Original URL: http://www.theregister.co.uk/2008/08/14/eds_restraining_order/

EDS hits TfL with restraining order

Oyster row gets legal

By John Oates

Posted in Government, 14th August 2008 10:37 GMT

EDS has filed a restraining order against Transport Trading Limited, a Transport for London subsidiary, to stop it handing the £100m-a-year Oyster contract to Cubic.

Cubic and EDS were majority partners in TranSys, which ran London's Oyster scheme. TfL, keen to get better value for money, was renegotiating the contract with both partners, but after failing to get better terms from EDS TfL decided to hand the whole project to Cubic.

The deal was meant to be signed at the same time as the termination of TfL's contract with TranSys was announced. But EDS filed a temporary restraining order stopping TfL from signing with Cubic.

This all emerged in a Securities and Exchange Commission filing from Cubic.

The filing said that two rounds of negotiations failed - one with TranSys and one with EDS and Cubic separately. After this TfL decided to give Cubic the whole contract for ticketing from 2010, when the deal with TranSys ends, to 2013.

A Transport for London spokesman said: "EDS, one of the partners of the TranSys consortium, has sought to challenge the procurement arrangements for the new contract. Transport for London are vigorously defending this challenge and have appealed against the interim court order. We remain committed to delivering better value for money and to ensuring a seamless transition to any new contract from 2010." European competition laws lay down strict rules for big public sector procurement projects - usually requiring an open tender process of some kind.

The filing warned that Cubic revenues might be hit in the short term by the restraining order but it expects it to be lifted by the end of the year and most of the cash to be restored.

In separate news TfL said it will seek £1m from the TranSys partnership for lost revenue caused by the two recent failures of the Oyster card system across London. ®