2022-03-14 General Committee Meeting Agenda

GENERAL COMMITTEE MEETING AGENDA                                                 14 MARCH 2022


    Noosa’s service appears to be the only double cable ferry service in Australia, with this
     providing carrying capacity, traffic movement and maintenance scheduling advantages.
    Contractual models, crossing fees and carrying capacity vary widely across the
     benchmarked services. Most services are State-run, with only a few run by local
     governments. The majority of services are either heavily or fully taxpayer/ratepayer
     subsidised. Only the Noosa, Daintree and Jardine River services appear to run on cost-
     recovery basis. Extracts of the benchmarked services’ details are included in Attachment 1.
    A number of local governments are actively looking to transfer their ferry operations to State
     Government responsibility.
    The benchmarked operating models are predominantly via contractual agreement, with the
     responsible authority owning the vessel and the contractor operating the service. Only the
     Noosa North Shore and Moggill ferry services involve the contractor owning the vessel/s,
     though the Daintree River service also previously operated in this way.
    Only one benchmarked service provided a priority resident lane, being the Daintree River
     northern approach operated for 3 months of the year. Most services operate with remotely
     operated boom gates, there is limited video monitoring for queuing, payment methods are a
     mix of cash only and EFTPOS, and the majority use payments on-board the vessel.
    Benchmarked services include a range of resident concessions, with Noosa’s level of
     concession one of the highest.
    Stakeholder feedback themes included hours of operation, fees, payment options, crossing
     infrastructure and Cooloola Recreation Area visitation pressures. These inform AEC’s
     service level and procurement recommendations. Some stakeholders requested their
     feedback remain confidential.
    QPWS indicates it is seeking to address sustainable visitation for the Cooloola Recreation
     Area and observed that “peak period loads are where impacts are most evident and potential
     management measures may include influencing a ‘spread’ of total annual visitation to
     transfer a percentage of peak usage to under-utilised times and/or sites”.
    Market sounding indicates an active market appears to exist for both the own-and-operate
     and operate-only contracting models.
Importantly, AEC’s financial modelling points to sufficient revenue and return for the service to
continue to contribute to Council’s general revenue and avoid ratepayer subsidisation under the
recommended operating models, which are discussed further below.
AEC identifies 10 different operating options, being combinations of council-owned and contractor-
owned vessel models under different fee and revenue share arrangements - see extract in
Attachment 2. AEC recommends Council considers two primary models outlined below. An
extract of AEC’s assessment of the associated risks for both options is included as Attachment 3.
Option 1. Council owned and contracted operations under a fixed fee for service plus revenue
share - on the basis that Council has access to cheaper capital to fund the vessel purchases, the
fixed fee component reduces the revenue fluctuation risk for the contractor, and the revenue share
component provides a financial incentive for the contractor to ensure that vehicles are transported
in an expedited and efficient manner.
This option sees Council procure its own vessels and outsource the operation of the service.
Identified strengths are Council’s lower cost of finance and ability to enter into a shorter-term
contract for the operation. Weaknesses of this option are Council’s lack of expertise and capacity
to procure and maintain vessels and the asset management and maintenance imposts that would
transfer to Council for marine infrastructure, which is not an existing area of its core business.
There is also greater potential for less contractor oversight and maintenance of Council-owned
vessels.
Option 2. Contractor owned and operated under a fixed fee for service plus revenue share - on the
basis that Council does not have the capability to design and procure suitable vessels for the

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