Wellington Scoop

Serco – first the prisons, and now it wants to run the trains

logo serco

As the government continues its inquiry into Serco’s discredited administration of Mt Eden prison in Auckland, here in Wellington there’s further scrutiny of the British outsourcing company – because it’s competing to take over the running of our commuter trains.

The Regional Council decided last December to shortlist Serco and another two tenderers, one of whom will take over the service that’s currently run by KiwiRail’s TranzMetro. At that time the council intended to choose one of the companies around the middle of this year and have a contract signed by the end of the year. But there seems to be a delay in making the choice, according to this announcement last month:

The Council plans to award this contract in early 2016, with the new contract expected to take effect from 1 July 2016.

The delay may well be linked to the rapidly-diminishing reputation of Serco, which was, nevertheless, successful last year in winning a tender to take over the running of a sleeper train service between London and Scotland. When it was awarded the contract, the BBC reported that the rail workers union was “deeply concerned.” The union’s acting general secretary said:

“This is a company with a truly shocking track record in the delivery of public services. Quite frankly, with their appalling list of failures in the UK and globally, they should never have even been considered as contenders for the Scottish sleeper service. The logical option of public ownership was not even looked at. Serco is a company that has a reputation for promising the earth and delivering quite the opposite as they seek to maximise profits and sweat their assets for every single penny piece.”

And the general secretary of the UK train drivers union expressed concern about zero-hours contracts:

“Up to now, no one has taken on board the concerns of the staff and their futures… We need quality jobs, not zero-hours contracts, and we need proper terms and conditions for the men and women who drive this vital service.”

As Toby Manhire reported in the NZHerald last week, Serco’s performance is also being criticised in Australia:

Serco runs Australia’s notorious network of detention centres – places that have attracted years of controversy amid allegations of sexual and other physical abuse, inhumane living conditions, rampant self-harming and woeful medical care. An inquiry by Australia’s Human Rights Commission found children who had been held on Christmas Island were “in a state of gross neglect”. Last year, a 92-page letter signed by 15 doctors who had worked at the Christmas Island detention centre condemned “numerous unsafe practices and gross departures from generally accepted medical standards”.

Who are the other two organisations that are competing with Serco to run Wellington’s trains? KiwiRail is one of them. It wants to keep the job, but it’s had to involve an Australian company because the Regional Council says that local experience isn’t enough. The other competitor is linked with the people who made the Matangi trains. Here’s how the council describes the three short-listed tenderers:

• Transdev Australasia Pty Ltd in a joint venture with South Korean-based company Hyundai Rotem. Transdev operates Auckland’s train service, Sydney’s light rail, ferries in Sydney and Brisbane, and bus services in Sydney, Melbourne, Brisbane and Darwin. Hyundai Rotem is the manufacturer of Wellington’s electric Matangi trains and has extensive experience maintaining rolling stock around the world.

• Keolis Downer in a joint venture with KiwiRail. Keolis Downer operates the Gold Coast light rail network in Queensland, Australia and Keolis operates Melbourne’s Yarra tram services. KiwiRail operates Wellington’s train services and maintains the region’s train fleet.

• Serco – an international service company that operates a range of rail services in the UK, the Middle East and Australia.

(That last description should be more specific. Serco operates the Dubai Metro. In March it sold Great Southern Rail in Australia, saying “we cannot provide the focus and investment GSR needs to thrive.” And last year, after 17 years, it lost its contract to run London’s Docklands Light Railway, which carries 100 million passengers a year.)

Serco’s proposal for Wellington is the only one that isn’t a joint venture, but it has been involved in such relationships in the past. In 2003 with Abellio (the British arm of the Dutch state railway) it won a 25-year concession to run Merseyrail services in and around Liverpool and Birkenhead. A year later, the same partners won the Northern Rail franchise, which provides services to more than 500 stations in Merseyside, Greater Manchester and West and South Yorkshire. But the Daily Telegraph reported last year that Serco was ending the Abellio relationship and would tender separately for an extension to the Northern Rail deal.

