4 Options Appraisal and Key Risks

4 Options Appraisal and Key Risks

4.1 Introduction

4.1.1 This chapter was written by PwC and it summarises the findings of an Operations Appraisal and Validation Workshop which focused on:

  • Achieving and confirming a shared long-term vision for smart and integrated ticketing in Scotland; and
  • Agreeing a short-list of feasible options, focussing on the Strathclyde area as the first phase of delivery of the national framework.

4.1.2 A paper prepared earlier by Transport Scotland regarding its vision for smart and integrated ticketing was used as a starting point for the workshop. The initial consideration was whether the vision articulated within that paper was valid and evidence-based. Whilst the paper focused on the possible technical solutions, other dimensions were considered as follows: modes, geography, technical solution and functionality. There was broad agreement on the basis of the evidence presented at the workshop and the subsequent discussion that the vision articulated by TS was indeed a valid way forward for Smart and Integrated ticketing in Scotland.

4.1.3 This overall vision for Smart and Integrated ticketing was articulated as ultimately operating on all modes of transport, supported by Europay, Mastercard, Visa and ITSO on the basis of an "e-purse", covering a number of services (travel, retail and parking), operating on a Scotland-wide basis and eventually cross-border.

4.2 A Phased Approach

4.2.1 As set out in the introduction, the strategic goal for smart & integrated ticketing is to eventually achieve roll-out across Scotland, thereby delivering benefits on a national basis. This reflects a desire to make public transport a more attractive option, representing a genuine alternative to car travel.

4.2.2 However, while the strategic direction is towards a scheme that is available nationally, there are clear arguments in favour of approaching this ultimate aim in a staged fashion, rather than attempting to implement a scheme across Scotland in one single move. The key arguments in favour of the staged approach are as follows:

  • A staged approach offers scope to better manage risk and financial exposure;
  • The DfT is adopting a similar approach in England, focusing first on urban centres. This offers the possibility of learning lessons from experience elsewhere and also drawing on high journey volumes to drive the realisation of benefits; and
  • A proof of concept can be developed at a local level and then potentially rolled out across the country.

4.2.3 In a Scottish context, therefore an initial focus on urban centres to create a blueprint and/or feasibility assessment for the remainder of the country appears to be sensible. In addition to the arguments set out above – which could potentially be applied to any urban centre – two factors suggest that Glasgow should be the primary focus.

4.2.4 Firstly, Glasgow already has an integrated ticketing scheme, through the SPT ZoneCard. This covers bus, rail and Subway and is available for different zones within the Strathclyde area. Although this is paper-based, it does represent an important step in relation to operator cooperation and to operator revenue sharing in particular.

4.2.5 Secondly, while Edinburgh does also have an integrated ticket (‘Oneticket’, as discussed in section 3), the Commonwealth Games will be held in Glasgow in 2014. This event will draw substantial numbers of spectators and other visitors to the city and could provide an important opportunity to showcase what the city has to offer. In this context, it may be possible to use the Games as a driver for the implementation of some form of Smart and Integrated ticketing. If delivered in time, this could deliver a further positive legacy for the city and could be an important stepping stone towards the strategic goal of a national scheme.

4.3 Defining the Glasgow-based Options

4.3.1 Building on these arguments, the Options Validation Workshop explored the parameters of the Glasgow-based options.

Glasgow-based Options

4.3.2 Within the framework of the national vision, the Options Validation Workshop identified three options for further evaluation. A short-list of options is key to allow for cost and benefit quantification and to ensure programme design can operate to a defined target. These three options provide a range of scenarios, with 2014 as a reference date.

Option One – Smart and Integrated Transport and G2014 Event Ticketing in Strathclyde (Ambitious)

4.3.3 The ambitious vision is for a Smartcard "travel purse" which integrates transport and events and permits travel on rail, bus and Glasgow Subway within the full SPT ZoneCard area, including specific corridors beyond this, being Edinburgh and satellite Games venues. If a Waterbus is introduced by Games time, this could also be included. Reflecting existing investment in the Concessionary Fares Scheme, the scheme would be ITSO-compliant27. This reflects a desire to future–proof the scheme against technological developments and ties into the long-term vision set out earlier in this document.

Option Two – Smart and Integrated Transport Ticketing in Strathclyde (Full inclusion of rail) (Mid-Point)

4.3.4 There is a separate subsidiary option which does not include event ticketing; the smart card solution would serve only transport ticketing. It is the same in all other respects to option one. Based on stakeholder meetings with Glasgow 201428, we understand that event ticketing could be delivered through a traditional paper ticket under this option.

Option Three – Smart and Integrated Transport Ticketing in Strathclyde (Partial inclusion of rail) (Safe)

4.3.5 The third option is the ‘do minimum’ option. This is a Smartcard-based "travel purse" covering bus and Subway travel within the SPT area. In addition, this option would allow travel on specific rail corridors within the city, including for example to Mount Florida (for Hampden Park which will host the athletics events at the Glasgow 2014 Games). This reflects emerging thinking on how spectators are likely to travel to events but does require assumptions to be made about the stations that should be covered. There is no intention to cover all the stations where journeys may originate at this stage. The "do minimum" approaches event ticketing in the same manner as option two.

