Service Contracts

[somebody]

It has come to my attention that QLD is living in the dark ages regarding its arrangements for service contracts.  Everyone else (NSW/VIC/SA/WA) have feasible mechanisms for replacing an operator who is not performing with a new operator.  Even NZ can do it legally and the mechanisms are likely to be implemented when contracts are reviewed in AKL.

NSW: Govt owns buses, and operators must make depots available to a replacing operator (not sure for what period)
VIC: Operators currently own buses and depots but must sell the buses to replacing operators, and make depots available for 4 years according to current contracts
SA/WA: Govt owns buses and depots.  Replacing an operator is easy and has happened in WA.
NZ: operator owns buses and depots and no provision is made for a replacing operator to have access to these

QLD: Operator owns buses*, depots AND SERVICE AREA and govt must have cause to replace an existing operator, but even in that case there is still no provision for a new operator to have buses or depots.

* Yes, I know a large part of BT's fleet is owned by the state and leased back but that is the exception, and it is still unclear that the lease would expire simultaneously with the service contract.

Legislation MUST BE CHANGED.

EDIT: Forgot to mention that TTA does NOT have the power to enter into service contracts, except if TMR delegates that power to them.  Makes a mockery of the alleged independence of TTA.
EDIT 2: The responsibility for consultation resting with TMR makes a further mockery of TTA's alleged independence

[somebody]

I can remember mufreight was somewhat incensed about Westside being renewed a few years back.  But it is difficult to see how the legislation makes it feasible to remove an operator.

[Golliwog]

I can't see QLD changing from having the operator own their own buses and depot (although it could for a new operator entering the market). However, I do agree that having an operator own a service area is ridiculous.

The only way to get rid of the operator owning their buses and depot would obviously be to have Translink buy them back, which would be a large cost and I can't see that happening with all the doom and gloom coming out of George Street.

[somebody]

I can't Brisbane City Council selling Brisbane Transport willingly either.

Although my understanding is the QTC owns the buses, or least a sizeable portion of them and leases them back to BCC/BT (Oh, I did mention that in the OP).  The depot is a fairly small cost in the scheme of things, but it is enabling to running the service.  I don't see why these should be in private hands with no mechanism to make available to a replacing operator.

Apparently BT's contract runs until 2014 (not sure when in that year).  If we can't get these pieces of legislation changed in the next 12 months, I will be very disappointed.

One other issue is that QConnect services are exclusive.  I do not see why (a) it should come under different rules (b) anyone needs an exclusive contract.  No one else seems to do it this way, and the reasons are OBVIOUS!

[Golliwog]

I do agree that having the operator leasing depots and buses is the best outcome for the passenger, but I can't see any operator willingly coming forward to say "Sure, you can buy all my things from me, I'll still run them for you, but you can now take them away from me if I don't operate to standard."

I fully agree that getting the operator to operate services as they are contracted to do is an important thing for Translink to have power over, but given where we are now, I can only see us moving to operators competing for service areas. The only other solution would be for the state to do some compulsory acquisitions, but I don't know if they have that power.

[somebody]

Of course the state has compulsory acquisition powers.  Whatever made you think that bus companies would be exempt from them?  However, I would agree that it would be going too far to make compulsory acquisition the first action.

It's not too hard.  Everyone else has done it (except NZ/AKL who I am confident will soon do it).  What is with your attitude?

I expect it has worked like this in NSW & VIC: If you don't sign the contract, which includes making depots available to a subsequent operator, you are not allowed to bid for the contract in the first place.  I have relatives in SA and I can remember them mentioning that their bus services were to be privatised.  So I suspect there was never a privately owned bus fleet there.

The software industry used to work on periodical licence fees almost exclusively, I'm told.  Now, no one with a choice will implement a system which will require periodical licence fees, because nothing prevents periodical licence fees from being increased.  Also, people have an illogical disdain for them, so even if the contract did prevent an increase, I still doubt a package requiring a periodical licence fee could be sold to anyone.   What is the relevance of this?  We need to get out of situation where we are largely at the mercy of bus companies, just like business has gotten out from under the mercy of software vendors to some degree.

