Auckland's multi-million ticketing mess: Snapper won't go down without a fight
Snapper says it will take "All necessary legal steps will be taken to recover losses arising from the wrongful termination” - promising Auckland's electronic ticking mess is about to get messier.
Late yesterday, Auckland Transport (part of Auckland Council) confirmed it had fired Snapper from the city's behind-schedule $100 million ticketing project, which covers trains, ferries and two rival bus services (one, NZ Bus, owned by NZX-listed Infratil - also Snapper's parent company).
Auckland Transport said Snapper had no chance of meeting a November 30 deadline for a united ticketing system. The Wellington-based company would receive no compenstion.
The announcement came after an emergency meeting yesterday afternoon failed to resolve the a conflict between French company Thales - which is managing the project - and Snapper.
Thales maintains Snapper has failed to deliver; Snapper that the French multi-national has fallen down at its end.
Snapper CEO Miki Szikszai did not respond to an NBR request for coment, but forwarded a statement from Snapper chairwoman Rhoda Phillippo said in a statement (see RAW DATA below).
"The fault lies with Auckland Transport, the New Zealand Transport Agency and the French multinational Thales for not providing the critical components for successful integration," Snapper chairwoman Rhoda Phillippo said in the statement.
News of Snapper's sacking came after market close. Infratil shares [NZX:IFT] had risen 2 cents to $2.10, close to the top of their 52-week range ($1.70-$2.13).
RAW DATA: Snapper release
24 August 2012
Wellington, New Zealand
Wellington-based Snapper Services Limited (Snapper) today confirmed that it had received notice from Auckland Transport purporting to terminate the Participation Agreement signed in November 2010.
Snapper maintains it has been wrongly blamed for delays in the introduction of Auckland’s Integrated Fares System (AIFS).
“The fault lies with Auckland Transport, New Zealand Transport Agency (NZTA), and the French multinational Thales for not providing the critical components for successful integration” Snapper Chair Rhoda Phillippo said tonight.
“Over the course of the last few months Snapper and Auckland Transport have been discussing Snapper’s role in the AIFS project. Auckland Transport has been concerned about its ability to deliver a complex multi-party integrated fare system. “The parties had been working over the course of the last two weeks on next steps but were unable to reach agreement”.
As a result, Auckland Transport has announced that they will engage French multinational Thales to develop and roll out a bus solution for all Auckland bus operators by April 2013 at a cost of over $12 million.
Rhoda said “We are naturally disappointed by this decision, as we have invested significant capital and effort to develop the Snapper system, which is currently the only operational integrated ticketing and payments solution in New Zealand. We are frustrated that critical components for our integration work that we needed from Auckland Transport, NZTA and Thales have consistently not been made available to us. Snapper put forward a plan in April that would have delivered by 30 November, but Auckland Transport never took the decisions and steps it needed to take for that plan to be implemented.”
“Auckland Transport is being disingenuous with its attempt to position Snapper as the reason that the AIFS project is delayed. Delivery of the AIFS system was the responsibility of Auckland Transport, with their partner NZTA and their prime contractor Thales. Snapper’s role was limited to integrating with that system, and the reality is that the AIFS system has not yet been built. What Auckland Transport also fail to mention is that of their $100m spent to date on this project, Snapper has never received any compensation for its integration efforts. Auckland Transport are solely accountable for the design, systems integration and delivery of this project”.
“Snapper is ready to deliver a fully compliant and integrated system as soon as Auckland Transport address fundamental capability and project management gaps – something they are unlikely to do until they acknowledge they have a problem.”
“The ultimate cost of this decision by Auckland Transport for Auckland ratepayers is likely to be significant when compared with the commercial investment that Snapper has made to date and were willing to continue to invest until the project completed”.
“Snapper’s clear legal position is that it has not breached its contract with Auckland Transport, so Auckland Transport cannot terminate the contract. All necessary legal steps will be taken to recover losses arising from the wrongful termination.”
The HopSnapper solution has proved to be a worthy solution as it has enabled Auckland Transport to meet its Rugby World Cup electronic ticketing commitments and improved service in Auckland. Snapper and NZBus will continue to operate HopSnapper and support the ca. 200,000 cards on issue to customers in Auckland.
