Based on our analysis, we concluded that operational risks are allocated appropriately, with commercial operational risks allocated to the concessionaire, and contract management risks remaining with the SCSA.
The allocation of contract management risks to the SCSA is reasonable because, under government policy, it is not possible for overall responsibility for the management of the station to be transferred away from the State, which is the ultimate owner of the station.
The reward and sanction regime is adequately aligned to the service delivery requirements and the penalty weightings are an appropriate mechanism to direct attention to critical service areas.
Nevertheless, the application of the key performance indicator (KPI) regime is dependent upon effective performance measurement and assessment. We consider that the ongoing issues associated with KPI monitoring and assessment compromises the effectiveness of such a regime.
The SCSA needs to continue to address the issue of monitoring and measuring KPIs including improving performance management system data integrity, to enable effective management of performance to expected service standards through the KPI reward and sanction regime.