The way forward is:

• Amend the legislation to:
  
  
  • Remove semi-automatic renewal
  • Remove exclusivity (although this could be controversial and arguable - other places like NSW do have exclusivity)
  • Make the contracts directly with TTA and a TTA responsibility rather than a TMR responsibility
  • Make consultation a TTA responsibility, rather than a TMR responsibility
  • Make it an offence for BT to refuse to licence the term "BUZ" to another operator
• When contracts are up for renewal, ensure that depots do not prevent changing operators next time around, particularly for private operators
• Pay attention to ownership of the buses.  If these are to be owned by the operator, they need to be able to be transferred to a replacing operator
• TTA should buy a depot near Browns Plains (i.e. replacing Larapinta) and put a contract for the 130/140/150 out to tender, and try not to give that to BT.  This may need to wait until service contracts are up for renewal.  Presumably it can be stocked with buses returned from lease to BT
• Other possible useful depot locations could be around Albany Creek and/or Bracken Ridge

Am I missing anything out?

[#Metro]

The way forward is:

    Amend the legislation to:
        Remove semi-automatic renewal
        Remove exclusivity (although this could be controversial and arguable - other places like NSW do have exclusivity)
        Make the contracts directly with TTA and a TTA responsibility rather than a TMR responsibility
        Make consultation a TTA responsibility, rather than a TMR responsibility
        Make it an offence for BT to refuse to licence the term "BUZ" to another operator
    When contracts are up for renewal, ensure that depots do not prevent changing operators next time around, particularly for private operators
    Pay attention to ownership of the buses.  If these are to be owned by the operator, they need to be able to be transferred to a replacing operator
    TTA should buy a depot near Browns Plains (i.e. replacing Larapinta) and put a contract for the 130/140/150 out to tender, and try not to give that to BT.  This may need to wait until service contracts are up for renewal.  Presumably it can be stocked with buses returned from lease to BT
    Other possible useful depot locations could be around Albany Creek and/or Bracken Ridge

Am I missing anything out?

I would suggest that TransLink purchase the trademark BUZ from BT, along with CityGlider. This is ridiculous, BCC is putting multiple trademarks et al on what are TRANSLINK services. If Logan buses or Surfside wanted to introduce a new route and style of service with special branding would that fly with TransLink? No, of course not.

With regards to exclusivity, I think that a sort of 'fuzzy boundary' approach can be taken.

[somebody]

I would suggest that TransLink purchase the trademark BUZ from BT, along with CityGlider. This is ridiculous, BCC is putting multiple trademarks et al on what are TRANSLINK services. If Logan buses or Surfside wanted to introduce a new route and style of service with special branding would that fly with TransLink? No, of course not.

I don't think they will sell it willingly, hence the hardball approach.  It should be an offence in any case, so I have no problem with making it an offence to not reverse.

[Golliwog]

I know the State has compulsory accquisition powers, but what I'm not sure about is the circumstances that need to exist for them to use them. Can they just come out and say "We want to compulsorarily accquire your buses."? (and yes I know you said that wouldn't be the first step, just a theoretical question).

My attitude is that these are privately owned bus companies and in the most part they operate fine owning their own buses and depots. The only one I have issue with is BT because the BCC politicies them. Having the bus operator own a service area is stupid, which we agree on. However I don't agree with the idea that because an operator isn't performing well enough we should just take their buses and depots away from them and give them to some one else.

I don't see anything wrong with the way things are run interstate in the examples you give where the operators only run the services and don't own buses or depots, and if we had started like that then I would be fine with it. But I don't agree with looking at what they're doing there and saying "We should have that." and going out and changing our system to a set up like that.

At the end of the day, our current operators own their buses and depots and it is in their interest to meet Translink's standards seeing as if Translink doesn't renew their contracts they're doing to have a bunch of buses (that they own) sitting in their depot doing nothing but burn a hole in their pocket.

[somebody]

I believe SR has posted before that it doesn't have to be "on just terms" if the state does it, only the Feds.

