The ACT faces a series of barriers before its public transport ticketing system can integrate with NSW to offer seamless travel across the border, Transport Minister Chris Steel has said.
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Mr Steel said the new system - to be known as MyWay+ - will allow the territory to integrate ticketing with NSW and other jurisdictions.
"There are some real hurdles that we'll need to work through in the future, and that includes how we manage concessions and if NSW will recognise the ACT's concession system," Mr Steel said.
Mr Steel said the new system, which would be developed over the next year, would allow the territory to begin conversations with NSW on integration, which was impossible under the existing MyWay system.
NSW Regional Transport Minister Paul Toole said last month cross-border public transport integration was a "conversation we have to have" with the territory.
The ACT has come to a long-awaited agreement with NEC Australia to build and operate the system, having first flagged an overhaul in 2016.
The rollout will include more than 1000 new validators across the bus fleet and light rail platforms, while about 25 new ticket vending machines will be installed.
Mr Steel said existing MyWay cards would not be compatible with the new system, parts of which could be operating before the end of the year.
"One of the reasons we're replacing the outdated MyWay system because it's no longer supported by the company that runs it, but also the amount of money is stored on the card itself, so that is a real problem because it means when someone loses a card, they lose the cash on the card," he said.
The opposition spokesman on transport, Mark Parton, said he had been surprised the ACT never sought to roll out the NSW's transport ticketing system, Opal.
"I would say do not cut your MyWay card just yet because I think you will be waiting for this new system longer than you would be waiting for pretty much for any suburban bus at any stage after 2pm on a weekend, and I think as weekend bus users would know, there's a far chance the bus is never coming," Mr Parton said.
Mr Parton said he agreed the new system - which will allow travellers to use their credit or debit cards to tap on and off public transport services - would help make public transport more accessible.
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"There are some positives in that a contract has been signed but I'm just astounded that after so much hot air has come from this government over the best part of a decade on this, we're still a fair way down the track," he said.
A previous procurement process for a ticketing system was abandoned after the government determined the preferred supplier's proposal was too expensive.
Mr Steel on Monday declined to say whether that preferred supplier was also NEC Australia, which has been selected to deliver the new system.
The Transport Minister said more announcements would be made on how data linked to passengers' accounts would be handled, but said this would be done in a secure manner.
Mr Steel also indicated the system may be able to link to other ACT government services, allowing residents to have one set of log-in credentials to access a range of government services.
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