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| Subject: ERG's management and new board must now demonstrate they can get pricing right, win profitable contracts and give real returns to shareholders. | |
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Author: ERG insiders claim the company has learned some hard lessons from its near-collapse.July 18, 2003 |
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Date Posted: Saturday, July 19, 02:50:15am In reply to: Newspapers reporting result--March 7 2003 SMH 's message, "Noteholders have tickets to ride" on Thursday, March 06, 08:38:56am Loser to pay the price of success By Neale Prior COMMENT IN LOSING on its home turf, ERG could be a victim of its own success in developing a sophisticated system and a beneficiary of its recent near-collapse. ERG nearly went broke developing and installing a sophisticated system that allows hundreds of thousands of transactions to be processed daily for a variety of transport operators and locations in cities such as Hong Kong, San Francisco and Rome. But in Perth we have a small city public transport that is run by one company, Transperth, and a simple fare system. Wayfarer, best known as a provider of the front-end ticketing equipment, has a simpler system than ERG and its back-office functions were designed for a single operator. Wayfarer's only integrated bus and train smart-card system is in Northern Ireland. Transperth's project manager, Tony Lenthall, said Transperth's needs were relatively simple and Wayfarer's technology and experience was more than adequate for Transperth. And, what's more, the Wayfarer-based system was at least $10 million cheaper than ERG's. The good news for ERG shareholders could be that the company, having spent well over $150 million developing its technology, did not cut its price in the pursuit of a deal on its home turf. Analysts in the past have suspected that ERG pursued contracts without adequate margins to cover the cost of developing and tailoring technology. ERG insiders claim the company has learned some hard lessons from its near-collapse. ERG's management and new board must now demonstrate they can get pricing right, win profitable contracts and give real returns to shareholders. [ Next Thread | Previous Thread | Next Message | Previous Message ] |
, Saturday, July 19, 03:52:18am