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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-10-19 Daily Xml
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SCHOOL BUS CONTRACTS

Adjourned debate on motion of Hon. D.W. Ridgway:

1. That a select committee of the Legislative Council be established to inquire into and report upon the department of education's open procurement process for school bus contracts, with particular reference to—

(a) the impact on regional communities through the subsequent deterioration of family business operators if contracts are lost;

(b) the ability of South Australian small operators to be sustained by private contract work and the subsequent impact on South Australia's future market competitiveness;

(c) the inclination of new contractors to support small communities in the same way as previous family bus company contractors;

(d) the sustainability of benchmarks used to determine tender applications;

(e) government subsidies and the concession reimbursement scheme provided to some operators;

(f) the failure to provide certainty for school bus operators whose contracts are yet to expire; and

(g) any other relevant matter.

2. That standing order No. 389 be so far suspended as to enable the chairperson of the committee to have a deliberative vote only.

3. That this council permits the select committee to authorise the disclosure or publication, as it sees fit, of any evidence or documents presented to the committee prior to such evidence being presented to the council.

4. That standing order No. 396 be suspended to enable strangers to be admitted when the select committee is examining witnesses unless the committee otherwise resolves, but they shall be excluded when the committee is deliberating.

(Continued from 14 September 2011.)

The Hon. T.A. FRANKS (21:16): I rise on behalf of the Greens to briefly indicate that we will support the motion of the Hon. David Ridgway into the issue of the South Australian bus operators and the bus contracts allocated recently to Australian Transit Enterprises in bulk and the effect that this will have on regional communities and the implications it has for the future running of these services.

There may be questions as to whether or not there have been incentive payments and so on to attract ATE to South Australia. That may turn out to not necessarily be the best outcome of our state and for our education system in terms of the support that these buses and coaches currently provide to ensure that students who are in rural areas of this state have the best access to education possible. The Greens note that there has been great community interest in this issue.

Certainly the 13,000 signatures sent to the Hon. Robert Brokenshire and tabled on this issue are not to be ignored. It is not a small figure, and it is something that this council should pay great attention to. On behalf of the Hon. Mark Parnell and myself, we were pleased to hear from the President of the Bus and Coach Association and also the executive director on this issue. We think that they have some reasonable concerns that deserve due respect and due notice be taken of them. With that, I commend the motion to the council.

The Hon. R.L. BROKENSHIRE (21:19): I advise that Family First will be supporting the select committee and the motion that we are debating at this point put up by the Hon. Mr David Ridgway. As the Hon. Tammy Franks has said, we did table a petition; in fact, now I think it is close to 15,000 signatures. There have been some more coming in. Whilst I know the government will not want this select committee, I point most of the blame of the concerns and angst through the community at the Department of Education and Children's Services.

Notwithstanding that, the Minister for Education and Children's Services, the Hon. Jay Weatherill, as of Friday of this week will become the premier of South Australia. I would have hoped that one thing the Hon. Jay Weatherill would have wanted was the opportunity for small businesses throughout South Australia to be able to: one, capitalise on being able to provide bus services for public schools, and also employment in the regions. So far, it appears that the Hon. Jay Weatherill has endorsed this policy and direction of the Department of Education and Children's Services.

I attended the Budget and Finance Committee, where we were able to ask some preliminary questions of the Department of Education and Children's Services. I felt that there was quite a lot of uneasiness with some of the senior staff of DECS regarding what was happening. In fairness, it may come to bear that a lot of the concerns that we have about probity, due diligence and the like are not a concern, but at this point in time Family First has not been convinced by DECS senior officers and the evidence given in that particular standing committee that there are no concerns about probity and due diligence when it comes to this matter of unprecedented upheaval across South Australia with respect to small bus contractors who have provided these services in good faith to the Department of Education and Children's Services for, in some cases, decades and who have lost their tenders.

I will not spend much more time on this now because I will have a lot more time to talk about it when the evidence has been given, deliberations made and a report put to the parliament, but my understanding is that there are the numbers in this place for a select committee.

I do not apologise for ensuring that: (1), probity and diligence has occurred; (2), that small businesses are looked at as a priority to the government across government; (3), that there is also the understanding that these public school bus contracts underpin bus services, precious and limited bus services for transport opportunities for people in rural and regional South Australia. With those few words, I look forward to the select committee being approved tonight.

