Auckland public transport service contracts Auckland public transport service contracts

Auckland Transport (AT) is required by legislation (Public Transport Management Act 2008) to outsource all public transport services under a public transport operating model (PTOM). This applies predominantly to Bus and Ferry services. Metro passenger rail is being reviewed by government as to which components of PTOM apply.

The public transport operating model

The aim of PTOM is to grow patronage with less reliance on public subsidies. It has two key objectives:

  • To grow the commerciality of public transport services and create incentives for services to become fully commercial; and
  • To grow confidence that services are priced efficiently and there is access to public transport markets for competitors.

It is a new approach to planning and contracting public transport services to enable less reliance on public subsidy and ensure services are procured effectively.


PTOM subsidises passenger routes and incentivises service providers to maximise efficient and effective delivery of public transport in a partnering arrangement with AT.

Under PTOM, AT receives the fare revenue and pays operators the total cost in monthly instalment rather than the present system, which sees the operator receiving the revenue and being paid a subsidy. This changes the risk profile for operators.

The role of NZ Waka Kotahi

Waka Kotahi ratifies AT’s procurement documents, to ensure they are consistent with AT’s procurement strategy, NZTA’s Procurement Manual, and the Land Transport Management Act (LTMA).

NZTA have endorsed AT’s procurement strategies for bus, rail, and ferry services, which set the framework for AT’s procurement of new service contracts for all three public transport modes.

Procurement process

Under PTOM, AT will use a pre-approved procurement procedure for bus services, described in the NZTA Procurement Manual, that is designed to achieve best value for money. Ferry and rail procurements require a customised procurement procedure that needs to be approved by NZTA before going to market for these services.

The model for bus services involves a mix of tendered and directly-appointed public transport units to award contracts. The ferry and rail models will award contracts through a competitive tender process.

For more information or advice

Contact Auckland Transport


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