The transport sector is facing a bill of more than £1bn to set up systems supporting industry-standard smartcards mandated by the Department for Transport (DfT).

Public sector Passenger Transport Executives (PTEs) are trialling equipment to accept the first Integrated Transport Smartcard Organisation (ITSO) passes following the Concessionary Bus Travel Act which was passed in April 2008.

Experts claim the cost of building the systems is too high and the complexity is beyond the resources of most local authorities.

It is assumed that DfT finances will pay for systems, with bus and train operators making the remaining investment. But operators are not convinced about the payback, a transport industry expert told Computing.

“This scheme is a total shambles. A lot of money has already been spent and we still have no real smartcard scheme, just a patchy structure, progressing at different speeds,” said the expert, who requested anonymity.

He said transport funding is allocated to district, town and borough councils, making it difficult to justify investment in separate back-office systems and forcing smaller authorities to explore smartcard partnerships with their neighbours. But no official guidance exists on establishing alliances.

“The limited number of vendors offering ITSO-compliant equipment hold about 90 per cent of the market, leaving authorities with no choice but to pay a lot for what is available,” he said.

However, some authorities remain optimistic. The Greater Manchester Passenger Transport Executive (GMPTE) has included a full smartcard implementation in its £2.5bn pitch for the DfT Transport Innovation Fund.

“When customer pressure becomes apparent, people will look at the feasibility of creating commercial agreements to share data,” said GMPTE IS director David Hytch. “I expect the industry will overcome that problem with regional hubs set up to offer services on behalf of authorities that cannot put in the infrastructure themselves.”

Logica is developing a standard platform for smartcard integration, comprising an off-the-shelf system and managed services for operators and local authorities.