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Bus Reform in Rural and Regional NSW

Rural and Regional Bus Reform Consultative Taskforce

In January 2006, the former Minister for Transport and Deputy Premier, the Hon. John Watkins MP, established a joint Ministry of Transport / BusNSW Rural and Regional Bus Reform Consultative Taskforce to develop options, for Government's consideration, for improving bus service provision in rural and regional NSW.

These objectives included development of:

• Performance based contracts incorporating a passenger focus, consistent service standards and mechanisms to ensure continuity of essential passenger services
• Transparent funding arrangements that support value for money, proper allocation of risk and a sustainable industry; and
• Effective service planning arrangements which reflect local travel patterns, minimise overlap and duplication and optimise value for Government transport subsidies in each location.

The Minister also sought advice from the Taskforce on any interim measures that could be introduced prior to implementing reforms to assist the sustainability of the bus industry and help maintain essential public transport services in rural and regional areas.

New contractual arrangements

In April 2008 the NSW Government approved new bus contracts to be issued across rural and regional NSW.

The new contractual, funding and service planning arrangements for rural and regional bus services were developed in consultation with the bus industry through BusNSW (formerly the Bus and Coach Association).

In July 2008, the Ministry commenced the replacement of the existing 1,753 non-commercial contracts with new "Contract A" and the replacement of 96 existing commercial bus contracts with new "Contract B". To support the roll-out of these contracts, the Ministry, in conjunction with the BusNSW, undertook an intensive bus operator information program which involved visiting approximately 35 key rural and regional locations.

These information sessions have proved to be very beneficial for all concerned with a number of bus operators signing contracts on the day.

Core features of the new contracts are as follows:

Contract A

Annual service reviews to confirm student numbers/kilometres required.

A process for monitoring contracts where student numbers fall below the Prescribed Passenger Limit (8) required to sustain a school bus service.

Provisions ensuring that replacement buses provide maximum seating capacity for the relevant category, enabling greater capacity/better use of resources within available funding.

Provisions to deal with category shift - where decreasing student numbers result in a change to the bus category required to provide the service - incorporating a stepped reduction in payments to help operators adjust to changes, and the ability for operators to apply to the Director General for consideration of financial assistance in special circumstances.

Right of first refusal: If towards the end of the contract term the Director General proposes to enter into a new contract, the incumbent operator has "a right of first refusal" to the new contract provided existing contract obligations have been met and there are sufficient passengers to warrant a continued service.

Multiple lines of route (non-commercial contracts) held by the one operator to come under a single contract, streamlining administration for both operators and Government.

A reduction in overhead payments for contracts covering 10 or more lines of route (non-commercial contracts) in recognition of economies of scale.

Bus categories updated to reflect bus models/seating capacity available and in use, and the requirement that when replacing a bus, the maximum seating capacity for that capacity must be provided.

Contract B

Revised service planning guidelines (included as a schedule to the contract) requiring:

• Community consultation
• Service reviews every three years
• Defined notice periods and communication strategies for changes to services
• Director General consent required to service changes in certain circumstances; and
• Establishing desirable service coverage/frequency parameters but enabling more flexible service delivery in response to community need.

Provisions requiring coordination with neighbouring operators, including entering into Neighbouring Service Provider agreements where specified.

Provisions enabling the Director General to require operators to provide emergency buses for a specified period and at a reasonable commercial rate to ensure continuity of service in the event of an emergency.

Requirements in relation to complaints handling and resolution including monthly reports to the Director General.

Participation in 131 500 when established for rural and regional services.

Key performance indicators relating to operational, financial, customer service, planning and safety performance, as well as reporting requirements including patronage, reliability, kilometres, fleet, financial results and customer complaints.

New fares schedules de-linking the fares set by IPART with the operator payments for provision of school services.

Concession arrangements that match those provided under metropolitan and outer metropolitan bus contracts including:

• Availability of $2.50 Regional Excursion Daily (RED) ticket enabling all day travel for pensioners and seniors on services provided under Contract B
• More generous arrangements for tertiary students so that, regardless of age, those who meet the eligibility criteria of being full-time, enrolled in day classes and not in paid employment, are able to travel for half price at all times. Note: Under current arrangements, only tertiary students under 30 can access half fare concessions and only for travel to and from study - but both full-time and part-time students are covered by these arrangements
• More generous arrangements for senior secondary students who do not qualify for SSTS, to enable them to access half fare concessions for all public transport travel. Note: These students can currently only access half fare concessions for traveling to and from school
• Access to half fare concessions for apprentices and trainees
• Free travel for World War One veterans and their wives/widows, assistance animals accompanying deaf people and people recognised for services to the State.

Standard terms and conditions

Seven (7) year terms with provisions for extension up to 12 months provided suitable notice is given to the Operator.

Provisions enabling the Director General to require a change to the services, ticket products or concessions provided under the contract, subject to reasonable notice and compensation where appropriate.

Bus and driver standards and reporting requirements including the maintenance of records, electronic lodgement of reports, and the ability of the Director General to conduct audits, surveys and inspections.

Financial Viability Reviews to be undertaken where the Director General reasonably suspects that an operator may in future be financially unable to carry out the services.

A cure regime providing a graduated approach to contract breaches enabling the Director General to require a remedy or a cure plan within a specified period.

Requirements for a Contract Management Plan - outlining how reporting requirements and Key Performance Indicators will be met and contingency and emergency plans.

The ability of the Director General to appoint a nominee to continue to provide the services where there is a risk of services not being provided for more than 24 hours or in an emergency situation.

Requirements for cooperation with neighbouring operators, community consultation, the provision of adequate timetables and information concerning timetable changes, and maintaining a telephone service.

Explanatory notes

The Ministry and BusNSW have developed explanatory notes to assist operators in understanding the arrangements and the associated procedural obligations required to comply with the new contracts.

Contracts A and B

1. Introduction to Rural and Regional Bus Reform
2. Bus Average Age
3. Not Used
4. Not Used

Contract A

5. Transition Arrangements - Capacity and Bus Category
6. Category Shift Relief
7. Bus Funding
8. Resetting of Kilometres and Hours
9. Reporting Requirements
10. Contract Management Plan
11. Forms
12. Not Used

Contract B

13. Application of Fare Scales - SSTS
14. Conversion of Contract A to Contract B
15. Country Town Boundary Movement
16. Concession Payment (HFC / RED)
17. Community Consultation Guidelines
18. Reporting Requirements
19. Contract Management Plan
20. Neighbouring Service Provider Agreement

Rural and regional reporting definitions and templates

The Ministry of Transport is required to monitor performance of operators under the Rural and Regional Bus Service Contract (RRBSC) through self reporting as prescribed at clause 8.2 of the Standard Terms and Conditions of the contract. Schedule 7 of the contract contains the templates that are to be completed.

As from 1 July 2009 all rural and regional bus operator will be required to complete and lodge the standard reports that are contained in their contracts at Schedule 7 by the due dates.

Bus operators will be required to lodge their completed reports electronically to their respective regional office.

The Ministry is currently developing a web-based system whereby operators will be able to lodge their reports via the internet. The Ministry will provide further details when this system is completed.

Operators that are unable to lodge their completed reports electronically will need to make application to the Ministry under clause 8.4(c) of the Standard Terms and Conditions of their contract. All applications will be considered on their individual merits and a specified period of exemption may be determined.