Opposition calls on State Government to release the contract for Keolis Downer to run train network
The Opposition argues that the Government’s figures on savings from train privatisation don’t add up – and they’ve asked for a public release of the contract.
SA News
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The State Government is refusing to publicly release the $2.14 billion contract it awarded to a private company to run Adelaide’s train network.
The Opposition is calling on the Government to make public the rail contract to prove taxpayers will be better off under the privatisation.
Transport Minister Corey Wingard rebuffed the request in State Parliament on Tuesday, saying the contract was commercial in confidence.
Six contracts awarded in March this year to private companies to run the Government’s bus services have been published online, with some redactions.
The Government in September announced it had awarded an eight-year $2.14 billion contract to Keolis Downer to operate the train network from the end of January 2021.
It said that while Keolis Downer would run the network, the Government would continue to control the infrastructure and ticket pricing.
Mr Wingard’s office on Tuesday clarified that the contract period was for an initial eight years with a possible four-year extension, meaning the $2.14 billion contract covered a 12-year period.
This equates to an average cost of $178 million a year.
“Last year, the operating cost of our train network was $133.6 million,” Mr Wingard told Parliament.
“That is excluding GST and excluding those maintenance costs.
“Maintenance costs are around $12 million to $15 million a year and that includes, of course, maintaining rolling stock, engines, bogies, wheels, and also rail tamping and signal replacement, so it’s a big operating system.”
Labor argued these figures – which equalled between $159 million and $162 million a year – showed it was more expensive to outsource the operation of the trains, based on the average saving of $178 million a year.
The Opposition further said it believed the cost of running the trains in-house was much less than the figure stated by Mr Wingard.
However, the Minister’s office said the amount quoted in Parliament did not include other costs which could not be disclosed for commercial reasons.
It also warned against drawing comparisons using an average yearly figure, saying it did not take into consideration undisclosed costs and inflation.
Mr Wingard stressed the deal would save taxpayers $118 million over 12 years.
“At the end of the day, when I sit down with the Treasurer and he works through the contract as well and says, ‘There is a $118 million saving for the South Australian taxpayer’, trust me, he’s looked at it very closely – It’s $118 million,” Mr Wingard said.
Opposition Leader Peter Malinauskas said the figures “simply don’t add up”.
“Corey Wingard must come clean and tell South Australians exactly how much it cost to operate Adelaide’s train network in 2019/20,” he said.
“I am very concerned (Premier) Steven Marshall and Corey Wingard’s privatisation plan does not represent value for money for taxpayers.
“Worse, I fear commuters will face higher fares and poorer services.”
The Opposition also asked if Keolis Downer would receive a share of the ticket revenue while it runs the train service.
Mr Wingard’s office confirmed the company would not get a cut of the ticket sales.