EDS court order blocks Oyster contract going to rival

EDS has secured a High Court order to stop another member of the consortium running the Oyster card system taking over the whole contract.

EDS has secured a High Court order to stop another member of the consortium running the Oyster card system taking over the whole contract.

In a further setback for the beleaguered smartcard payment system, the temporary order is disrupting the transport authority's plans to replace the TranSys consortium that has been running Oyster.

EDS, a leading member of the consortium, has secured the order against Transport Trading Ltd (TTL), a subsidiary of Transport for London (TfL) after the authority last week gave two years' notice to terminate the contract.

TfL said that the termination of the contract was unrelated to software glitches that caused chaos for passengers, whose swipe cards became corrupted or stopped working. TfL is seeking £1m compensation from TranSys over losses it says were caused by the chaos.

The authority was planning to give the Oyster contract to the other main member of the TranSys consortium, Cubic Corporation, from August 2010.

But a filing by Cubic to the US Securities and Exchange Commission revealed that EDS has blocked that move with an interim order.

The filing said, "In early 2007, TTL expressed its desire to restructure its contract with TranSys to obtain better terms. Negotiations with EDS and Cubic commenced under the TranSys umbrella and continued through February 2008.

"At the end of February 2008, TTL notified TranSys that, while satisfactory progress had been reached with Cubic, negotiations with EDS had failed. TTL terminated negotiations with TranSys, but continued separate negotiations with EDS and Cubic outside the TranSys umbrella.

"Negotiations with EDS failed again. TTL then negotiated with Cubic to perform the entire project."

"These negotiations were successful and a new contract called the Future Ticketing Agreement (FTA) has been prepared under which Cubic would provide TTL with all services from 2010 to 2013."

"It was TTL's intention to sign this contract simultaneously with terminating the existing TranSys contract. EDS has obtained a temporary restraining order (TRO) preventing TTL from doing this.

"Cubic believes that TTL will have this TRO lifted by the end of this year. When this occurs, Cubic and TTL now intend to then sign the FTA."

A TfL spokesman said in a statement today, "EDS, one of the partners of the TranSys consortium, has sought to challenge the procurement arrangements for the new contract. Transport for London is vigorously defending this challenge and have appealed against the interim court order.

"We remain committed to delivering better value for money and to ensuring a seamless transition to any new contract from 2010."

No one could be reached at EDS for comment in time for publication.

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