We should nip the problem of a potential out of line private operator in the bud.  Indeed, it has already happened, allegedly, with Westside.  It's not fine at all for it to be so hard to replace an operator.

However I don't agree with the idea that because an operator isn't performing well enough we should just take their buses and depots away from them and give them to some one else.

What are you trying to say here?  That this sanction should not be available?  That is a very strange argument.

With the interstate operations, things didn't start that way.  They created rules to bring about the current situation by (relatively) prudent management.  You seem to be arguing against prudent management occurring in Brisbane.

At the end of the day, our current operators own their buses and depots and it is in their interest to meet Translink's standards seeing as if Translink doesn't renew their contracts they're doing to have a bunch of buses (that they own) sitting in their depot doing nothing but burn a hole in their pocket.

The people need the bus companies at least as much as the bus companies need the people, and the bus companies know it.  Much like waterfront workers really.

[Golliwog]

What I'm saying is that I don't agree with that sanction. The operator bought the buses and the depot, so even if you don't like what they're doing you can't just say "hand it over."

Penalise them in other ways. Give their routes to another operator for all I care, make them work with someone to improve their performance, but their buses are their buses. Unless they're willingly letting the government buy their assets I don't agree with it.

[somebody]

What I'm saying is that I don't agree with that sanction. The operator bought the buses and the depot, so even if you don't like what they're doing you can't just say "hand it over."

Well if they sign the contract, they have agreed to it.

I think your entire argument is absurd.  If PT is a monopoly, and it should be, you can't allow a monopoly operator to hold the public interest to ransom.  I note that you aren't providing any reasonable alternative.  I'm not saying that they shouldn't be compensated, if that's what you think.

[Golliwog]

I never said let them hold the public ransom. If I recall the Westside scenario correctly the problem was mostly evident in late running/not running services at all due to various reasons (I think it was not enough buses/drivers/schedules were written to tight?) Either way, most of the problems there could be solved by taking some (but not all) of their routes away to another nearby operator. Not sure which routes Westside ran/runs but most of SEQ's bus network has places where operators overlap a little or at least serve the same interchange, meaning that deadrunning could be reduced.

I think forcibly aquiring an operators assets should be the last strike when you're shifting to a new operator, not what happens from the get go as a 'just in case' measure.

[somebody]

Well you are saying that they should be able to hold the public to ransom.  Run dead from Richlands, is that your plan?  Can´t you see the enormous public funding to achieve this, not to mention the unreasonable cost to acquire the buses which cannot be used until the service contract expiry comes around.  And you are also completely ignoring the runs that the buses from Richlands would usually do.

Either way, most of the problems there could be solved by taking some (but not all) of their routes away to another nearby operator.

How do you think this can be achieved?  Not renew their contract for non performance but then offer them a different contract?  I'd imagine that non-renewal would be taken to QCAT and reversed, with full renewal granted.  Or are you saying to change the legislation first, to prevent this?

It took I think 6 years to establish Sherwood depot.  I think 1-2 for Willawong.  These things cannot be established overnight.  It would be expensive to have an operator with 10 buses for the term of a contract, which is not short and nor should it be.

[somebody]

I think forcibly aquiring an operators assets should be the last strike when you're shifting to a new operator, not what happens from the get go as a 'just in case' measure.

I would say that there is a middle road between these two extremes.  And that is what has been pursued in other jurisdictions.

[SurfRail]

I believe SR has posted before that it doesn't have to be "on just terms" if the state does it, only the Feds.

Strictly speaking (to use an old law school chestnut) the State could pass a law requiring that all blue-eyed children be put to death.  Doesn't mean it would happen.

I'm not sure which piece of legislation would affect the taking of things like a bus fleet, but it would involve compensation of some sort and would need to be more than just appropriating without a reasonable amount. 

[somebody]

It might be an option to prevent them acquiring further bus+depot assets to bring these assets under state control, but for all we know a number of these assets are already owned by the state.  I doubt that applies to BT depots though.