Rhoda maintains that Snapper remains a successful option. “New Zealand’s regions want a choice of how they deploy integrated ticketing for their customers. The Auckland system is expensive and complex and may not be appropriate for smaller regions with less public transport patronage. Snapper will continue to offer its services in these regions where it makes economic sense. Snapper’s existing business in Wellington remains a key focus as do other projects including Parking and Mobile Payments where Snapper has established a clear leadership position with partner 2Degrees.”
In the interim, NZBus and Snapper will continue to focus on ensuring they provide excellent services for Auckland passengers.
Rhoda Phillippo
Chair, Snapper Services Limited
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Comments and questions28
A good old punch up in the courts. Better than watching the footy.
Still when the ceo of snapper as quoted "The fault lies with Auckland Transport" he is so right on every level. Auckland transport is a bloated, over funded zoo of incompetents that has an extraordinary ability to stuff up anything to a measure in line with their arrogance. The region is littered with examples such as the most recent plan to munt Wellington St onramp with the stupid ramp signals stuffing up routes all over Auckland.
Nice try, the Wellington St onramp was a NZTA decision not AT.
"The NZ Transport Agency and Auckland Transport have completed a three-month joint review....."
http://www.nzta.govt.nz/consultation/wellington-street-on-ramp/
No buraucrat wants to be tainted when the public finally get their way.
Wow, it's everyone's fault but dodgy old snapper's! Steven Joyce shouldn't have interfered with the AT/Thales contract and forced them to cut snapper into the deal for political reasons. If Joyce has just kept his nose out, the whole thing would be working by now
I knew it wouldn't work from the Start...
I mean really we are never going to be like Singapore e , Hong kong and even Australia !
mono rail, Good Trains.. Stop donating to Trusts and Grievance s and bring in Asians to show us how to DO it instead of bullshite asses that are just Stitching up; Dumb old Transport Companies
I wish I could dream up a Scheme and Sell my stupid Idea for millions and then Take them to court if I fail ,,,,,WOW
The irony is that the French company Thales is going to implement a system that is nothing like what is used in France (& Germany, Italy, Belgium, Portugal). Those countries all use a technology branded as 'Calypso' which is - quelle surprise - quite similar to Snapper!
The technology that Auckland Transport (and by default NZ Transport) are looking to standardise NZ wide is old, proprietary (owned by NXP semiconductors), and no standards based support for mobile phones. Anyone introducing a public transport system in 2012 that does not have mobile usage & payment as a core strategy is simply INCOMPETENT!
>"The technology that Auckland Transport (and by default NZ Transport) are looking to standardise NZ wide is old, proprietary (owned by NXP semiconductors), and no standards based support for mobile phones."
If this is the case then this really needs to be stopped before it's too late. To proceed on this basis would be nonsensical.
sounds like auck transport didn't build "their bit" but are way to dumb to realise it. age old problem with it builds - developers get the blame for building what they are contracted to do but the bits at the other end aren't ready. go snapper - i hope the truth comes out for you guys
Few days ago when this story was unfolding there was a story in the NEWS Papers that Bill English pressured (rather arm twisted) Auckland Transport into snapper deal. Auckland Transport went along because they were expecting Govt. support for their rail project. This is a mess created by National and they should sort it out instead of Auckland Tax payer straddled with legal bills, damages, replacement costs etc. National 's ongoing interfering with the process (remember Nick Smith) to help their buddies is costing the country. Rt Hon John Key your reaction please. Your ministers these days don't front up. they take to you tube. They don't even respect peoples privacy. Instead use then to blackmail you into silence. Don't worry guys Labour is no better. All of them come from gutters
This is why you shouldn't run a country like a business. Steven Joyce should stop trying to help out his mates.
This whole fiasco has come about because of pressure from Mike Lee going back to the days of the ARC, to control all aspects of public transport in Auckland, and particularly the cash flow from integrated ticketing. He never accepted the sale of the buses to a private sector operator, and has been antagonistic towards NZ bus ever since. If Snapper works as an integrated ticketing sytem in Wellington, surely it could have worked in Auckland - but that would have involved a private sector solution, and we can't have that can we?
There is no integrated ticketing system in Wellington and no evidence that any of the bus companies really wants it to happen. Why change the system if you can charge one full fare to the railway station, then another two section fare up to the uni-? the services run on public subsidies for the most part ,as potential clients resent being gouged by the current ticketing policies.
Thanks 'Steven Joyce' for this screw-up!!!
