No extension to signing of school bus contracts

14/1/04

The State Government has confirmed there will be no extension to Friday's deadline for those school bus contractors wanting to sign the new contracts.

Planning and Infrastructure Minister Alannah MacTiernan said bus contractors should be very clear that the opportunity to take on the 20 to 25-year contract expires on Friday.

"The new contracts are very, very generous," Ms MacTiernan said.

"Indeed, to offer any more would be irresponsible.

"The affected contractors, who are not subject to tender, will be paid on average 24 per cent more under this offer than the rates paid under the contracts awarded by competitive tender.

"This is not a dispute between the Government and drivers.

"The contract increases drivers' wages from about $13 an hour to about $16 an hour.

"Owner-drivers also get this benefit."

The contracts also provided new entitlements and protections not in their current contracts and not usually provided in Government service contracts, such as:

• exit or 'redundancy' payments where the service was no longer required; and
• provision for appeals to an independent referee where there was a dispute between the contractor and the PTA about the delivery of services.

"They also allow for an annual profit of 10.5 per cent on the replacement cost of the bus, not just on the original price of the vehicle," the Minister said.

The new contracts also:

• paid school bus companies, on average, 12.6 per cent more than they received under their current contracts and paid each contractor at least what was paid under the current contract;
• provided the security of a long-term contract (20-25 years);
• covered all their operation costs;
• repaid 90-95 per cent of the cost of the bus as depreciation over the bus life;
• delivered an annual profit of 10.5 per cent on the replacement cost (NB not the historical cost) of the bus; and
• automatically indexed the amounts paid to cover increases in costs.

The new contracts contained a mechanism so that future discussions between the Government and the industry could result in variations to the contracts.

"Contractors cannot fairly claim that they have not had time to consider this offer," Ms MacTiernan said.

"This issue has festered for more than eight years. Since being elected to government in 2001, we have been in continuous negotiations to provide a balanced outcome. At some stage the contractors have to make a decision.

"In June last year every contractor agreed in principle to the proposed remuneration package, and now it is time for contractors either to sign up or remain on their current contracts.

"All contractors have had the final draft contract since the first week in October - the only changes since then have been to their benefit negotiated at the request of their representatives.

"Their representatives have known since the end of October that a decision would be required by mid-January.

"The Government wanted to send the final contracts out earlier to give contractors more time to consider the final offer but their representatives requested it be held back to mid-December to allow them more time to negotiate.

"For those who choose to remain on the current contracts, the issue of fair commercial return for their service will be determined when the Public Transport Authority calls for competitive tenders for these routes before the current contracts expire."

Ms MacTiernan said the Government appreciated the past service of existing contractors and had been committed to giving them the opportunity to accept an improved contract which would give them security and protection from State Supply Commission tender requirements for 20-25 years.