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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-09-28 Daily Xml
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SCHOOL BUS CONTRACTS

The Hon. J.A. DARLEY (15:17): I seek leave to make a brief explanation before asking the Minister for Industrial Relations, representing the Minister for Education, questions regarding school bus services in rural areas.

Leave granted.

The Hon. J.A. DARLEY: In August Channel 7's Today Tonight aired several stories on school bus services which exposed the fact that the Department for Transport, Energy and Infrastructure was making student reimbursement payments to Australian Transport Enterprises (ATE), operating as Link SA, for students who were not carried on Link SA services. Today Tonight aired a further story on 29 August which featured a former bus company employee who admitted that he was directed to complete falsified paperwork in order for Link SA to receive false student reimbursement payments.

I understand that quite a number of country school bus services have recently been awarded to Link SA by the Department of Education and Children's Services following a public tender. Questions have been raised with regard to the equity of those who submitted tenders as I understand many of Link SA depots, administrative buildings and workshops are either subsidised or owned by the South Australian government. This would reduce their operating costs and therefore allow the company to lower their price during tender. This in turn has had a detrimental effect on local bus operators, who had previously been operating this service and relied on school bus runs as a basis for their business.

Further to this, I understand that local businesses, such as mechanics, auto electricians, cleaners, etc., used by these local bus operators are expecting to be significantly impacted by the loss of these contracts to ATE. My questions to the minister are:

1. Given the information exposed about Link SA providing falsified information to receive student reimbursement payments, is the minister able to reconsider the tenders awarded to Link SA in preference to local bus operators and, if so, will he do so?

2. Did the minister consider the socioeconomic impact on the local community if tenders were awarded to a large interstate company rather than local operators?

3. Can the minister advise how much local content ATE had in the winning tenders and whether these will be honoured, or will ATE simply revert to using their own national service suppliers and wholesalers?

The Hon. R.P. WORTLEY (Minister for Industrial Relations, Minister for State/Local Government Relations) (15:19): I am advised that in 1999 DECS consulted with the Bus and Coach Association in relation to bus contracts and agreement was reached about the process for contract renewals with bus services continuing into the future. More recently, this process involved either rolling over existing contracts, direct negotiation with incumbent suppliers and/or open tenders, depending on the length of previous arrangements, and this occurred in early 2000.

On 13 September 2010 the Minister for Education and Children's Services announced the following:

the government will spend $114 million over four years to modernise and improve school bus services across Australia. This figure included $32.8 million over four years of additional funding, $13.8 million of which is from the redirection of existing department resources, as announced in the 2010-11 budget;

a total of $23.8 million will be spent to acquire 97 new buses over the next four years;

$90.7 million will also be spent in supporting private bus operator contracts over the next four years, ensuring that all new contracts provide buses with seatbelts and air conditioning;

all new buses in the DECS fleet will have seatbelts, air conditioning and other safety standards;

the government will move to a new two-stage procurement process for each route or cluster of routes to seek expressions of interest, and then either choose to directly negotiate with operators or move to a general tender process; and

industry briefings will be held in key regional centres.

Submissions received in the new contracts will be evaluated against new costing benchmarks, which have been updated to include the new safety requirements.

The first stage commenced with a call for expressions of interest in October 2010. As of September 2011, the second stage resulted in 1,175 RFPs being issued for 125 routes. I can advise that approximately 50 per cent of the routes awarded have remained with the incumbent contractor, with the remainder awarded to other existing contractors. The evaluation of other routes tendered to date is continuing, as is the process of progressively issuing RFPs.

It is anticipated that by 2016 all contracted buses will have seatbelts, air conditioning and other safety requirements. DECS school bus contractors are able to access the department's bus supply contracts, and it is anticipated that the DECS bus supply panel will assist contractors in securing better delivery lead time for their buses.

The incumbent benefits include that the evaluation process for new contracts recognises individual operators' record of providing quality service. The following advantages for incumbent contractors are:

a 5 per cent preferential weighting to incumbent bus operators in the first evaluation stage to recognise prior service;

incumbent bus contractors receive an additional opportunity to review their bids if they are over the benchmark and there are bids from other respondents that are below the benchmark;

incumbent bus contractors also receive a higher reference weighting in the second evaluation stage in comparison to other bidders;

the process is closed off when all offers are over the benchmark, and this provides the incumbent contractors with the opportunity for direct negotiation; and

if there is no result from direct negotiations with the incumbent bus contractor, the department can then negotiate with any other party or place a DECS bus on the route. DECS may also consider calling public tenders for these routes to give the incumbent a further opportunity to be awarded the bus contract.

The Hon. R.L. BROKENSHIRE: I have a supplementary.

The PRESIDENT: The time for question time has expired. You can do that tomorrow.

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