BUS CONTRACTS

The Hon. C.C. FOX (Bright—Minister for Transport Services) (14:09): I seek leave to make a ministerial statement.

Leave granted.

The Hon. C.C. FOX: It is known that Adelaide commuters have been frustrated by problems following changes to bus contracts last year. It is worth noting that these new arrangements were a result of a formal and proper tender process designed to provide maximum value for money for the South Australian taxpayer for what is a set of contracts worth about $1.5 billion over eight years.

For this frustration and inconvenience, the government has apologised to commuters and has already planned measures that will seek to jointly address congestion problems and improve bus priority measures to provide commuters with a better service. After a long history of underinvestment by the Liberals, the Rann/Weatherill governments have been committed to providing quality public transport to South Australians—

Members interjecting:

The SPEAKER: Order!

The Hon. C.C. FOX: —and we have a proud history of record investment. While the government is investing in infrastructure and working with the three private bus companies on improvements, it is also imperative that the companies themselves perform to levels expected by the taxpayer and to which they have agreed in their respective contracts.

On 13 March I advised this house that I as minister had chosen to impose initial discretionary fee adjustments to all three companies where I felt their performance was materially at variance to their contractual obligations. The fee adjustments for the October-December 2011 quarter were $14,536 for Transfield, $11,973 for Australian Transit Enterprises and $11,919 for Transit Systems.

In April I received the audited performance data for the January-March quarter, covering seven performance criteria, and I wrote to the three contractors requesting they explain why they have failed to meet contractual performance benchmark standards. All three contractors responded to the Department of Planning, Transport and Infrastructure by the due date of last Friday, that is Friday 27 April. Today I have received the department's formal advice on the mitigating circumstances provided by these companies.

Applying the schedule 11 performance assessment criteria for the January-March quarter sees all six contract areas liable for a fee reduction, and I will table a summary of these performances with this statement. A common theme raised by all three contractors was that of traffic congestion and, in particular, an argument that this was beyond their control. In both the media and this place I have acknowledged that this is a contributing factor.

However, while the traffic congestion has some relevance in relation to the Harris Scarfe redevelopment and the 'Mad March' road closures associated with the Clipsal 500, it does not adequately explain—

Members interjecting:

The SPEAKER: Order!

The Hon. C.C. FOX: —the significant failure of—

Members interjecting:

The SPEAKER: Order!

The Hon. C.C. FOX: —some services to reach the on-time running performance benchmarks. Following analysis of all relevant factors—

Members interjecting:

The SPEAKER: Members on my left, order!

The Hon. C.C. FOX: —the government has concluded that, while all three contractors have failed to reach performance benchmarks, Transfield has performed significantly worse than Transit Systems and Australian Transit Enterprises. Transfield was the only contractor to exceed the agreed level 3 threshold, and did so in both of its contract areas. The penalties to be imposed by the government reflect these relative levels of performance. It must be noted that the government considered it appropriate to exclude the Adelaide Hills contract area from any fee reduction given the relatively good performance in this area.

Today I have written to the three companies advising of the following fee adjustments for the January-March quarter: for Transfield, $121,345; for Australian Transit Enterprises, $50,455; and for Transit System, $46,043. I am releasing the amount of these fee adjustments today as I believe it is in the public interest to do so. However, it is important to inform the house that I am restricted in the further detail of the financial calculations that I can provide due to the commercial nature of the legal contracts.

I do not expect the bus contractors to be happy with these penalties, nor do I expect the penalties to ease the legitimate frustration of commuters. However, the government believes these penalties are an important message that the bus companies must lift their performance and work with the government as important changes are implemented to improve the experience of passenger transport commuters.

In closing, I would remind the house of the very important Metrocard system I spoke about yesterday which, when operational later this year—

Members interjecting:

The SPEAKER: Order!

The Hon. C.C. FOX: —will improve bus running times and also provide real-time running times for the South Australian public to see.