Where Victoria begins to compare disastrously in its smartcard roll-out is in the costs of establishing the first stages. The state government's Transport Ticketing Authority yesterday attempted to dismiss the opposition's assertions that Oyster had cost $289 million to create, saying the card was widely reported as costing around $2 billion. ''The 'comparison' to London's Oyster system,'' spokeswoman Jean Ker Walsh said, was flawed because ''it is well publicised that full implementation of Oyster has come at a cost of £1.2 billion, or about $A2.1 billion.'' But this bundles together the cost of running the system over the past decade, as well as the initial establishment costs. British Treasury figures confirm that £161 million was spent establishing Oyster - about two-thirds of what the Victorian government had initially committed to spending on its smartcard project before the massive cost blow-outs. Other cities analysed by the opposition, including Delhi, Chicago, Perth, New York and Seattle, all had much cheaper options, albeit simpler cards with less functionality. Myki has now become a festering sore that Labor in Victoria must deal with before November's state election. Certainly, new Transport Minister Martin Pakula has done all he can to stress it is his top priority. He has moved the old boss of the government's ticketing authority on and brought in an old government transport campaigner, Bernie Carolan, to try to get things back on track. ''Myki is one of those issues that has caused people to take it out on us a bit,'' Pakula conceded last week.

It is criticism well deserved. The card, late and significantly over budget, is operating only on trains - and working well for those who use only its simplest functions - but not on trams. An extra $216 million has also had to be poured into Metcard to keep it running alongside myki while the problems are tackled. Perhaps the problems started for the government when Transport Ticketing Authority officers selected US company Keane to write crucial elements of the tender brief in 2005. The lack of probity in having a likely future tenderer write guidelines for how the tender process should work - as detailed in a leaked Auditor-General's report in 2008 (that was later dismissed by the Auditor-General as an early draft, despite all dates, names and verifiable facts thus far proving correct) - was remarkable. It later emerged that the then chief executive of the Transport Ticketing Authority, Vivian Miners (who could not be contacted for this story despite many attempts by The Age), was found to have shares in a company that was part of the consortium that won the myki contract. The US company Keane leads the consortium building myki, and operates as Keane Australia Micropayments Consortium. ''Keane had no corporate experience in developing, implementing and operating a ticketing system … Keane has barely demonstrated adequate capability,'' the leaked audit report said. WHAT was never seriously considered by the government after 2003, when then transport minister Peter Batchelor pledged a $300 million smartcard for Melbourne, was simply extending the existing Metcard system, which already had a very basic smartcard capacity built into it (although it would not have been able to store money as myki can, or automatically calculate the lowest fare for passengers).

ERG, the company that created Metcard, repeatedly offered to do this for the government, for what they claim was a cost under $100 million (others have estimated it would have cost $220 million). Such a move would have mirrored the less ambitious but more successful transitions to a smartcard by other cities. Smartcards are being introduced by many transport systems worldwide because they allow the system operators to spend less on ticketing and simultaneously gather massive amounts of travel data. Transport systems with smartcards also need fewer vending machines, are cheaper to maintain because so many transactions are done online, and allow huge numbers of passengers to board services quickly. Sophisticated smartcards also allow different fare options, such as off-peak, that will lure passengers away from packed peak-hour services. The government has been at pains to point out that ''off-the-shelf'' smartcard systems are not possible. In a statement posted on its website, the Transport Ticketing Authority said in November that ''while hardware components can be bought off the shelf - and myki uses some - software must be designed to best meet our state's individual fare structure''. This meant maintaining many existing Metcard and regional fare features, while introducing many new myki features - an excruciatingly complicated feat.

What is clear, however, is that the government could easily have employed a smartcard ticketing system specialist with vastly more experience than Keane. Also bidding were Cubic, which has built many US systems and worked on Oyster in its first stage. Another consortium bidding to build Melbourne's smartcard had developed Hong Kong's Octopus smartcard, which initially cost $100 million to introduce. It has had many teething problems over the years, including in 2007 having to refund about $500,000 to customers who had been overcharged small amounts over seven years. So what are the problems that stop myki being turned on for users across Melbourne, and then rolled out to the wider V/Line system across Victoria (many regional towns will not get myki, despite the system being promoted as a statewide project)? Myki users who catch a train daily and who use only myki's most basic function are likely left wondering what all the fuss is about - other than an occasional problem getting out of gates at City Loop stations, the card works well if they top up with cash and remember to touch off. This is the sort of functionality that Tasmania got with the $4 million Greencard: the most basic of smartcard, it is available on the Apple Isle's buses, and is not much more difficult to use than an office or parking lot entry card.

Any myki users, however, who have tried to top up their card automatically online, or tried to make an online payment, have been left either waiting days for the money to appear on their online myki balance, or find that it does not turn up at all. Minister Pakula has regularly said that these sort of ''back office'' problems continue to happen. Peter Carr, a city worker, is typical of those who have encountered a ''back office'' problem with the card. Upon receiving his card in the mail, Carr topped it up with $50, and noted that the website said it would take 24 hours for this money to load. Three days later, he checked his myki account online and the money had still not appeared. So, despite having spent $50, he was forced to buy a Metcard to travel. A long discussion with the myki call centre followed, and he was told there were delays because so many people were trying to top up. ''Surely that's what it's designed for!'' says an incredulous Carr, who works in IT. Eventually, the money appeared in his account and Carr got to use his myki at Flinders Street Station. He held it up to the barriers but they failed to open, so he bought a Metcard and went home. The next time he checked his myki balance he was shocked to discover he had been charged a $9.92 default fare for a journey he was never able to make.

Another conversation to the call centre resulted in being told he would be refunded the $9.92. That conversation was almost three weeks ago, and Carr is still waiting for the refund to arrive. FOR a few users luckier than Peter Carr, the opposite has been the problem: myki money they never asked for has been credited to their accounts. One pensioner, Kamco confirmed, checked his balance in January to find he had been credited $167,000 to his myki card. Other users have registered for one card, only to receive up to four, or their gender has been mistaken, or they could not access any of their online details. The problems have been as varied as they have been numerous as far as the website and online top-ups have been concerned. Many students using the cards as they started to go back to universities and TAFEs this week and next are experiencing issues with cards that were never activated properly by Kamco before they were sent out. The other problem that continues to nag myki - the big one that stops it from finally being rolled out for all tram and bus users in Melbourne - are the drop-outs that continue to occur on trams, making reliability far below what is needed for a functioning ticket system.

This week, the Australian Financial Review reported that tram drop-outs were related to the heavy steel construction of the trams hindering wireless communications. Pakula said earlier this month that a key problem still affecting trams is ''canyoning'', in which trams regularly drop out of remote communication with a central server because of tall city buildings. One source who is close to the myki project said the government had considered installing remote devices on tall CBD buildings to improve communications with all devices in the city centre. So what are the solutions to the problems being experienced? Last week, it was reported that Pakula had asked his department to look at the impacts of dropping zone two from trams, so that travellers would not have to touch off. Yesterday his office said this was not being considered at this stage. Ultimately, if this option is taken up by the government, it would mean its expensive smartcard could have been bought for a fraction of the cost because the complexity of designing a system for the 53 zones that Victoria has been divided into for myki need not have occurred. A simpler card would have sufficed. Another option that the government appears not to have considered was to follow Sydney's lead: dumping the whole project, which the NSW government did in 2008, after a decade of trying to make it work. It is now starting the process of trying again, but it is clear it is going to be a long road before Sydney has a smartcard.