Serco is trying hard to expand its activities in New Zealand. It’s also shortlisted to run Auckland’s trains. In July, NewsTalk ZB reported that Auckland Transport was being tight-lipped about whether Serco’s fall from grace as a prison manager would harm its chances of running the city’s trains. Similarly, our Regional Council hasn’t said a word on this subject.

And why are tenders being sought for the trains? It seems to be a requirement of the government’s newish Passenger Transport Operating Model. The description on the NZTA website needs updating (it’s more than three years old), but one of the key objectives aims

to grow confidence that services are priced efficiently and that there is access to public transport markets for competitors.

Hence the arrival of Serco, eager to compete against KiwiRail, to expand its New Zealand presence and to make more money. Not only from prisons. But also from passenger trains. Let’s hope that the Regional Council is paying attention to the “numerous unsafe practices” report from Australia and the “shocking track record” statement from England.

Inquiry into Serco extended to end of October
Another Serco failure


  1. Trev, 5. October 2015, 11:52

    Good on Wellington.Scoop for digging this information out first. Heaven knows what Serco-run trains will be like; anything like their prisons, then commuting in Wellington will be a riot!

  2. Observer, 5. October 2015, 17:47

    Of the short-listed three, I would only have confidence in Keolis as a good operator.

  3. NZSage, 5. October 2015, 20:22

    Why change at all? I’m a daily user of the service and frankly it’s second to none with its staff a credit to Tranz Metro. How could any of the three options improve on that? Or perhaps customer service is not a priority for the Regional Council?

  4. Rob, 5. October 2015, 20:30

    Think of the benefits. You might be able to get the guards to smuggle you a new cellphone? [via Twitter]

  5. luke, 6. October 2015, 11:40

    I’m looking forward to Serco’s fight night on the trains.

  6. Carlton, 6. October 2015, 22:14

    If you want real opinion about Serco, ask Transport for London for who Serco ran the Docklands rail system for many years, winning a number of awards. Don’t ask a union official who has never worked for Serco or been their client.

  7. CC, 7. October 2015, 6:08

    Carlton – do you mean this award winning outfit? http://www.telegraph.co.uk/finance/newsbysector/transport/10945368/Docklands-Light-Railway-awarded-to-Keolis-in-blow-to-Serco.html

    The self-serving data provided by Serco has already had the light shone on it over the NZ prisons debacle.

  8. Nigel, 8. October 2015, 8:31

    Good informative piece.

  9. Phil C, 13. October 2015, 3:32

    Carlton, the Docklands Light Railway was a new build with the capability to be run on a fully-automated, non-manned basis (which it was for a number of years.) If you could pick any railway to run, the DLR would be it for ease of maintenance and low running costs. The success of the DLR reflects much more on the designers and TFL than it does on coupon-clippers like Serco.

  10. Geoff A., 13. October 2015, 15:26

    In Oz we have had nothing but trouble with Serco – believe the company is also known as Skynet in the UK.

  11. Mike, 13. October 2015, 16:50

    Phil C – the Docklands Light Railway has never been “run on a non-manned basis”. Operation is driverless, but every train has a crew member on board.

  12. Phil C, 14. October 2015, 23:29

    Mike: I beg to differ. I used the Lewisham-Bank branch of the DLR from around 1999-2006 and for several years there were no staff members present on trains on that part of the line (presumably because tickets gates had been installed on the extension and no drivers are required i.e. keeping costs down.) They did, latterly, include staff, who even pretended to drive the trains and open doors from time to time.

  13. Mike, 15. October 2015, 15:34

    Sorry, Phil C, but we must be talking about different railways. With the odd exception, DLR stations are unstaffed and therefore do not have ticket gates. That’s why every train is staffed – see https://tfl.gov.uk/transport-accessibility/help-from-staff for full information.

  14. Phil C, 17. October 2015, 4:21

    Mike, they are staffed now, but on the opening of the Lewisham to Bank line, there were no staff on the trains. Trust me. I travelled that route for several years, working in the City and at Canary Wharf and as a train geek made a good note of the fact that there were no staff on board and the automated nature of the trains. I don’t know about the other routes (Bank-Stratford et al), however. The Bank end of the line has always had gates (as it joins with the underground.)

    How often did you use the DLR?

    (South London resident for two decades…)