The South Australian government says it has struck a deal to scrap the privatisation of train and tram services.
The Labor government announced on Sunday that it had signed a deal with train operator Keolis Downer Adelaide (KDA) and tram operator Torrens Connect to hand back operations by 2025.
That move fulfils an election promise by Labor to reverse the former Liberal government's privatisation of tram services in 2020 and of train services in 2021.
While the contracts were for an initial eight-year term, with an option to extend, the government said it would not pay early termination fees of up to $94 million.
However, the government will pay about $36 million over the next two years to cover what Transport Minister Tom Koutsantonis described as "mobilisation costs, not compensation costs".
"These are costs we would pay at the end of the contract anyway to bring it back into public hands," he said.
Mr Koutsantonis said that amount would cover the costs of purchasing intellectual property, physical assets and retraining, accreditation and legal fees.
"These are costs — like training, hiring, purchasing IP, management systems, ticketing issues, [and,] of course, scheduling systems — all the things you need to run a modern railway service on top of paying the contract, which we do each and every year."
In a statement, KDA said it would hand back operations to the government by January 31, 2025, but would continue to handle customer service and security management until June 2027.
KDA also said it would manage the maintenance of fleet and infrastructure until 2035.
Mr Koutsantonis said KDA would receive a "good contract" for the maintenance of the train system, but said he did not have the exact cost to hand.
"Like our buses, like our other public services, we don't run all of the maintenance for our hospitals and our schools. They're run privately," he said.
Mr Koutsantonis said about 130 public servants who were currently "unassigned" since the privatisation, would be "re-offered jobs back into our public sector".
He said public transport was an "essential service" that "belongs in the public control".
"We can take the profits of our rail and tram service and reinvest them back into a public good," he said.
Speaking ahead of the announcement on Sunday, state Liberal MP Matt Cowdrey said feedback had been that the service had "actually improved" since the privatisation.
"The trains have always been owned by the people of South Australia, simply operated by somebody else," he said.
"If that has not changed, if the operation in some aspects is still being undertaken by this company, then it is clear that the South Australian Labor party has broken [its] promise to the people of South Australia," he said.
Mr Cowdrey also said any arrangement with KDA that "hasn't gone to an open tender process clearly provides the potential for lost savings and higher cost to South Australian taxpayers".