The PRESIDENT: Make sure you ask the ones that were successful to the committee hearings as well, like the Townsends in the Riverland.

The Hon. G.A. KANDELAARS (21:22): It will be of no surprise that the government opposes this motion. The Department of Education and Children's Services has been working with school bus contractors, the Bus and Coach Association (BCA) and other stakeholders since 1998. In November 1999, the State Supply Board approved the government's strategy to replace longstanding open-ended contracts under the previous Liberal government to shift contractors from open-ended contracts to fixed term contracts.

The shift to fixed-term contracts was on the basis that upon their expiry new bus contracts would be subject to public tender. DECS has been working with school bus contractors since this time to demonstrate what fixed term contracts will mean to their business. In September 2010, the government announced an investment of $114.5 million over four years to modernise and improve bus services in South Australia, $23.8 million will be invested in 97 new DECS buses and $90.7 million to support school bus contract operators to ensure that all new school buses are fitted with seatbelts, air conditioning and other safety and environment standards.

The first stage of the procurement process involved asking school bus contract operators to register their interest with DECS for particular runs or clusters of school bus runs. The second stage of the procurement process involved asking school bus contract operators to submit their offers for individual or clusters of school bus runs. The two-stage process came about following meetings with the BCA to enable direct negotiations with incumbent school bus contract operators where there was no competition for a bus route.

The incumbent school bus contractors are being supported in the two-stage procurement process with a 5 per cent weighting that recognises prior service; incumbent operators receive an additional opportunity to review their bids if they are over the benchmark and there are other bids below the benchmark; the incumbent operators receive a higher reference weighting in the second evaluation stage compared to other bidders; the process is closed when all offers are over the benchmark. This provides the incumbent contractor with the opportunity for direct negotiation and, if there is no result from the direct negotiations, DECS may consider calling public tenders to give the incumbent another opportunity to be awarded the bus contract.

The department is supporting small businesses by assessing all submissions asking for school bus contractors to detail how they will support local businesses. For example, where they will be locally purchasing fuel, mechanical work undertaken by local mechanics, local garaging, whether the drivers reside in the region, and whether all other maintenance requirements (oil, tyres, etc.) will be purchased locally. The weighting given for the regional business support criteria is substantial.

This has been a big exercise. To date, 1,585 requests for proposals have been issued to 166 bus routes to 194 expression of interest respondents; 934 offers have been received; contracts for 121 routes have been awarded to 20 different contractors; about 60 per cent of the contracts have been awarded to incumbent operators—that is, the contractors already operating a particular route; 100 per cent of all contracts have been awarded to contractors operating currently within the DECS school bus system—that is, no contracts have been awarded to outside operators to date. This supports the fact that the procurement process is fair and that incumbent bus operators are winning routes.

The second stage procurement process has been approved by the State Procurement Board. The department has engaged the services of an independent probity consultant to oversee the procurement process and to review the conduct of the evaluation of offers to ensure the integrity of the procurement process and fairness for all tenderers.

The department is continuing to work with bus contractors and the BCA to ensure the continuity of appropriate transport services to regional schoolchildren, to award contracts fairly and inform contractors about the procurement process.

The Hon. D.W. RIDGWAY (Leader of the Opposition) (21:28): I thank members for their contributions. It is pleasing to note that we have enough support in the chamber to establish this select committee. I think it is important for rural communities and the bus operators to have the opportunity under a select committee format to come and give evidence with the protection of parliamentary privilege and that we can get some answers for those people in the community who feel that they have been badly dealt with in this particular set of circumstances. With those few words, I thank members for their contributions and urge people to support the motion.

Motion carried.

The Hon. D.W. RIDGWAY (Leader of the Opposition) (21:29): I move:

That the select committee consist of the Hon. Mark Parnell, the Hon. Jing Lee, the Hon. Gerry Kandelaars, the Hon. Robert Brokenshire and the mover.

Motion carried.

The Hon. D.W. RIDGWAY: I move:

That the select committee have the power to send for persons, papers and records and to adjourn from place to place and report on 23 November 2011.

Motion carried.

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