normal contract issues.
"From the outset, a range of discussions have occurred between Kamco and the TTA, and these are expected to continue for the duration of the period."
Kamco spokeswoman Margo Nison said she was unable to discuss payments, as the subject was commercially sensitive.
"Progress continues to be made to deliver the right solution to meet Victoria's unique requirements," Ms Nison said.
"Elements of the software development required additional time and the right thing to do is get the solution right. Progress has been made which enabled environmental testing to commence last month.
"Kamco remains committed to working with the TTA to get the ticketing system right."
Opposition transport spokesman Terry Mulder said the Government needed to make a hard decision.
He said they would either have to hand over the money or face the embarrassment of the project going "belly-up". "Kamco must be held to its original tendered price. If it is handed millions of taxpayer dollars, losing bidders would have every right to be outraged and to claim that they were dudded in the tender process."
During the controversial tendering process, the TTA negotiated back and forward between bidders and, according to reports by the Auditor-General, succeeded in getting the price reduced by 30 to 40 per cent.
There are now real fears within the Department of Infrastructure and the Government that the price may be too low, and the Government may have to stump up millions of dollars to ensure the project stays on track.
The 2005-06 TTA annual report shows that Kamco was paid $10.6 million in fixed service delivery charges and a further $31.4 million for project delivery.
Ellen Whinnett Herald Sun December 24, 2007
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