The Brumby Government today announced it will run a major worldwide tender for the operation of Melbourne's train and tram networks as part its plan to improve public transport services across Victoria.

Premier John Brumby said the Government had decided to retain private sector involvement in the day-to-day service delivery of the train and tram networks as it provided the best value for money for Victorian taxpayers. But he said the Government had ruled out the option of renegotiating a new contract directly with the current operators, in favour of a full open competitive tender process."We want to make sure that we deliver the best possible services at the best value for money for Victorian people," Mr Brumby said.

Mr Brumby said an extensive State Government market sounding process had indicated considerable interest in Melbourne's train and tram network from experienced mass transit operators internationally. "Our research confirms there are a number of interested parties from across the world," Mr Brumby said. "That's why we believe it is in the best interests of commuters that we go to a full national and international tender. In putting the train and tram networks out to competition we encourage increased competition that will get the best possible services for Victorians." 

The Minister for Public Transport has instructed the Department of Infrastructure (DoI) to immediately begin work on the tender process with expressions of interest to be called by mid 2008, followed by a full tender process. Mr Brumby said the Government had committed $10.5 billion for transport infrastructure, through Meeting Our Transport Challenges, including $7.5 billion to improve capacity on the current public transport network. "To improve services on our public transport network we need to improve the day-to-day operations as well as strengthen our infrastructure capacity," he said. "The train network in particular has been under enormous pressure in the past two years with unprecedented patronage growth of almost 20 per cent. There are now more than 40 million more trips on trains and trams than in 2004-05, more than 800,000 extra trips per week. Over 33 million of those are on trains alone. "This is why we are working as quickly as possible to implement projects like the Clifton Hill duplication, a new timetable which will be in place by October providing an additional 39 services, the bringing forward of 10 new trains which during peak hour will carry about 8000 people, and a new ticketing system."

"We will now begin work to secure the best operators to help us deliver on the biggest investment in public transport infrastructure this State has seen in 30 years."  It's vital that as the Government moves into a phase of implementing major infrastructure projects, Melbourne's train and tram network continues to run smoothly and efficiently. 

Public Transport Minister Lynne Kosky said the existing contracts provided an option for an extension, which would be exercised to allow time for a thorough tender process and to enable the Government to bed down the forward capital works program. "The Government will extend the existing contracts with Connex and Yarra Trams for a further 12 months until November 2009," she said. "This will deliver greater certainty to potential bidders who will have a clear understanding of the timing of infrastructure works and how they will impact on the system." 

Ms Kosky said the Government would work hard during the tender process to secure the best value for money for Victorian taxpayers.  'The Government will continue to own the train and tram networks in a franchise arrangement with private sector operators for the service delivery," Ms Kosky said. The Auditor General has found that the operation of the system by private operators delivers value for Victorian taxpayers.

An investigation by the DoI, independently reviewed and verified by Deloitte, also confirms that the current franchising arrangements have offered value for money in service delivery of public transport. "A system which allows the Government to focus on public transport policy, planning and delivering major projects, with operators running the day-to-day services, is the best system to help us meet the challenges we face on our public transport network." 

Ms Kosky said she expected the tender process to be completed by mid 2009 with successful train and tram operators in place by the end of that year. She said the Government would continue to operate V/Line services for the foreseeable future, while Metlink would continue to be the industry agency responsible for providing marketing, customer services and ticketing services across Victoria.