Auckland Transport

New bus contracts mean more services for less subsidy

South Auckland Bus Contract SigningSouth Aucklanders will get more bus services when new contracts, signed today, come into effect later this year. 

The new contracts, between Auckland Transport and a number of bus companies, will also be delivered for $3.1 million less cost.

In addition a new fleet of state-of-the-art, low-emission buses, and new standards of service, will be introduced.

There was a lot of competition for the new contracts which cover eight different clusters of routes. The contract was signed by Auckland Transport Chief Executive, David Warburton and the successful tenderers, Ritchies Transport Holdings/Murphy’s in a joint venture, Howick and Eastern Buses Ltd and Go Bus Transport Ltd. They are the first to be signed in Auckland under the Government’s Public Transport Operating Model (PTOM).

Image: Dr David Warburton (seated left) CEO and Dr Lester Levy (seated right) Chairman of Auckland Transport sign the contracts watched by Calum Haslop (standing left) Managing Director of Go Bus, Sheryll Otway, Managing Director of Howick and Eastern and Andrew Ritchie, Director of Ritchies.

Go Bus, a company owned by Ngai Tahu and Tainui, has secured just over half of the new routes. A new player in the Auckland urban bus market, Go Bus operates urban services, nationally. Ritchies/Murphy’s has secured a further 40 percent, with Howick and Eastern operating the remaining five percent of routes.

The current public subsidy is $20.3 million each year. From October, when the new contracts come into effect, the contracts will cost $36.3 million resulting in $17.2 million public subsidy with about $19 million in passenger fare revenue being paid to Auckland Transport thereby reducing the overall net cost by more than $3 million.

Bus customers will also see a 21 percent increase in hours of operation and a 15 percent increase in kilometres covered by the services. 

South Auckland buses travel around 25,000 kilometres each day or the equivalent of once around the world, and provide some 1,740 services a day. In total, the new services will operate 9.3 million kilometres a year. In Auckland, bus patronage is increasing at about 4 percent every year.

Despite being provided by different companies, all buses will be presented in the AT Metro livery to ensure a uniform appearance and consistent customer experience. It will also help minimise confusion among unfamiliar passengers, about whether or not they are catching the right bus.

Auckland Transport chairman, Dr Lester Levy, says AT, the bus companies and the Government through the Transport Agency (NZTA), have brought about a new era in service provision and cost.

“To quote the old saying, this result has been about working smarter.

“Both our own Auckland Transport staff and those of the bus companies, separately, have worked very hard and very imaginatively, to identify opportunities and extract the best possible outcomes for the people of south Auckland. 

“When you consider the investment in work opportunities, new equipment, reducing congestion and getting more people to their destinations, quicker, this is very good for both Auckland and for the New Zealand economy,” he says.

NZ Transport Agency Regional Director Ernst Zollner says it is pleasing to see positive results from the first bus tendering in Auckland carried out under the PTOM model.

“These contracts will ultimately result in better quality services for customers, and better value for money. It’s the result of a lot of hard work on the part of the bus companies, Auckland Transport and the NZ Transport Agency – all coming together to identify opportunities and get the best possible outcomes.

Calum Haslop, Go Bus Managing Director, says his company will invest $40 million in new buses, equipment and depot facilities. It will commit 89 buses, mostly brand-new and built in New Zealand on European chassis.

Andrew Ritchie, a Director of Ritchies Transport Holdings says he is pleased at the opportunity to bring first class bus services to south Auckland.  Ritchies is one of the biggest bus operators in New Zealand and already provides a range of bus services in other parts of Auckland.

Sheryll Otway, Managing Director of Howick and Eastern, says the company had recently committed to a new fleet of double-deckers.

Dr David Warburton, CEO of Auckland Transport, says the cost savings were achieved through a mix of economies of scale, greater efficiencies in the way routes are organised and a modern fleet that is fuel efficient and maximises the number of passengers per trip.

On the other side of the ledger, he says, a modern, comfortable, fleet getting people where they want to go faster and more conveniently, will all contribute to attracting more passengers. This has the double advantage of increasing revenue share opportunity for the operators and reducing the cost in subsidies. 

The new services have been designed to deliver AT’s New Network model. The New Network will include all-day frequent routes in the south, connecting with trains at the new Otahuhu Interchange and Manukau Bus Station.

Find out more about the Public Transport Operating Model (PTOM).