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WRITTEN QUESTION TO THE MINISTER FOR TRANSPORT AND TECHNICAL SERVICES BY DEPUTY G.P. SOUTHERN OF ST. HELIER
ANSWER TO BE TABLED ON TUESDAY, 7th NOVEMBER 2006
Question
- Would the Minister provide to members the content of advice he received from the Jersey Competition Regulatory Authority regarding the tender process recently completed for the schoolbusand leisure services contracts, and the potential for a reduction in competition thereby produced?
- In his answerto an oralquestionon 24th October 2006 theMinister stated that it was the opinion ofmy advisors - and indeed,myself - that the estimatesubmittedbyConnexforthe proposed summer service was indeed optimistic, whichiswhywe did not base our calculations onthoseestimates'. Would theMinister supply members with a detailed account of the measures usedby his Department to calculate theestimated revenuesfor the proposed summerservice?
Answer
- In January2006,when the future operation of the schooland leisure services were beingconsidered,advice was sought from the Jersey Competition Regulatory Authority(JCRA).The process for the intervening period 2007-9was discussed and the plans for the tender process outlinedfor both theschool and summer services. While theJCRAwerehappy to provide guidance ontheimplications (if any)oftheCompetition (Law) 2005, they didnot see their role asbeing that of regulator undertheMotor Traffic (Jersey) Law 1935. The content of the advice from the JCRA did not extend to the potential reduction in competition. Discussions withtheJCRAindicated that a tenderprocesswas considered to provide a sufficient competitive element.
- During the tenderprocess, both contractors were advised ofthe actual income for the Easylink service for 2005. The evaluation procedure identified that the projected incomeshownin the Connex tender for the summer service was optimistic. As a result, the financial evaluation of the Connex tender applied the actual 2005 and projected 2006 Easylink income, uplifted this figure as the Connex service will operate seven days per week as opposed to the Easylink six day service, then applied a range of sensitivities to this new projected income.
W hen the Minister considered both tenders, the income level proposed by Connex and the alternatives
calculated by the department were available to demonstrate the difference in cost between the two tenders and the overall cost to the States of Jersey depending on the final income level achieved by Connex.