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PROOF VERSION ONLY SELECT COMMITTEE ON TRAIN SERVICES Inquiry into the factors leading to and causes of failures in the provision of metropolitan and V/Line train services, including the impact on those services as a result of the purchase, operation and implementation and oversight by government of the myki ticketing system in Victoria, including an examination of performance, costs and integration of the myki ticketing system Melbourne — 23 August 2010 Members Mr B. Atkinson Mr S. Leane Mr G. Barber Mr E. O’Donohue Mr D. Drum Mr M. Viney Ms J. Huppert Chair: Mr B. Atkinson Deputy Chair: Mr S. Leane Staff Executive Officer: Mr R. Willis Research Officer: Mr S. Marshall Witnesses Mr G. Purdy, chief executive officer and vice-president, Keane Australia Micropayment Consortium Pty Ltd; and Mr A. Durrani, executive vice-president, Keane Asia-Pacific. Necessary corrections to be notified to executive officer of committee 23 August 2010 Select Committee on Train Services 1 The CHAIR — I formally declare open the Legislative Council Select Committee on Train Services public hearing. Today’s hearing is in relation to the committee’s amended terms of reference of which you have been well aware — namely, the factors leading to and causes of failures in the provision of metropolitan and V/Line train services, including the impact on those services as a result of the purchased operation, implementation and oversight by government of the myki ticketing system in Victoria, including an examination of performance costs and integration of the myki ticketing system. I extend a welcome to representatives from Keane Australia Micropayment Consortium Pty Ltd: Mr Greg Purdy, the chief executive officer and vice-president; and Mr Amir Durrani, executive vice-president, Keane Asia-Pacific. I indicate to you both that all the evidence that is taken today is protected by parliamentary privilege. However, if you were to go outside the precinct and repeat those comments — indeed repeat them to the media on the steps of Parliament or something — then you are not necessarily covered by that same privilege. All evidence is also going to be subject to Hansard in so much that notes as a comprehensive record of today’s proceeding will be taken. You will have an opportunity to have a look at that record to make sure that we have no misspellings or key things that might be inaccurate, but obviously the substance of the record is not to be changed. What we have done with most of the witnesses over the process is invite them to make some opening statements, and then we have proceeded to questions. On this occasion if you would like to do that as well, I would invite you to perhaps give us an introduction and overview from your point of view in respect of our terms of reference, and then we will proceed to some questions. Mr DURRANI — Good afternoon, and thank you for inviting us to this session today. My name is Amir Durrani. I am the executive vice-president, Asia-Pacific, representing Keane. Kamco is part of my portfolio. Obviously it is a significant part of our portfolio in Asia-Pacific. Also you know that Kamco is a wholly-owned subsidiary of Keane. Keane globally has about 12 000 consultants. We are a US-headquartered organisation. Our Asia-Pacific headquarters are in Melbourne. We have around 150 consultants based locally out of Melbourne, primarily around Kamco. We look forward to your questions. However, before that I would like to introduce Greg Purdy. He is the CEO for Kamco. I invite him to present his opening remarks. Mr PURDY — Good afternoon, gentlemen and ladies. I am Greg Purdy. I am the CEO of Kamco, so I am responsible for the day-to-day operation of the company. Included in that responsibility is the management of the build team deploying myki and the operational team that is providing the support to the modes that are currently in revenue service, being regional bus, metropolitan rail and metropolitan bus and tram. The myki contract was awarded to Kamco on 12 July 2005. Kamco was contracted to design, build, implement and then operate the myki system. As you are aware, under the contract Kamco is to be paid $494 million over 14 years. This includes $176 million to build the system and then around $318 million to operate the system for 10 years. So far we have been paid around $150 million. Now we are out and operating on four of the modes, as I said earlier. As recently as July we went live on tram and bus, as you know. Amir and I are happy to take your questions. Mr BARBER — Thanks very much. The equipment and all that as they operate I get to see everyday, so I have a feel for it. I am no tech-head, as they say, but I get to see that in operation. The back-end financial and data processing side of it is obviously not visible to me. Can you explain to me what is the scale of that part of the job and what functions you are performing there, apart from the obvious thing, which is to collect some money from someone? Mr DURRANI — I think a big piece of our processing is obviously the financial aspects, which involve the financial reconciliation on a day-to-day basis and on a monthly basis, and we are performing that in conjunction with the TTA, and sharing the results with them. So we have gone through an audit process with them. Obviously TTA owns the results of that audit — the government owns that — and we are delivering those services in conjunction with TTA. 23 August 2010 Select Committee on Train Services 2 Mr BARBER — But can you give me an idea of how many transactions that involves or how big the computer has to be or how many people you need to keep that running? How often do you have to intervene in it to keep it running? It is not just a giant automatic teller, obviously. Mr DURRANI — No, it is not. We have a whole operations team there monitoring the system 24/7 to keep the system up and running. We are running the system. We have the data and information, but a lot of that data and information is owned by the government, and they should really be sharing a lot of that information with us. But we have a fairly elaborate operations scheme in Melbourne to monitor the system on a 24/7 basis. Mr BARBER — I do not know what ‘fairly elaborate’ means, because I do not know anything about this sort of exercise. Mr DURRANI — ‘Elaborate’ means to provide the customer experience that you are seeing today. When you said you go and visit the trams or buses and you are seeing the response from them, that is what the team is supporting to provide for you. Mr LEANE — You mentioned introducing myki onto trams and buses in July, and obviously there were a few problems before introducing it onto trams and buses in July. Can you fill us in on the problems and what you had to do to overcome those problems to get to the position we are in now; and secondly, regarding the future of information flow between trams and buses and the main servers, or whatever you want to call it, at the last hearing there was talk that there might be some new technology that will improve the way you move information from the trams and buses to the system. Mr PURDY — The system, like all large complex software systems, has had a maturity path through versions of software. What you saw occur through June then into July was a standard maintenance release of software. In June we piloted one organisation, finalised it, debugged it and then in July there was the version we sanctioned to go live upon as it was stable and met the requirements that were required. Moving forward, like every software program it will have a release cycle where maintenance releases will be programmed over time to increase the system maturity and availability. That will be an ongoing thing that will be part of the normal program, and then we will move into the operations phase. The enhancement you may be speaking of is fairly well known through to TTA, and that is the inclusion, commencing later next month, of a vehicle communications unit on the remote tram and bus communications. So that will enable us to get better and more timely communications from the vehicles. Mr O’DONOHUE — When will myki be rolled out on V/Line? Mr PURDY — We are currently working the scheduled in a staged approach with the TTA, but the TTA are the owners of when we are going to do that. Mr O’DONOHUE — Do you anticipate that that will happen this year? Mr PURDY — It is the TTA’s decision as to when we actually roll that out. Mr O’DONOHUE — I appreciate that, but do you think it will happen this year? Mr PURDY — It is the TTA’s responsibility for that schedule. The CHAIR — If the TTA said next week, are you in a position to do it? Mr PURDY — The program is a phased approach. The next phase will be to launch this into regional rail, which is part of V/Line. The CHAIR — But when are you, operationally, able to do it? I understand the TTA will make the final decision, but when is your capability such that in that phased approach you would be able to deliver on that sort of direction? 23 August 2010 Select Committee on Train Services 3 Mr PURDY — The system is able to be rolled across different modes, and we have a schedule to do that.