Frank Klees

Frankly Speaking

Frankly Speaking
Article By Frank Klees, MPP
As published in the Auroran
December 4 2012

PRESTO!  Another Scandal in the Making

In the coming weeks, I believe the word PRESTO will become as synonymous with the word ‘scandal’ as e-Health and Ornge.

Transit users are familiar with PRESTO. It's the fare card that allows commuters to tap on and off Go Transit without having to use tokens or cash. The card calculates the fare and deducts it from the balance on the card which can be loaded up and replenished as needed. An OK system, but far from leading-edge  technology. In fact, most electronic fare card systems in other North American cities either have, or are in the process of moving to an "open payment" system that allows commuters to use their ATM bank card or any credit card they may be carrying.

That's the system the TTC decided to implement more than two years ago, and issued a public tender to solicit proposals. After an extensive process, ACS Xerox, one of the prospective bidders, met every one of the conditions and specifications prescribed by the TTC, including the ability to integrate PRESTO into its open payment system. This meant that the open payment technology could be extended to all transit systems throughout the Greater Toronto and Hamilton Area, through one seamless fare card system.

Of particular interest to the TTC and the City of Toronto, was that the ACS Xerox bid not only had superior technology compared to PRESTO, but would save taxpayers more than $300 million in capital costs and some $15 million in annual operating costs.

So what happened next is as inexplicable as it is predictable of dysfunctional governments at all levels.

Just days before the TTC was about to sign a contract with ACS Xerox, Metrolinx directed  the TTC to deal with PRESTO or risk losing millions of dollars in gas tax revenue for key infrastructure projects.

When this issue was brought to my attention last November, I immediately contacted the Ministers of Transportation and Finance asking that they intervene. Both ministers did nothing.

On December 7th of last year, I raised the issue with the Premier during Question Period. I asked if once again, it would take the Auditor General to get the government's attention on a matter that involved gross mismanagement and waste of tax dollars.

The question was ignored.

At the very same time, there were reports that the same coercion tactics were being employed by Metrolinx and the Ministry of Transportation with other municipalities including York, Peel, Durham and Ottawa.

The Ottawa scenario was particularly concerning, because after OC Transpo had been forced by Metrolinx to contract with PRESTO, after two years there was nothing to show but failed attempts to implement its so-called "Next Generation Technology". And while PRESTO was was forced to give OC Transpo a $3 million penalty discount because of these delays, across the river in Gatineau, Quebec, ACS Xerox had successfully implemented same system months earlier.

When it became clear that the government was turning a blind eye to this issue, I contacted the Auditor General on April 30th of this year and asked him to consider including Metrolinx and PRESTO in his next value for money audit.

So where do things stand today ?

Last week, Metrolinx and the Ministry of Transportation  announced that an agreement had been signed with the TTC and the City of Toronto under which PRESTO would deliver its transit card-payment system. There was no public tender process for this multi-million dollar deal - a glaring contravention of provincial procurement policy.

We also know that PRESTO still does not have the ability to deliver what the TTC is expecting - and what people actually want - the advanced, user-friendly open payment system. PRESTO's response is that it will "develop" that technology.

We should remember that the consultants behind the eHealth scandal led us down the same blind alley. They wasted more than a billion dollars developing an electronic medical records system and we still don't have anything to show for it.

The question now is, why have we not learned from eHealth?  Why, after the Ornge fiasco, do we now hear from the CEO of Metrolinx that taxpayers' money will be used to develop a technology that will ultimately be the property of a private, for- profit company ?

In the normal course, I would have had the opportunity to pursue the government on this issue in Question Period, but as we know, the doors to the Chamber are locked.

The Auditor General will be releasing his report within the next two weeks, and I will be looking forward to his findings on this issue.

As always, I welcome your comments and advice. I can be reached through my website at or at 905 750 0019.


Auditor General Report Released December 12, 2012 confirms . . .