TRANSPORT FOR GREATER MANCHESTER COMMITTEE REPORT FOR INFORMATION

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1 9 TRANSPORT FOR GREATER MANCHESTER COMMITTEE REPORT FOR INFORMATION Date: 11 September 2015 Subject: Report of: Smart Ticketing Update Chief Executive, TfGM PURPOSE OF REPORT To provide an update on the implementation of Smart Ticketing in Greater Manchester. RECOMMENDATIONS Members are recommended to note: 1. the current position in relation to the Smart Ticketing Programme; 2. the commercial settlement that has been agreed with Atos; 3. the progress made in next steps including, in particular, in relation to the Metrolink Transition Plan and the shorter term roll out plan; 4. the status of the multi-operator Smart On Bus solution; 5. the inclusion of smart ticketing within the requirements for the new rail franchises; and 6. the initiation of a refresh of the smart ticketing strategy and plan for Greater Manchester in the context of devolved transport powers and Transport for the North. Update reports will be provided to Members on a regular basis. CONTACT OFFICERS Steve Warrener Bob Morris Des Gardner TfGMC Smart Ticketing Update v /09/ :00

2 1. INTRODUCTION AND BACKGROUND 1.1 TfGM contracted Atos in 2012 to design, build and operate a smart ticketing system for Greater Manchester to be rolled out initially on Metrolink and with options to roll the system out subsequently to bus and rail. 1.2 Although the system is currently operational for use by our 500,000 concessionary card holders, after a considerable period of delay it became clear that Atos could not deliver the smart ticketing system as contracted. 1.3 Therefore, both parties decided that it was in their best interests to agree to a mutual termination of the contract, on commercial terms, the details of which, remain confidential between the parties, but which provide substantial compensation to TfGM in respect of the costs incurred and which will enable TfGM to develop a smart ticketing system with alternative providers; and establish alternative arrangements for the existing English National Concessionary Travel Scheme (ENCTS) smart ticketing on Metrolink. 1.4 The terms of the Atos Settlement Agreement are summarised in Section 2. The Transitional Service arrangements are summarised in Section A number of options to enhance the Metrolink smart ticketing customer offering in the short term have also been developed. The most promising options are described in Section In addition, separate activities have been progressed since the end of 2014 with bus operators and Greater Manchester Travelcards Limited (GMTL) to establish a multi-operator Smart on Bus smart ticketing solution for implementation before the end of The current status of the implementation is summarised in Section Implementation of smart ticketing on heavy rail is being included within the rail franchising process and is summarised in Section The current TfGM smart ticketing strategy was developed five years ago, in , and provided the base for the smart ticketing procurement that was concluded in the Atos contract in August The marketplace, technology and political landscape have changed significantly since that time. Notably there is now widespread use of contactless payment card technology, including on the London transport network and the Greater Manchester Devolution Agreement, which includes Bus Franchising powers, provides a further catalyst to refresh our smart ticketing strategy. Section 7 outlines the process that TfGM has started to enable a new strategy to be in place before the end of Systems used to deliver smart ticketing solutions in other cities will be considered and reviewed fully as part of the update to the smart ticketing strategy. TfGMC Smart Ticketing Update v /09/ :00

3 2. ATOS SMART TICKETING SETTLEMENT AGREEMENT 2.1 The terms of the settlement between TfGM and Atos are set out in two separate agreements, the Deed of Settlement and the Transitional Services Agreement (TSA). 2.2 Under the Deed of Settlement, the parties each release the other from their obligations under the Smart Ticketing Contract in return for Atos agreeing to enter into the TSA and making significant payments to TfGM. 2.3 The TSA governs the parties relationship following the termination of the Smart Ticketing Contract. Under the agreement, Atos will provide support for the current operational assets that provide the smart ENCTS concessionary passes and work with TfGM and its suppliers to transition the current operation to new hosting arrangements by the end of The terms for settlement secure compensation for TfGM s losses and Atos will also contribute significantly towards TfGM s professional fees associated with the Settlement and Transition. 2.5 This is considered to be a favourable outcome for TfGM based on the financial and legal analysis of cost and risk, and this has been externally validated. In addition, the settlement allows for the orderly transition of the current operating environment, which supports smart enabled ENCTS concessionary passes. 3. TRANSITIONAL SERVICE ARRANGEMENTS 3.1 Atos will continue to host and operate the current smart ticketing system until it is transitioned to other suppliers. The intention is to enter into the necessary contracts to enable transition to these other suppliers by the end of The transitioned services will maintain the current smart ticketing experience for Metrolink ENCTS customers as well as supporting system resilience, development and incident management. 4. METROLINK SMART TICKETING NEXT STEPS 4.1 In order to maintain the engagement of Metrolink customers with smart technology, and the benefits of the get me there brand presence, TfGM has considered a range of approaches that could deliver enhancements to the smart customer experience before the end of 2015 or early in These include: TfGMC Smart Ticketing Update v /09/ :00

