TTF: On the buses report

[ozbob]

FEB: A joint TTF and LEK report on the financial benefits of franchising Australia's publicly operated bus networks.

On the buses: >> http://www.ttf.org.au/Content/Onthebuses290216.aspx

Note. The link for the actual file is a pdf.  There is coding error on the TTF page.

[#Metro]

Experience in Perth suggests that it can lead to big savings.

Bus Reform In Perth

Bus Reform: Competition Reform of Transperth Bus Services
Report 3 – June 1997

https://audit.wa.gov.au/wp-content/uploads/2013/05/1997-Insert-BusReform.pdf

What the examination found....
Prior to public transport reform, Transperth's bus costs were rising, reaching $151 million in 1992-93. Since the reform program
commenced, annual bus costs have decreased by nearly $31 million in real terms, a 20 per cent reduction on the 1992-93 costs.

BUS REFORM
Competition Reform of
Transperth Bus Services
Report No 3 – June 1997
Performance Examination

https://audit.wa.gov.au/wp-content/uploads/2013/05/report97_03.pdf

The results to date suggest that all operators are responding to bus
presentation monitoring with the private operators out-performing
MetroBus (Figure 10).

Figure 12: Examples of the elimination of waste and duplication
There is scope to better utilise existing resources by eliminating unnecessary waste and
duplication. The Department expects that the many changes, small as well as large, will
add up to global improvements in Transperth

The cost of providing a similar level of Transperth bus services is estimated, in real
terms, to be $30.9 million less in 1996-97 than it was in 1992-93. This represents a cost
reduction of about 20 per cent made in four years as a result of public transport reform.
Source: The Department, MetroBus and the OAG

And to ABSOLUTELY make sure that the changes stuck, the auditor general revisitied the situation 7 years later in 2000....

Bus Reform: Further
down the road
A follow-on examination into
competition reform of Transperth
bus services

Performance Examination
Report No. 6 June 2000
https://audit.wa.gov.au/wp-content/uploads/2013/05/report2000_06.pdf

As part of Bus Reform, responsibility for the daily operation and maintenance of
buses was contracted out to four private sector companies through a process of
competitive tender. This occurred in two stages  about half being contracted out
in 1996 and the remainder in 1998. A previous 1997 report1 found that the initial
stage of Bus Reform had been successfully completed as significant cost savings
had been realised, and service quality maintained, through the transfer of service
delivery to the private sector. This follow-on examination was undertaken to assess
developments since 1997.

Quote
This analysis shows that
Bus Reform halted a long-term trend of increasing annual bus expenditure. Transperth
provided more bus services, for less cost, in financial year 1998-99 than it did
prior to Bus Reform in financial year 1992-93:

◆ An additional 5.5 million bus service kilometres2 were provided in financial
year 1998-99. This represents a 15 per cent increase in annual outputs since
financial year 1992-93. The annual output is projected to be 47.8 million bus
service kilometres (a 34 per cent increase on 1992-93) by financial year 2000-01.

◆ Total annual bus expenditure has been reduced.

◆  Cost efficiency, as measured by cost per bus service kilometre, improved substantially
after the contracting out of bus services to the private sector. Gains in cost
effectiveness, as measured by cost per passenger boarding, were not so large.

[#Metro]

The contracting of urban bus services - Recent Australian developments

Ian P. Wallis a, *
, David J. Bray b
a Ian Wallis Associates, New Zealand
b University of Queensland, Australia

Research in Transportation Economics 48 (2014) 48-61
http://www.worldtransitresearch.info/research/5426/

Since 2011, very significant developments have occurred in the procurement and contracting of bus
services in major Australian cities. After many years of 'grandfathering' (continuing rollover of negotiated
contracts with long-established private operators), competitive tendering has been progressively
implemented for bus services in Sydney and Melbourne, and is also planned for Brisbane. All bus services
in Adelaide and some services in Perth, which were previously competitively tendered, have also been
retendered.

The paper addresses the context for these changes, the events that have occurred and their outcomes.
The empirical evidence assessed shows that procurement through competitive tendering has reduced
the costs of service provision, very substantially so where the services were previously provided by
government monopoly operators, and rather less so, but still significantly, where contracts were previously
negotiated with incumbent private operators. In both cases, improvements in service quality and
delivery have also been achieved, resulting in increased patronage. Our assessment reinforces the need
for robust operator procurement processes, and for mechanisms and incentives for operators to develop
their services to better match market needs.

The learnings from the recent experience are very relevant to further developments in procurement/
contracting policy for urban bus services, in Australia and also internationally.

© 2014 Elsevier Ltd. All rights reserved

[#Metro]

I don't think it should be called privatisation in the sense that government is still very much in control. Partnerisation might be a better word.

I'm not into franchising (where the operator keeps some or all of the revenue/profit). I think the current model where operators are paid per km driven, independently of passenger load is a good one. It allows TL to prop up the coverage routes with surpluses made on the inner city and peak hour routes.

[#Metro]

I will put a qualification on this. I think bus network reform needs to proceed, however ownership / operator changes are something that are not required for that to happen and it is best to focus on one large task at a time IMHO.

Mixing the two at the same time could sink the process, which would be a bad outcome.