The delivery of reliable public transport services in Melbourne depends on the train and tram networks' assets being adequately maintained. Victorian Rail Track (VicTrack) owns these assets, which it leases to Public Transport Victoria (PTV). PTV then leases the assets to the train and tram franchisees, Metro Trains Melbourne (MTM) and Yarra Trams, and pays them for maintenance and renewal works.

The current metropolitan train and tram franchise agreements (MR3) include an operational performance regime (OPR) and a customer experience performance regime (CEPR).

The former Department of Transport designed these regimes and negotiated the MR3 agreements with the franchisees, Metro Trains Melbourne (MTM) and Yarra Trams. Since 2012, Public Transport Victoria (PTV) has been responsible for managing the franchisees and motivating them to improve their performance.

Efficient and reliable public transport is critical for the state's economic prosperity and liveability. In Victoria, metropolitan trains and trams have been run by private operators since 1999, operating under various franchise agreements with the state government.

Operating train and tram services through franchise agreements introduces risks for the state—private operators may not deliver the best possible performance and value for money.

Public transport is an essential service for many Victorians, and an effective transport system is critical to the state's economic development. Public Transport Victoria (PTV) is responsible for managing the contracts with the operators that run the metropolitan passenger train and tram networks, known as franchise agreements. Agreements must be well designed, and effective contract management policies, processes and systems must be in place to ensure these agreements deliver value for money to the state of Victoria.

 Ordered to be published

VICTORIAN GOVERNMENT PRINTER December 2016

PP No 228, Session 2014–16

Introduction

In accordance with section 16(3) of the Audit Act 1994, a copy of this report was provided to the Department of Economic Development, Jobs, Transport & Resources, the Department of Justice and Regulation, Emergency Management Victoria, Public Transport Victoria, Victorian Rail Track and V/Line Proprietary Limited for submissions and comments.

Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.

Responses were received as follows:

Security risks to control systems have increased significantly in recent years. Around the world, public and private sector systems have faced unprecedented and escalating cyber threats to the security of information.

Under the Transport Integration Act 2010, Public Transport Victoria (PTV) is responsible for planning, coordinating, providing, operating and maintaining a safe public transport system, including train services. PTV, train operators and other relevant entities have a shared responsibility under the Rail Safety Act 2006 to make sure train services are safe. This includes securing control systems—the central systems that manage and monitor train services.