Article: Connex enlists foreign help to keep rail contract

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Connex enlists foreign help to keep rail contract

Connex enlists foreign help to keep rail contract

    * Clay Lucas
    * April 8, 2009

CONNEX has joined forces with Singapore's metro rail operator in a bid to retain the lucrative contract to run Melbourne's train system.

In a surprise move revealed after yesterday's deadline for lodging bids, Connex announced that SMRT, which runs Singapore's underground rail network along with buses and taxis, had joined its consortium.

Connex is believed to have enlisted the Singapore company to help it devise better systems for customer service, track and train maintenance and planning.

Connex, owned by French infrastructure giant Veolia, is bidding against another French transport firm, Keolis, and Hong Kong's MTR operator for the next contract to run the trains. All have formed consortiums with engineering and train maintenance firms.

The winner, to be chosen by the middle of this year, will run the rail system for eight years from December 1, with an option for another seven.

Stockbrokers JP Morgan last month predicted the contract could earn the winning bidder $8 billion or more in revenue over 10 years.

Connex currently receives around $600 million a year for running Melbourne's trains.

SMRT, which is 55 per cent owned by the Singapore Government, put in its own bid to run Melbourne's trains last year, but did not make the shortlist of three.

At the time, one manager at SMRT told The Age they were mystified as to why they had not been shortlisted.

The remaining shortlisted consortiums will now present fresh "pitches" to the Transport Department in a series of meetings after Easter.

The department wants bidders to prove they can not only manage Melbourne's train network well, but that they can manage the transition from Connex control.

Even if Connex wins the contract, there will be new conditions, including that the operator adopts a new Melbourne-focused brand name for the rail system.

The department also wants operators to prove they will be able to manage projects planned under the Government's recent transport plan for Melbourne by reducing disruptions when works are under way.

Connex executive chairman Jonathon Metcalfe said the train operator had put forward a "compelling case" to be retained as train operator.

Premier John Brumby declined to comment on whether Connex's poor performance in recent months would affect its bid.

"All the bids are in. They'll all be considered," Mr Brumby said. "They'll take into account all of the bid documents, all of the commitments that are made by Connex."

State Opposition transport spokesman Terry Mulder yesterday pointed to the $1.3 billion myki smartcard ? running three years late and $350 million over budget ? as proof that Labor could not negotiate big transport contracts.

"Labor's strength is not contract negotiation. Labor cannot smell a rat," he said.

Commuters would notice little improvement as a result of the new train contract, he predicted, because Labor had not tackled basic infrastructure problems.

"Changing staff uniforms, rolling stock signage and titles at the operator's head office will not deliver the system passengers deserve. Labor has failed to invest in the basics," Mr Mulder said.

But acting Public Transport Minister Tim Pallas said the Opposition had "ignored the facts", because the Government spent over $80 million a year on maintaining Melbourne's rail network.

"On top of this we have the $38 billion Victorian transport plan. The Opposition has no policy and stands for nothing," Mr Pallas said.

With AAP