Recommendation

3.1  To enforce the SDA performance specifications, the SCSA should make demonstrable progress in addressing the recognised inadequacies of the current KPI measurement and assessment regime.

RESPONSE by Chief Executive Officer, Southern Cross Station Authority

The SCSA would like to thank the audit team for the professional and comprehensive manner in which this performance audit has been conducted.

The audit has been of benefit to the SCSA in providing an independent review and endorsement of the strategies and directions identified by the SCSA within the current Corporate Plan.

With regard to the review of the Global Settlement Agreement, the SCSA agrees with the conclusion reached by the audit team.

For clarity, it should be noted that the costs of the delays encountered by the Developer as a result of contamination, were a shared risk between the SCSA and the Concessionaire, with each responsible for 50 per cent of the costs of removing non identified pre existing contamination. This was the risk allocation under the original SDA and was unchanged by the Global Settlement.

With regard to the review of the Operations and Service Delivery phase the SCSA agrees with the Recommendation in the Report. However, it should be appreciated that the Operating Phase of the PPP commenced just over one year ago and for a significant portion of this period was in a transition phase, designed to enable a smooth hand-over.

During this period, the SCSA has identified areas where performance could be improved and both parties are working together towards achieving the agreed service levels and continued improvements in performance. This settling-in period has been invaluable in establishing the groundwork for the future and enabling the development of an effective working relationship between the SCSA and the Concessionaire.

The SCSA has identified that the measurement of some of the Service Standards and related Key Performance Indicators (KPIs) needs to be clarified to ensure that performance monitoring is transparent and measurable and that there is integrity and auditability of the data generated by the Performance Management System. The SCSA will continue to work with the Concessionaire to achieve these objectives.

Whilst it is expected that commercial tensions will exist where there is a reward and sanction regime, which is normal practice for the operation of a PPP project, the SCSA considers that gaining a greater clarity of the required service standards is essential to deriving the full benefits of this PPP arrangement.