Victoria’s new tram operators are already locked in a contract dispute just months after taking over Melbourne’s network, seeking compensation over damaged assets and raising the prospect of further legal action.
Yarra Journey Makers (YJM), a consortium made up of French outfit Transdev and construction giant John Holland, took over the city’s tram operations on December 1 after beating out the incumbent operators KDR Victoria, which included Keolis Downer. They have retained the Yarra Trams branding publicly, with the nine-year contract worth $6.8 billion.
Since December, the new operators have sought compensation under a part of the contract that allows them to recover costs for damaged assets received when they took over the franchise.
The government maintains there is no additional cost to taxpayers, and that there are rules and clauses in the contract that spell out how the franchise should be handed over. The Department of Transport is working with YJM within these rules.
Under the metropolitan tram contract, any infrastructure or other assets that were lost, destroyed or damaged at the time of the handover fall under “transition provisions”, assuming the cost of their replacement or repair is more than $1 million.
The new operators were required to immediately tell the department about these issues, and had until December 31 last year to provide a full list.
I believe this contract was completed with the tendering process with Ben Carroll at the helm as Minister. Yet another debarcle.
If the department agrees to replace or repair these assets, YJM is entitled to seek compensation for the impact it might have on the ability to fill out the contract.
This could take the form of amendments to their agreement, waivers of requirements or any other relief the parties agree to.
The Age
Who was the minister at the time was it the same guy who handled the myki contract that is also a problem and way over budget?