2022-03-14 General Committee Meeting Agenda

GENERAL COMMITTEE MEETING AGENDA   14 MARCH 2022




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GENERAL COMMITTEE MEETING AGENDA                                                                              14 MARCH 2022

                                ATTACHMENT 3.            AEC Ferry Review — Extract of Recommended Operating Models Opportunities & Risks

    Option 1 — Council Owned Vessels
              NOOSA NORTH SHORE FERRY REVIEW                                                                                                                                   AEC TH
       Model       feyesen tans                                                                       ene                                                                                th) eee
        Contracted Operations with Fixed Fee for Service plus Revenue Share
      Operational/    Council utilises a contractor with the requisite ferry / marine industry experience to Less flexibility to adapt to current and future Council plan and strategy adoption requiring Medium (M32)
      Service         operate the service.                                                              negotiation and potential compensation should contractual requirements not be clear or
      Delivery        Technology improvements to improve the customer experience (EFTPOS, booking       need to be amended.
                      systems, etc.) can be advanced via conditions in the new contract.                Ongoing customer and or political enquiries / complaints relating to the ferry operation. Medium (M28)
                     Council will remain to some extent at arm's length regarding the ferry operation and day-
                      to-day issues.
                      Council can, via conditions in the new contract, ensure the contractor handles the day-
                      to-day customer service enquiries / complaints relating to the ferry operation.
                      Contractor performance monitoring against service benchmarks / KPI's will be able to be
                      conditioned in the new contract.
                     Contractor has a strong incentive to move as many vehicles as possible during the day.
       Govemance/     Procuring a contractor with the required expertise in the marine / ferry regulatory Council does not have the capability to design and procure suitable vessels for the Extreme (E88)
       Legal/         environment and operations will mitigate some legal and regulatory exposure.      contractor.
       Regulatory     Contractor re'ationship management and performance will be guided via the new     Legitimate contractors are dissuaded from tendering under a fixed fee for service plus Medium (M52)
                      contract terms and conditions.                                                    revenue share model given associated financial risks.
                      Council still has an opportunity to undertake business planning to guide future contract Contractual renegotiation and financial compensation associated with potential State High (H72)
                      management performance.                                                           Government imposed permits/restrictions.
                      Ferry marketing and communicaton can be delegated to the contractor via new contract fe Council is exposed to ICT security breaches if technology obligations are not passed on High (H72)
                     conditions.                                                                        to the contractor.
       Human          Council will avoid the need to directly employ and manage staff under existing local Contractor may not be able to find suitable resources.                      Medium (M32)
       =
                      intemal services and Property branch management.
      Financial/      Tendered prices will exclude a commercial return on capital component civen Council The upfront capital investment required in new / upgraded ferry infrastructure results in Medium (M32)
       Economic       would be purchasing lhe ferries.                                                  deferral / delay of olliet priviily projects in Council's capilal plan.
                     Upside revenue fluctuation benefits resulting from increased crossing volumes above Financial exposure from reduced crossing volumes compared to budget forecast,   High (M40)
                     budget forecast will be shared with the contractor, but annual price increases do not including exposure to any State Government imposed permits/restrictions.
                     need to be shared with the contractor if a unit-based system based on the contract year Current fees may nct be sufficient to maintain Council’s retum from the ferry operation High (H60)
                     fees is established (as per the current contract).                                due to increased tender prices and capital costs associated with new ferry acquisitions.
                      Financial efficiencies achieved by the contractor via employing staff under non-local Contractor will tender a revenue share arrangement based on conservative demand High (H60)
                      government awards should be re‘lected in tendered pricing.                        estimates to reduce financial risk over the course of the contract term.
       ~                                                                                                Selatan
                      ensure appropriate asset service levels are maintained.                           management planning, establishment and delivery of annual preventative and reactive
                                                                                                        maintenance regimes, renewals forecasting, etc.).
       5           a                                                                                    ete
      Reputational                                                                                      outcomes and additional Council / Property branch staff pressure and workloads.
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