It actually does a bit more than you think ...
The PRESTIGE contract covers the operation of the Oyster card, the barrier readers and nightly processing of all the days travel information and card management.
The original contract was for 15 years (I think - although it may have been 17) whereby the consortium had to stump up all the up front costs. They would then be paid as a percentage of ticket sales. The original break-even point was supposedly in the 10 - 12 year range, I have no idea whether that is still true or not, but expect that Cubic will not be pulling out with a loss.
But still, all the risk was placed squarely on the consortium that bid. It took LT almost 2 years to finally accept the system - which I bet did not count as part of the payback period.
In case you're wondering it collects approximately 10 million journeys per day which it processes overnight. It works out the start and end points for each journey and then determines if the sum of the individual trips would be greater than a daily travel card and caps it at that - obviously there is a bit more complexity if several zones are involved.
Is £100M a lot ? Depends on what you think the alternative is. Do you want to give this kind of project to local government to run ?
In the end they'd just outsource and waste the money between them and the outsourcer. At least Cubic had some incentive to deliver quickly and get it right.
Compare with any of :
- Child Support Agency
- Rural Payments Agency
- Inland Revenue - it may be OK-ish now but it took a while
- NHS Patient details
- LIBRA - Magistrate court system
I don't think I need go on ...