MEDIA RELEASE

March 8, 2013
ORC awards new bus tenders

The Otago Regional Council (ORC) has awarded tenders for replacement public transport service contracts for the Balaclava/Kenmure/ Helensburgh, Corstorphine / St Clair Park, and Palmerston routes, and the weekday evening, Sunday and public holiday services in Dunedin.

Otago Regional Council Chairman, Stephen Woodhead, said when tenders were last called in 2011 there was healthy competition in the market.

“We had no reason to think it would be any different this time around, and that has been the case.

“The tender process has delivered some sharp pricing, and will save approximately $1million over the existing contract prices in the three-year term of the new contracts.

“In addition to this excellent financial outcome, some tidying up of routes and timetabling will occur,” Mr Woodhead said.

All buses operating on the new contracts will be fitted with bicycle racks. The contracts also allow for the applicable improvements identified in council’s recently adopted Regional Public Transport Plan to be implemented through the term of the contract.

ORC chief executive Peter Bodeker said, “Tendering allows ORC to maintain its programme of continuous improvement to the frequency and quality of services, and using a competitive process was the best way to deliver good results for Otago ratepayers and bus users.”

Alongside the tender process ORC and the New Zealand Transport Agency (NZTA) have been negotiating over the Otago implementation of the new Public Transport Operating Model (PTOM). The Government is proposing this model for public transport, which is part of the Land Transport Management Amendment Bill currently before Parliament.

Mr Bodeker said NZTA officials did not want ORC to call for tenders for the contracts expiring in June, on the basis that the public would not receive value for money.

“However, ORC has sound economic reasons, that have now been proven, for wanting to continue to tender for replacement services, rather than directly negotiating with operators as NZTA had wanted.

“We believe our tender processes can also be operated in a way that will make for a well-managed transition to PTOM if it becomes law,” Mr Bodeker said.

Cr Woodhead said, “ORC is committed to improving bus services within affordable budgets, and can achieve the best possible fares relative to the cost of running the service.
Tenders are a crucial tool to ensure these goals are achieved.

“Not putting the contracted services out to tender would have been likely to result in increased costs to bus users and ratepayers, as has happened in other parts of the country,” he said.

Contracts for 80 percent of the Dunedin bus network are due to expire over the next three years. The council began the renewal process in October last year when it authorised staff to call for tenders relating to three contracted bus services which are due to expire on June 30 this year.

Mr Bodeker said NZTA have been presented with the tender outcome in an effort to get them to reconsider their position with regard to providing subsidy for these contracts.

“At this point we are awaiting a response from NZTA and will continue to negotiate with them as need be,” Mr Bodeker said.

© Scoop Media

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