ACTION general manager Tom Elliott said about seven companies had bid to supply the system, and two had made the short list.

After visiting Canberra, both companies were preparing final tenders which would be evaluated over Christmas.

Cabinet would then be briefed with a recommendation to proceed.

The ACT Government has allocated $8million for the project which will be based on smartcard technology. It will significantly improve data collection by ACTION on passenger movements and will replace the present Wayfarer system, installed in 1995 for about $3million and which is well past its use-by date. Units regularly fail, losing revenue and data.

Mr Elliott said that by taking time with the introduction of the new system, there would be a better result.

''The vendors are telling us that if we are smart we need to be a bit patient. Their view is that we should take most of 2009 to design, test and pilot the system and bring it online properly in 2010.'' Mr Elliott said

Benefits of ACTION's new ticketing system will include information on when passengers board and alight.

The current system records only how many people travel on a particular route.

Mr Elliott said this meant designing efficient routes was largely subjective.

''The route services are designed on what we think people might be wanting to do, but it doesn't tell us what they are actually doing,'' he said.

With the absence of hard data, the subjective nature of the network's design made it difficult to provide better connections at interchanges and other points around the city.

With Canberra's bus network designed around nodes, connections were critical to make the service comfortable, convenient and accessible for customers. Getting connections as right as possible would increase patronage.

Using a global positioning system, the new ticketing system would also provide information on bus movements, which was essential for providing passengers with real-time information.

It would also allow ACTION staff to observe bus movements to identify services that did not meet particular timing points.

Mr Elliott said ACTION wanted a ''tag on, tag off'' system to record passenger movements on all services. The new ticketing system would be based on a continuation of ACTION's flat fares.