Fall-back Positions

4.3.6 As a contingency, fall-back positions have been identified as follows:

Fall-back 1 - Non-smart card based fallback

4.3.7 The existing paper-based ZoneCard is considered to represent the ultimate fall-back option if new technology should fail or prove infeasible to implement within the required timescale. This paper-based fall-back is the mitigating strategy for the new technology risk which applies to all three options.

Fall-back 2 - To simpler ticketing product

4.3.8 If it became unfeasible to provide a travel purse on a Smartcard, a fall-back position could include a less complex Smartcard product, such as a season ticket, as is currently being piloted by FSR29. A season ticket would operate over a defined period and could in theory serve any period of time, including for travel only on a single day.

Fall-back 3 - Use of a non-ITSO smartcard solution

4.3.9 If the ITSO solution is determined to be unfeasible and a smart solution considered essential for G2014, a third option would be to use a non-ITSO solution, such as Oyster.

4.4 Illustrative Options Scoring

4.4.1 The three noted options (paragraphs 4.3.3, 4.3.4 and 4.3.5) were subjected to a scoring exercise to identify the preferred "first step" option. The outcome of the options scoring exercise, details of which are provided at Appendix 9, was as follows:

Weighted Score

Table 4.1: Scoring Exercise for "First Step Option"

Assessment Factor

Option1 – Ambitious

Option 2 – Mid-Point

Option 3 – Safe

Strategic Fit (x8)




Ambition (x5)




Pre-conditions to delivery (x9)




Feasibility (x8)




Existing Investment (x4)




Passengers (x7)




Political Acceptability (x9)




Total Score Weighted




4.4.2 The three fall-back positions (paragraphs 4.3.7 – 4.3.9) have not been scored as these are not investment options but rather represent contingency actions which will only be considered for implementation should the preferred option not prove feasible or deliverable.

Commentary on Scoring

4.4.3 The result of this scoring exercise highlights that there is relatively little between the three options final weighted scores. Option 2 (the midpoint) scores highest largely because it reflects a greater ambition than option 3, whilst reducing the risk of delivery associated with option 1.

4.4.4 The ambitious option has a slightly lower score principally because of the pre-conditions and challenges likely to be involved in delivering such a complex scheme. Combining transport and events ticketing on a single Smartcard is an unprecedented offering which carries an inherent level of technology risk. This affects the scores for the ambitious option on both the ‘Pre-conditions’ and ‘Feasibility’ factors. The scoring acknowledges, however, that it is ambitious and therefore has the potential to deliver a more significant legacy. As such, this may make it more politically attractive.

4.4.5 The safe option has scored less well because it fails to build on the FSR pilot which is an important component of existing infrastructure and recognises the important passenger flows between Scotland’s two major cities. In addition, it may also be deemed insufficiently ambitious from a political standpoint. However, it is the least complex and hence potentially the most deliverable of the three options. It may also prove most attractive to Glasgow 2014 in view of its appetite to reduce risk wherever possible.

4.4.6 The mid-point option scores highest of the three, principally because it builds on existing investment and demonstrates ambition through its wider geographical coverage, but does not include the extra risks associated with integrating travel and event ticketing.

Key Risk Analysis

4.4.7 The analysis of the smart and integrated ticketing landscape in Section 3 was supplemented by a risk workshop at which the key risks pertaining to the options were analysed.

4.4.8 The output of that workshop was a risk register which is contained in Appendix 10.

4.4.9 Following the risk workshop, each risk was assessed in terms of its probability and impact, resulting in a combined score which was used to prioritise the risks identified. On the basis of that exercise, the key risks (i.e. those with the highest probability and impact rating) identified were as follows:

  • Scotland may be a trail blazer for a complex project and therefore will be watched closely by DfT;
  • Due to lack of investment in the new Business Plan, ITSO does not deliver a workable standard to enable the ticket product in terms of customer load, interoperability and hotlisting;
  • The preferred option cannot be delivered within the envelope of available funding;
  • The existing equipment becomes obsolete during the implementation process for Smart and Integrated Ticketing;
  • Operators do not wish to co-operate with integrated ticketing – they perceive a weak commercial position for their business; and
  • Competition Commission review into the bus industry is yet to be published. The impact on market structure is therefore unknown at this stage.

4.4.10 The risks identified from this process have a clear linkage with those identified through the information gathering phase of the project. The risks identified are strategic in nature and any of them could endanger the whole scheme.

4.4.11 The number of high likelihood/high impact risks underlines the challenge surrounding the successful implementation of a Smart and Integrated ticketing scheme at this stage. It is important to note that these key risks stem principally from Integrated, rather than smart ticketing. Consequently, it is clear that a Smart approach would carry less risk to the public sector.

4.4.12 In addition to those risks noted above, a further issue is the risk appetite of the Organising Committee of the 2014 Games, which considers that its aspirations for the Games can be met without taking an unnecessary risk on a technological ticketing solution that they do not consider is central to their own strategy for the Games.