New row over Oyster card

Thousands of passengers are being denied cheaper fares in a new row over the Oyster smartcard.

Transport for London is locked in a dispute with rail companies operating in the capital's suburbs over the roll-out of its £1.2 billion ticketing system.

Three million journeys a day on Tubes and buses are now being made by passengers using the Oyster, which was introduced in summer 2003.

Now the Evening Standard has learned that the wider take-up of the card across the mainline rail network within the capital's boundaries has been grounded - to the frustration of TfL executives and Mayor Ken Livingstone.

A handful of private train companies are refusing to allow TfL to install the Oyster technology - preventing passengers from using the smartcard and paying a single fare for their entire journey.

The rail firms refusing to accept Oyster are believed to include West Anglia Great Northern and South East Trains. The companies are understood to fear losing control over fare-setting. However, they would still recoup money paid to TfL, just as they currently share income from "paper" Travelcards.

TfL has only weeks to convince the rail firms to adopt the Oyster card readers on their stations if they are to join the scheme by 2006. It is offering to install the machines free of charge even though they do not fall under the Mayor's control.

Last year, Mr Livingstone accused the Strategic Rail Authority of providing "little or no support" in encouraging the rail industry to adopt the Oyster. To date, only 35 stations around London are equipped with card readers to allow pre-pay Oyster. This still leaves some 250 stations unable to do so.

Charles Monheim, TfL's Oyster card director, said: "We have proposed to the train operating companies that by the end of 2006 we could install equipment to all of these stations."

Meanwhile, problems with the use of the Oyster pre-pay on the buses are likely to prove far more costly than expected, transport bosses have admitted.

They say losses are set to top £100,000 - a five-fold increase on previous estimates - as a result of an inability to charge bus passengers premium rates between 6.30am-9.30am on weekdays until the end of February. The Evening Standard last week revealed how technical glitches with the prepay version of the Oyster forced TfL to delay the introduction of higher bus fares.

The revelation comes alongside a promise from TfL that fare "capping" will shortly be introduced for pre-pay users preventing them from running up large bills if they make multiple journeys.

TfL has revealed it expects to make almost £2.5 billion in income in the next financial year from higher fares and increased numbers of passengers.