As many readers will know from the monthly board meeting updates we see, Auckland Transport are in the process of putting out a new tender to run all rail services in Auckland from Mid 2016 onwards. Wellington has also going through this same process and ATs reports say they’ve been working with the Greater Wellington Regional Council (GWRC) on some aspects. The outcome of the tender process will be fascinating as in Wellington Kiwirail (and predecessors) have always run the regions trains. In Auckland they were contracted out over a decade ago – a time when very few people caught trains – to Connex which became Veolia and now Transdev. A few years ago the contract was extended to mid-2016 so AT weren’t changing operators in the middle of the roll out of electric trains. Since that time Transdev’s performance has improved significantly which is good – although it’s still not perfect.
One of the aspects that spurred the contracting situation a decade ago was that the existing operator didn’t want to run the services anymore. The growth in train use that Auckland has seen and will continue to see over the coming years has made operating the trains a much more attractive proposition. As such a number of companies are likely to be very interested in winning the tender and the Wellington tender gives us an idea of who some of the main contenders will be. Just before Christmas the GWRC announced the short list of companies who will be sent tender documents for the running and maintaining of trains.
Greater Wellington Regional Council has finalised a short-list for the tendering of its new rail contract.
Greg Campbell, the Regional Council’s Chief Executive, says that after careful evaluation of Expressions of Interest the following companies have been short-listed. They are:
- Transdev Australasia Pty Ltd in a joint venture with South Korean-based company Hyundai Rotem. Transdev operates Auckland’s train service, Sydney’s light rail, ferries in Sydney and Brisbane, and bus services in Sydney, Melbourne, Brisbane and Darwin. Hyundai Rotem is the manufacturer of Wellington’s electric Matangi trains and has extensive experience maintaining rolling stock around the world.
- Keolis Downer in a joint venture with KiwiRail. Keolis Downer operates the Gold Coast light rail network in Queensland, Australia and Keolis operates Melbourne’s Yarra tram services. KiwiRail currently operates Wellington’s train services and maintains the region’s train fleet.
- Serco – an international service company that currently operates a range of rail services in the UK, the Middle East and Australia.
Greg Campbell says tender documents will be issued to the short-listed companies early next year. “We plan to select a preferred tenderer around the middle of next year and have a contract signed by the end of 2015. The new rail contract will take effect from 1 July 2016.”
The Regional Council is developing and procuring new performance-based, partnering contracts for all public transport services in Wellington. “The new contracts will have a much greater emphasis on providing high quality, affordable services that encourage more people to take the train, bus or harbour ferry.”
Perhaps the most interesting aspect is that two of the bidders are joint ventures, one of which includes Kiwirail which means that regardless of who wins the current situation in Wellington will definitely change. My understanding is in the Keolis/Kiwirail bid Keolis will actually run the trains on a day to day basis with Kiwirail doing the maintenance – that in itself is a big change for Kiwirail. I assume it will be the same thing on the Transdev/Hyundai Rotem bid, Transdev running the trains with Hyundai Rotem maintaining the trains.
Presumably all of these bidders are also hoping to pick up the Auckland contract too as there would be some improved economies of scale from doing so. The big difference in Auckland is the train manufacturer CAF already has a 10 year contract to maintain the trains.
Perhaps a disappointment from the list above is that all operators seem to be only about operating the service. It’s a shame there doesn’t appear to be an operator like MTR from Hong Kong who might also be interested in not just running the services but investing in developments around rail stations in a bid to improve patronage. I imagine others will also raise the question of why the operations aren’t being brought in-house by both AT and GWRC – even if operated by an independent entity – rather than the profits going overseas.
We’ll have to wait and see what happens in both cities but there’s certainly a possibility that both cities will see some major changes in the running of trains going forward and that has the potential to be quite disruptive for some time. There’s definitely some interesting times ahead.
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Keolis runs the light rail / trams in QLD and Melbourne? Perhaps trams are coming to Auckland sooner than expected in a grand scheme of things? 🙂
Perhaps, guess we’ll just have to wait and see
I doubt it, Keolis are 70% owned by SNCF, but I’m pretty sure we aint gonna see a TGV any time soon 🙂 🙂
‘It’s a shame there doesn’t appear to be an operator like MTR from Hong Kong who might also be interested in not just running the services but investing in developments around rail stations in a bid to improve patronage’
That doesn’t seem to be what the contract says in Melbourne.
