Cooper Associates

Case Studies

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Rail franchise procurement

Andrew is currently leading the procurement of a new rail franchise for Auckland Transport. This includes the design and development of the service scope and specification, commercial framework, contract form and drafting, and the subsequent tendering, negotiation and appointment process for the future rail franchise agreement for the delivery of Auckland’s metro rail services.

The current contract governing metropolitan rail services in Auckland has been in place since 2004, with only minor modifications during that time. Consequently, the operating and commercial model, risk allocation and incentive mechanisms are no longer considered optimal for the purpose of delivering a modern metropolitan rail service in which customers are at the heart.

Development of a new rail franchise provides an opportunity to review how Auckland Transport manages and allocates responsibilities for metropolitan rail services across the region. The current passenger rail operational model is vertically separated with several entities performing different roles. Procurement of a new rail franchise for Auckland provides the opportunity to review and redesign the manner in which rail services are delivered.

The outcomes of a new rail delivery model for Auckland will be reduced organisational interfaces, a more appropriate allocation of risks across the rail system and improved efficiency, customer and safety outcomes.

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Bus contract procurement

The Greater Wellington Regional Council (GWRC) is responsible for the planning, marketing, management and procurement of public transport services in the Greater Wellington region.

Recent legislative changes in New Zealand created a new framework for the procurement and governance of public transport services – the Public Transport Operating Model (PTOM). PTOM aims to build long-term commercial partnerships between regional authorities and public transport operators, to improve services and grow patronage.

The PTOM framework provided an opportunity for the GWRC to tender bus service operating contracts across the region for the first time in decades. Coupled with the need to replace Wellington’s ageing bus fleet and a bus service that was at capacity in Wellington city, the implementation of PTOM provided an opportunity to take a fresh look at how bus services are delivered across the region.

Five principles underpin the provision of public transport by GWRC on which the procurement process was based:

  • GWRC and public transport operators should work in partnership to deliver the public transport services and infrastructure necessary to meet the needs of passengers.
  • The provision of services should be coordinated with the aim of achieving the levels of integration, reliability, frequency and coverage necessary to encourage passenger growth.
  • Competitors should have access to regional public transport markets to increase confidence that services are priced efficiently.
  • Incentives should exist to reduce reliance on public subsidies to cover the cost of providing services.
  • The planning and procurement of services should be transparent.

Under PTOM, services are grouped into ‘units’ of routes, each an exclusive contract with an operator. The Wellington region comprises 16 bus units. Seven of these units were directly appointed by negotiation to incumbent operators, with nine units tendered.The procurement of the sixteen bus operating contracts, valued at circa $80 million pa was led by Andrew Cooper.

The tender process included many features to reduce barriers to entry and is regarded as a benchmark for industry engagement which resulted in an attractive and competitive tender opportunity.

Twelve local and international bus companies participated in the pre-tender engagement process providing valuable input to the tender and contract design. Industry input to the process resulted in a strong performance-based contract, with appropriate allocation of risks between the transit agency and operators.

Nine of the original twelve bus companies submitted a total of 86 tenders covering a variety of individual and bundled tendered bids.

The final tender outcome awarded the nine tendered contracts to two new entrants, with the tender result yielding strong savings against expectations which were set by a ‘shadow bid’.

This case study was presented to the Thredbo international transport conference held in Singapore in 2019. Read more here.

Evaluating low emission bus fleets
The successful pricing of harmful emissions contributed to a tender outcome that has delivered 100% new buses to the tendered contracts, 95% of which will be Euro VI (the latest in diesel emission reduction technology). The outcome saw an initial ten battery electric buses enter service in 2018, followed by the planned phased introduction of a further twenty-two electric buses over the following three years of the contracts. Read more about the pricing of emissions in a practice paper presented to the Australasian Transport Forum here.

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Programme Director – Bus Services Transformation

Greater Wellington Regional Council is responsible for the provision of public transport services in the Greater Wellington region.

As Programme Director of the Bus Services Transformation Programme, Andrew was responsible for delivery of a number of projects providing a step change in the service performance, cost effectiveness and ease of use for customers of bus services in the region.

These projects included:

  • Implementation of the Public Transport Operating Model (PTOM) for bus and the associated procurement of 16 bus operating contracts across the region to the value of circa $80 million pa. The objective of PTOM is to deliver a competitive public transport operator market, with enhanced service levels and value for money for the public purse by tendering new performance based contracts. The successful implementation of PTOM is critical to the delivery of a range of interdependent transformational initiatives that will change the way PT services are delivered in Wellington in the future.
  • Fleet transition – incorporating the transition from trolley buses and old diesel fleets to a low emission bus fleet and ultimately an all electric bus fleet in the region.
  • New bus network – incorporating implementation of the new Wellington city bus network and the associated communication and transition arrangements with customers, bus operators and other stakeholders.

