PTV in the spotlight

PTV is not using preferred method of performance review for Melbourne metro bus contracts

The auditor-general says Victoria is not assured value for money from the Melbourne Metropolitan Bus Franchise (MMBF) arrangements.

In 2013, the Melbourne Metropolitan Bus Franchise (MMBF) was established to service around 30 per cent of Melbourne’s metropolitan bus network.

The contract is worth approximately $1.7 billion over 10 years.

This audit examined whether the state has effectively secured value for money by assessing the MMBF tender and Public Transport Victoria’s (PTV) management of the resulting contract.

Victorian auditor-general John Doyle says while the contract resulted in cost savings of $33 million in 2013–14, cost savings alone are not sufficient to demonstrate value for money.

"In particular, the contract's potential has not yet been realised due to Public Transport Victoria's (PTV) failure to resolve longstanding issues impacting the implementation of the related performance regime," he wrote in a report released by the Victorian Auditor-General’s Office  in May.

"The contract's potential is not yet being realised primarily due to unreliable performance data. This is compromising PTV's capacity to effectively manage the contract.

"A further concern is the Department of Economic Development, Jobs, Transport & Resources' and PTV's slow progress in preparing to reform the remaining metropolitan bus contracts which are expiring in 2018."

PTV chief executive officer Mark Wild says while he notes the conclusion of the report and accepts the recommendations, significant cost-savings and service improvements had been delivered.

"The bus tracking system has progressively improved since the commencement of the MMBF contract," he wrote in a letter to the auditor general.

"PTV is now accurately tracking over 90 per cent of Transdev bus movements and is confident that Transdev’s performance is being monitored effectively.

"We agree that the Metropolitan Bus Franchise represents a significant step forward in the delivery of bus services.

"Although PTV’s current interim contact management plan for the MMBF is to vibe refined, we note that PTV is a contract management organisation and as such has extensive and comprehensive contract management processes and systems and is subject to audit."

The auditor general recommends PTV ensures contract management processes are in place prior to commencement for any new service contracts, establishes a contract management plan for the MMBF in accordance with Victorian Government Purchasing Board guidance.

He also wants PTV to establish a process for systematically monitoring and verifying the completion of required Melbourne Metropolitan Bus Franchise contract management tasks and consistently enforces the terms of the Melbourne Metropolitan Bus Franchise agreement in accordance with the contract.

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