Melbourne's privately operated train and tram networks have regularly failed punctuality targets, but nevertheless reaped millions of dollars worth of bonuses.
Metro Trains met its monthly punctuality target of 92 per cent only six times in the past year and Yarra Trams met its target of 82 per cent seven times, according to figures released on Thursday.
The late services cost the private operators $750,000 and $300,000 respectively in penalties.
"As a result, both operators have more work to do, and that's recognised in the contract so there is more stretch on them," Public Transport Victoria chief executive Jeroen Weimar told reporters.
But performance bonuses paid to the two operators far outweigh the penalties.
Yarra Trams received $1 million and Metro earned $6 million in bonuses.
"There is a combination of carrot and stick in these contracts and we're targeting sticks to those areas that we really want to see improve and we're seeing some encouraging signs of progress being made," Mr Weimar said.
"There's also bonuses to incentivise going beyond the 92 per cent, to go beyond the 82 per cent."
In the past 12 months, about 2300 customer surveys were completed on the tram and metropolitan train network, recording an increased level of customer satisfaction.
There have also been other improvements, with tram cancellations and the non-completion of routes dropping 25 per cent, train faults down 20 per cent and overall network infrastructure faults down 30 per cent.
Commuters are being warned to prepare for service disruptions on Friday, due to forecast hot weather.
Up to 60 tram services will be cut and network speeds will be slowed with tracks expected to expand in the heat.
Mr Weimar was "absolutely" confident there would not be a network meltdown.
But it's not just track infrastructure that will struggle under the heat - about a third of all of Melbourne's trams do not have air conditioning and it could take until 2025 to retrofit them.
Opposition public transport spokesman David Davis said more needed to be done to modernise the fleet.
"We have a tram system that is not performing, that is not meeting its targets, a tram system that is antiquated," he said.
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