Myki Tap-and-Go Rollout Delayed Until 2027
Victorian public transport users will need to continue using Myki cards until 2027 due to delays in implementing tap-and-go payment technology, according to a report by the Victorian Auditor-General’s Office (Vago).
The report identified an 18-month delay caused by a dispute between the Department of Transport and Planning (DTP) and US-based contractor Conduent, which increased the project cost by $136.8 million.
Background and Contract Details
Conduent was awarded a $1.7 billion, 15-year contract in 2023 to upgrade the Myki system to support contactless payments via debit or credit cards, smartphones, or smartwatches. At the time, then-public transport minister Ben Carroll highlighted the change as a significant modernization, noting that Sydney had introduced similar technology in 2017.
Contract Dispute and Delays
By June 2024, the DTP and Conduent were in dispute over the contract and rollout schedule, resulting in a six-month standstill, the auditor general’s report stated.
The Vago report, tabled in parliament on Wednesday, revealed that the department had been warned prior to signing the contract that Conduent’s delivery schedule was "overly optimistic and did not contain enough detail."
"Ultimately, the schedule was proven to be unrealistic," the report reads. "DTP did not address these known issues before signing the contract. It instead deferred this work … which contributed to disputes."
The report also cited delays in the department’s handover of source code from the existing Myki system, which Conduent required to operate both old and new systems during the rollout. There were "issues" concerning ownership of the intellectual property rights for the code.
"Partly due to not receiving the source code, [Conduent’s] revised master schedule proposal asked to delay milestones in Phase 1 and Phase 2 by an average of 6.5 months," the report states.
Revised Timeline and Phases
The audit outlined a revised timeline targeting early 2026 for tap-and-go payments to be enabled for full-fare passengers statewide (Phase 2). By mid-2027, concession passengers and all regional areas are expected to have access (Phase 3). The new system is planned to be fully operational by mid-2028, preceding the retirement of the current Myki system.
Project Milestones
- Government approval of the new ticketing system strategy
- Expiration of contract with original Myki provider and engagement of new provider
- Six-month contract standstill
- Project reset included in state budget; Phase 1 involves installation of approximately 23,000 new reader devices across the network
- Phase 2: Launch of tap-and-go payments for full-fare passengers
- Phase 3: Extension of tap-and-go payments to concession fares and expansion to all regional areas
- Phase 4: Full launch of the new system
Current Status and Challenges
Vago noted the program is on track with the revised timeline but highlighted potential challenges that could cause further delays. One such issue is the department’s pause on a secondary contract with HCLTech, valued at $34 million, to develop a system enabling concession fares via tap-and-go payments.
HCLTech informed auditors that the "risk of further delay has now materialised" due to the absence of a resumption date, warning this would "directly impact phase three timelines."
Transport department secretary Jeroen Weimar explained the pause was due to policy changes, including the introduction of free travel for under-18s through the new youth Myki.
Expert Commentary
Daniel Bowen, a longtime public transport campaigner and former president of the Public Transport Users Association, described Victoria’s delay in adopting contactless payments as "frustrating," noting the state has "fallen so far behind the rest of Australia and a lot of jurisdictions around the world."
"Could we leapfrog Sydney and get it working before them? I wouldn’t be counting our chickens before they hatch, but it does seem like we’re in a reasonable position to make it work," Bowen said.
He also remarked on the complexity of applying concessions to contactless systems, a challenge other states have yet to fully resolve.
"They don’t want to push it ahead too quickly because if it goes wrong they’ll have egg on their face," Bowen said, referring to the cautious approach following the problematic 2009 Myki rollout.
Trial and Testing
Despite setbacks, some commuters have begun testing the new technology. On Monday, passengers on the Craigieburn, Upfield, Ballarat, and Seymour lines participated in a trial of the tap-and-go system.