Andrew designed and led the procurement process for sixteen 9 and 12 year bus operating contracts. Under PTOM, services are grouped into ‘units’ of routes, each an exclusive contract with an operator. The Wellington region comprises 16 bus units. Seven of these units were directly appointed by negotiation to incumbent operators, with nine units tendered. The tender process included many features to reduce barriers to entry and is regarded as a benchmark for industry engagement. The result was a highly competitive tender process with nine local and international bus operators submitting tenders.

To meet Council aspirations for a low emission bus fleet, the tender process featured an industry-first quantitative assessment of bus fleet emissions using an economic cost to society approach to monetise bus emissions. This feature contributed to a tender outcome that has delivered 100% new buses to the tendered contracts, 95% of which are Euro VI, plus an initial ten battery electric buses which will be followed by the phased introduction of a further 22 electric buses over the first three years of the contracts. The resulting environmental outcomes are delivering improved air quality across the region with emissions of harmful pollutants reduced by 38 per cent in Wellington city and 84 per cent in the Hutt Valley conurbation. Read more here.

Andrew’s responsibilities also included the implementation of a redesigned bus network in Wellington city featuring a more integrated and connected system of bus routes designed to provide greater coverage and reach, while reducing route duplication and bus congestion in the central city. The new network features greater use of connecting services requiring the construction of 7 bus hubs at key locations across the city.

Stakeholder engagement has been a key area of focus throughout the project, requiring close working relationships with the NZ Transport Agency and Ministry of Transport. In addition to meeting governance requirements through the course of the project, Andrew regularly briefed the GW Council, together with other stakeholder TLAs, in particular Wellington City Council.

While the tender process met objectives for enhancing competition, delivering value for money and substantially improving bus fleet quality, the transition was particularly challenging. The new contracts, featuring two new entrants, new fleet and new depots were implemented at the same time as a radically new bus network, expanded and upgraded ticketing system, upgraded real time information system and a substantial change programme for the Regional Council, involving new roles, systems and processes.

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Performance Manager – NZ Transport Agency

Andrew led the establishment of a Performance Management function for the Highway and Network Operations (HNO) Group for the NZ Transport Agency (NZTA). This new team is responsible for the monitoring, measurement and bench marking of the Agency’s maintenance, operations and renewals activities.

A key outcome of the role has been to develop the Agency’s commercial intelligence and measurement and monitoring capability with respect to the cost of maintenance and renewals to assist the Agency become a more informed purchaser, and to ensure national planning is effective and investment is directed at the right places and at the right times.

Andrew provided direction to the setting of the Performance Framework for the Network Outcomes Contracts and the development of the measurement and bench marking tool for capturing this information.

Within this role Andrew also led a supply chain review of the maintenance market to inform the understanding of the drivers of market behavior.

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Commercial Lead – Metro Rail Rolling Stock Procurement

As Commercial Lead on the Auckland EMU procurement project, Andrew brings the experience and learnings from one of the largest and most complex transport procurement projects in New Zealand in recent years, the procurement of Auckland’s first electric train fleet and long term maintenance arrangements.

Andrew was involved in all areas of procurement team responsibilities including:

  • Input to procurement documents and procurement strategy
  • Development of the evaluation strategy and evaluation criteria
  • Review and input to supply and maintenance contracts
  • Oversight of financial modelling for the supply, maintenance and depot scenarios
  • Member of 4 person TET
  • Formulation of an availability and performance regime under the long term maintenance contract
  • Developing the negotiation strategies and leading the commercial aspects of the negotiations with the two shortlisted bidders

As the lead commercial advisor Andrew was responsible for managing a team of senior financial and commercial advisors from tier 1 and tier 2 Australian and NZ firms.

In leading the commercial work stream, he oversaw the financial modelling for the project. These financial models were used, inter alia, to model the whole of life costs of the rolling stock and maintenance services and to determine the Price Estimate, required for the NZTA prescribed Price Quality (PQ) evaluation methodology.

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Economics lead – Clifford Bay Ferry Terminal Investigation Project

Andrew was the economic lead to the project, as well as being the project’s freight and maritime advisor.

In 2013, the MOT undertook a detailed investigation of the proposal to relocate the South Island ferry terminal to Clifford Bay. The purpose of this process was to examine the commercial viability of Clifford Bay as a development requiring minimum investment and risk for the government. As part of the detailed investigation a comprehensive economic assessment was also undertaken, led by Andrew.

The economic case assessed both the conventional national cost benefit analysis (CBA) of the project as well as wider economic benefits (WEBs).

Andrew was instrumental in gaining buy-in across the three stakeholder agencies – MOT, NZTA and Treasury, to the approach taken and final deliverables.

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