Request for information concerning transport rate estimates in Wellington Regional Council’s Draft 2011/2012 Annual Plan

The complainant requested the Greater Wellington Regional Council (GWRC) to provide him with “a copy of all the background calculations used to create the estimates for the transport rate tables for the Draft 2011/2012 Annual Plan”. The GWRC refused part of the request under section 7(2)(b)(ii) of the Local Government Official Information and Meetings Act 1987 (LGOIMA) on the basis that provision of some of those background calculations would be likely unreasonably to prejudice the commercial position of transport operators in the Wellington region.

The GWRC periodically seeks tenders from transport operators for the provision of public transport services in the Wellington region. The provision of such services is funded by fares paid by passengers, the transport rate levied by the GWRC on local authorities, and grants (subsidies) the New Zealand Transport Authority (NZTA) pays the GWRC. In its 2011/2012 Annual Plan estimates of expenditure, the GWRC indicated that the transport rate would be about $46.4 million. The request related to background calculations for the transport rate.

In the last tender round for transport services, transport operators completed “price proposal” forms for each route tendered for. In these forms, transport operators provided details for each route of the “gross contract price”, “total estimated revenue” (called also “anticipated revenue”) and “net contract price”. The expression “total estimated revenue” is the revenue earnt by transport operators from all sources, other than from the GWRC. Transport operators tendered a “net contract price” based on the difference between the “gross contract price” and their estimate of fare revenue (“anticipated revenue”) they would receive from passengers. The “gross contract price” is the total of the “anticipated revenue” and the “net contract price”. The “net contract price” largely determined the amount the GWRC originally paid to successful tenderers.

To assist it in keeping accurate information about the provision of public transport services, the GWRC created a transport rating model (TRM). The TRM includes information about the amounts originally paid by the GWRC to transport operators each year, the “Contract PA – cost” (annual cost of providing transport services for each route), adjustments to those amounts reflecting increases in NZTA subsidies, and operators’ actual revenue for routes they service. The withheld information includes the described information. If the GWRC released the described information, the complainant would be able to calculate the transport operators’ “anticipated revenue” and the “gross contract price” in the “price proposal” forms, together with the actual revenue earned by operators on a route-by-route basis. (During the course of my investigation, the GWRC stated it was prepared to release the following information in the TRM it had originally withheld: the “net contract prices”, contract prices amended to reflect changes to the originally contracted services and information relating to concessionary fares.)

Through public sources or as a result of a request to the GWRC, a member of the public is able to obtain a substantial amount of information about the cost of providing transport services and other information relating to those services. The information available includes the total amounts paid by the GWRC to transport operators for provision of transport services, the rates levied on local authorities, the names of present transport operators on a route-by-route basis and now the “net contract prices”. The complainant is now able to calculate operators’ gross earnings per kilometre on a route-by-route basis, but not their profit margins.

In terms of section 7(2)(b)(ii) of the LGOIMA, I formed the opinion that the release of the withheld information would unreasonably prejudice the commercial position of transport operators. For example, the releasing of the “anticipated revenue” in the “price proposal” forms would be likely to reveal transport operators’ strategies in the last tender round and also in future tender rounds, if GWRC seeks tenders on the same, or substantially the same, basis as the last tender. The releasing of that information would thus affect transport operators’ ability to participate competitively in future tenders for transport services in the Wellington region. The disclosure to the GWRC of transport operators’ anticipated and actual revenue is a point of difference from day-to-day tenders, which do not usually require disclosure of such information.

Ratepayers are entitled to have as much information as is reasonably necessary to enable them to ascertain whether the amounts they pay through rates for public transport services have a reasonable basis, and, likewise, users of public transport services are entitled to know whether fares are reasonable taking into account, among other things, the cost of providing those services. But it is not in the public interest that transport operators reveal their tender strategy by disclosing their “anticipated revenue” and actual revenue on a route-by-route basis. Keeping that information confidential will assist in maintaining a competitive environment for the provision of transport services in the Wellington region, and allow GWRC to obtain the most favourable price for the service.

Accordingly, I formed the opinion that, in terms of section 7(1) of the LGOIMA, the withholding of the information at issue is not outweighed by other considerations which render it desirable, in the public interest, to make that information available.

For the reasons set out above, I formed the opinion that the GWRC had good reason to withhold the information at issue under section 7(2)(b)(ii) of the LGOIMA.