STA Privatisation / Franchising

[Stu]

The guvmint and the rtbu are both peddling lies and are as anda as each other.

Constants;
- poor on time running, yet fails to mention the causes such as current poor road transport infrastructure, West Connex and CSELR.
- high number of complaints, yet has failed to provide the breakdown of reasons for complaints and has not displayed the ratio of total number of services provided against the total number of complaints received.
- private operator can do a better job. How can any operator provide services to run on time in certain areas of Sydney?

Union;
- higher fares under privatisation. Lie - IPART / Govt responsibility.
- bus stop removal under privatisation. Lie - TfNSW / RMS bus priority program that commenced in 2014.
- slower journey times. Is the rtbu suggesting that ex STA drivers will stop using the centre door or just start to drive very slow across all of Region 6?
- cuts to services. Lie - one of the current guvmints only achievements has been increasing services in recent years.

The rtbu will negotiate an EBA which will last for the first 18 months under the new operator. I think that the rtbu will still look after its flock for this period and then the TWU will swoop in to gobble up thousands of new memberships. Unless the rtbu can convince its subscribership to stay with the rtbu.

[Tonymercury]

The guvmint and the rtbu are both peddling lies and are as anda as each other.

Constants;
- poor on time running, yet fails to mention the causes such as current poor road transport infrastructure, West Connex and CSELR.
- high number of complaints, yet has failed to provide the breakdown of reasons for complaints and has not displayed the ratio of total number of services provided against the total number of complaints received.
- private operator can do a better job. How can any operator provide services to run on time in certain areas of Sydney?

There should also be a complaint to passenger ratio.

[Jurassic_Joke]

The guvmint and the rtbu are both peddling lies and are as anda as each other.

^^^^^^^^^^^^^^

Yup. Not exactly sure myself who I want to triumph over the other, but I suppose in the mean time it'll be entertaining to sit back and watch it all with some popcorn

[Free Lance]

After it is "ALL DONE AND DUSTED" the only thing that will change will be the management structure, buses will still operate, drivers will still have jobs and be paid award wages ('til driverless buses become the norm, don't think I will be around to see that!) passengers will still have timetables, the only loser the RBTU

[grog]

But does anyone had any solid information on what the coverage will be post franchising? How about for Newcastle- have there been any moves for RTBU members to move over to TWU? It wouldn't be a matter for the government or new operator to determine, it would be up to the members, the RTBU and TWU to work out between themselves how any changes to coverage work.

[boronia]

the only loser the RBTU

And that is the only reason they are so noisy.

How noisy were they in Newcastle?

[Stu]

The unions only look after themselves. I wouldn't be surprised if the two unions worked out a no-members-invited-back-room-under-table-behind-closed-doors deal/agreement to determine member retention or member transfer arrangements.

[grog]

That's exactly how the union movement generally works, with agreements between unions on coverage. I just wanted to know if anyone has heard anything about likely arrangements in Newcastle as it could indicate what happens in region 6. The status quo of members retaining RTBU coverage for historical reasons is certainly not out of the question - there are a lot of quirks like that throughout the movement.

[Linto63]

The Go-Ahead Group have stated they are exploring opportunities in Australia. https://www.go-ahead.com/en/investors/f ... entre.html Primarily a UK bus and train operator, it has more recently won bus contracts in Singapore and Dublin much along the line of those being offered for Region 6 in Sydney. So maybe a potential new bidder?

[tonyp]

The Go-Ahead Group have stated they are exploring opportunities in Australia. https://www.go-ahead.com/en/investors/f ... entre.html Primarily a UK bus and train operator, it has more recently won bus contracts in Singapore and Dublin much along the line of those being offered for Region 6 in Sydney. So maybe a potential new bidder?

The last thing we need is an operator with roots in British practice only. It would be preferable to have operators with extensive continental European experience like Arriva. We need the industry to move forward, not stay as it is.

[Swift]

What a nightmare having private British operators running the show here. Let's not go there... PLEASE!!!

[tonyp]

What a nightmare having private British operators running the show here. Let's not go there... PLEASE!!!

Isn't that what we've had clones of for the past 70 years? Not that the French are miles better either. It needs to shift a little more eastwards - or ideally best of all, properly clued up Australian operators.

[Swift]

- or ideally best of all, properly clued up Australian operators.

There's a unicorn if ever I saw one!!

[Linto63]

It would be preferable to have operators with extensive continental European experience like Arriva.

But then it wouldn't really be privatisation, merely transferring the service provision from one government to another, Arriva being owned by the German government.

What a nightmare having private British operators running the show here.

National Express did alright didn't they? Sure they sent Westbus to the wall and ended up walking from their Victorian contracts, but surely we can forgive and forget. Ok, the Harry Blundred piecart experiment in Queensland that forced out the incumbent operators was a bit of a disaster as was Alexander Dennis' purchase of Custom Coaches.

[tonyp]

But then it wouldn't really be privatisation, merely transferring the service provision from one government to another, Arriva being owned by the German government.

Well you can choose between Merkel or Macron running your PT - the devil or the deep blue sea!

DB is actually a private company - but the only shareholder is the German Federal government. Where does that sit in the brave new world of privatisation?

[Linto63]

Well you can choose between Merkel or Macron running your PT - the devil or the deep blue sea!

