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Cubic Corporation, the US-based system integrator, has announced that its Cubic Transportation Systems (CTS) business division was selected by the Massachusetts Bay Transportation Authority (MBTA) to design, build, operate and maintain a next-generation fare payment system under PPP scheme.

The base contract award for Cubic includes an approximate US$575 million for implementation with 10 years of operations and maintenance in addition to two 5-year extension options.

An important aspect of the agreement is a public-private partnership (P3), in which Cubic and its partner John Laing arrange the funding for the implementation and operation of the new fare payment system. The Cubic-John Laing Consortium, which was selected as the preferred bidder for the new system, will be the first P3 fare collection project in the U.S.

Cubic will be responsible for the development of the new fare payment system as well as operational and maintenance services including platform and back office hosting; card fulfillment; financial services including clearing and settlement; and the retail merchant network. Equipment will include fare validators, fare gates and vending machines for all MBTA subway and rail stations, in addition to more than 1,000 buses.

Luis Manuel Ramirez, general manager of the MBTA, said:

“This isn’t just the next generation of fare collection, but an entirely new way that our customers will interact with the MBTA. The new system will be compatible with all modes and will provide more options for paying fares, and will have more fare media available for use. While we still have much work ahead of us in educating our customers in how the system will work, today is a major step forward in our partnership with the Cubic | John Laing team to completely transform and modernize our system of fare collection.”

Brad Feldmann, president and chief executive officer of Cubic Corporation, added:

“The vote of confidence from the MBTA leadership is a tremendous honor for us and further demonstrates our market leadership. Cubic | John Laing brings together the best-in-class expertise, technology, services and financial resources to ensure customer success.”

Anthony Phillips, managing director, primary investment North America for John Laing, commented:

“We are absolutely delighted to have been chosen alongside our partners Cubic by the MBTA to make this significant investment in the Boston transit system. This is an important milestone for the MBTA and for the transit industry, which recognizes the advantages of P3 procurement in delivering cost and schedule certainty.”

The new system allows payment flexibility for customers including mobile payment, contactless debit or credit cards and agency-issued fare media for those without a bank card or who prefer not to use one. Additional access will be created through an extensive retail merchant network; optimum placement and types of ticket vending machines, kiosks and wide-aisle gates; an easy-to-use website for customers to review transactions, set up payment methods, enable autoloads and load value and products; and a mobile app that offers the same functionality as the website.