ARTA Media Release 16 October 2008

ARTA reassures customers of commitment to provide ongoing ferry services to Half Moon Bay and Bayswater

Following Fullers’ decision to discontinue ferry services to Half Moon Bay and Bayswater, the Auckland Regional Transport Authority (ARTA) has moved to reassure ferry commuters that ARTA is committed to provide ongoing ferry services to both areas. ARTA's General Manager, Customer Services, Mark Lambert says, " Ferry operators are being approached by ARTA to provide services to Half Moon Bay and Bayswater on an emergency basis and ARTA will be seeking firm proposals shortly. ARTA expects Fullers to be part of that process.”

Mr Lambert says," A response to ARTA’s offer to provide additional public subsidy support and reduce operating costs was rejected late yesterday by Fullers and their owner NZ Bus.

"Fullers also sought a fare increase for ferry customers which ARTA did not wish to accept”.

Mr Lambert said, "ARTA is very conscious of financial pressures on its customers and is working to minimise any additional cost impact.

"ARTA is disappointed that Fullers and NZ Bus refuse to accept ARTA’s offer of increased public subsidy and reduced operating costs at a time when ARTA needs to be ensuring that constrained public funds are efficiently spent ". Mr Lambert said, "Today’s announcement by Fullers that it is discontinuing the Half Moon Bay ferry service is the mirror image of the situation in 2005 when Fullers abandoned its commercially operated (no public subsidy) service between Half Moon Bay and Auckland.

"ARTA stepped in at that time to provide emergency funding and an emergency contract for Fullers to ensure that Half Moon Bay ferry users were not abandoned.

"Following the 2005 commercial service abandonment by Fullers, a publicly subsidised contract was negotiated, which expired at the end of 2006. This contract was extended to mid-2007.

"Since then, Fullers and ARTA have pursued an open book assessment of cost, and have attempted to negotiate a continuation of the existing service.
"Based on Fullers cost data, ARTA offered an increase in public subsidy in recent weeks that would have covered Fullers operating costs and a contribution to return on investment. A push for passenger growth could have also contributed to that return.

"In good faith, ARTA offered to provide a back-payment to cover Fullers to the contract expiry in mid-2007. ARTA has also offered to purchase pontoon assets and take on lease costs from Fullers to further reduce Fullers operating costs. These offers have all been rejected.

"Fullers required a return on investment above assessed benchmarks, which ARTA could not justify particularly in a sole supplier negotiation. ARTA has to get best value for the public funds it spends on public transport particularly in the current economic climate", said Mr Lambert.

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