The Andrews government has renewed contracts with both Metro Trains and Yarra Trams to continue operating Melbourne’s public transport for the next seven years.

But the contracts, worth $7 billion, will see tougher performance targets and penalties for both services – coinciding with expected major disruptions to the network during construction of the Metro tunnel.

Trains will be required to be on time 92 per cent of the time per month, up 4 per cent, while trams will need to be on time 82 per cent of the time, up 5 per cent.

In the event that half the train network shuts down, or results in commuter chaos for longer than two hours, Metro will face fines of up to $700,000 on top of $1.25 million fines a month for poor performance.

Metro Trains will also be banned from skipping stations if services are running behind schedule, and Yarra Trams will be forbidden from altering their services to meet punctuality targets.

Trams will also see increased fines of up to $500,000 per month for poor performance.

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In addition to the stricter performance targets and penalties, including daily inspections of stations, trains and major tram stops. Failure to meet maintenance standards on the network could incur $10 million in fines. A ban on wrap-around tram ads will be implemented.

Alongside harsher penalties Metro Trains will also receive a larger $1.25 million performance bonus should performance targets be met.

The Rail, Tram and Bus Union has been campaigning for some time to have public transport operations opened up for public scrutiny.