Auckland Transport have announced the short list of companies to run Auckland’s trains from July next year onwards and none particularly fill me with confidence.

PT RESOLUTION EMU_6484

Auckland Transport has short-listed three companies that will be invited to tender to operate passenger rail services from 1 July 2016.

They are Serco NZ, Transdev Auckland and KiwiRail.

Mark Lambert, general manager AT Metro, says tender documents will be issued to the short-listed companies soon and the new rail contract will take effect from next year, when the existing contract expires.

Mr Lambert says there was a high level of interest internationally when Auckland Transport sought Expressions of Interest and the three shortlisted companies were selected after careful evaluation.

He says that the new contract will be performance-based and reflect the huge changes in the Auckland passenger rail system since the current contract was put in place in 2003.

Auckland’s Metro rail service has been electrified and modern electric trains will soon be operating on all lines, stations have been upgraded, new stations built and the Western Line double-tracked. The number of services has significantly increased from 40,000 to 140,000 per annum since 2003. Passenger boardings have passed a record 13 million a year and are climbing at record rates, with growth of 33% in March 2015 compared to the same month last year. Annual growth for the March year was 21%.

Shortlisted companies:

  • Serco NZ is the New Zealand arm of the British Serco PLC, an international service company working in a variety of sectors including transport, health and corrections. Internationally, Serco’s rail operations include the MerseyRail and Northern Rail operations in the UK and the Dubai Metro in the United Arab Emirates. Serco delivers services to central and local governments in New Zealand and Australia with over 9,000 staff across the region and 600 based in Auckland.
  • Transdev Auckland is part of the Transdev Group, one of the world’s largest private passenger transport companies. The Group, whose head office is based in France, operate light and heavy rail services in Europe, North America, Asia and Australasia. Transdev has been operating the Auckland Metro rail services since 2003.
  • New Zealand Government-owned KiwiRail owns and manages the national railway network. It operates freight and passenger rail services throughout New Zealand, including the Tranz Metro commuter rail operation in Wellington, which provides 2,200 services each week.

With Transdev and its predecessors we’ve have more than a decade of poor performance – not all of which has been their fault. Perhaps most annoying to regular customers has been the frequent poor communication when things go wrong.

Serco also operates the Mt Eden prison and if they were to win the contract I’d certainly hope they ran the rail network better they were the prison a few years ago where the failed to meet half of their performance targets.

Lastly Kiwirail who own the tracks and currently run the trains in Wellington. In reality they are a freight company and to date have shown little regard for PT or its users in Auckland.

What’s also noticeable about this announcement is that the three companies shortlisted are the same as those shortlisted for the Wellington contract with one exception. In Wellington Kiwirail have bid in joint venture with Keolis Downer.

All the companies shortlisted will almost certainly be hoping to win both the Auckland and Wellington contracts which would allow them to leverage some economies of scale across both operations. That has the potential to be good if it means services can be delivered cheaper but might have negative consequences if it limits how easy it is for other companies to compete for future tenders.

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56 comments

  1. the other applicants must have been pretty bad if this is what we are left with. Time for AT to do it themselves.

  2. Likewise, looking at the short list filled me with a degree of trepidation for the future good running of the Auckland suburban rail network. KiwiRail were a total disaster when they managed the network prior to ARTA taking it over: passengers were unfortunate inconveniences in the running of freight. As readers of the English satirical magazine Private Eye are only too aware, Serco is one of those nasty British service companies that essentially tick boxes and cream a profit; it’s only redeeming factor is that it is neither the worst (Crapita) nor the most venal (G4S). Transdev have at least sort of improved over the years but their most notable success has been to announce that they repatriated a profit of $1 million last year (ratepayer & taxpayer subsidies); their quality of service recently, particularly on the Western and Southern Lines, would make the managers of any decent train operating company hang their heads with shame. AT should just run the thing themselves so that any ‘profits’ accrue to the network not to a bunch of corporate shysters.