It does all depend on what is contractually agreed, part of MTRs charter in Hong Kong gives it this as an obligation.
I don’t so much mean contractually require developments but a company who did it privately to leverage off the services they provide (and boost use of them
Matt, Tony, I might be wrong, but i think that what happens in Hong Kong is that the government actually sells the land (eg the current massive underground railway station site on Kowloon) to the developer, who then installs not only the actual station (at their own expense) but also the obligatory massive retail mall, and then a small forest of apartment towers as well. That way they get a continual flow of money in as rent from the shops and apartments, and a captive audience of shoppers, and a through-flow of commuters to spend in the mall. The nicer they make the whole shopping and train-using experience, the more people want to shop there / live there.
It is, sadly, a very different experience here, where Councils have to force developers to add in a bus or train station, because otherwise there is no incentive to do so. That’s what is so great about the new Manukau station – with the Uni over the station. Brilliant. But needs to go further to really pay off…
Serco run Great Southern Rail, a very nice scenic rail service in Australia. http://www.greatsouthernrail.com.au Would be interesting to see what they bring to the table.
With Transdev, I have found some staff are very unprofessional and do not seem to have a passion about their job at all, also many do not seem to be able to communicate properly, especially the ticket inspectors who are mostly rude and do not care for your explanation even when legitimate. I know this is not all the staff, some (probably most actually…) staff are very good, but unfortunately those few ruin many peoples perception of the company and it shows poor management that this continues. Many who communicate via the loudspeakers onboard trains and on stations also do not speak clearly and there seems to be no mitigation of this by anyone as I have seen it continue for years and often with the same individuals.
Just my 2 cents.
Yes, customer service is an interesting one. From my experience most are very polite and friendly, however you get one now and again who isn’t (and it only takes one to instill a negative attitude about a company). Obviously train companies like Transdev and the like do have customer service training and have expectations of their customer-facing staff. However, I think it comes down to individual staff attitudes. If staff don’t working with the public then companies shouldn’t have to continue to employ them. Of course these staff are unionised and so getting rid of them is a complicated issue (opening a can of worms), and I dont think it can be dumped on management. I do go on however service quality in NZ is a little bugbear of mine.
Don’t you just love the many excellent urban transport systems in many European cities where the local authority or state owns and runs them, and they do so competently, efficiently, innovatively, and have done so for decades. And year after year they deliver consistency and user-friendliness, integration with the city fabric, and continual innovation. And they do this without the need for disruptive re-tendering, re-contracting and re-branding. Each time you visit you know the system will still be there, stable, reliable, usable, and likely with improvements since your previous visit. . . .
E.g. Paris.
Couldn’t agree more. We are shooting ourselves not in the foot but in the head. Public transport should be public transport. Let’s reset the knowledge clock each round and send any profits off the network. We are complete idiots and with the PT about to go vertical with 50% mode share. No actual costs , less being self thinking and proactive, reviewing EMU numbers at each location and time. Frankly they won’t give a toss.
Dave the Paris Metro and RER are run by RAPT (a public authority) and SNCF, but there are quite a few services around France and Europe operated by private companies under long term contracts. Transdev /Veolia who run the Auckland trains trace back to Companie Generale des Eaux , who provided water and then other municipal services including transport in France. Wellington Regional Council have already taken over a lot of the costs of the Wellington services and manage the operation closely. I am sure they will not go through with the tenders unless they are sure there will be benefits.
“I am sure they will not go through with the tenders unless they are sure there will be benefits” – since the existing contract is ending, it’s hard to see how GWRC would be able to stop the tender process, even if they wanted to.
Do they also has development rights near the station? Operation alone is not very profitable.
You raise an excellent question, specially when public money is concerned. Why aren’t AT and GWRC operating the services in house? Remember, the millions in profits sent to overseas based headquarters could better be used by investing in more public transport services.
Most of the current staff are locals in the first place. It is not like Transdev could up and leave with no one able to run Auckland rail services.
