Our industry is at its best when we are unified on issues. The BIC has always said this and we will continue to make sure it happens.
The announcement of competitive tendering for metro contracts in NSW, moving away from the negotiated system, is a big blow to the incumbent operators in these areas, but also presents an opportunity to show the strength in industry unity.
Some of these bus companies have been servicing the community for decades. They not only know the lay of the land and how to move people in their communities, they are a vital part of the social fabric of their communities.
Governments have every right to determine how they procure bus services, but the BIC view, based on evidence, is that performance based negotiated contracts deliver the best outcome for governments and communities.
If this move from the NSW Government is about increasing efficiency, the first step should have been to look at the operation of the State Transit Authority (STA) bus services.
The NSW Government's own reports have identified the inefficiencies of the government owned fleet as compared to the private contractor. The big efficiency and savings are to be gained by privatising STA.
There is a plethora of global evidence that confirms negotiating performance based contracts is the most effective method of procuring bus services, not tendering.
Negotiated performance based contracts are designed to achieve shared strategic outcomes, such as reduce congestion, reduce greenhouse gas emissions, and increase social inclusion, whereas tendering typically just sees the appointment of a contractor with the cheapest price.
The best thing about negotiating performance based contracts is that it is transparent. All the costs are declared and fortunately, running a bus isn't rocket science. There's the capital cost the bus (sic), labour, fuel and servicing.
If a tender is awarded to the lowest bidder who doesn't potentially cover off these cost imperatives, we see performance problems arise.
We cannot support this move from the NSW Government and BIC will work with BusNSW and other State Associations to inform Governments that negotiated performance based contracts are the way to go and that the nature of the bus business and how it is developed means that the competitive tendering mode for this industry does not work.
Bus Industry Confederation,
PO Box 6171,
Kingston ACT 2604