Yarra Trams executives face accusations from senior staff of financial mismanagement and inappropriate handling of conflicts of interest, amid a raft of job losses at the public transport operator.
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executives → face → operator
A whistleblower report submitted to the company’s management in April by Yarra Trams’ head of procurement operations alleges millions of dollars in unusual advance payments to vendors, in a late financial-year scramble to avoid penalties for missing social procurement targets.
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report → submit → targets
An internal investigation into the allegations was launched immediately by the company’s senior lawyer – only for the lawyer, the whistleblower and four other procurement staff to be made redundant before it was completed.
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it → launch → lawyer
The Age can also reveal that the Independent Broad-based Anti-corruption Commission interviewed at least one other former employee, separate from the whistleblower, regarding the same allegations.
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Commission → reveal → allegations
The two separate interventions come amid a tumultuous round of job losses at the company just two years into its nine-year, $7 billion state government contract to run Melbourne’s tram network.
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interventions → come → network
Since taking over in December 2024, a joint venture between global transport giant Transdev and big builder John Holland has made 36 employees redundant – most from Yarra Trams’ Bourke Street head office.
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employees → take → office
Yarra Trams’ contract includes a requirement to spend a proportion of its budget with firms providing social benefits, including Aboriginal employment, disability employment, and gender equality initiatives.
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contract → include → employment
The operator faces penalties of up to $1.5 million a year if it misses the contractual benchmarks.
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it → face → benchmarks
The Age has spoken with 13 current and former Yarra Trams staff about the matters contained in the whistleblower complaint and report to IBAC.
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Age → speak → IBAC
Though unwilling to speak publicly about the confidential material, all asserted the matters raised were legitimate.
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matters → speak → material
The whistleblower alleges, in a 34-page report, that millions of dollars of contracts were inappropriately fast-tracked last June to avoid financial penalties.
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millions → allege → penalties
The arrangements include large advance payments for security services, espresso machines and barista training, and personal protective equipment.
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arrangements → include → services
The whistleblower was concerned the process meant appropriate services were potentially not procured.
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services → mean → ?
“Obligations relating to social procurement are designed to deliver outcomes for disadvantaged Victorians through the channelling of public expenditure into enterprises that deliver jobs and development,” the report stated.
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report → relate → jobs
“Proper process would have been to set evaluation criteria for the required service and give favourable weighting to suppliers who can show social outcomes.”
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who → set → outcomes
Instead, emails, invoices and payment receipts show a last-minute effort by Yarra Trams management to hit strict social procurement spending targets before the financial year ended.
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year → show → targets
To avoid fines in its contract, called “abatements”, senior executives authorised a rush of advance payments to social vendors before June 30 – logging the spending on paper to clear contractual benchmarks.
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executives → avoid → benchmarks
Internal correspondence reveals executives authorising payments – including $500,000 to a security provider, $300,000 for the “design, development and manufacture of [a] custom uniform”, and a $300,000 coffee deal for espresso machines to be installed in offices.
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machines → reveal → offices
A June 2025 invoice shows Yarra Trams issuing a $500,000 advance payment to a “social outcomes security group”.
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Trams → show → group
The security company asked for questions to be directed to Yarra Trams.
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questions → ask → Trams
A $300,000 purchase order shows money being paid to a uniform company that had not even developed the product at the time of purchase; a spokeswoman said the company had since delivered 2000 high-visibility vests, “with work undertaken at our North Melbourne manufacturing facility” that provided “employment opportunities for refugee and asylum seeker women”.
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that → show → women
Yarra Trams also entered into a deal with a coffee supplier that donates a share of it profits to charity.
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that → enter → charity
It supplied the tram operator’s offices with espresso machines, beans, and maintenance.
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It → supply → machines
Internal records show an overall contract value of $300,000, with more than $10,000 dedicated to “barista training”.
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10,000 → show → training
The coffee company declined to respond to questions.
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company → decline → questions
In a May 2025 email chain discussing the strategy, Yarra Trams’ chief financial and commercial officer Marc Walter approved the initiative, writing in response: “This is approved to proceed.
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This → discuss → response
No further approvals required to commence.”
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approvals → require → ?
It is not suggested that Walter endorsed any inappropriate spending to hit the target – only that he told staff they could proceed with the contracts.
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they → suggest → contracts
The whistleblower report questions whether using public franchise funds to prepay for coffee machines and undeveloped products represented genuine value for money or was simply complying with state government social procurement rules to avoid fines.
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using → question → fines
It also details the January appointment of a Brisbane-based consultant for $2000 a day.
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It → detail → 2000
The Age has seen the contract confirming the wage, plus flights to and from his Queensland base.
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Age → see → base
The executive who hired the consultant also submitted a conflict-of-interest form acknowledging the consultant previously reported to him at mining company BHP.
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consultant → hire → BHP
The form’s proposed conflict-of-interest management plan was left blank, but CFO Marc Walter countersigned the document.
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Walter → propose → document
Responding to the allegations, a Yarra Trams spokeswoman said that all procurement processes were subject to strict probity requirements.
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processes → respond → requirements
“We have reviewed these matters and are satisfied the procurement and workforce-related decisions were subject to the relevant approval and oversight processes,” she said.
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she → review → processes
She said Commonwealth legislation prevented Yarra Trams from commenting on “potential whistleblower matters”.
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legislation → say → matters
On corporate job cuts, the company stated that while 36 roles were made redundant, its total workforce had expanded by approximately 120 roles since December 2024.
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workforce → state → December
Addressing specific vendor contracts, the operator said procurement decisions were made “based on operational requirements, value for money and contractual obligations”.
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decisions → address → money
The company defended the coffee contract as “a trial of a managed coffee-service model, including coffee machines, coffee supplies, maintenance and training services.
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company → defend → machines
The coffee machines have been installed and are operational”.
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machines → instal → ?
…and 4 more, not listed.
The Aporia
