Services on the Pakenham and Cranbourne lines have been partially suspended. Credit:Joe Armao "The people who are writing the contracts for Victorians have to be much smarter and much tougher." The government, however, argues that simply assessing the massive jump in public transport spending over the past decade purely against punctuality and reliability figures ignores significant increases in patronage and extra services now running. The Andrews government last month began negotiating possible contract extensions with both Metro Trains and Yarra Trams, with deals signed under the Brumby government expiring within two years. Melbourne's trains and trams were taken out of public operation and given to private operators to run in 1999.

A tram on St Kilda Road. The then premier Jeff Kennett declared at the time that, within five years Melbourne, would experience "the most wonderful change to the quality of public transport". Meanwhile, subsidies from the public were predicted to fall to zero by 2010. Instead, government payments for private operation of Melbourne's trains and trams has ballooned by 40 per cent in real terms in the past decade – from $938 million in 2004-05 to $1.33 billion in 2012-13. "Almost all of this increase has gone to the train franchisee, Metro Trains Melbourne, in the form of additional payments for maintenance," the report said. "Total payments to [Metro] grew by 63 per cent." They rose from around $600 million in 2004 to almost $1 billion by last year.

But the paper, to be released at The State of Australian Cities conference on Thursday, finds Melbourne's railway operators since 2004 have increased services by only 30 per cent. The report also explores the unforeseen problems that have emerged since the government signed the 1249-page contracts for Metro to run the city's rail system in 2009 – especially its much-loathed practice of station skipping. "Loose definitions in the contracts have allowed Metro to avoid penalties by skipping stops to make up time on delayed trains," the report finds. "In addition, caps on penalties since 2009 have meant that failing to meet targets is more a public relations problem than an issue of major concern to shareholders." Metro reduced its practice of station skipping only after intense pressure from government, following media coverage of the practice. The paper finds that the Andrews government must negotiate much harder to achieve more specific – and publicly assessable – commitments for improvements for the public from the operators.

Public Transport Minister Jacinta Allan said that there had been significant patronage growth on trains and trams in the last decade, along with increased spending and more services running. She said that performance requirements, penalties and enforcement measures would be considered in negotiations with private operators, "to ensure services improve as our transport system grows". Dr Stone said that, during the periods of the Baillieu and Napthine governments, there was "no appetite for chasing the operators". "They could have cracked down on station skipping. As soon as a loophole appears, they need to be using whatever method they can to put pressure on the operator." He said the new contracts, assuming the government proceeds with the current system, needed to look at far more than just punctuality and reliability, and focus on what users need.

"The large increases in maintenance funding [for Metro], they are not tied to any performance outcomes – things as simple as how many kilometres of track have been renewed. There is nothing in the public domain that explains what all this money is being spent on."