Doesn’t pro-market legislation prohibit them running their own services [insanely]?
First time poster here, long time reader.
The CEO of AT has remarked that it is possible to run the trains directly, but there ‘would be a lot of disruption’. So it is possible.
Interesting; got a link, or source?
Agreed ditch the contracts. Hire experienced staff for council controlled organization
Not saying public controlled doesn’t have same performance KPI’s
Self thinking. Do the same with the buses and get both modes fully under central control and working together seamless. All trains all buses and work towards 5 star together and lure those car drivers. True raw cost . and focussed on value and service. Profits back into both modes. Smart backup plans and smart use of firepower.
Do you really think that AC/AT can run train operations any better than the private industry? What about the history of councils suggests that they will be any better? The current train operator made a profit of something like $3 million last year (peanuts really – compare this the the banking industry). Lets be honest, even if AC/AT hire the best and brightest to run the trains the inherent bureaucracy and politics of council (any council) will soon put the brakes on any possibility of a better train system.I simply don’t believe that in-housing the operations will improve the system. With the number of companies looking to tender for the new contracts AC has a huge amount of private industry track record and experience to choose from, and in 5 years time AT gets a go at re-choosing who they want – that is a good thing. We also assume that issues with the train system are solely due to the private operators and not AT/AC and we know this isn’t true.
5 years to throw an outfit out if they don’t perform, that’s a lot of damage to the main spine of the public transport system. Maintenance contracted out , yes, extension of tracks yes. Running the trains no. A council controlled organization is and should be at the direct service of the ratepayers. If there are performance issues, after this given a good try and not tied up in braurocratic knots then fine, I was wrong but at least all money staying in this organizations books. It needs to be a separate transparent entity. Also same for bus a separate transparent entity. Your engineering example is an.interesting one having , started as a council trainee myself when fully inhouse doing everything from surveying, design to supervision and then later working for private consultants. Were the ratepayers better off for the small to.medium projects, I don’t think so. I think in that regard you need a mixture of in-house and outsourced expertise. But without some inhouse knowledge you have no idea what you are doing in the first place and no one appreciating value or directly fixing problems.
I think we can easily address some traps of in-house. Monthly performance measures, recommendations for network and plant and the organization given a reasonable budget to make changes direct themselves than awaiting beaurecratic approval unless a major recommendation worthy of a benefit-cost ratio. The advantages of continued growth in knowledge, making longer term decisions and true raw costs for.public analysis, and management thinking big picture all modes except self interest.
I mean you CAN put in all the systems in the world but you cant extract that from the realities of it being run by a council. I just look at all the engineering firms out there who provide services to Council (and Watercare). There are 10’s of firms and 1000’s of engineers (many who read this blog) vying to provide the best design and construction solutions to problems council services (stormwater, road, power etc), OR you could employ a small band of people in house at AC and hope to god have the same knowledge of those 1000’s of engineers. I see the train operations in a similar way. If the private company is not doing a good enough job we chuck em out when the contract expires, we cant do that to in-house staff typically.
I know they’re still operating with some old gear but I wouldn’t say Transdev’s level of service is that great. Maybe they need to review their procedures for handling faults and staff training for these. (Haven’t we already had a couple of bad Mondays since the xmas maintenance period?) I’d like see it bought in-house but I’m not sure that would improve things. Isn’t Serco the UK prison company?
They certainly aren’t perfect but are better than they were a few years ago. New management has helped
Public transport needs to be a living breathing thing. always looking at improvements, adapting routes for buses as need be, increasing frequency if demand is there. A fleet with some flexibility for emergencies, events, different demands holidays like beaches etc. A mix of rapid, scheduled, outer feeders. For rail looking at number of carriages, scheduling peak demands, maybe different lines that miss stations to speed trips up etc. Do lines need more trains to allow for network inefficiencies. Do we look at off peak discounts to spread demand out. Does bus need to run a parallel route to assist rail. How effective are the bus feeders, are there interchange issues to make short term fixes. Track maintenance , same equivalent service by bus. What is the mode share by each arterial Rd, why? How is growth at each station and bus stop.What is working, what isn’t. Are fares good value, does it attract mainstresm.Do we need more services around bars, restaurants at night? Can we improve shopping services. This is probably not all, but I’d rather have a council team looking at all these things, than a blind contracted run.
