29 Nov 2019

Government extends school bus contracts to Dec 2021

11:05 am on 29 November 2019

The Ministry of Education has extended all school bus contracts by a year to end in December 2021, rather than the end of next year.

School bus

School bus contracts in New Zealand cover thousands of routes and 40 million trips by children each year. Photo: RNZ

They cover thousands of routes and 40 million trips by children each year.

The ministry is now writing to all operators offering a 12-month extension.

The contracts were meant to be put up for tender last month, but the ministry delayed that due to protests from small operators that large companies were being given an unfair advantage.

This last-minute delay and sudden extension came despite the ministry having years to plan between contracts, which were last let in 2008, and despite a government review begun recently into the how other public bus routes are tendered, a tender process that the Transport Minister has said was flawed.

The ministry did not announce the tender delay; it came to light after RNZ began running stories about bus safety.

"The consultation the Ministry ran in August this year focused on listening to the industry about their concerns with the current procurement process," Associate Minister of Education, Jenny Salesa, told RNZ in a statement.

However, operators have told RNZ it was not a consultation at all, as the ministry had simply laid out what it was going to do.

The current operators range from Ritchies Transport with almost 300 school bus routes, down to single routes using buses run by school communities, like one at Rere on the East Coast.

The ministry had previously told the latter that single routes would not be available any longer. "The Ministry will not be tendering individual runs," it had told operators in an industry roadshow in August.

"Routes will be grouped together to encourage economies of scale and simplify engagement between the school, transport operator and Ministry."

Among the 86 groups in total, Auckland was to have seven groups consisting of between five and 31 routes, and Canterbury eight groups of between 10 and 74 routes each.

These groupings meant school communities could only keep doing that by subcontracting to an operator who ran a whole route group or setting up a joint venture with other operators to take on a whole group.

The last time school buses went to tender was in 2008, and sparked investigations by the Auditor-General and Ombudsman, after operator numbers were slashed from 227 to just 95, of which only about 70 or so are still operating today.

Small operators fear the grouping approach this time would reduce competition further, but the ministry said it would ensure that "competitive tensions" continued to exist.

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