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Misleading Rates

After our last meeting more thought was given to the way in which the rates were offered and agreed upon. It was quite frankly mind boggling to us when first brought up at the meeting in the city, but when confirmed by you that this was the way it was done, it seriously astounded both Les and I. We strongly disagree and actually think it quite bizarre that it was formulated in this manner. Are you sure this was how the PwC meant this to be? It was not explained this way at the Focus Group Meetings and I have never heard of anything done like this before. There was always a bit of Leeway added for Km’s in the past but not to the actual rate. Are you sure that it is not being confused with the usual IN HOUSE budget that would normally apply?

At the first DEC meeting we were given a rather unexpected answer for the way our runs are mapped. Les and I are both perplexed by the rather bizarre and unusual calculating method used. This is my attempt at an explanation.

The Point to Point Google mapping method, (which we all know does not allow for any extra travelling necessary to complete a run) will not be changed.  We will be paid only what Google advises is the “route” even though the average run would exceed this amount of Kilometres regularly. This is because an allowance has already been added to our rates. Yes, you read it correctly – already added. Are you all scratching your heads at this moment? Or, are you racing to find your copy of the document which you signed and agreed to, so as to check where you missed this “little beauty”. Don’t bother, it’s not there.

The new rates were devised with each class of vehicle in mind to allow for those extra Capital and Running costs involved for each class. (Of course this is now moot due to Category Lowering) At the same time apparently, an amount (percentage) was added to the base rate in each class as an allowance to cover extra kilometres that may be necessary to actually perform the run. (For safe turning, medium strips, one way streets, schools with long driveways etc etc). This is why the Department see the Google “point to point” method of measuring, as being the “true” distance mapped. In other words, we are already receiving payment for all those extra kilometres that we may need to drive on a daily basis. Confused yet?

According to the rates schedule, 50 km’s in a People Mover is $209.71. But the actual amount we are being paid for those 50 km’s is $199.22. The difference of an additional $10.49 is added in case you need to drive more than 50 km’s for that run. This extra amount equates to around 2.5 km’s. There would be many runs where an extra 2.5 km’s may be about the average extra amount driven, therefore, this addition could be adequate. But, there would be many other runs where the allowance of an extra 2.5 km’s would still be substantially insufficient.

The main issue I have is that it was never explained to us this way in either the first OR second Schedule of Pay rates issued. The copy I received of these rates certainly implies that I am to be paid for each loaded km I drive. To be precise, the implication any rational person would perceive from this schedule could be nothing else. One would believe that payments are based on each kilometre needed to be driven to perform the run using the shortest practicable route which ensures the shortest time necessary for both students and TSO’s to be in the vehicle.

If I am signing to be paid per Km, then I would expect to be paid PER KM. If I am given a rate for those Km’s, then I expect to be PAID that rate. I could never anticipate that the schedule of rates were NOT what they so visibly appear to be. I could never anticipate that those rates included a notional allowance, especially if it was not written as such on this legal document.

Another reason that makes this whole unexpected calculation so strange is because of what we were originally asked to include in our tender quotes. Both in the Tender documents and at the briefings, we were given quite detailed instructions on what we should include (and not include) in our prices – vehicle purchase costs, running costs, administration, wages and legislation requirements, profit and unloaded km’s. At NO time were we advised that we should also include an allowance in our rates to cover the extra LOADED kilometres that we MAY or MAY NOT need to drive. And why would we? After all, isn’t it written that it is the LOADED Km’s that we are PAID to drive?

If we were NOT told to include an estimation for the possibility of driving loaded, yet UNPAID Km’s in our original offers, then it would seem apparent that this strange calculation method had not then been conceived. Therefore, how strange that Chris Raper, who was very empathetic to our plight, and PwC, an experienced and large finance and pricing firm should conceive of a method which includes all potential associated costs, yet did not define this precisely on the completion of the new revised rates. My bet is – he didn’t.

Operators will see this as being:-

1) An “after thought” excuse, to explain under payments which deny them their rightful and expected pay rates.

2) Another example of the lengths the ASTU will go, to deprive operators of their deserved rates by retracting them at every opportunity.

3) Total disrespect toward operators because of the ASTU’s complete ignorance in business costing.

4) Another example of how contract clauses are continually manipulated and interpreted in a self serving manor.

5) A contrived method to falsely mislead the media and in turn the public with announcements of new rates (publicly available on the DEC website) as being an appeasement to improve the public opinion of both the Minister and the DEC, while at the same time those rates are being quietly and underhandedly eroded.

Operators were given a list of rates that are perfectly understandable to them as payment for the loaded kilometres that are driven. To now say that this is NOT the case is to admit that operators have been deceitfully misled into signing a contract that misrepresents the truth of that contract.

When the new rates were being formulated, any government department would also need to budget for the proposed rates and that this budget should include an additional percentage to cover miscellaneous costs. This would be an IN HOUSE budget and should not be confused with the amount set as the rates, which I believe has been done in this case.

The reason there is a need for improvements and transparency in this contract are due to the continual and deliberate deception in the practices of the ASTU.

They CANNOT offer rates then once agreed upon, lower them by using some feeble, confusing and dishonest reasoning.



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