Transport for London cancels £100 million-a-year Oyster card contract » Bill payments » 24dash.com

A £100 million-a-year contract to run London's Oyster card system is to be terminated under moves aimed at saving millions of pounds, it was announced today.

Transport for London (TfL) said it had given notice to TransSys, the consortium running the contract to maintain and develop Oyster cards, used by millions of people to pay for travel in the capital.

TfL said the announcement had nothing to do with recent problems with the system, which led to ticket barriers at Tube stations being kept open at all stations last month.

A statement said Mayor Boris Johnson and TfL were convinced that any new contract will deliver enhanced services for less money, driving significant savings.

"The Mayor is keen to improve the Oyster card to make it even more attractive for Londoners and TfL will work to make sure this happens, both quickly and in a way that represents the best value," said a statement.

Shashi Verma, TfL's director of fares and ticketing, said: "Transport for London is committed to delivering value for money across all of its services. As part of this we are looking at more cost effective ways to manage and develop the Oyster card system that we expect will save millions over the next few years.

"The savings will be reinvested to deliver further improvements in London's transport system."

The contract was due to run until 2015 but will now end in 2010, with TfL exercising a "break option."

TranSys shareholders include Cubic (UK), EDS International, Fujitsu Services and WS Atkins Consultants. The contract was put in place in 1998 for a term of 17 years.

Around six million Oyster cards are now in use, accepted on 38 million journeys every week on Tubes, buses and railways.

In a statement, TranSys said it had received official notification that TfL had invoked the break clause which forms part of the Prestige contract.

The company went on: "As with the majority of PFIs (private finance initiatives), the Prestige contract, which has been in existence since 1998 and includes Oyster, incorporates a 10-year break clause element.

"The London transport system has changed dramatically over the past 10 years. For the benefit of all stakeholders, contract negotiations have been taking place over the last year between TranSys and TfL. The TranSys consortium will continue to operate and deliver for the next two years."