4 implementation of Metrolink tickets using smart phone technology; and acceptance of contactless payments for the purchase of paper tickets on Metrolink Ticket Vending Machines (TVMs). Smart Phone Mobile Ticketing 4.3 The use of smart phones for travel on Metrolink has always been part of the smart roadmap. The technology is evolving at a fast pace as smart phone usage increases and the functionality within the devices increases and improves. 4.4 Similarly, customers increasingly expect to be able to use their smart phones to access an ever widening range of services. The UK introduction of Apple Pay using iphone 6 smart phones in July 2015, and the use of contactless payments on London s transport services, will further this trend. 4.5 The customer experience will be enhanced by the introduction of a smart phone App to enable customers to purchase smart phone Metrolink products at a time and location convenient to them, and it is expected to reduce the amount of ticketless travel for those who travel without a ticket due to queues at TVMs. 4.6 Mobile Ticketing Apps have proved to be very popular with other transport providers, with many bus, train and tram operators now offering tickets using this approach. Apps present a visual version of the ticket on the smart phone screen and incorporate various features that prevent fraudulent use. 4.7 TfGM has developed a specification that is being used in a procurement process with existing App suppliers, giving the potential for the introduction of the App during Contactless Payments on TVMs 4.8 The TVMs at Metrolink stops already incorporate Chip & PIN technology for bank cards. The devices are scheduled to be upgraded during autumn 2015 to enable the acceptance of contactless payments. 4.9 Following installation, the plan is that customers will be able to purchase Metrolink paper tickets using contactless bank cards at TVMs before the end of SMART ON BUS 5.1 In November 2014, the major UK bus operator groups (Stagecoach, First, Arriva, Go Ahead and National Express) announced their intention to work TfGMC Smart Ticketing Update v /09/ :00

5 collectively to deliver multi-operator smart ticketing across England s largest city regions during As a result of this announcement and building on the smart ticketing discussions that have taken place since 2011 with GMTL and the work of the Smart Cities Partnership, TfGM has been working with Stagecoach, First and Arriva and with Greater Manchester Travelcards Limited (GMTL) to establish a multi-operator Smart on Bus smart ticketing solution in Greater Manchester, with the objective of introducing an initial range of prepaid multi-operator products by the end of The intention is that the initial delivery of Smart on Bus will: introduce an initial suite of get me there branded, multi-operator, prepaid bus smart products across Greater Manchester in collaboration with the three principal bus operators and GMTL; and enable all bus operators in Greater Manchester to participate in the scheme through the provision by TfGM, where necessary, of ETMs and associated back-office services. 5.4 An open public procurement process has resulted in the selection, subject to contract, of a preferred supplier for ETMs for smaller operators that are currently not smart-equipped to support the development of smart ticketing across the North. 5.5 In addition, TfGM has signed a Memorandum of Understanding with South Yorkshire Passenger Transport Executive (SYPTE) and West Yorkshire Combined Authority (WYCA) with the objective of forming a newco to facilitate common approaches to smart ticketing and to drive smart across the north and across all modes. A due diligence process is being undertaken. 5.6 The anticipated benefits of the Smart on Bus implementation include: creating a significant base of get me there cards which can be used to travel on bus in Greater Manchester; in advance of subsequent rollouts on Metrolink and Rail; enabling the introduction of smart multi-operator bus products across Greater Manchester and providing a platform for the introduction of multimodal products in the future; and supporting smaller operators to become smart-equipped, which will enable the introduction of multi-operator products across all operators in Greater Manchester, but will also enable the roll out at a later date of Local Concession smart products. TfGMC Smart Ticketing Update v /09/ :00

6 6. SMART TICKETING ON RAIL 6.1 The Department for Transport (DfT) issued Tender Documents for the Northern and TransPennine Express rail franchises in February 2015, including requirements for smart ticketing. 6.2 Franchise bidders were not permitted to propose their own smart ticketing schemes and were asked to demonstrate compliance with existing implementations. 6.3 The new franchises are due to commence in April TfGM has been in active discussions with prequalified bidders on a range of subjects including smart ticketing. 6.4 TfGM is playing a lead role in the Transport for the North discussions around smart ticketing and in supporting the development of the business case for Smart in the North. 7. SMART TICKETING STRATEGY REFRESH 7.1 A review of the existing smart ticketing strategy will proceed in parallel with the immediate activities that are being progressed. 7.2 The following areas of the strategy will be refreshed: Alignment of the future smart ticketing objectives with the recently published TfGM 2040 Vision, taking into account the emerging aspirations of Transport for the North and the Smart in the North considerations within the rail refranchising programme and devolution programme, including particularly the Bus Reform work; Market updates on the latest technology and payment / ticketing systems worldwide for further consideration to implement in TfGM s smart ticketing strategy; Consideration of the underpinning smart technologies and their associated standards (ITSO, cemv, proprietary contactless approaches, etc.), particularly in the context of solutions associated with mobile devices; Refresh the road map to address the future needs of Manchester s growing population, economy and the increasing devolved accountability within the region; The customer benefits and the potential impacts on patronage; Sourcing approaches for solution development and operational services; and Options to optimise Greater Manchester s integrated transport network using smart ticketing data. TfGMC Smart Ticketing Update v /09/ :00

7 7.3 It is anticipated that the work will be carried out over the next few months, enabling a refreshed strategy to be in place by the end of RECOMMENDATIONS 8.1 A full set of recommendations appears at the front of this report. Dr Jon Lamonte Chief Executive, TfGM TfGMC Smart Ticketing Update v /09/ :00

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