Latin America's relatively underdeveloped transportation infrastructure, coupled with backing from US printing solutions provider Xerox (NYSE: XRX), has opened up transportation sector opportunities for US business process outsourcing (BPO) company Affiliated Computer Services (NYSE: ACS), ACS executive VP Tom Blodgett told BNamericas.
ACS already has a track record of transportation sector projects in both the US and Europe, and the company is taking steps to accelerate business in Latin America, according to Blodgett.
"In Latin America, there's growth, especially when you look at Brazil, and there's more development," he said. "Some of the infrastructure isn't quite as mature as it would be in other places, and so the opportunities are significant."
ACS, which was acquired by Xerox this February, is also leveraging ties that its parent company has in the Latin American market.
"We are talking to local municipalities, as well as on the country level," he said. "For the most part, toll collection and ticketing systems are very active in Latin America... our opportunities parallel their [Xerox's] presence."
This week, online news source Contactless News reported that ACS has launched a 14-year, US$200mn contract to operate Peru's first contactless ticketing system on Lima's forthcoming bus rapid transit (BRT) line.
ACS's contract also covers back-end management, cash collection and daily revenue reconciliation, device maintenance, customer care center services and in-station card sales.
Blodgett said extended contracts are the norm for transportation projects, and that regional deals of a similar size are possible.
"When you talk about transportation systems and toll collection and ticketless collections, they require significant investments," he said. "In that case, the contracts, as a general rule, are significantly longer than they would be in a BPO contract. Where we might think that five years might be a reasonable length for a BPO contract, we wouldn't take on the risk of the investments without at least a 10-year plus contract" for a transport system.
Upon completing the ACS acquisition, Xerox said that the combined company will target a US$500bn global document and process management market.