AUSTRALIA: Keolis Downer has reached agreement with the state government of South Australia to hand back the operation of the Adelaide suburban rail network progressively from January 2025.
The joint venture between Keolis and Downer has run the services since January 31 2021, under an A$2·1bn contract awarded by the state’s previous Liberal administration. However, the Labor government elected in 2022 included in its manifesto a commitment to reverse the privatisation of Adelaide’s rail and tram networks. After taking power, the new regime announced its intention to establish a ‘commission of inquiry’ to look at returning public transport to state control.
Keolis Downer confirmed on April 2 that it had reached a ‘milestone agreement’ with the state government ‘which paves the way for the progressive return of the operation of the Adelaide Metro Passenger Rail Network to public hands’. It insisted that the agreement was ‘not reflective of the performance of Keolis Downer Adelaide’, adding that ‘it is recognised that KDA has been performing well since taking over the network’.
Under the agreement, operational functions including drivers, operations control, network and timetable planning will return to state control by January 31 2025. Customer service and security management functions are to be returned in June 2027, while KDA will continue to manage the maintenance of the infrastructure and rolling stock fleet until 2035. The joint venture will also ‘provide expertise to government around future innovation opportunities for customer services and the broader rail network’.
Noting that the two companies had ‘partnered collaboratively’ with the state government since the start of operations, Keolis Downer explained that ‘this partnership will continue in a different form, which will aim to maintain a high-performing network while delivering benefits to the local community’.
‘As a public transport operator, our objective will always be to partner with governments to provide services that are safe, performant and deliver a positive passenger experience’, insisted Keolis Downer CEO Julien Dehornoy. ‘Our people are at the heart of the successful delivery of transport services, and we will ensure they are supported as we enter this new partnership.’
State Transport Minister Tom Koutsantonis had previously told local media that the privatisation had been expected to deliver A$118m in savings over the 12-year contract period, but risked costing taxpayers up to A$120m. Noting that 134 staff who had not transferred to the private operator remained ‘unassigned’ on the public payroll, he said they were effectively ‘being paid not to work’.
Under break clauses in the contract, the state could reportedly have been exposed to termination and disengagement fees totalling up to A$94m. ‘We never said that there weren’t any compensation clauses in the contract’, Koutsantonis explained. ‘We’re saying we’re not paying any of it, and we’re not. We won’t be paying a cent of it.’
