Metrolinx has now spent $1 billion delivering the Presto fare card system to transit agencies across the province, and expects the bill to increase by $200 million more over the next three years.

The anticipated $1.2-billion in spending was revealed Friday in the arms-length provincial transportation agency’s annual report, and represents the capital costs for Presto between 2002 and Mar. 31, 2018.

The whopping sum is equal to the entire construction budget for the 11-kilometre Finch West LRT.

It is also a significant increase from the $700 million in Presto costs Metrolinx projected six years ago when a provincial auditor general’s report warned the program could end up being one of the world’s priciest fare-card systems.

Jessica Bell, transit critic for the opposition Ontario NDP, said the new numbers prove “it’s time to have a good, long review” of Presto.

“The costs keep going up, and it’s transit riders that are paying more for a system that is just not adequate,” said Bell, MPP for University-Rosedale. She cited problems such as the TTC’s delay of its transition to Presto and the program’s history of technical glitches.

In its report, Metrolinx defended the $1.2-billion capital outlay, describing the spending as “comparable with the electronic fare payment system investments made in comparable world-class global cities.

“As we move forward with maintaining and improving the Presto system, we’ll ensure that we’re spending public dollars in the most responsible manner, while also ensuring that we’re achieving the best value for our customers,” said Metrolinx spokesperson Anne Marie Aikins.

The $1.2-billion figure doesn’t include the operating costs of the fare card system, which is used by the TTC, GO Transit, MiWay, and eight other agencies across the province.

Metrolinx said it was unable to provide yearly operating figures for the program Friday.

Of the $1 billion in capital spending to date, Metrolinx has spent $478 million deploying the Presto system on the TTC, which is, by far, the region’s largest transit agency. Metrolinx estimated, in 2012, it would cost just $255 million to install Presto on Toronto’s network.

Aikins said the TTC-related costs were higher than expected because Metrolinx paid for additions to the original contract such as installing Presto equipment on the agency’s older streetcars as a result of delays to the city’s order for new Bombardier vehicles.

The TTC has disputed that argument in the past, saying that most of the costs Metrolinx has incurred were within the original scope of the project.

Presto’s capital costs have ballooned steadily since 2006, when, under the previous Liberal government, the ministry of transportation signed a 10-year, $250-million contract with Accenture, a private company, to develop and operate the Presto system. Roughly $150 million of the original contract was allocated for capital costs.

But the contract grew in the ensuing years as the scope of the project increased and new transit agencies signed on.

Most significantly, in 2011 the TTC agreed to adopt Presto, despite having an agreement in principle with a private company to develop its own open-fare payment system. The TTC abandoned that plan as the Liberal government of the day made transfers of provincial gas tax proceeds and other funding to municipalities contingent on their adoption of Presto.

In his 2012 annual report, then auditor general Jim McCarter criticized Metrolinx’s spending on Presto, particularly its decision to develop a system called Presto Next Generation (PNG) in order to expand the fare card to Ottawa’s OC Transpo and the TTC.

Instead of putting the new system out to competitive tender, Metrolinx merely increased the size of its existing contract with Accenture.

McCarter wrote that Metrolinx had been unable to show it had explored alternative procurement options that may have lowered the cost of PNG.

He stated that when spending on the original base Presto program and PNG were considered together, Presto “would turn out to be one of the more expensive fare-card systems in the world.”

Although the Progressive Conservatives slammed the Liberal government’s spending on the Presto program while in opposition, a spokesperson for Transportation Minister John Yakabuski declined to say Friday whether the newly elected PC government considers the cost of the fare card system appropriate.

“We have conducted a line-by-line audit of government spending to ensure that we are best positioned to deliver transit projects in a cost-effective way. We will continue to eliminate inefficiencies and provide quality service to bring relief to transit users,” wrote Justine Lewkowicz in a brief statement.

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According to Metrolinx’s annual report, the additional $200 million the agency expects to spend over the next three years includes “transit agency-specific and cross-network items,” such as changes to support the TTC’s new time-based transfers, a Presto app, and the launch of disposable Presto tickets on the TTC.

According to Metrolinx, an average of 1.1 million riders across the province use Presto each weekday.

Only about one quarter of TTC riders use the card, but that is expected to increase as the agency phases out tokens and tickets at the end of 2019.

The $1-billion spent on the program to date includes the cost of developing the central Presto system, expansion to OC Transpo in 2012, the addition of the Union Pearson Express in 2015, and the installation of fare card equipment on TTC buses, streetcars, and subway stations. Metrolinx has also spent on system upgrades and capacity expansion to support an anticipated fivefold increase in Presto users as more TTC riders switch to the fare card.

Metrolinx also spent $42 million in the 2017-2018 fiscal year to keep the system in state of good repair.

In addition to the province’s costs, the TTC has budgeted $60.9 million of its own money to put Presto-enabled fare gates in its subway stations.

Presto timeline

2002: Ontario Ministry of Transportation and GO Transit begin developing fare card system

2006: Ministry signs 10-year, $250-million contract with Accenture to develop and operate Presto

2011: Under threat that province will cut off gas tax proceeds, TTC abandons deal with another supplier and agrees to adopt Presto, instead

2009-2012: Metrolinx seeks board approval for additional spending that pushes capital costs of Presto to $700 million, causing auditor general to warn province is creating “one of the more expensive fare-card systems in the world”

2016: Presto readers are installed on all TTC buses and streetcars, and at least one entrance of every subway station

2017: Cost estimate of installing Presto on the TTC rises from $255 million to $385 million

2018: TTC report reveals switching to Presto will cost Toronto agency millions more each year compared to old tickets and token system.

Ben Spurr is a Toronto-based reporter covering transportation. Reach him by email at bspurr@thestar.ca or follow him on Twitter: @BenSpurr

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