Bus and Coach Association NSW (BusNSW) has taken aim at a recently-released report, which criticises Newcastle’s privatised network.

The document entitled Private Gain, Public Pain, commissioned by the Rail, Tram and Bus Union (RTBU), found the Keolis-operated Newcastle Transport was delivering worse services for commuters while costing taxpayers significantly more.

It also claimed the privatisation experiment in Newcastle had failed, calling for it to return to public hands when the current contract expires in 2027.

But, BusNSW slammed the McKell Institute narrative, stating it presented a largely ideological argument.

“It overlooks the well-documented reasons why the NSW Government moved away from the direct government operation of bus services,” executive director Matt Threlkeld said.

“A 2015 NSW Auditor-General’s Report found the former government operator (State Transit Authority) was underperforming compared with private operators, including poorer punctuality and weaker overall performance indicators.

“It also concluded the contractual arrangements with the STA did not clearly separate the roles of purchaser and provider and lacked the financial incentives and risk transfer that exist under privately-operated bus contracts.”

Mr Threlkeld said the McKell report acknowledged franchising had delivered significant cost savings for taxpayers, though it didn’t recognise the NSW Government’s Procurement Policy Framework and the principle of achieving value-for-money when contracting in the future.

“It’s important to note it was produced in partnership with the RTBU, too, which has a vested interest in the return of government-operated bus services,” he added.

“This raises legitimate questions about the objectivity of the report’s recommendations.”

FRANCHISING MODEL MISREPRESENTED

BusNSW noted that the McKell report overlooked the fundamental structure and benefits of the franchising model used in NSW.

“Timetables, routes, bus stops, bus frequency, network planning and fares are regulated by Transport for NSW (TfNSW), while private operators deliver services under contract in accordance with strict performance requirements,” Mr Threlkeld said.

“The suggestion private operators control the network and service design is simply incorrect.

“Similarly, the insinuation that they have ownership of government assets under the franchising model is misleading.

“Furthermore, there is no credible evidence to support claims that pay and conditions have worsened for workers employed by private operators.”

EXTERNAL FACTORS IGNORED

Mr Threlkeld said the report failed to acknowledge the significant external factors that had affected public transport services in recent years.

“The 2025 Auditor-General’s testimony on metropolitan bus contracts recognised the industry has faced unprecedented disruption following COVID-19,” he explained.

“This includes driver shortages, changing travel patterns as more people work from home, and increased traffic congestion caused by a shift away from public transport.

“The Auditor-General’s report also noted operators often have limited ability to address root causes of customer complaints such as congestion, patronage fluctuations and government’s control of timetables.”

BusNSW also documented the McKell report failed to acknowledge that fare evasion and anti-social behaviour directed at bus drivers were community issues, instead attributing responsibility to private bus operators and franchising.

RECOMMENDATION AND PROPOSAL FOR GOVERNMENT-OPERATOR TO TENDER QUESTIONED

BusNSW indicated the McKell report’s recommendation that TfNSW assume day-to-day operational responsibility for the Newcastle bus network was difficult to reconcile.

“Given the well-documented criticism of its procurement processes and contract management in recent Bus Industry Taskforce and Auditor-General reports, it is not logical for the same agency to assume responsibility for drivers, rostering and operations,” Mr Threlkeld said.

“TfNSW does not possess operational experience or the capability required to directly operate bus services.

“The idea a government operator could be created to compete in a tender process run by the government itself is a highly unusual policy proposition.

“The state previously exited direct bus operations in part because the former government operator was costing taxpayers about $3 per kilometre more than comparable private operators.”

FOCUS SHOULD BE ON PARTNERSHIP AND SYSTEM IMPROVEMENTS

Mr Threlkeld admitted the NSW Bus Industry Taskforce had highlighted the importance of a genuine partnership model between TfNSW and private operators.

“It recognised better outcomes are achieved when government and private operators work collaboratively to improve bus services,” he said.

“The Newcastle community would benefit from the NSW Government focusing on investment and practical improvements to the public transport system.

“Advancing fleet upgrades, replacing an outdated ticketing system, improving real-time bus tracking, and delivering better customer information will do far more to enhance the passenger experience than unnecessary efforts to assess the reinstatement of a high-cost government operator.”

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