Transport for London (TfL) has
bought the rights to the Oyster card brand for £1m ($1.5m) from
TranSys, a consortium whose contract to run the service expires in
August.

TranSys has been running the Oyster
card system since 1998 under a Private Finance Initiative (PFI) and
took on a debt of £190m. TfL was scheduled to pay back this debt to
TranSys over a period of 17 years; however, in August 2008, TfL
gave notice it was terminating the contract.

TfL took advantage of an ‘opt-out’
clause, which meant it could pay back the debt early and save £4m
in interest payments, giving the business enough money to snap up
the brand themselves.

When contacted by CI,
TranSys declined to comment. Cubic Transportation Systems,
part-owner of TranSys, and HP Enterprise Services will take over
operating the Oyster system when the current contract with TranSys
expires.

Antony Lain, transport sector
director for HP Enterprise Services UK, said: “HP has been involved
for over a decade in delivering services to TfL and its customers
as part of the TranSys consortium.”

“HP is proud to have been part of
the hugely successful Oyster project and will continue to be
involved in the ongoing delivery of Oyster services under a new
contract from August.

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By GlobalData

A Cubic Transportation Systems
spokesperson said: “After August 2010, Cubic will continue to
deliver the services into TfL with the support of HP. The work will
be delivered under a new and different contract.”

The move is part of TfL’s £5bn
efficiency savings programme. It claims the purchase has been made
to deliver better value for money and to make improvements.

Kulveer Ranger, the Mayor of
London’s transport adviser, said: “Oyster has the potential to be
used for so much more than simply getting around the capital.

“The technology is there to make it
even more convenient for Londoners to use by integrating it into
mobile phones or bank cards.

“Buying full rights to the Oyster
brand means TfL now has total control over the future of Oyster.
Paying off the PFI debt six months early is common sense as it will
save London £4m in interest payments.”

TfL started investigating expanding
the Oyster card as a contactless payment network in 2007. Pilot
schemes with handset manufacturer Nokia, phone network O2, Visa and
TranSys enabled consumers to pay for tube journeys with their
mobile phones.

TfL recorded that 9 out of 10
participants said they were happy with the service, and 78% said
they would be interested in using a contactless service if
available on their mobile phone.

From August, all ticketing systems assets such as Oyster
readers, validators, and ticket gatelines; all London Underground
retailing devices including ticket office and passenger operated
machines; and London buses ticketing equipment and back office
systems will be transferred to public control and the ownership of
TfL.