New tenders for the outsourced operation of Adelaide Metro trams and trains

adelaide transport

The South Australian Government will release tenders for the operation of Adelaide Metro tram and train services, in a measure to deliver better and more customer focused services.

The State Government can guarantee maintaining the same service frequency and standards and strongly expects to be able to increase service levels once this model is fully implemented.

This means train and tram services will operate under the same arrangement as around 70 per cent of the current public transport network which is provided by outsourced bus services contracted by the former Labor government.  

The Adelaide Metro public transport network is underperforming compared with most other jurisdictions and has:

  • One of the lowest patronage levels in the country
  • The worst level of integration in the country
  • Almost half of public transport users don’t think they are getting good value for money

Under this revised model, the State Government will retain control of services and will:

  • Retain ownership of rail assets, including trains, trams, tracks and stations
  • Set requirements for levels of services
  • Continue to set the fare price for travel on trains and trams
  • Retain the revenue
  • Enter into a performance-based franchise contract that keeps the operator focused firmly on the efficiency and quality of service delivery to customers

State Minister for Transport, Infrastructure and Local Government, Stephan Knoll, said, “There is no doubt that we can and must provide better and more customer focused public transport services for South Australians.

“We know that public transport patronage growth has stalled, and customers want a better level of service than is currently provided.

“Under this model, we will be able to deliver more efficient services, so we can reinvest back into the network to provide better services.

“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.

Minister Knoll said that the State Government will still own and control the assets, control fare prices and set service level requirements – in the same way they currently do for Adelaide Metro buses.

“We will ensure through the tender process that the existing frontline workforce will be provided with the greatest level of opportunity for on-going work.

The framework is intended to enable the Government to leverage the capability, innovation and expertise from private sector organisations to improve the efficiency and quality of service, while continuing to determine the fare price and the levels of service provided to customers.

South Australia is the only jurisdiction in the country that does not outsource the operation of its tram services.

“If we are going to provide better and more customer focused public transport services, we need to keep pace with the rest of the nation and benefit from their learnings,” Mr Knoll said.

Outsourcing of operations is increasingly a preferred business model for delivery of public transport services around the world, because it blends government ownership and control with the best practices the private sector can bring to operate efficiently and deliver better services. 

In Australia, Adelaide led the way in transitioning to the modern form of outsourced service delivery model for bus services in the early 2000s and will now complete the transition for its train and tram network.

Infrastructure Partnerships Australia, Chief Executive, Adrian Dwyer, said, “The South Australian Government’s smart decision to franchise its metro train and tram services and retender existing bus services will modernise Adelaide’s transport system for the better.

“Franchising the operation of these services is a tried and tested way to drive value for taxpayers and deliver better outcomes for customers.

“Franchising is not privatisation and its unhelpful and inaccurate to conflate the two.

“Opening up the operation of the train and tram services to competitive tender is not about selling assets, its about delivering better services to customers.

“Customers don’t care about who operates their bus or tram, they care that it’s clean and on-time.

Mr Dwyer said that train and tram customers right around the country are already enjoying the benefits of having the best private providers operating their service and South Australian customers should too.

“Infrastructure Partnerships Australia, Infrastructure Australia, and many others have consistently recommended that state and territory governments pursue the franchising of their bus and train services and its good to see that SA has listened,” Mr Dwyer said.

Tram services will be included in the scope of Phase 2 of the current Bus Services Contract Tender.  

Timings for the tender for train services will be finalised after a market engagement process that will commence later this year and full transition to private sector operations is expected by mid-2021.

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