Article: Connex slapped before it was axed

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Connex slapped before it was axed

Connex slapped before it was axed
Article from: Herald Sun

Ashley Gardiner

July 27, 2009 12:00am

RAIL operator Connex was secretly issued with a reprimand by the State Government for poor performance just weeks before it was dumped.

Director of Public Transport Hector McKenzie handed out the call-in notice, issued under the contract in late March, in a sign to rail chiefs they were about to be axed.

But despite its poor performance, Connex has made millions of dollars a year.

Its profits, which were not required to be publicly disclosed and are about double what had been thought, are revealed for the first time.

The details were in its 2008-11 business plan, obtained by the State Opposition. It showed Connex made a $25.65 million after-tax profit in 2007-08 and $22.46 million in 2008-09.

A $15 million profit was forecast in 2009-10 and $20.74 million in 2010-11. Connex expected to keep getting poor performance fines: $18.36 million for 2009-10 and 2010-11.

Connex, which will be replaced by MTM on November 30, would not comment.

By 2010-11, the Government's annual payment to Connex was forecast to have been $400.71 million.

Opposition transport spokesman Terry Mulder said the profits were about double what was previously thought.

An internal document seen by the Herald Sun reveals a secret Government rebuke for Connex at the height of bidding to run the train system.