Monday 28th May, 2018

New 7-year contracts for Metro Trains and Yarra Trams

Metro train. Photo:

New contracts have been awarded to the private operators of Melbourne’s train and tram services, mandating higher performance targets and enforcing tougher penalties for failure to meet them.

The contracts, valued at approximately $7 billion, give Metro Melbourne Trains (partly owned by Hong Kong based MTR Corporation) and Yarra Trams (owned by France-based Keolis Downer) operation over the city’s train and tram networks for the next 7 years, with provisions for the state government to extend the period by further 3 years.

Metro Trains and Keolis Downer took over from Connex and Transdev in 2009 and have been running the networks for the past 8 years.

The contracts are expected to be signed within the next two weeks and will commence on November 30, when the old contracts expire.

The state government is imposing steeper performance targets and harsher penalties for the two operators: trains will have to run on time 92 per cent of the time per month (up from 88 per cent in the previous agreement), while trams must run on time 82 per cent of the time per month (up from 77 per cent).

Bans have also been placed on the practice of station skipping, which has often been used as a method of meeting punctuality standards.

Failure to meet monthly performance targets will cost Metro Trains $1.25 million (up from 1 million), while the penalty for Yarra Trams remains at $500,000.

“We are cracking down on those things that really frustrate passengers, whether it’s the bypassing of the City Loop, station skipping, short running,” state transport minister Jacinta Allan said.

“[These are] much tougher penalties than what exists currently and we have to remember too that these tougher penalties are being judged against tougher performance requirements, so we have lifted the bar on both counts.”

Metro Trains will also face fines of up to $700,000 if a network failure stops more than half of services or delays them by 30 minutes within a two-hour period, while failure to meet maintenance requirements could lead to $10 million in fines.

The added penalties come after Metro Train was fined $1.2 million after the July 13 computer malfunction that forced a temporary shutdown of the Melbourne network at peak hour, causing 224 services to be cancelled, 378 to run late, and stranding tens of thousands of passengers on platforms for up to three hours.

Further details of the contacts include the inclusion of daily inspections and cleaning of trains, trams, stations and major tram stops, quarterly “mystery shopper” surveys assessing vehicle cleanliness, and restrictions on advertising (such as wrap-around tram ads).

“Passengers have said that they want cleaner trains and stations, more reliable services, more timely and accurate information, less graffiti and scratching and that’s what these contracts will do,” Allan said.

The government also expects that 700 new jobs – 150 new train drivers, 270 passenger support staff, 90 maintenance workers – will be created. There is, moreover, to be an increase maintenance and renewal budgets: Metro Train’s will go up 32 per cent to $330 million a year, while Yarra Trams’ will go up by 81 per cent to $81.5 million a year.

“We’ve listened to passengers, staff and unions so that these new contracts hold MTM and KDR to account in delivering increased maintenance, better services and real-time information,” Allan said.

However, the Rail, Tram and Bus Union (RBTU), which would like to see transport back in public hands, wants greater scrutiny to be given to the contracts.

“The devil is always in the detail,” RTBU secretary Luba Grigorovitch was quoted by the ABC as saying.

The previous contract provided the two operators with the exclusive right to negotiate with the Victorian Government for a new deal before other businesses could bid.

“Without testing the market, without looking at other options and without sufficient transparency, there remains room for improvement and many questions to be answered,” Grigorovitch said.

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