YOU A$$
I hope they go to court so all the details of this sordid waste of funds can come to light. The suggestion that integrated ticketing is worth $90 million is beyond belief, and I can only surmise that someone got something from someone to agree to that over-inflated by ten times deal.
Thales is old news and outdated. Why are we going into an old outdated system when modern tech allows you to use your mobile phone to pay for public transport as you board the bus or train ie; Japan and Korea who are way ahead of NZ. I can see that in 5 years time the Thales system will change with another cost to the ratepayer so passengers can pay by mobile. Len Brown says we will become a world class city but it won't be with old technologies.
The same way of thinking applies also to the overhead electric cables being installed for electric trains in Auckland, why not go under ground now instead of paying twice with undergrounding in 10 years time double dipping on the ratepayer.
Private businesses would all fail if they operated the way Auckland City Council is operating. Get real Len Brown and gang of double dippers.
AT can't even replace a broken bus stop, let alone handle a complex modern ticketing system.
Auckland Transport won't be too fazed by Snapper's legal threats, because they have Ratepayer Indemnity Insurance. Free, too.
And the winner in all of this will be the lawyers as they will suck still more rate payer money out of the pot. The commuter - and the subsidising Auckland Rate payer miss out again!
Sounds a bit like the Infratil arrogance we had over the Wellington airport signage: if anyone criticises our company they must be idiots or closet commies. Snapper is a dog as implemented in Wellington, and of course you have to pay a commission to the company to put any money on it, and there is no word of cards being refundable if no longer required (cf the Octopus card in London where it is feasible to buy one just for a few days and then sell it back without penalty at Heathrow or any other station)- Auckland has done well to limit its exposure to Infratil.
So here goes the legal battle of the century and expect Auckland transport to end up with big problems and paying enormous money to Infratil / Snapper. There is a history of Auckland Transport officials hating Snapper and telling half truths about so called open processes. After all in the peoples republic of Auckland with the out of control left wing politicians and local government bureaucrats this suits their cause.
My money (from a reasonably well informed position) but not connected with Infratil or Snapper, is that Auckland transport will be sued for multi millions.
Put $50 million in your budget for payment to Snapper Mayor Brown - Infratil and Snapper apparently consulted widely with the legal fraternity and there are rumoured to be a number of Top Tier legal firms and barristers fighting to take this one, as it is a slam dunk !
If snapper is so good, why did Snapper not able to convince Newlands bus to use it? It is sad that the CEO of Snapper is mute and not able to speak out and has to rely on the chairwoman of Snapper.
It makes me laugh at so many "pro Snapper" authors posting here. Great trolling by Snapper but the truth will out over time. Snapper have had 2 years to develop a complaint solution to the same international standard that has been successfully implemented overseas. And so far how much have they developed?... 15% at best according to independent experts. Ask anyone involved in NZTA, Parkeon, Thales, GWRC and AT and they'll tell you that Snapper have been deliberately obstinate and obstructive throughout the whole integration process. Even the OAG report on the subject (if ever released) will show how poor Snapper really are. Sympathy? None. Termination without a cent of compensation is entirely appropriate.
@ no name supplied - I worked with Miki and he was a good guy who got a whole lot done. Ignorance and comments like yours are not helping the situation which is very sad.
Auckland Transport, we all know they are morons. Look no further than their determination to have Segways registered , licensed and off the pavements. No problem...lets deliver pizzas by bus.
I use snapper in Wellington and it works fine for catching the bus, buying snacks and catching the train.
You see Jaffas we have public transport that works in Wellington
Auckland Transport was never going to accept Snapper. ARTA's miserable project performance at the beginning in not selecting a system, pushed NZ Buses into introducing Snapper. ARTA and then Auckland Transport have undertaken a position of ousting Snapper since they felt so aggrieved that NZ Buses did something faster than they could ever have done. Within a day of the decision, nice glossy brochures are being issued to public transport customers, which has reference to Snapper not being used - Strange how they could do this so quickly. Auckland Transport needs to get it's project management and stakeholder management together and stop wasting public money.
I laughed at that too. "Decision made late on Friday" my a*se. I heard about it the week before and they had plenty of time to print brochures and book Herald advertising.
Auckland cant live in it, cant nuke it...... this might be a good time to suggest a new branding campaign for Auckland "Auckland, New Zealand'd nuclear weapons testing site in waiting"