Here's the 2004 Unsworth bus report in case anyone is interested: http://www.transport.nsw.gov.au/sites/default/file/inquiries/unsworth-final-bus-report_full.pdf
EDIT: Interim report here: http://www.transport.nsw.gov.au/sites/default/file/inquiries/unsworth-interim-bus-report.pdf

[mufreight]

A large number of the buses/coaches in use under Translink are on lease, in some cases these leases are through the government,.(Brisbane Transport builds buses for use by BT that are paid for by the Transport department then leased to Brisbane Transport to operate services for Translink.)
As for the service contracts themselves there was (weather on not it is still existing) that an operator was required to operate above a minimum standard to hold their service contract and it they failed to do so the contract could be withdrawn and another operator brought in to operate the service.
As I understand it all that saved Westside up here in the Ipswich area was that a large part of the problems were as a consequence of the actions of Translink and that Bus Queensland would have pulled its services if action had been taken against Westside, political interference of the worst kind.

[somebody]

A large number of the buses/coaches in use under Translink are on lease, in some cases these leases are through the government,.(Brisbane Transport builds buses for use by BT that are paid for by the Transport department then leased to Brisbane Transport to operate services for Translink.)
As for the service contracts themselves there was (weather on not it is still existing) that an operator was required to operate above a minimum standard to hold their service contract and it they failed to do so the contract could be withdrawn and another operator brought in to operate the service.
As I understand it all that saved Westside up here in the Ipswich area was that a large part of the problems were as a consequence of the actions of Translink and that Bus Queensland would have pulled its services if action had been taken against Westside, political interference of the worst kind.

This tends to reinforce my view that a single big operator is BAD NEWS.

In the Westside/Bus Qld case, this could not have been done in any other jurisdiction that I am aware of.  It would have been a relatively simple matter to get a different operator to run the existing buses and depots.  I'd still question whether you think the changes I am outlining are on the right track.

[Arnz]

What about if existing operators in contract areas, eg Buslink on the Sunshine Coast took over TAG's Sunshine Coast service contract for example? 

I would assume in a scenario like this, they would move the buses from TAG's Marcoola depot to the many Buslink depots throughout the coast to reduce dead running,  although I would think the Buslink Caloundra fleet would move to TAG's Caloundra depot in this case (as TAG has the bigger depot space down there).

[somebody]

What about if existing operators in contract areas, eg Buslink on the Sunshine Coast took over TAG's Sunshine Coast service contract for example? 

I would assume in a scenario like this, they would move the buses from TAG's Marcoola depot to the many Buslink depots throughout the coast to reduce dead running,  although I would think the Buslink Caloundra fleet would move to TAG's Caloundra depot in this case (as TAG has the bigger depot space down there).

This is the sort of thing which could come out of the tender process, if there was one.

BTW, in Vic dead running is the state's responsibility!  Doesn't seem to encourage well positioned depots as being a priority there.  In NSW dead running is the operators' responsibility.  Not sure about other states.

As for the service contracts themselves there was (weather on not it is still existing) that an operator was required to operate above a minimum standard to hold their service contract and it they failed to do so the contract could be withdrawn and another operator brought in to operate the service.

Well the legislation states that there are to be performance standards, and reporting.  The question is about the enforceability of sanctions against the operators.

In NSW at least one operator (Harris Park) said they didn't want to operate any more with the Unsworth bus reforms, but they are missed by no one.  That may well happen here too if there is some reform which happens.

[somebody]

Golli, I think it is fair to say that if you don't want to make moves to make it easier to replace a private operator then we shouldn't have private operators.  Just bring it all under state control.  I would say that there is considerable reason to think that would be far less efficient than a privatised setup though.

[Golliwog]

Golli, I think it is fair to say that if you don't want to make moves to make it easier to replace a private operator then we shouldn't have private operators.  Just bring it all under state control.  I would say that there is considerable reason to think that would be far less efficient than a privatised setup though.