We already have Macron, with the French government having an interest in Newcastle Transport operator Keolis Downer.

DB is actually a private company - but the only shareholder is the German Federal government. Where does that sit in the brave new world of privatisation?

For all intents and purposes though, is a government entity. If the State Transit Authority was restructured as State Transit Pty Ltd with the government as sole shareholder, would still be considered as government owned. Maybe we will end up like the Poms where in spite of the original intention to have the private sector take over, a good portion of their bus and rail services are now operated under contract by the governments of other countries.

[tonyp]

Well of course the French government is indirectly involved as shareholder in numerous tram and bus systems across Australia, but it's a bit of a stretch to say that they're run by foreign governments. The foreign government is involved more in the capacity of a private shareholder and is not trying to implement their policies through their shareholding.

I do wish more Australian companies would get involved, after all it's only a service industry and can't be too hard to break into.

[In Transit]

Well of course the French government is indirectly involved as shareholder in numerous tram and bus systems across Australia, but it's a bit of a stretch to say that they're run by foreign governments. The foreign government is involved more in the capacity of a private shareholder and is not trying to implement their policies through their shareholding.

I do wish more Australian companies would get involved, after all it's only a service industry and can't be too hard to break into.

There are two significant barriers;
- unlike many service industries, the only customer (in terms of tendering) is the government. Government tendering places a high premium on minimising risk (not that it is always successful!), so generally a company needs to demonstrate significant prior experience in the industry to even get a look in. In those contracts where there is a transfer from government operator to private, there is the added complication of needing to demonstrate experience in managing this transition (which is a key risk to be managed from goverment's perspective)...which significantly increases the difficulty for many local operators.
- the relatively low margins (for competitively contracted operations) provide a significant barrier to entry for new companies, as without extensive local knowledge (ie existing operations) to benchmark costs against, it is extremely difficult to get your cost estimates accurate enough to be comfortable operating within the industry's low margin. A good example of this in a mature contracting environment is Perth, where in my view contract prices have reached as low as they can possibly get. This is one of the reasons (the PTA's conservatism probably being another) why the market has effectively become limited to the existing three operators - they all operate the same buses in the same environment with the same union and the same client... so they all have an accurate understanding of costs that no outsider could hope to have, and the competition is effectively limited to either who will go low enough with their margin, or who is aggressive enough (sometimes also code for making an error!).

These barriers are not insurmountable, but they are significant.

[Linto63]

Is Perth actually a 'closed shop' in that only the incumbents can bid, or is it just that nobody else has ever succeeded, as if I am not mistaken, it has only ever been the same 3 players?

Entering a new market without a good grounding of how things actually work is full of risk, recall this is where National Express came unstuck in Victoria through misinterpreting the revenue figures. And then sometimes when they do come here, they deem it to risky and walk away. Recall Stagecoach had a looking at bidding for the Victorian franchises in the late 90s but though better of it, and FirstGroup having been shortlisted for the Melbourne bus franchise ultimately won by Transdev, decided not to lodge a tender.

Still experience doesn't necessarily stop it happening. In the UK Virgin Trains who have 20 years experience in that market, have overbid on the East Coast franchise and are trying to renegotiate, much like 2 previous operators of that franchise (Sea Containers and National Express) did and ended up handing back the keys.

[Frosty]

I've seen in Singapore who has implemented similar bus contracting models they've got two new operators in Go-Ahead & Tower Transit/Transit Systems. There is quite a lot interest over there though their operating conditions more favourable than Sydney.

Oh God not First Group they have a really bad reputation in the UK. Do you reckon the Chinese might be interested in running for PT contracts ?

[Linto63]

FirstGroup had a bad wrap on them about a decade ago gaining the WorstGroup nickname, but they have pulled up their socks since and are the best UK train operator in the eyes of many.

[Stu]

There is a 'working committee' that will determine which routes will be shared with other regions. This also serves a crucial role in determining how many timetabled trips each operator will operate thus allowing both STA and the as yet un-named Region 6 operator to create new rosters and new shifts.

[boronia]

For all intents and purposes though, is a government entity. If the State Transit Authority was restructured as State Transit Pty Ltd with the government as sole shareholder, would still be considered as government owned. Maybe we will end up like the Poms where in spite of the original intention to have the private sector take over, a good portion of their bus and rail services are now operated under contract by the governments of other countries.

State Transit was "corporatised" for many years in an attempt to distance it from direct government control. FreightCorp operated on a similar basis. IIRC in both cases the motive was to prime them up for resale.

[Linto63]

While in theory corporatising allows decisions to be made independently with direct government interference, reality is that the board / senior executives report to the minister, so if the government want something to happen it will.

[Stu]

The original intention of the STA restructure was to preserve the future of STA, this is what Rowley believed in although other authorities may have seen otherwise as many believe that the real reason for the restructure was to pave the way for STA to be sold. Apparently the initial Rowley restructure has had a face lift in order to further create a corporate look and structure. There is talk about hiring outsiders to top roles due to STA staff not in possession of the necessary qualifications. The restructure will save STA money however that is just simply a smoke screen as the guvmint has publicly said that they wish to franchise the remainder of STA. I think that the end result will make STA look very attractive to prospective operators looking to expand current Sydney operations or an operator looking to enter the Sydney market.