IBM HAS won a major contract with the Railway Procurement Agency (RPA) to provide an electronic payment system that will support the introduction of integrated ticketing on public transport in the greater Dublin area.

Neither side would reveal the value of the contract, but it is understood that it is the biggest public sector project IBM will work on in Ireland next year.

With the award of the contract to IBM, which will provide the back office systems as well as a clearing house for payments, the much-delayed project is now expected to go live in late 2009.

The cost of the project, which will create a single "smart" card that can be used for travel on bus, rail and tram services in the capital, has ballooned from an initial estimate of €30 million to €50 million.

IBM will build a back office system with three main elements - a scheme monitor, an account management system and a clearing house which ensures payments are distributed to the different transport providers. The system will have the capacity to handle up to two million journeys a day. It can also be extended to provide for new functionality such as internet top-up of cards.

It will be up to the individual transport companies taking part to install the "smart" card readers necessary to accept the electronic tickets.

The award of the contract is "a great milestone for the project" said Tim Gaston, project director for integrated ticketing with the RPA.

IBM's sub-contractor on the project is Singapore firm MSI Global, which developed integrated ticketing in the southeast Asian country. "They are modifying the core system from Singapore to meet the needs of Dublin," said Mr Gaston. "That's a very well-recognised way of delivering a project."

Mr Gaston said it was expected IBM would complete its work in late 2009 and integrated ticketing would be launched to customers in the fourth quarter of 2009. Integrated ticketing was first announced by then minister for public enterprise Mary O'Rourke in November 2000.

Last February, Minister for Transport Noel Dempsey said integrated ticketing would launch with Dublin Bus, Luas and private operator Morton's Coaches. Iarnród Éireann, Dart, commuter services and Bus Éireann would come on board later.

IBM is also working on city-wide traffic management projects in London, Stockholm, Singapore and Brisbane.