ERG 0.00% 1.3¢ eneco refresh ltd

smart move

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    Smart move for ERG; +30%
    Shares in smart card group, ERG Ltd (ERG) surged more than 30% today on news it had signed a $320 million contract to operate a smart card system for the entire Greater Sydney public transport network.

    Investors rushed in to snap up the stock, pushing ERG up as much as 5c to 18c before settling back down to 16c in afternoon trade.

    ERG estimated the contract was worth approximately $320 million, but said it could rise to as much as $370 million, incorporating CPI escalation over the term of the contract.

    The 10-year agreement, expected to be fully operational in 2006, covers all State Rail, State Transit and private operator buses, State Transit and private operator ferries, as well as Sydney's light rail and monorail.

    "It is expected that the first commuter smart card travel will be available on inner city services in late 2004, with current plans to convert most of Greater Sydney's commuter transport services to smart card ticketing during 2005," ERG said.

    "At that time it is expected there will be two million smart cards on issue."

    ERG said the contract also included a separate agreement which gave ERG the right to work with the government to potentially extend the use of the transit smart card to vending, venue ticketing, parking, fast food outlets and tolling, with additional revenue shared between ERG and the government.

    At 1440 AEST ERG was trading 3c higher at 16c

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