TO
Nigel Corry, Chief Executive
COPIED TO
Nicki Lau Young, NTS Project Director
FROM
Scott Gallacher, General Manager, Metlink
DATE
14 April 2022
FOR YOUR ACTION: APPROVAL MEMO AND PROCUREMENT MEMO FOR INTERIM SNAPPER ON RAIL SOLUTION
Implementation of the Interim Snapper on Rail Solution in support of Metlink’s
resilience and preparedness: Preparing for National Ticketing Solution (NTS)
1.
The purpose of this approval memorandum is to request your approval to:
a) the implementation of an interim roll out of Snapper electronic ticketing across the
remainder of the rail network (the Interim Solution) - noting the Johnsonville line pilot
commenced in November 2021 - with the expectation that the full network (rail, bus,
ferry, and cable car) will transition to the NTS in approximately 2.5-4 years, with the
most recent insights from Waka Kotahi indicating it is more likely closer to 4 years;
b) Out of Scope
c) Out of Scope
2.
Out of Scope
3.
We are therefore requesting that you agree to the above approvals
subject to Waka Kotahi
approval to FAR funding of the Interim Solution.
4.
The memo also notes the arrangements that wil need to be put in place for revenue
protection under the Interim Solution and the upcoming approvals in this regard.
Background
5.
Since mid-2018 electronic ticketing has been provided on all buses in the Wellington Region
under the IBTS (Interim Bus Ticketing System) Agreement with Snapper Services Ltd. Rail has
continued to use paper tickets pending the introduction of the NTS which has had a number
of implementation dates, but at the time of the IBTS agreement was scheduled for
implementation in 2021/2022.
6.
On 14 November 2021, GWRC initiated a pilot of Snapper on the Johnsonville Rail Line
(Johnsonville line pilot) as part of its transition to NTS to learn from operational and customer
APPROVAL MEMO TO DELIVER INTERIM SNAPPER SOLUTION
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experience. This trial has already been very successful, providing many learnings and
generating a positive customer response.
7.
GWRC received advice from Waka Kotahi in December 2021 that a state of readiness of NTS
for implementation on the Wel ington network wil not be before mid-2024 at the very
earliest.
8.
As a result of this advice, a proposal to implement the Interim Solution on the remainder of
the rail network (Kapiti, Hutt, Melling and Wairarapa lines) has been explored to enable us
to meet community needs that come from electronic ticketing, and in support of ongoing
resilience and preparedness objectives. This would be implemented by extending Snapper to
the remainder of GWRC’s rail network in November 2022.
Scope
9.
The functionality of the Interim Solution will be limited to that needed to introduce electronic
ticketing on an interim basis onto the rail network. This means that, for the large part, the
functionality (including validator form) would be the same as the Johnsonville line pilot, with
minor additions to reflect the fare requirements for multiple rail lines moving to Snapper.
Benefits of Interim Snapper Solution
10.
There are a number of benefits in implementing the Interim Solution ahead of a transition to
the NTS. These are:
• Contactless payment option for rail in a Covid environment. While the option to pay by
cash on board the train is proposed to be retained during this Interim Solution, the ability
to pay by Snapper will significantly reduce Council’s financial exposure in the event that
we need to move to only contactless payment to reduce health and safety risks for
customers and workers.
• Increased fare revenue through reduction in revenue leakage on rail (see cost/benefit
analysis below).
• Availability of data (which is non-existent or poor for aspects of the paper ticketing
system) regarding rail usage in support of increased network planning and efficiency; and
• Meeting community expectations of having electronic ticketing across our bus and rail
network.
11. An extension of the Snapper on Rail trial will also provide invaluable lessons for the
implementation of the NTS and its integration into Metlink operations and business activities.
It will also continue the important step of culturally transitioning all rail customers to
electronic ticketing to support a smoother NTS transition. Other key learnings wil include
revenue protection, passenger behaviour and flow management and optimal location of
physical electronic ticketing devices and its retail network.
Cost and Financial Benefits of the Interim Solution
12.
There is currently an LTP provision of $68m ($49m Capex, $18m Opex) for the introduction
of integrated fares and electronic ticketing this triennium.
13. The total incremental cost (above the expected GWRC’s NTS implementation costs) of the
Interim Solution and assuming a transition to NTS in February 2025 is $18m of project opex.
SoR is intended to be a short-term interim arrangement only in place for 2-3 years and
APPROVAL MEMO TO DELIVER INTERIM SNAPPER SOLUTION
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providing key learnings for the wider roll-out of NTS. It is therefore proposed that any
spending on Snapper on Rail this triennium be treated as non-capital project cost (project
opex). As such, this can be funded via a combination of loan and rate funding.
Note that the $18 million estimated cost of implementing Snapper on Rail relates to both one off implementation
costs of $8
mil ion plus estimated ongoing ticketing operation costs of $10 mil ion. These ongoing ticketing
operation co sts would have needed to be incurred if NTS was introduced earlier.
Of the $8m
illion one off implementation costs, it is estimated that approximately half relates to infrastructure
cos ts that will not be re-incurred for NTS.
14.
The expected financial benefit from the Interim Solution over the same timeframe from
increased revenue protection is $14.6m (opex).
15. This results in a net cost of the Interim Solution of $3.4m given it is expected that up front
capital expenditure wil be mostly offset by operational savings. Out of Scope
Procurement of Snapper Ticketing Services
16.
Out of Scope
17. Out of Scope
APPROVAL MEMO TO DELIVER INTERIM SNAPPER SOLUTION
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Approval and sign off
Contract and Procurement approach as set out above approved by (Authorised DFA):
Signature
Nigel Corry
Chief Executive
Date: 19/4/2022
APPROVAL MEMO TO DELIVER INTERIM SNAPPER SOLUTION
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