2019-04-09 Services & Organisation Committee Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                    9 APRIL 2019


White and Grey’s analysis indicates that a 1% revenue increase from extended trading hours
would be significantly less than the associated operating costs. That is, subject to negotiations
with the operator to confirm its revenue impacts, extended hours would be likely to require
significant ratepayer subsidisation.
Two Ferries at All Peak Times
The ferry lease requires NNSF to operate a second ferry “if there are more than 20 vehicles
waiting in the queue when the ferry is loaded, or at the direction of the Council”. In practice,
NNSF does not wait for queuing events but anticipates peak visitor periods based on weather
forecasts, tide times, holidays and the operator’s 20 years of experience with visitation patterns.
On occasion, NNSF does need to react to queuing and is able to be reasonably responsive,
having employees on standby in close proximity. Council staff regularly discuss resourcing for
upcoming peak periods with NNSF and monitor the levels of service to ensure they meet
expectations.
White and Grey consulting undertook sensitivity modelling for increased ferry provision scenarios
(which would generally fall outside the terms of the current lease agreement). The modelling
indicates that, whilst some minor queuing improvements and revenue increases might be
possible, such service level increases fall outside the lease agreement and would require
significant ratepayer subsidisation.
Electronic Purchasing
White and Grey’s review considered opportunities for the introduction of technology, such as
EFTPOS, toll booths, toll tags and website booking services. They reviewed other Australian
ferry operations (particularly the Daintree ferry), held discussions with the current lessee and
assessed the efficiency of the current cash-based ferry payment system. Notably, the current
lease agreement does not provide provision for the introduction of technology. Should Council
seek the introduction of technological improvements to the processing of ferry fee, they would
likely constitute a material change of the Lease Agreement and substantially impact the lessee’s
operating cost structure. As such, the review excluded cost-benefit analysis for technological
improvements.
White and Grey’s analysis confirmed that payment from all vehicle/person crossings on each
ferry is processed during the actual journey time of approximately 90 seconds. This process
forms the benchmark when considering other technologies and there are no apparent
improvements that would deliver efficiency gains to reduce queuing and boarding times.
A key risk identified of technological improvements is the reliance on internet connectivity, and
the potential for significant delays and increased queuing in the event internet connection is
interrupted.
Cash handling also has inherent issues and, increasingly, will fail to meet customer expectations.
Council should continue to explore opportunities for electronic payment options, particularly with
the next tender process.
Concessions
From discussions with NNSF regarding the efficiency and efficacy of the existing concession card
and voucher system, it is apparent the administration of the system is a significant operational
burden and a source of complaints and frustration for some ferry users. The review found:
   Concession travel represents approximately 20% of all ferry crossings;
   Concession travel represents approximately 2% of all ferry revenue; and
   Concession travel represents the operator’s biggest administrative burden.
White and Grey’s analysis indicates there would be merit in simplification and redesign of this
system, which might include:
   Transfer of the concession processing system from the ferry operator to Council; and
   Issue of flat fee annual payments for concession cards, with ferry crossings free for card
     holders.

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