I agree that it shouldn't be hard to replace an operator. But I don't agree that you need to have the state own the depots and the buses for that. Now if the State is helping fund the new buses these private companies are getting, then yes the State should retain some control over those units. What would happen with private operators who do a considerable business outside of the Translink network? Take BBL for instance, the only Translink service they operate is the 399 which is operated out of their depot at Enoggera, but they have a large number of other buses which they use for private charters and school runs. What would you do there under your plan of having the state own the depots and buses?

If you have to get an operator from further afield (and potentially pay a little extra for it) to operate the service, then so be it IMO. Just because you don't like the operator doesn't mean you should force their assets off them (even if you're paying them for them). Just take back any buses the state helped buy, and give them to other operators and let the dodgey operator suffer from a loss of business.

[somebody]

In the particular case of BBL, I imagine if presented with a contract to make available buses and depots available they would decide to either tender for a larger parcel or say they don't want the work.  In this special case, I can agree that another depot/operator doing the work wouldn't be a huge imposition.  This sub 1% case does not justify getting the 99% wrong.

As for your other comments, I'm sure the state government has emergency secret powers to magic buses and depots out of the air to replace an operator!

Life is hard.  I am sure people who lost their houses for the Eastern Busway didn't appreciate it too much.  I don't see why we should give over a natural monopoly to the private sector without reasonable steps being taken to allow their replacement.  It doesn't make any sense.  Neither does the thrust of your argument!

Where is stephenk's dead horse flogging emoticon!

[somebody]

Is something like this suitable for a media release?

[ozbob]

Is something like this suitable for a media release?

No I don't think it is.  This would be better done by writing a letter to the Minister outlining your concerns.

[somebody]

I'd probably get more traction that way.

[ozbob]

I'd probably get more traction that way.

.
Yes for sure.

[somebody]

I want to add that it is enshrined in the legislation that TTA (and probably QConnect) have a "gross cost (fixed)" model.  That means that all fare revenue goes to TTA and the operator gets a rate per service-km.  This is the same model as in Melbourne who do not have a good bus system.  Adelaide, Perth and Sydney privates all have a "gross cost + incentive" model.  So while fare revenue is returned to the government, there is still an incentive payment for patronage.  I think this model represents best practice.

[ozbob]

I want to add that it is enshrined in the legislation that TTA (and probably QConnect) have a "gross cost (fixed)" model.  That means that all fare revenue goes to TTA and the operator gets a rate per service-km.  This is the same model as in Melbourne who do not have a good bus system.  Adelaide, Perth and Sydney privates all have a "gross cost + incentive" model.  So while fare revenue is returned to the government, there is still an incentive payment for patronage.  I think this model represents best practice.

Yes good point.  As I understand it the bus operators get the same dough if there is one pax or 50 pax  here ...

[Golliwog]

But what concerns me with +extra for patronage (while I agree it should be the model used) is how easy it is for a driver to bump up patronage figures. As I understand it, they have a button to press for a passenger getting on with a paper ticket bought on another service. Not hard to have drivers claim extra pax on the bus, and given the number of services being run, hard to enforce.

[somebody]

But what concerns me with +extra for patronage (while I agree it should be the model used) is how easy it is for a driver to bump up patronage figures. As I understand it, they have a button to press for a passenger getting on with a paper ticket bought on another service. Not hard to have drivers claim extra pax on the bus, and given the number of services being run, hard to enforce.

Perhaps so, but others can do it.  It's far worse for private operators in NSW who have 100% paper tickets, effectively.

I expect if +counts rise against paper ticket sales, questions will be asked.  And besides, they should be getting rid of paper tickets so this problem shouldn't last long.

[Golliwog]

But what concerns me with +extra for patronage (while I agree it should be the model used) is how easy it is for a driver to bump up patronage figures. As I understand it, they have a button to press for a passenger getting on with a paper ticket bought on another service. Not hard to have drivers claim extra pax on the bus, and given the number of services being run, hard to enforce.

Perhaps so, but others can do it.  It's far worse for private operators in NSW who have 100% paper tickets, effectively.

I expect if +counts rise against paper ticket sales, questions will be asked.  And besides, they should be getting rid of paper tickets so this problem shouldn't last long.

Good point, though as we all know, just because they should be doing something, doesn't mean they will.