    1. Tranz Rail operated the network back in the day prior to Connex/Veolia/Transdev and then they had to maintain platforms and the practically everything associated with passenger rail. In the end they were near on insolvent as well. And the long defunct privatised Tranz Rail was a very different beast from KiwiRail, so the two can’t be confused.

      1. Train Rail (Tranz Metro) operation of the Auckland suburban network was a disaster both for the company and, more importantly, for the passengers; it was being run into the ground. The services were infrequent, invariably late (by tens of minutes) and often cancelled without notice. Infrastructure was ancient – nothing except demolitions and closures were undertaken following its pre-privatisation – and was there was barely maintained. Train stations often lacked shelter, signage and the PA system was rudimentary and barely used. Passengers were perceived by the company as a hinderance and rarely considered. I have seen no evidence that this institutional attitude has changed either since Tranz Metro was stripped of its role or the company was re-nationalised, to the contrary. Of course, the other problem is that AT doesn’t seem to use lawyers able to write a watertight contract that ensures a first class level of service, or may be they don’t want it. If I was going for a new operator, rather than taking it in-house, I’d be begging the Hong Kong rail operator MTR Corporation to consider it. What they’ve achieved on the London Overground network for TfL is nothing short of miraculous.

  3. Wouldn’t rail ops benfit from disintermediation effects if AT run them directly? Fewer middlemen? Currently problems seem to lead to endless finger pointing about who’s responsible. Possibly that could also be true with KR, except the fear that passenger services ranking lowly in KR’s hierarchy leading to even worse outcomes…? In any case it is unlikely it would stop the rail bores and KR foot-soldiers claiming that all problems are anyone but KR’s responsibility.

    1. Agree 100%.

      Doesn’t seem like AT are planning to take that option, or maybe they could if none of the tenderers are considered suitable.

      My understanding is that as of now AT provide the EMU drivers, so the question is why should there this artificial split between the train driver and all other train staff?
      Which obviously a in-house operation wouldn’t need to have.

      I trust KR bugger-all but trust Serco and Trasndev a hellofuva lot less, so if AT don’t end up running it then KR is a second best prize, but a very distant second.

    2. Agreed on that. AT should run this because then any idea’s, wishes and whims they have will reflect directly on them good or bad and as you say the bloody infuriating finger pointing will cease. But is there not legislation, a hang over from the last National governments love of ideology and helping their mates corporate interests that says AT cannot run PT outright?

      However KiwiRail own the network so they have a vested interest and it will always be at least a 2 party deal, they have heavy rail expertise and at least they are NZ owned.

    3. You’d think so. Surely, the fewer players, the better. At the moment, everyone can point the finger at everyone else. If the government was willing to change the law, I think the best set-up would be:

      * Kiwirail Infrastructure (the rail network itself) rolled into NZTA. It would charge track access fees and pay them into the NLTF, and rail would likewise be funded from the NLTF. It would operate as a semi-user-pays public service, exactly like State Highways. Also, since it’s not trying to be a freight company, it wouldn’t give preferential treatment to freight and shaft metro rail.

      * Kiwirail itself stay as solely a freight operator, run commercially. National could flog it off, if they wanted, without sabotaging the rest of the rail system.

      * AT and GWRC would run their metro networks in-house.

      * Other commercial operators or regional councils would have the opportunity to run intercity services.

    1. KiwiRail would be the worst option in my opinion. They would run it for six months, say there is no demand and then want lines mothballed.

    2. Kiwi rail would be the worst. Bunch of old dinosaurs, my experience or working with them. I doubt they will have the vision to run a service having to satisfy millions on clients. The average commuter is not like Fonterra

      1. Ring 555, you can out your doubts to tour rest anD sleep easy at night. KiwiRail certainly does have that vision, as Wellington commuters can and do attest, with both their opinions and their patronage – 92% customer satisfaction takes some doing (just ask Transdev).

        Clearly Auckland needs more bunches of old dinosaurs!

