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Legislative Assembly for the ACT: 2014 Week 13 Hansard (Thursday, 27 November 2014) . . Page.. 4198 ..

I make the point that those PPPs failed because of the patronage risk assumptions taken by the private sector in those projects and the fact that they overestimated the amount of patronage, the amount of tollway revenue they would be getting.

In this project patronage risk resides with the territory.

The business case for capital metro estimates that passengers will pay $5.5 million in fares during the first full year of operation. Minister, what level of patronage risk is there for this project and what are the potential impacts on the budget?

MR CORBELL: For the purposes of determining the overall economic benefit associated with this project, you have to take into account what people will pay to use the service. That is just one of the many parameters that have to be taken into account in determining the overall cost and benefit of the project. So that is why that figure is there. As I have said previously, issues around risk are apportioned between the PPP consortium and the government. In relation to patronage, the government has determined that that risk will lie with us. But what that means as a result is that we can determine a price which is consistent with and integrated into the broader public transport network services provided by other operators such as ACTION. Further, it allows us to make sure that other issues such as ticketing can be integrated and seamless so that people can move from bus to light rail and back again in as seamless a way as possible.

MADAM SPEAKER: A supplementary question, Mrs Jones.

MRS JONES: Minister, will the availability payments be made public?

MR CORBELL: I refer Mrs Jones to my previous answers in relation to that question.

MADAM SPEAKER: A supplementary question, Mr Coe.

MR COE: Minister, has the government used a light rail fare of $1.01 because you expect fare evasion to be high?


MADAM SPEAKER: Supplementary question, Mr Coe.

MR COE: Minister, will the government be making incentive payments to the operator if fare revenue is greater than expected?

MR CORBELL: It is simply premature to reflect on that at this point in time. Those are matters the government will work through in the context of the delivery of a contract. I am not saying the government will be doing that. I am simply saying there will be a whole range of parameters that will be subject to discussion as we go through that detailed negotiation during the tendering period. It would simply be pre-emptive to speculate on those things at this time.

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