Ticketing and Concessionary Travel on Public Transport - United ...

Ev 68 Transport Committee: Evidence
additional funds. It is therefore sensible for Network Rail to look beyond the rail network <strong>and</strong> consider
supporting all modes of surface <strong>and</strong> sub-surface public transport. With DfT policy now being to spread
ITSO technology onto heavy rail, <strong>and</strong> the financial needs of ITSO Ltd, it makes sense to fold one
Membership Company (ITSO Ltd) into the other one (Network Rail).
18. The present commercial arrangements (with the competition problem mentioned above, <strong>and</strong> the
short termism still built into rail franchising) militate against significant investment by the service providers,
<strong>and</strong> of course central government doesn’t want to fund large capital programmes. But there may be a light
at the end of the tunnel as far as ticketing systems are concerned, although the tunnel appears to be currently
blocked by DfT inaction—hence the statement made by PSSG this week.
19. It has recently become clear that there are two str<strong>and</strong>s being discussed <strong>and</strong> perhaps developed
within DfT:
— in a similar manner to the Scottish project 6 , roll out electronic ticketing over all 50,000 service
buses in the UK (the public sector to use the functionality to manage concessionary travel); <strong>and</strong>
— roll out electronic ticketing right across heavy rail (perhaps 25,000 items of ticketing equipment).
20. But there is no co-ordinated action, <strong>and</strong>, at the March 19th Supplier Briefing session for the DfT
procurement of services for <strong>Concessionary</strong> Bus <strong>Travel</strong>, there was a clear statement that there is no DfT
policy to roll out ITSO technology across all of surface <strong>and</strong> sub-surface public transport in Engl<strong>and</strong>.
21. The probable timescale is five years, ie roll out to be completed by 2012. If that is coupled with
eVective on-line ticket purchasing across the internet 7 , it should be possible to leverage a large proportion
of the capital investment out of the private sector—that is because with multi-modal deployment there will
be a long term future for the methods. I believe that Eric Sampson was right when he said to me that the
big service operators have to get to the stage where they all decide to move together <strong>and</strong> authorise the
investment in interoperable electronic ticketing. Currently I believe that none of the major operating groups
has a positive business plan for the rollout on their own: they see costs but not enough financial benefit 8 ,
but they will invest if they see a national policy announced <strong>and</strong> taken forward. DfT has to show us a coordinated
five year project if integrated ticketing is to be delivered, <strong>and</strong> DfT has to manage the programme
far better than hitherto.
22. It should be noted that the ticketing environment resulting from a nationwide rollout will not just be
a rollout of smart cards. Other physical formats of smart media will be used, as will (with care) print at home
(using bar codes for security) <strong>and</strong> “show <strong>and</strong> go” ticket to mobile phone. New secure short range technology
is coming along (Near Field Communication is currently the best suggestion, embedded in mobile phones),
<strong>and</strong> could fit onto the front end of ITSO style schemes. The ITSO Method is capable of adaptation to these
diVerent ticketing media, although currently a very rigid DfT m<strong>and</strong>ate for “all cards to be usable
everywhere” 9 is inhibiting, <strong>and</strong> there is no credible way for extensions to be managed.
The Use of Smartcard Technologies
3. Is the industry taking up modern smartcard technologies adequately <strong>and</strong> appropriately?
23. No, but why should it? “Industry” in the shape of the set of public transport operators has an
overwhelming duty to its shareholders, <strong>and</strong> until recently there have been indications that they see
introduction of the technology as having a massively negative business case for them unless about £250M
is pumped in by government. Also, in the absence of measures to promote growth in public transport, the
necessary parallel introduction of interoperable ticketing has a negative business case to a service operator,
because it increases competition. But now I believe that they see the benefits of improved service
management that the ITSO Environment delivers, plus a determination within government to improve
public transport services.
24. The answer to this one is already presaged in the answer to Q2: we need:
— a co-ordinated 5 year strategy <strong>and</strong> programme from DfT, designed to leverage most of the
investment out of the private sector; <strong>and</strong>
— a change in the way that the technology is managed.
6 But it must be managed much better than the Scottish project.
7 Not using the clumsy method apparently currently being put forward—see later in this submission.
8 About three years ago someone from one of the big transport service groups showed me his figures: they were looking for a
grant as subsidy that, divided by the number of buses in their fleet, came out at £3,000 per bus—however, since then many
of them have already invested in new ticket machines, so the per bus figure will now be lower. Get them to move together,
justifying the capitalisation of the funding, <strong>and</strong> they will do it themselves.
9 Which has already been deviated from.