  4. Is this a subcontract (i.e. operator paid to operate services only) or a franchise (i.e. operator runs business and takes on patronage risk – more money for it if patronage increases)?

    1. Yeah there should be big insenitives to do better and big penalties for failure. As it currently stands Transdev seems to do whatever the hell they want and only PT users get to suffer any penalty from it and often end up back in their cars.

  5. Serco has actually improved mount eden a great deal. Many payments are contingent upon outcome. If it is all kept in house, this incentive is removed.

    1. Because KR has such a bad reputation for (not) running the train service in Wellington they have to partner with someone else to get a look in.

      1. As I understand it, in Wellington the joint bid would see them only responsible for maintaining the trains with Keolis Downer running them. In Auckland CAF maintain the trains so Kiwirail are bidding for the operations.

        1. So why does KR in Auckland think it can do a better job of running the EMU network than they managed in Wellington then?
          Wonder why their partner in Wellington is not in the shortlist in Auckland?

          Either way it doesn’t bode well for KR.

        2. Greg N: “KR has such a bad reputation for (not) running the train service in Wellington”; “So why does KR in Auckland think it can do a better job of running the EMU network than they managed in Wellington then?”

          I suggest a little research before making such wildly inaccurate statements: as measured by GWRC, the latest annual TranzMetro customer satisfaction figures are overall 92%, with punctuality of 93% for Jounsonville, 95% for Hutt Valley and Kapiti (and a pretty woeful 75% for the Wairarapa) – see http://www.stuff.co.nz/travel/news/64746847/better-rail-service-impresses-wellington-customers.

          So that’s why KR think they can do a better job than the incumbent, because they currently do just that – and most companies would kill for a reputation as “bad” as this!

        3. One Swallow does not a summer make.

          From that article:

          “Customer satisfaction levels dipped as low as 48 per cent between 2010 and 2012, before improving to 59 per cent last year.”

          “Between 2010 and 2012, years of unreliable trains were also still fresh in the public mind, even though the hundreds of millions of dollars invested by central and local government in track upgrades and new Matangi trains was improving punctuality and reliability,”

          Just because KR got their shit together for this year, when the network is using new trains, which are fully bedded in, yeah, well of course the “service” levels will be perceived as better. But is that rating because of KR or in spite of them?

          These contracts run for many years, not just 1, come back when KR has scored like this 10 years in row. Then I’ll change my mind.

        4. Again, facts are helpful: “when the network is using new trains” – there are still quite a number of 30-year-old Ganz Mavags in service,

          “But is that rating because of KR or in spite of them?” – you are really desperate to put the boot in, aren’t you? I wonder why?

          And it’s an indisputable fact that they can and do run a suburban network better than the incumbents, since Transdev’s ratings have never been that high, even while the network is being upgraded – full blocks of line over Christmas/Easter and ongoing bus replacement, for instance.

        5. Never said Transdev was anything to write home about or compare to. Their service is shit, always has been.

          KR in Wellington is definitely benefiting from perception of “new fleet” syndrome – they are running a vastly upgraded fleet of trains so of course the public’s perception of the service will be better, those old clunkers Ganz-Mavags are chalk and cheese to the new Hyundai’s – I know I’ve ridden both. Even if some old dungers are still around, the majority of the fleet is new Hyundais and so KR will benefit from that by association.

          And if KR was doing such a fantastic job all along, how come the publics ratings plummeted like stones to below 50% when the new Hyundai’s were having teething problems a few years back?
          With the supposed “superior” service including communications you keep banging on about that KR offer Wellington commuters, you’d think the public would have rated them accordingly.

          Yet, every other day on the radio I hear announcements of Wellington rail “bus replacements” or delays to rail commuter services in Wellington.
          Since KR run the trains and maintain the tracks you have to wonder why they can’t seemingly deliver a faultless commuter service all day every day when they control just about everything about it currently.

