Outer Metropolitan Bus Service Contracts


I acknowledge the recently elected member for Northern Tablelands who is in the Chamber. I hope he had a good first week in this place. Well done. I speak on an issue that is having a considerable impact on three regional bus companies from the Hunter and Central Coast. I understand that as many as six other private bus regions may also be affected. In short, those nine operators are being offered just a three-year future under the category of outer metropolitan. Meanwhile metropolitan bus operators have secured a 5 plus 1, plus 1, plus 1 year term and regional bus operators have recently secured a seven-year term. Beyond three years is complete uncertainty for the nine operators. This makes investment in infrastructure, employment and bus stock at best a dangerous gamble, and at worst a foolish waste.

I will read on to Hansard some words that were offered at a gathering in Parliament House 48 hours ago by Mr Aaron Lewis of Rover Motor Coaches. His words might be deemed by the ill-informed to be an attack on the Government, but they are not. In fact Aaron offers advice for both sides of politics. No, his words are not a political statement, they are a plea. They are a plea from a businessman who has a family operation with more than 88 years history. They are a plea that offer more common sense than many things said in this Chamber. Aaron said:

It used to be a truism in our industry that “our past assures our future”. That all changed in 2006 when the new contract system commenced and despite performing well for the last 7 years we have never been under more pressure to prove we offer value for money—that we are efficient. We are soon to negotiate for a very short renewal term of just 3 years.

When the recommendations of the Unsworth Review were handed down it was significant that it noted that “country and regional centres were not microcosms of Sydney and should not be treated as such”. I quote this as it was lifted directly from my own submission.

The current Minister for Transport, the Hon Gladys Berejiklian, was also clear on this point at the recent Manly bus conference.

We hear a lot today about value for money and cost to Government. We have no problem with that and will willingly state our case as highly efficient service providers operating under strict and complex regulations. It has always been that way; from the 1920s when local Shire councils were the regulators, through 90 years of various changes to the Passenger Transport Act, right up to today, when the level of service demanded by the public has never been greater and the administrative requirements have never been higher.

Now we are being asked to show more efficiency.

The owner operators here tonight represent a particularly stubborn and resilient type of businessman. How else can you describe the survivors of a 38 year period of patronage decline? In my company’s case from 1967 when a major new road opened and public transport commenced a losing battle with the car and 2005 when the Government policy introduced Pensioner Excursion Tickets which saw a tremendous resurgence in the use of existing services.

The Government of the day was smart in the late 1960s. They cancelled the local train service, invited us to provide a regulated bus service, and then forced us to continue a contracted run to the Newcastle BHP for all shifts even for two and a half years after the night shift had effectively closed down. We carried those losses 100% and now WE are told to show more efficiency.

One of the ways we have remained in business for so long, 88 years in our case, is by being innovative and implementing solutions with a long term view. While regulators have talked, we have gone ahead and taken the inevitable and morally correct action. We led the way on introducing double deck buses before WWII, we led the way on introducing trailer buses after the war, we led the way on low floor buses in the late 1990s and we lead the way in seat belt equipped buses today. Efficiency can be measured in more than dollars.

Put simply if we weren’t efficient we wouldn’t still be here. We have survived the long decline of public transport and are now a vibrant part of the growth and renewal of transport as an essential service.

In country regions like Cessnock we never had the population growth that drives the need for public transport, we are nothing like Sydney. In fact, we are essentially school bus operators. The basic ingredients for heavy demand on public transport simply don’t exist in regional areas and the Government recognised this over 40 years ago when they cut our rail line. Buses are vastly cheaper to provide than trains and that factor alone points to proof of our efficiency.

Just how much saving does the Government realistically think it can achieve in a regional operation such as mine? We represent just .1% of bus patronage in this state’s various contracted regions. Given the small scale of our operation the potential savings are obviously less than the cost of the process.

Why are experienced operators who have historic links to country towns being put through this expensive process with little possible gain to be had? Who here would take on a business on such a short term of just 3 years?

Nevertheless I am happy that the decision is to negotiate with me as the incumbent and offer this cost efficiency up front. Let the owners negotiate directly in good faith.

The proposed negotiation process cost to me in lawyers, consultants and accountants is more than my annual net profit. How do I recoup that in a 3 year contract?

Why are we not being offered a renewable contract? That’s not efficient. I imagine the cost to government to run the process this way is at least double our costs.

And apparently the intent is to do it all over again in just 3 years’ time.

An Outer Metropolitan operation is vastly different to a Metro operation. We can’t change our geographic location, or our population density. We are country regions thrown into a Metropolitan based contract system that simply cannot apply to us in any meaningful way.

To pre-empt the negotiation by the expectation that we can further cut costs ignores these facts.

I ask that the Minister acknowledges our unique differences and recognise our professional commitment to the task of service provision as we have done for nearly 90 years. Thank you.

It is right that I use Aaron’s words at length. He lives and breathes the industry, just as his father did and as his father’s father did. I, for one, hope that sanity will prevail and that these great local companies will have many decades of successful operation ahead of them. The journey can start right now if the contract offered were a three plus three-year term.