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A Review of Public Transport Service Contracts in Australia and New Zealand

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A Review of Public Transport Service Contracts in Australia and New Zealand INTERNATIONAL ASSOCIATION OF PUBLIC TRANSPORT AUSTRALIA / NEW ZEALAND REPORT FRAMEWORKS FOR OUR NETWORKS: A REVIEW OF PUBLIC TRANSPORT SERVICE CONTRACTS IN AUSTRALIA AND NEW ZEALAND FEBRUARY | 2021 © XXX International Association of Public Transport Australia/New Zealand (UITPANZ) 525 Collins Street | Melbourne VIC 3000 | Australia [email protected] | www.uitp.org/regions/australia-new-zealand/ © International Association of Public Transport Australia/New Zealand, February 2021 All rights reserved / No part of this publication may be reproduced or transmitted in any form or by any means without the written permission of the International Association of Public Transport TABLE OF CONTENTS — 5 — Executive Summary — 10 — Introduction —13 — Governance and institutional arrangements by jurisdiction — 21 — Overview of key design variables — 23 — Analysis of key design variables — 54 — Trends analysis and conclusion — 56 — Schedules 1 FOREWORD ALLENS The past two decades have seen major change in relevant transport network and the policy priorities and public transport in Australia and New Zealand. Rapid objectives of the government of the day. Based on the population growth and urbanisation have contributed to benefits realised so far, we anticipate the trend toward unprecedented demand for public transport. Structural private sector operation of public transport services in reforms within government and the broader economy Australia and New Zealand will continue well into the and accelerating technological change have also had future, and the contractual models under which the a significant impact on the public transport networks services are provided will continue to evolve. in Australia and New Zealand over this period. At the As a leading international law firm, Allens has a long same time, both countries have moved progressively to and proud heritage of shaping the future for our a governance model for public transport where there is clients, our people and the communities in which we a clear separation between the authority that oversees work. Our market-leading infrastructure and project the development and delivery of the relevant system, financing teams are no exception. These teams advise and the operator that manages the system and provides across the full lifecycle of transport infrastructure and passenger services on a day-to-day basis. Although many service delivery projects, and play an active role in the public transport systems remain government-owned and development of the markets in which we operate. As we operated, this reform has facilitated the steady growth approach our 200th year, we have grown to offer our over the same period in private sector operation of clients a worldwide network, with 40 offices across 28 all modes of public transport services in Australia and countries, through our global alliance with Linklaters. We New Zealand, from train and light rail to bus and ferry are privileged to hold some of the world’s longest ongoing services. client relationships, stretching back more than 170 years, The movement to this governance model for the delivery and to be trusted with their ‘first-to-market’ and market- of public transport services in Australia and New Zealand changing transactions. has not been without controversy, but experience With the release of this report in collaboration with has shown that the reforms have led to significant UITP Australia New Zealand, our aim is to inform benefits, including improved performance outcomes future policy development in the transport sector by and enhanced customer satisfaction, as well as improved providing governments and industry participants with a efficiency and productivity, resulting in cost savings and comprehensive review of the range of public transport consequent benefits for taxpayers. That said, there is no service contract models currently in use in Australia and single form of public transport service contract between New Zealand, and to provide a useful resource for those a transport authority and a transport operator which directly engaged in contract development and design. guarantees a successful outcome. Instead, each contract needs to be carefully structured and designed for the Paul Kenny Penny Alexander Partner Partner Allens Allens 2 UITP AUSTRALIA NEW ZEALAND This report is the result of months of hard work and to ensure they provide optimal arrangements for dedication by our member, Allens. In particular, I wish our networks going forward. Understanding the to thank Partners Paul Kenny and Penny Alexander commonalities of jurisdictional approaches to public for their contribution to what will no doubt become a transport contracting will no doubt aid those who are foundational document for all matters related to public seeking to review and improve those contracts, help transport contracting going forward. I’d also like to thank inform the appropriate policy settings for government and the public transport authorities across Australia and drive overall improvements in the passenger experience. New Zealand for all participating in the review process. The public transport sector has always been one of The report offers a comprehensive overview of the innovation and rapid change, moving people and Australian and New Zealand markets and jurisdictional simultaneously being driven by the evolution of the arrangements. In undertaking this research, we knew the societies in which our networks operate. More than ever, report would meet a long-standing need to capture and our contracts need to be agile to keep up with a range analyse publicly available contract information and that of factors including changing government priorities and the scale of such an undertaking was why it has not been protecting the commercial interests of private operators. done before. It is an invaluable resource and record of This report will give readers a broad knowledge of the how public transport service provision is regulated and mechanisms available to future-proof public transport delivered in our region at the present time and will inform service contracts against unknown events and prepare for future decision making. the trials and opportunities presented by climate change, 2020 was a challenging year for the public transport sector new technologies and population growth. Indeed, these (and many others) with the global, ongoing disruption challenges may require investment and change, but they of COVID-19. Public transport service contracts have can also be viewed as the chance to innovate and find provided the frameworks for the ways in which operators new ways to collaborate, generate revenue and serve and authorities have persisted in providing safe, efficient people who need and choose to use public transport. and reliable services to the community. We must I’m certain UITP Australia New Zealand members will safeguard our public transport services as the backbone find this report useful and hope it will enable them to not of mobility in our cities and towns, to ensure a future of only improve the design and management of contracts good air quality and low congestion. and assist operators in their delivery of world-class public Many jurisdictions globally and locally are reviewing their transport services, but also to approach contracting with commercial models and in many respects COVID-19 innovation and creativity to continue to meet the needs has accelerated the need to evaluate our frameworks of our communities well into the future. Michelle Batsas Executive Director UITP Australia New Zealand 3 ACKNOWLEDGEMENTS We would like to thank the following public transport have not been endorsed by any of the people who authorities, and the individuals mentioned, for their time provided comments or the organisations they represent. reviewing and providing comments on this report. Their The content of the report is entirely the responsibility of comments were very helpful in making the report as the authors. comprehensive and accurate as possible. However, we We would also like to thank the Allens team that assisted note that the content of the report, including descriptions with the research for the report and the UITP Australia of the contracts reviewed and the opinions expressed, New Zealand team that assisted with its preparation. Auckland Transport Victorian Department of Transport Colin Homan Kha Truong Group Manager Enablement, Integrated Networks Executive Director, Commercial Strategy South Australian Department for Infrastructure Northern Territory Department of Infrastructure, and Transport Planning and Logistics Fergus Gammie Greg Turner Adelaide Rail Transformation Program Director A/Director Passenger Transport Peter Andrews Greater Wellington Regional Council Director Bus Services Project Scott Gallacher Transport Canberra General Manager Metlink Vanessa Barnett Queensland Department of Transport and Main Senior Director Strategy, Planning & Policy Roads Tasmanian Department of State Growth Dan Moore Kim Harris Program Director – School Transport Program Principal Contracts Officer, Passenger Transport Management Unit Transport for New South Wales Western Australian Public Transport Authority Jenny Birch Brendan Lumbers Director, Metro Bus and Ferry Service Delivery Business Intelligence Team Leader, Transperth System Ian Vinicombe Contract Manager, Transperth Bus Services Allens UITP Australia New Zealand Monique Bischof Angé Anczewska Georgina Clough Sophia Dickinson Georgia Percy Eugene Twomey Thanushar Sridaran Edward Thien 4 1 EXECUTIVE
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