          I’m sure KR can pull a rabbit out of its arse for 1 maybe 2 years, but for longer? Not with the current management they have in place.
          And I think KR know this, which is why in Wellington they are doing a joint tender.

          As I said. “come back when KR has scored like this 10 years in row. Then I’ll change my mind.”

  6. I wonder if there would be best if Kiwirail ran it. For example AT could write into the contract that they run a diesel locomotive rescue service. (thunderbirds to the rescue). Also seeing as they also run the train control system fairly stiff fines for late arrivals and cancellation could help them focus their minds on keeping the trains running smoothly. At the moment it doesn’t matter and they can prioritise freight trains.The other thing is it would focus their minds on improvements which could be made such as crossovers or operating procedures etc which will help get things moving again in the advent of a snarl up. If they can improve the train statistic then they can get a bonus. At the moment they are just like a landlord who doesn’t care about their tenant. And write the rules before you sign the contract.

      1. To a degree, but emu rescues are limited to where there is overhead wires wheras a diesel rescue can take emus (pans dropped) anywhere there is track. For example thru a non interlocked yard to bypass a mainline blockage for example. It does add a degree of flexibility when the effluent hits the fan.

        1. Well, not enirely true, if they want to run a passenger train over wynn williams points they need to be spiked prior to the movement, but track warrant lever locked points for example can be passed over in the reverse positon ok.

      2. As the traction lines are supplied from both Penrose and Southdown, the likelihood the network will lose all power is as likely as an Auckland-wide blackout.

    1. As someone with a bit of inside knowledge I can assure you KiwiRail faces fairly stiff fines if freight trains delay suburban services. Ultimately the times freight trains are able to arrive and depart at are specified in the access agreement between KiwiRail, Tranzdev and Auckland Transport. While I would be lying if I claimed freight trains never delayed suburban services the fact is without a third main between Westfield and Wiri it is difficult for KiwiRail to meet the needs of its customers without delaying something given how crowded parts of the network are during peak times.

      In reality the vast majority of issues on the network have nothing to do with freight trains and instead are the result of things such as; overcrowding on the western line, door issues and ETCS on electric trains, old diesel trains breaking down, platform availability and turn around times at Britomart, crowed junctions at Newmarket, Westfield and Wiri, and Tranzdevs inability to have enough staff to run all their services most days. No matter what company gets the contract I suspect there will always be issues that are somewhat out of their control and I suspect that whoever gets the contract will at some point benefit from the public investment that has been made in the network and rolling stock over the past decede.

      I support KiwiRail’s bid mainly due to the fact that I don’t think who gets the contract will have big impact on the quality of service in the near future so at least any profits will stay in New Zealand and given they own the network it might reduce some administration costs if AT only has to deal with one party instead of two. If I would make a suggestion though it would be for AT to make customer communication a bigger emphasis in any negotiation as this seems like something that is easy for a service provider control but seems to be falling flat at the moment.

      1. This is the best summary I’ve seen on the topic.

        My view is that the third and potentially forth main lines are probably the second most important network upgrade behind the CRL. As the network load increases, there will need to be a continued infrastructure investment to keep the levels of service expected by users (passengers and freight) who have to share the network.

        As an illustration of how difficult this can be consider the Sydney rail system. The last timetable change took 6 years to implement, primarily a series of infrastructure projects that untangled track dependencies to reduce complexities in operating the network. At the same time 78 new trains were introduced, requiring rebuilding the power systems to cope with the increase in electricity demand and there was a change in governance structures.

        The Auckland rail system continues to improve and patronage continues to increase, there will continue to be growing pains as the constraints in one part of the network are solved and new constraints are identified and then resolved.

        Scrapping/suspending ETCS until level crossings are removed and door opening/dwell time fixes would be the operational priorities at the moment.

  7. Well hopefully whoever ends up running the service will be able to have new contracts with the drivers etc so that we don’t have this current ridiculous situation with train managers slowing everything down.

