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For Whom the Road Tolls

For Whom the Road Tolls

Contract Lessons

Tizi admits that the time spent coming to grips with Transurban's legal entanglements was trying, but he insists that it was precisely that kind of challenge which drew him to the role of Transurban's CIO in the first place. "It was a frustrating time when I did that, but I think I learnt something that I don't think I'd have learned in a more typical IT role," he says. Chief among those things Tizi learned is a new respect for the way the construction industry writes contracts. He feels IT projects have a few lessons to learn from their more practical, earthbound brethren.

"I think we can learn from the construction industry how to write contracts, how to manage contracts and how to manage the handover stage," Tizi says. "Companies looking at IT deliverables shouldn't have to stand for it when another company just keeps extending the timeframe. They should expect some compensation. If a reputable company says they're going to deliver something, and they don't deliver it in the time frame, why should someone keep paying? Let's write these contracts differently.

"Generally I think the IT industry has done it very badly," Tizi says. "The construction industry does it very well. The construction industry has a mindset that when they pick a date, the project will work on that day. And it will work on that day because the project is so carefully put together and the contracts are so clearly written."

The Road Ahead

Of the 72 people in Transurban's IT operations group, 42 are devoted to research and development. The reason for such a large R&D commitment is that, having successfully refined CityLink's core tolling application, Transurban now plans to shrink-wrap it and sell it as a commercial product in Australia and overseas.

"Communities want roads, but governments are saying: We can only build them if we toll them," Tizi says. "No one wants toll plazas any more - coin operated ones are just too inefficient. When you introduce multi lane free-flow, with no plazas and no slowing down, you automatically increase the capacity the road has by about 20-30 per cent. It's like adding an extra lane."

After a $20 million, three-year research process Tizi's IT team has transformed CityLink's original tolling system into one with "bolt-on capability", meaning it can be adapted for use with any toll road in the world and doesn't require much expertise to install. The result is the first release of Transurban's own software package, called GATe 1.0.

Tizi says it wasn't part of his original plan to package and market Transurban's tolling technology, but when governments from all over the world began to show interest in CityLink's example, he realised he had a classic business opportunity on his hands. IT shops are usually seen as cost-centres; Tizi found himself with the chance to transform Transurban's IT group into a revenue generator.

"There's just amazing demand," he says. "It's not us going out there and saying: 'Hey, does anyone want to buy a tolling system?' We've got a constant stream of people who come here and ask how to get this toll technology onto their roads, from South America, North America, Europe, Japan, Malaysia, the list goes on . . . "

A consortium headed by Transurban has already been awarded the $1.5 billion Western Sydney Orbital project, including all electronic tolling and customer service functions for the 39-kilometre toll road, due to be completed in 2007. Another prospect is Taiwan, where plans are under way to build a giant toll road across the island. There are 10 different companies bidding for the proposed toll road in Taiwan, and Tizi says every one of them has made contact with him, with many having already visited Melbourne to see how CityLink operates firsthand. "It's a brand new industry," he says. "It's like the mobile phone industry was in 1990. We're at the beginning of something that is really growing."

Tizi is clearly very proud to be taking Transurban's Australian-developed technology and selling it overseas. "This is a 'green field' environment, and so the opportunities we have to take our intellectual property and sell it for profit are greater than those of many others, like the utilities or financial services organisations," he explains. "A lot of governments around the world have been trying to come up with solutions in this area and they've headed down the wrong path. When you've proven yourself to be effective and successful in a new industry like this, you're bound to attract the interest of other players."

Tizi is well aware that others have tried to follow this course and failed. Pitfalls may lie ahead, but he clearly relishes the challenge, just like he was eager to take on the daunting task of overhauling Transurban's approach to IT three years ago.

"Lots of organisations have tried this and not all of them have been successful," he says. "A lot of the utilities have built some great software and tried to sell it outside their organisations, and it's not easy to do. But to be able to build some technology and then market it successfully is one of the greatest satisfactions an IT person can get."

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