I do know from insider knowledge that GWRC have been very, very frustrated with their inability to get KiwiRail to perform. They invested several hundred million into new trains and a massive infrastructure upgrade – but the old dears at KiwiRail still seem stuck back in the RNZ days.
Because while they were able to run an ok service if nothing went wrong, whenever something did there never seemed to be a Plan B or contingency. Small issues quickly escalated into 2hr plus delays. The staff on the ground always did their best with what they had to work with – but from direct observation it was a layer of hidebound senior management within KiwiRail where the problems resided.
As someone who worked for Tranz Rail, in the Wellington passenger group – the problems we had, owed a lot to problems within TranzRail as-was as a whole. Especially to do with infrastructure, where the work we needed could never be done on time. I imagine little has changed.
I have read your recent comments re the GWRC metro train service and in particular your views around KiwiRails performance and linkage back to TranzRail days
I would be happy to talk with you directly about the significant service improvements that have been delivered for the travelling public in wellington as evidenced by the recent GWRC market announcements that customer service performance is now at 92% – a big shift from the old days of Rail
Let me know if i can be of assistance to clarify the facts relating to the metro service and patronage improvement journey over the last 4 years
I believe there is something contractually (with NZTA?) that prevents AT having a Rail Licence to operate the trains. Presumably this might be similar with GWRC. There is also significant risk associated with taking on the rail licence which council organisations might be keen to steer clear of and leave with a commercial / PT operator.
That’s my understanding, some crazy ideological law that enforces transfer of public money to private operators. Dominated in Akl by NZ Bus, owner by Infratil, who currently look like they are being extremely disruptive over the New Network roll out…. Oh joy.
An efficient PT network does not easily conform to competitive market conditions, which is why London effectively took operations back in house after a similar ideology led experiment there.
“London effectively took operations back in house after a similar ideology led experiment there” – not so: London’s bus services are tendered in a similar way to what is happening here (which is why there’s a drivers’ strike there this week, since different contractors have different pay rates); the Overground and DLR are tendered; the Underground has always been operated in-house (though maintenance was in two PPPs, which could be described as a failed technology-led experiment).
Don’t expect any change on that front while National / ACT runs the country. Same ideology sees us selling state houses at a discount because well, no one really knows. Just like we sold our power companies for less than the dividend flow and created a future carbon regulation headache for ourselves. Despite the bluster I believe this ideology is simply about transferring wealth to their supporters – corporations and their shareholders. So it’s good that public money is transferred to Infratil – that’s actually the intent.
Sounds like NZ Bus and Infratil have still got the sulks over AT not choosing the Snapper card system. For an idea of what motivates Infratil, and why private companies owning public infrastructure is a terrible idea, this quote used to be on the Infratil.com/about-us page: Infratil aims to, “provide its shareholders with a consistent return of 20% per annum over the long term. Infratil invests in growth infrastructure sectors and supporting excellent management and employee commitment to deliver top quartile financial, operational and service performance.” (courtesy of the internet wayback engine)
Not quite. Private infrastructure companies are fine when the companies can be run without requiring further public money (the main airports in New Zealand, Telecom as-was, at least some of the ports). The problems arise when public subsidies are required, as they are for almost every railway in the world, because of the governance issues which they create (that of paying subsidy to a private monopoly).
Private ownership of operations is workable, even if subsidies are needed, because competition *for* the market is often possible when competition *in* the market is not. An example of this, to pick up on Patrick Reynolds’ comment above, is London Buses; where the vehicles are owned privately but have to work to the London bus specifications, rather than the free-for-all we have elsewhere.
I suggest a reading of the ZVV history is worthwhile. That model is being used for expansion in Switzerland I understand. Also “Transport for Suburbia: Beyond the automobile age” is another good read. The pros and cons of Public versus Private operation really is driven by Ideology as I see it. co-ordination by CCO becomes very difficult and It’s hard to see a way of achieving the pulse type activity of a nerwork unless there is a great deal of Central control.