  8. Please just ensure the contracts say that trains cannot terminate early, or suddenly start skipping stations. i’d definitely wouldn’t want KR to run the service as it’ll prioritize fright trains too much.

  9. Patrick wrote: [Wouldn’t rail ops benfit from disintermediation effects if AT run them directly? Fewer middlemen?]

    It would reduce the main parties from three (AT, Transdev, KiwiRail) to two (AT, KiwiRail), because it will be KiwiRail in 100% charge of the network, including Train Control, signalling and tracks even if AT take over the running of the trains (which will still be subject to direction by KiwiRail’s Train Control).

    If KiwiRail gets the contract, it will still be two parties (AT, KiwiRail), but KiwiRail will be in charge of everything associated with the trains and the network, so would probably deliver the most efficient method of running the show.

    Matt wrote: [In reality they are a freight company and to date have shown little regard for PT or its users in Auckland]

    To be fair, they don’t have the contract, BUT don’t forget that AT are one of KiwiRail’s biggest customers, comparable to some of the larger freight customers. I don’t think they take their responsibilities to AT any less seriously than any other large customer. I actually see KiwiRail wanting a more efficient Auckland network where AT’s trains run more smoothly, such as wanting the third main so that freight and passenger can be more separated, but to date, AT have proven to be the stumbling block at getting such initiatives underway, by refusing to contribute financially to its construction.

    I also think it’s a bit unfair to claim KiwiRail will do a poor job based on the experience with Tranz Rail over a decade ago. Deborah Hume worked pretty hard to turn it into a well performing metro operation around 2012-2014, before she left.

    https://www.tranzmetro.co.nz/OnTimePerformance.aspx

    The performance stats are much better than Auckland’s, except for the Wairarapa Line, but the issue there is that GWRC won’t pay for the motive power required to meet the timetable, or introduce slower timetables.

    Only Serco is going it alone with both Auckland and Wellington bids. Tranzdev is partnering with Hyundai Rotem for the Wellington bid, but going it alone in Auckland, whilst KiwiRail is partnering with Keolis Downer for the Wellington bid, but going it alone in Auckland.

    1. Half a dozen temporary speed restrictions on the Wairarapa line is what’s killing on-time performance. There’s effectively one long TSR from Woodside to Waingawa at the moment!

      1. Thats actually two 4km long tsrs awaiting settlement after tamper (but given the passenger work at carterton it does seem like 40km from woodside to waingawa).

      2. This is compounded by the single track from Upper Hutt to Trentham. If it arrives late in Upper Hutt or the north bound Upper Hutt train is delayed it can’t progress until the line is clear, then it gets trapped behind the all stops Taita train.

    2. “To be fair, they don’t have the contract, BUT don’t forget that AT are one of KiwiRail’s biggest customers”
      You wouldn’t know it from the way they have acted. Some of the things I’ve seen and some of the story’s I’ve heard suggest otherwise.

      “such as wanting the third main so that freight and passenger can be more separated, but to date, AT have proven to be the stumbling block at getting such initiatives underway, by refusing to contribute financially to its construction”
      Except it’s not AT’s role to fund that infrastructure. KR can charge AT as part of track access charges but AT shouldn’t be contributing capital to it. The only reason KR hasn’t built it already from the turn around plan funds is that they think they can extort the money from AT and therefore use those funds for other projects.

      1. Yes I know Matt, but my understanding is that AT are unwilling to pay anything for the third main – i.e., they won’t agree to higher track access fees to pay for it, even though they will be one of the benefactors of the project.

      2. Matt L – “The only reason KR hasn’t built it already from the turn around plan funds is that they think they can extort the money from AT [an interesting way of describing a normal commercial transaction] and therefore use those funds for other projects” is because KR’s directors, like all company directors, have an overriding primary legal duty to act in the best interests of their shareholders, a duty not diminished by those shareholders being Ministers of the Crown.

        Don’t blame KR – it’s merely implementing Government policy.

