After a protracted wait, four more contracts to run NSW inner metro bus services are now decided
By David Goeldner | August 30, 2013
After several months delay, NSW Transport Minister Gladys Berejiklian this week announced who will be operating the remaining Sydney inner metropolitan bus contracts sent to tender last year.
The immediate reaction was mostly positive, with BusNSW Executive Director Darryl Mellish saying the awarding of all four contracts to current Sydney operators was a vote of confidence in their ability to provide value for money, and to meet customer expectations.
Of the four regions decided, one changed hands but to a private operator with existing Sydney experience.
With the dust now settling over Sydney, Mellish was still critical of the way the Transport Ministry went about the process of selecting operators to run Sydney’s public bus services.
“The industry continues to grapple with the incumbents not first being given a chance to negotiate new contracts with tender as the fall back option,” Mellish says.
“With years of operator Investment not funded by the NSW government, the transition to market testing arguably should have had a negotiation test first.
“In other jurisdictions programmed service improvements and additional buses have been introduced via partnership between government and existing private operators.”
Mellish says BusNSW members were still puzzled with the NSW Government’s decision earlier this year to give the State Transit Authority (STA, the government-owned operator of Sydney Buses, a new five-year contract without any market testing in the environment.
Regions 2, 4, 5 and 15 were decided in the latest round with some ‘tweaking’ which saw regions 2 and 15 modified.
Region 4 went to the incumbent Comfort Delgro Cabcharge (CDC), Region 5 also went the way of the incumbent, Punchbowl Bus Company.
A previous joint venture which operated Region 2 covering Liverpool, Glenfield, Ingleburn, Bringelly and Hoxton Park is now under the sole operation of Interline, trading as Ingleburn Bus Services.
To the south of Region 2, the neighbouring outer Sydney suburbs of Campbelltown, Narellan and Camden, grouped as Region 15, went to Neville’s Bus Services operated by Busabout.
Busways lost the Region 2 contract, but still retains parts of Sydney’s inner and north western suburbs decided earlier this year.
The new contracts come into effect progressively from June to August 2014, and run for five years with a three year right of renewal subject to meeting performance standards.
Berejiklian claims the tender process will save $350 million over eight years, and provide ‘stronger’ on-time running.
“The new contracts will put 63 brand new buses on the road from the first day these operators take over their regions from mid-2014,” she says.
“These new buses are over and above the more than 200 new buses recently announced for the 2013-14 financial year by the NSW Government.”
Berejiklian says interest from bus operators in Sydney’s bus contracts was strong, with almost 30 tenders received for the four contracts.
“The four successful tenders are highly experienced and reputable transport companies, all of which currently operate bus services in Sydney,” she says.
While Sydney metro rounds one and two have now been decided, outer metro and regional operators are the next in line for contract negotiation.
And unlike Sydney’s suburban operators, regional contracts will be negotiated with the incumbents.
Mellish sees negotiation with incumbents as the preferred option for all contracted areas.
“In contrast to the metro contract tender process, BusNSW is pleased that the NSW Government understands the intricacies of the outer-metropolitan and rural and regional bus contract environments,” he says.
“Negotiation with existing operators can achieve value for money and deliver customer outcomes.”