‘Disaster’ for commuters: Backflip on bus services

The Minns government has quietly abandoned its pledge to end bus privatisation after entering into “scandalous” new negotiations with private bus contractors.

The Minns government has walked away from its commitment to attempt to end the privatisation of the state’s bus services after entering into new negotiations with private bus contractors.

Exclusive: The Minns government has quietly walked away from its commitment to attempt to end the privatisation of the state’s bus services after entering into “scandalous” new negotiations with private bus contractors.

It can be revealed that Transport for NSW is negotiating a two-year contract extension with Transit Systems West to provide bus services to Sydney’s inner west, known as Region 6.

The extension comes despite promises made by Premier Chris Minns that under his government there would be no more privatisation.

On Monday the Premier denied breaking any promises, saying the government had been upfront about the “challenges” of bringing the city’s bus contracts back into public hands.

He said taking over the contracts would involve “starting a brand new bus service from scratch with virtually no depots”.

“We would have to take ownership of them and (we have) no workforce,” he said.

“We were very realistic about what we could purchase back and what was just too cost prohibitive for NSW taxpayers.

“We’re going to make sure that we hold the reins of the private providers really tightly so that if there’s a complete failure we are in a position to step in.”

Rail, Tram and Bus Union (RTBU) bus division president Peter Grech said the new deal was “disastrous for commuters”. “Extending a contract without even opening it up to a tender process is absolutely scandalous,” Mr Grech said.

“This backroom deal is condemning local commuters to two more years of substandard services.”

Former Transport Minister Jo Haylen. Picture: NewsWire/ Gaye Gerard

In April 2023, then-Transport Minister Jo Haylen called the former Coalition government’s approach to sign multi-billion dollar long-term deals with private bus companies, a “failed experiment”.

At the time, Ms Haylen said bringing the contracts back into public hands would be difficult because the government would be liable for fees if contracts were broken prior to their expiry date.

“Bus passengers across Sydney are facing thousands of service cancellations a month because of the former government’s failed bus privatisation experiment,” she said back in April 2023.

The existing contracts allowed bus companies to earn financial bonuses for running on-time services, which resulted in the cancellation of thousands of services to meet the on time targets.

The first 12 of 40 new electric buses hit the roads in Sydney from November as part of a $29.5 million pilot program. Picture: Supplied.

The Region 6 contract with Transit Systems is the first contract signed by the former government to expire, with the end date set for June 30 next year.

In two announcements made to the ASX, the latest in March this year, Transit Systems owner Klesian Group said the company had entered into “direct negotiations” with TfNSW over a new short term contract “on new terms”.

“TfNSW has advised that if the parties are not able to reach agreement on a new short-term contract by mid-2025, TfNSW will proceed with a competitive tender process for Region 6, as previously planned,” the ASX announcement said. A transport insider with knowledge of the negotiations said one of the reasons that the contract was likely to be extended was because TfNSW had “not got their act together” to put the contract out to tender earlier.

The source said many of the private bus companies had been losing money on their contracts over the last few years and that any contract extension would come with conditions.

“A new contract would have to be conditional on Transit Systems making money out of the extension rather than continuing to lose money,” the insider said.

A Transport for NSW spokesperson said the contract extension would bring the expiry date into “closer alignment” with those of the remaining bus contracts across Greater Sydney, which expire between 2029 and 2031 .

“This closer alignment of contract expiry dates allows a more consistent procurement program for future Greater Sydney bus services,” the spokesperson said.

“This also provides an opportunity for Transport for NSW to incorporate the findings of the bus industry taskforce recommendations into future bus contracts.”

Opposition leader Mark Speakman called the contract extension a broken promise.

“They promised no privatisation, but while the inner west was waiting at the bus stop, the Minns Labor Government was cooking up a secret deal behind their backs,” he said.

Originally published as ‘Disaster’ for commuters: Backflip on bus services