      3. I think that AT should tag the CRL project with the cost to build the 3rd [& possibly 4th] main and then lease access to KR for these mains, on the basis that KR freights then HAVE to use ’em.

        Will mean that KR gets its guaranteed access slots on the Eastern/Southern lines, and KR can “pay” for the 3rd/4th main over many years as its freight business recovers.

        The cost for AT to fund this themselves and have it paid off by KR track access fees is basically rounding in the overall CRL budgets and likely will be paid by construction savings during CRL build anyway.

        This will also protect the Passenger operations from being impacted when KRs freight business does go through the roof – especially once POAL sorts it shit out and realises it can’t simply build into the harbour forever.

        Looks like a WIN/WIN/WIN to me.

  10. Why can’t we invite Hong Kong’s MTR to come operate it? Yes they keep on raising prices every year but they achieve 99.9% on time rate, year after year.

      1. Their model is based around owning and developing land around the metro stations. The metro itself is almost a loss leader just to get punters into their shops, offices and apartments.

        Is isn’t a crazy concept, consider the average kiwi supermarket or mall and how much money they pour into developing and operating parking at a pure loss just to get punters into their stores to make profits there. Why not do it with other transport mechanisms instead.

        Yes they have the capital to build the infrastructure, but really only because of the high vale of land in Hong Kong. We should be doing exactly the same thing in Auckland. I guess Orakei is somewhat similar on the property development side but really there’s huge potential for Ststion development to pay for rail operations. Look at Panmure for example, the city pours money into a great station and bus interchange then sits back to hope the land around it might one day be more than car yards and big box. Someone like MTR would have built the station for free and had a whole new Panmure centre built up to six stories by now.

        1. Nice comment Nick R. I hope the powers that be are listening – there is good scope to offset the CAPEX of the CRL against property development, and also OPEX against property rentals in future. Helps to secure those employment target numbers for the government by gaining a strong direction over what gets built over the stations.

          Maybe some scope for private sector involvement as a minority shareholder in the CRL above ground developments also – would bring some extra skills and transparency. The right funding mechanism needed to incentivize the private investment capital……could be controversial, but may also just help get things completed sooner. And there is nothing stopping the council/AT from inviting a handful of competing developer/architect/project management consortiums to submit proposals through a tender process.

        2. “Their model is based around owning and developing land around the metro stations. The metro itself is almost a loss leader just to get punters into their shops, offices and apartments”

          With a farebox recovery ratio of 186% (http://www.mtr.com.hk/eng/investrelation/2012frpt_e/E130.pdf), it’s a bit of an exaggeration to call the metro a loss leader… Also note that there was limited commercialisation prior to privatisation in October 2000.

          Having traveled a fair bit on the MTR (Hong Kong is my fav city outside NZ), my opinion of the MTR stations is that the commercialisation is little different to Britomart or Newmarket – Just larger and so much more busy.

  11. Hi, sorry if this is an old question, but I did check the archives. Is there a reason there is no train station in Kohimarama, between Glen Innes and Meadowbank? I lived in St Johns at Uni and took the Glen Innes train because the bus takes so long to town.

    And looking at the transport map, it is a larger than average gap in stations between GI and Meadowbank. Any info appreciated.

    1. There is a reason, basically the rail line is right down in the bottom of the gully, as it goes through the tunnel, while all the houses and roads are back up at the top of the hills. Any station ther would be a very long and difficult walk to get to on foot, and tricky to build a road down for buses or cars.

    2. There also used to be one right opposite Purewa cemetary, believe it was built in the 20’s or 30’s when the line was built (its island platform was visible in old aerial photos of the area in the 50’s), but was basically unused and in serious disrepair in the ’70s and removed during track realignment sometime after. And the land it used is now part of the Purewa cemetary.

      But as Nick says, its pretty steep and rugged to get to from the Kohi side by road and would have no access from the Meadowbank side without removing several houses that border the line.

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