Transport Minister Stephan Knoll said the Government would tender out Adelaide Metro tram and train services, in the same way as public bus services have operated since 2000.
He said the State Government would retain control of services, including ownership of rail assets such as trains, trams and stations, but outsource the operations.
The Government would enter into a “performance-based franchise contract that keeps the operator focussed firmly on the efficiency and quality of service delivery to customers”.
Knoll said the Government would ensure that “the existing frontline workforce will be provided with the greatest level of opportunity for ongoing work”.
He also argued that the Government would be able to deliver more efficient services under the new model, which would allow funds to be reinvested in public transport.
“That’s why the State Government can guarantee maintaining the same service frequency levels and standards and expect an increase in service levels once this model is fully implemented,” he said.
We know that private business is able to provide a customer-focused service in ways governments struggle to
“The State Government will still own and control the assets, control fare prices and set service level requirements – in the same way we do for Adelaide Metro buses.”
Knoll told a media conference today that he wanted to seek out the best operators of public transport from around the world.
“The global expertise… will save money that we can invest in better public transport services,” he said.
“The Government will maintain control over what happens: we will control the fares, we will control the frequency (of services). We won’t be selling anything.
“This is about delivering better public transport services… in a way that places right across the glove have been going.”
For months, Knoll has been prosecuting an argument that Adelaide’s public transport services are underperforming.
He released results of a customer survey today, taken late last year, which he said showed there was “a lot of room for improvement”.
However, the results show that commuters are more satisfied with train and tram services than with Adelaide’s buses.
The survey showed that 80 per cent of bus users expressed “overall satisfaction” with the service, compared to 87 per cent of train users and 91 per cent of tram users.
Knoll was asked repeatedly to address customer satisfaction with the bus system, but declined to address it directly.
“Overall with different parts of the network are between 80 and 90 per cent,” he said.
“Only half of our customers are happy with the value for money they’re getting.”
Asked whether today’s announcement was “privatisation”, he insisted it was “outsourcing”.
But he argued private bus operations had “worked successfully in Adelaide”, adding that after bus services were first put out to tender, patronage grew by 15 per cent.
He stressed that by commissioning a private contractor, the Government could better enforce key performance indicators.
“I don’t think that there are too many people in Adelaide that would say that the way the existing bureaucracy is working is at its optimum,” he said.
“We know that private business is able to provide a customer-focused service in ways governments struggle to.”
Fare price hikes, job losses not ruled out
Knoll said the government would continue to set the fares, but did not rule out price hikes.
“It doesn’t always mean that the cheapest is the best, we will continue to control the fare box in Adelaide, but the opportunity of providing the quality of service … is the real key,” he said.
“When it comes to delivering value for money for out customers, price is important – we do actually have some of the cheapest public transport fares in the country – but we also need to provide a better service.
“But we will continue to set the fares … and we will make sure that we deliver that value proposition for South Australians.”
He said the government would keep prices “amongst the lowest in the country”.
Knoll also declined to rule out job losses, but said the Government expected the majority of public workers to transition into working for the private provider.
“The expectation is … where this operating model is put in place, the existing workforce is utilised first and foremost,” he said.
“There are existing provisions within the EB agreements that give government the opportunity to help redeloy and help re-train workers.
“The existing EB provisions will transition across, so workers won’t see a derogation of their union agreements.”
The outsourcing of tram services will be included in the scope of phase two of the bus services contract tender, to be released this week.
Knoll said timing of the train services tender would be finalised after a market engagement process to begin later this year, with a full transition to private sector operations expected by mid-2021.
World’s “best operating model”
Knoll said he had spent the past several months travelling around the country and to Europe to see how other jurisdictions manage the best public transport systems.
“We have been working over the past months to look around the globe at what the best operating models are,” he said.
“It’s very clear that from London to Melbourne, this operating model is the one that has delivered the best operating model for people.
“Having visited Melbourne, Sydney, Canberra and Newcastle, as well as London, Manchester, Glasgow, Edinburgh – a whole series of places around the world, to look at how they operate their public transport systems.”
But Knoll said the Government wanted global expertise to help improve outcomes for commuters.
“We need to get the best operators of public transport systems around the world … to help improve our system,” he told the press conference.
“We need to bring that global expertise here to Adelaide.”
However, EdinburghLive reported last week that Scotland railways operator ScotRail had received the highest number of complaints in six years.
Privatisation “A very significant betrayal”: Labor
Labor leader Peter Malinauskas slammed the move as “a very significant betrayal”, noting Steven Marshall’s pre-election pledge claim that “he didn’t have a privatisation agenda”.
“They’ve certainly got one now,” he said.
“It’s clear now that there is a substantial privatisation agenda [and] the privatisation of the train and tram network will mean that public transport is less about people and all about profit.”
The Opposition Leader wouldn’t commit to returning the fleet to public hands if elected, saying “we’re still digesting this announcement”, but insisted “the focus now is squarely on what possible justification does the Government have for this”.
“This is not consistent with anything they said before the election – they’re supposed to be delivering better services,” he said.
“This is a key public service that tens of thousands of people use every single day, and the quality of their service will inevitably be compromised through the profiteering of a private company.”
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