posted on Jan 14, 2014 by NelsonHall Analyst
Capita has been awarded a £145m contract by Transport for London (TfL) to operate the congestion charging, low emission zone and traffic enforcement notice processing schemes. The contract is for five years starting from November 2015 with an option to extend for a further five years.
Services to be provided include:
- Operating the traffic congestion scheme
- Operating the low emissions scheme
- Traffic enforcement notice processing for penalty charge notices for bus lane and yellow box junction contraventions.
- Provision of IT systems, back office and contact centre to run the schemes and the associated enforcement processes.
Capita has been awarded a £145m contract by Transport for London (TfL) to operate the congestion charging, low emission zone and traffic enforcement notice processing schemes. The contract is for five years starting from November 2015 with an option to extend for a further five years.
Services to be provided include:
- Operating the traffic congestion scheme
- Operating the low emissions scheme
- Traffic enforcement notice processing for penalty charge notices for bus lane and yellow box junction contraventions.
- Provision of IT systems, back office and contact centre to run the schemes and the associated enforcement processes.
After months of speculation, Capita finally confirmed today that it has won back the London congestion charging and low emission zone contract. The contract awarded by TfL is for £145m for 5 years starting from November 2015 with an additional option to extend for a further 5 years. The scope has expanded to include traffic enforcement notice processing for penalty charge notices for bus lane and yellow box junction contraventions.
We estimate that the value of the contract has shrunk by >40% while the scope has expanded to include administration of traffic enforcement penalty notices. Capita will have to work hard to deliver against lowered revenues. Its £100m five-year contract with the DVLA to provide Vehicle Excise Duty (VED) and Continuous Insurance Enforcement (CIE) services nationally was terminated three years early in August 2013. Price may have been a contributing factor to problems with that contract.
All too often we see public sector bodies focus heavily on price as the key factor in making buying decisions. We would like to see more risk assessment on the impact of low prices on the service in question, in the long term.
Capita has won a series of public sector contracts recently, including picking up the interim contract for offender tagging services after the G4S and Serco overcharging debacle. All the while, the Cabinet Office has been attempting to break up what it refers to as an oligopoly of suppliers. In the IT segment, initiatives such as the G-Cloud and the Digital Services Framework are helping increase the government's supplier base but BPO is proving tougher to crack.
Capita has been preparing for this contract for some time, and in October 2013 acquired Parking Eye to enhance its ANPR capabilities.
Capita and a consortium led by Thales Alliance, originally designed and implemented the technology and then operated the congestion charging scheme when it was first launched by TfL in February 2003.
IBM and a consortium including NCP Services won the renewal against Capita, to run the scheme from 2009. The size of the IBM deal was not disclosed: Capita's revenue from the Congestion charging contract had been ~£56m per annum.