The SA government says taxpayers will not be "paying a cent" of a $94 million potential penalty to break a rail privatisation contract and return Adelaide's train and tram network to public hands.
The government today declared its intention to push ahead with plans to scrap the $2.14 billion agreement between the previous government and Keolis Downer, saying the economics of the deal did not stack up.
Transport Minister Tom Koutsantonis said instead of delivering $118 million in savings, the controversial privatisation would have instead cost taxpayers up to $120 million over the contract's potential 12-year life span.
He said the extra cost was largely because 134 rail staff who did not transition to the private sector when the deal was struck currently "remain unassigned" but on the public payroll.
"We have public servants who are being paid not to work," Mr Koutsantonis said.
He also accused the previous government of planning to slash the number of passenger service assistants (PSAs) by a third.
Analysis of the contract had revealed a termination clause that could leave taxpayers exposed to "as much as $94 million in termination and disengagement fees" — but Mr Koutsantonis said that would not deter the government from pursuing its pre-election commitment and scrapping the deal.
"We never said that there wasn't any compensation clauses in the contract — we're saying we're not paying any of it, and we're not. We won't be paying a cent of it," he said.
Mr Koutsantonis said he had met with senior Keolis Downer staff and believed it would act as "a good corporate citizen" and not pursue legal action.
"I don't think they're happy about [that], but they understand the electoral mandate," he said.
"Keolis have shown to us over the last 12 months that they are good corporate citizens and they are prepared to sit down in good faith and negotiate.
"I don't think the Australian arm of Keolis is interested in having a commercial or legal dispute with any government in Australia."
Keolis Downer declined to comment.
Blowout claim is 'creative accounting'
Opposition transport spokesperson Vincent Tarzia rejected suggestions the government could break the contract without incurring costs.
"For the government to come out and say that the taxpayers of South Australia aren't going to be exposed to some termination clause is just rubbish," he said.
"The public transport system has never worked better here in South Australia — we know it's safe, it's reliable, it's efficient.
"They know that it's a contract that stands up, and that's why they haven't torn it up."
Mr Tarzia accused the government of "creative accounting", saying the public cost of the deal would have reduced significantly as staff were redeployed.
"If there are 130 jobs that can be redeployed to other sectors, that's actually not a cost; that's an opportunity," he said.
"We know that a number of these staff are going to be redeployed … into meaningful work right across the public sector."
The government said a further announcement regarding its intention to scrap the privatisation was "imminent" but did not elaborate on how soon that might be.
