Tendering of Metropolitan Bus Contracts

Tabled: 6 May 2015

Overview

In 2013, the Melbourne Metropolitan Bus Franchise (MMBF) was established to service around 30 per cent of Melbourne’s metropolitan bus network. The contract is worth approximately $1.7 billion over 10 years. This audit examined whether the state has effectively secured value for money from the MMBF by assessing the MMBF tender and Public Transport Victoria’s (PTV) management of the resulting contract. The state’s progress in reforming future metropolitan bus contracts was also examined.

The audit found that the state has not yet secured full value for money from the MMBF arrangements, despite achieving almost $33 million in cost savings in 201314.

The MMBF tender was soundly planned and run in accordance with Victorian Government Purchasing Board requirements. However, the contract's potential is not yet being realised primarily due to unreliable performance data. This is compromising PTV's capacity to effectively manage the contract.

Of particular concern is the Department of Economic Development, Jobs, Transport & Resources' (DEDJTR) and PTV's slow progress toward reforming the balance of metropolitan bus contracts expiring in 2018. Urgent and sustained action is required to avoid limiting the state's procurement options in 2018, and compromising any opportunity to leverage better value from these services through increased competition.

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