2022-03-14 General Committee Meeting Agenda

GENERAL COMMITTEE MEETING AGENDA                                                     14 MARCH 2022


6.    REPORTS DIRECT TO GENERAL COMMITTEE


3     NOOSA NORTH SHORE FERRY REVIEW AND PROPOSED TENDER

Author            Property Advisor, Denis Wallace
                  Corporate Services Department

Index             ECM/LEAS13/0040/59.05 Noosa River Ferry Services

Attachments       1.    AEC Review - Extracts of Benchmarked Cable Ferry Services
                  2.    AEC Review - Extract of Operating Models Available to Council
                  3.    AEC Review - Extracts of Recommended Operating Model
                        Opportunities & Risks


EXECUTIVE SUMMARY
This report provides feedback on the outcomes and recommendations of an independent review
of the Noosa North Shore Ferry service operating model. Council commissioned the review by
AEC Group economic consultants to inform its upcoming procurement process for the next service
commencing in 2024 following the expiry of the existing lease. The review benchmarked Noosa’s
existing service against other cable ferry operations in Eastern Australia, indicating it is one of the
most highly patronised and financially sustainable services in the country.
AEC assessed the range of operating models available to Council and recommends two primary
models, which involve the outsourced operation of the service and either Council owned or
contractor owned vessels. Market sounding indicates an active market appears to exist for both
these operating models.
Staff recommend the fully outsourced model is pursued through a new tender, as it retains the
demonstrated financial sustainability strengths of Noosa’s historic model, which have avoided
ratepayer subsidisation. This tender approach will allow competitive market responses from a
range of experience operators having different procurement opportunities for vessels.
A recommended tender process is outlined, which aims to award a contract in late-2022 for the
next service term commencing on July 1, 2024.

RECOMMENDATION
That Council note the report by the Property Advisor to the General Committee Meeting dated 14
March 2022 and agree to proceed to the tender process for a new ferry service to commence in
July 2024, based on the fully outsourced operating model identified as Option 2 and the
recommended tender approach outlined in the report.

REPORT
The purpose of this report is to provide feedback on the outcome of an independent review of the
Noosa North Shore Ferry service model and outline a recommended tender approach to procure
the next ferry service commencing in July 2024.
1.    Background
Council operates the Noosa North Shore Ferry service via a commercial lease agreement currently
held by Noosa North Shore Ferries Pty Ltd (NNSF). The service provides the primary vehicle
access to residents, workers and visitors to the Noosa North Shore.
In April 2019, Council considered a report providing a review of the ferry service and recommending
award of a lease extension available under the agreement with NNSF. Council decided to award

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