Tendering of Metropolitan Bus Contracts

Tabled: 6 May 2015

Tendering of Metropolitan Bus Contracts: Message

Ordered to be published


PP No 31, Session 2014–15

The Hon. Bruce Atkinson MLC
Legislative Council
Parliament House
The Hon. Telmo Languiller MP
Legislative Assembly
Parliament House

Dear Presiding Officers

Under the provisions of section 16AB of the Audit Act 1994, I transmit my report on the audit Tendering of Metropolitan Bus Contracts.

The audit examined whether the state has effectively secured value for money from the new Melbourne Metropolitan Bus Franchise (MMBF) arrangements. It assessed the planning and conduct of the MMBF tender, and the management of the resulting contract. The audit also examined the state's progress in reforming future metropolitan bus contracts.

I found that the state has not yet secured full value for money from the MMBF arrangements. While the contract resulted in cost savings of $33 million in 2013–14, cost savings alone are note sufficient to demonstrate value for money. In particular, the contract's potential has not yet been realised due to Public Transport Victoria's (PTV) failure to resolve longstanding issues impacting the implementation of the related performance regime.

A further concern is the Department of Economic Development, Jobs, Transport and Resources' and PTV's slow progress in preparing to reform the remaining metropolitan bus contracts, which are expiring in 2018. This risks compromising the state's immediate opportunity to leverage better value from these services.

Yours faithfully

Signature of John Doyle (Auditor-General)

John Doyle

6 May 2015

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