The Otago Regional Council has awarded new contracts for
Dunedin public bus services, despite a threat from the New
Zealand Transport Agency that it would not subsidise the
The ORC has defended the decision to go ahead with the
contracts, with chief executive Peter Bodeker critical of the
pressure applied by the NZTA and the Ministry of Transport.
''We believe the public is going to get an enhanced service
and we are concerned a government department seems to be
riding roughshod over what we consider to be good management
of public funds, regional funds and national subsidies,'' Mr
The NZTA has taken issue with the council's regional public
transport plan, which included higher standards for public
buses than those imposed nationwide.
It also advised the council not to seek tenders for public
bus contracts, which were due to expire at the end of June,
but to instead roll over existing contracts until new
legislation was implemented. The council refused, seeking
tenders and awarding new three-year contracts.
The NZTA then indicated it would not subsidise public bus
services under those contracts.
''In our view the ORC is defining value for money very
narrowly - as short-term cost savings. It is for that reason
the NZTA does not intend to contribute to the cost of these
specific contracts, because they will not deliver best
services for passengers or best value for money for
ratepayers or taxpayers over the medium and long term,'' NZTA
southern regional director Jim Harland said.
Both agencies have said they would continue to negotiate, but
neither seemed willing to budge.
Mr Bodeker said the council might have to use ''contingency
funds'' which had been built up over the years by ratepayers.
He said money had been targeted for public transport and
ratepayers would not be directly affected.
The council had presented its tender outcome to the NZTA ''in
an effort to get them to reconsider their position with
regard to providing subsidy for these contracts'', Mr Bodeker
The council would save about $1 million over three years
under the new contracts, because bus services had been
tweaked and would run more efficiently.
''We were advised by the NZTA, and subsequently by the
Ministry of Transport, that we should not tender, that we
should just roll the contracts over and wait for new
legislation to come into place. But we proved that we could
be more efficient and make some savings by awarding
short-term contracts,'' Mr Bodeker said.
He said the ORC had met the NZTA halfway by cutting contracts
to three years from six or seven, and accepting tenders based
on national standards, not its own higher standards.
New legislation would take about two years to be implemented
at a regional level, he said, when contracts would be close
New contracts were awarded to Citibus (Corstorphine, St Clair
and Palmerston), while Ritchies picked up the Balaclava,
Kenmure and Helensburgh routes as well as week-night, Sunday
and public holiday services.