Media Releases
NZ Bus is on a mission to dramatically grow Hutt Valley bus services
10th, December 2009
The completion of negotiations to extend Hutt Valley bus service contracts isn’t the end of the hard work for NZ Bus, it is just the beginning.
Greater Wellington Regional Council and NZ Bus have agreed to extend most existing Hutt Valley bus service contracts for between three and four years.
As part of the agreement, NZ Bus subsidiary Valley Flyer is committed to operating the main Hutt Valley bus routes (Upper Hutt – Petone, Stokes Valley – Queensgate and Eastbourne – Wellington) on a commercial (unsubsidised) basis for at least the same period.
The agreement guarantees existing service levels, but allows Valley Flyer the freedom to offer the Hutt community improved services and more flexible fares.
NZ Bus Chief Executive Bruce Emson said his company took a very narrow window of opportunity to register commercial operation of the Hutt Valley bus services before the commencement of GWRC’s proposed tender process, which would have resulted in all services being operated on a gross contract basis, with commercial operation of services locked out for 12 years.
Following NZ Bus’s registration of these commercial services, GWRC proposed the negotiations which have brought about the extension of the existing net contracts for other Hutt Valley bus services.
Mr Emson said: “NZ Bus believes passionately that the most effective basis on which to achieve growth in bus services is one where the operator succeeds or fails on its ability to attract customers by providing superior service. Commercial operation of services, and net contracts such as the now extended Hutt Valley contracts, provide powerful incentives for bus operators to attract and keep extra customers. Conversely, the risk of failing to achieve this sits fully with the operators.”
“In the case of the newly commercialised Hutt Valley services, NZ Bus has put its money where its mouth is,” Mr Emson said. “We have given up between $7.5 million and $10 million in subsidy, depending on the final term, and we will have to increase patronage of these services by 30% just to recover that. It’s a tall order, but we are confident that we can do it by delivering a superior bus service to Hutt Valley people.” Mr Emson continued: “This is our opportunity to demonstrate to the community and to GWRC, the New Zealand Transport Agency and the Government that this model works. We will be heavily investing in our Hutt services and doing everything we can to offer our customers a reliable, efficient, and value for money service. We are committed to growing patronage and service levels on all of the commercial and contracted routes over this time.”
In the meantime, the commercial registrations will save the region $2.5million in subsidies annually, and the GWRC have stated publically that the successful contract negotiations have enabled them to meet their two priorities – continuity of service and best value for money for ratepayers.
Mr Emson said “Although GWRC has said that at the end of the three to four year period it intends that Hutt Valley services will be tendered under a gross contract arrangement, we want to make such a success of growing the services in the meantime that this is unnecessary.
“NZ Bus is fully supportive of the Government’s intentions to achieve increased value for money through a greater focus on commercial services and a competitive market for contracted services. The proposed changes to the Public Transport Management Act that the Minister of Transport has signalled, are necessary to give bus operators the certainty that will enable them to continue to work collaboratively with the public sector, whilst taking greater responsibility and risk to improve public transport services.
“The circumstances that applied in respect of the Hutt Valley services arose uniquely out of GWRC’s timetable for introducing its proposed new procurement regime for bus services at the same time as the legislation was put under review, such circumstances cannot be expected to re-occur in other cases.”
“We are genuinely committed to working positively and collaboratively with central and local government stakeholders and other operators to support improvements in New Zealand’s public transport system,” Mr Emson said.
For more information:
Megan McSweeney
021 880022
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Siobhan O’Donovan, Communications Manager
021 840 839
