Save money! With privatisation!

Infrastructure Australia released a study today claiming that privatising public transport can save billions of dollars:

Media release: Franchising public transport services could deliver $15.5 billion in funding for new transport services (Full study here)

I had a quick read of the study and I have to say, I found it utterly unconvincing. The executive summary talks up privatisation, but the study text doesn’t really present any compelling arguments for or against it.

It provides a case study of Melbourne’s tram and trains, but the graphs showing patronage and punctuality/performance don’t really show how privatisation/franchising affected this. After privatisation in 1999, patronage was stagnant initially, only shooting up in the latter part of the 2000s when population growth, the economy and CBD growth really kicked in.

A section discussing service reliability (eg cancellations and punctuality) notes that the Auditor General concluded many of the factors there were taxpayer investment in infrastructure and fleet upgrades.

It talks about forecast cost savings from other PT services around the country being privatised/franchised, but doesn’t really talk about the cost savings out of Melbourne’s existing franchises (perhaps because there haven’t been any) – instead only talking about costs since 2004, which is five years after privatisation occurred.

The study does compare Sydney vs Melbourne operating costs (Melbourne is lower), claiming the main difference is public vs private operation, but seems to ignore the fact that Sydney trains have two staff aboard each service vs Melbourne’s one — something which changed before privatisation occurred.

Thanks to some well-placed headline figures suggesting that the savings can be spent on [insert local city upgrade here], it’s had plenty of media coverage around the country, including The Age and Brisbane Times.

Ultimately it’s not about who runs the services, it’s about whether it’s done well. Privatisation doesn’t change that.

New operators might bring in experience and innovation from their other operations, which potentially means improvements.

But the risk is if governments don’t put in adequate checks and balances, operators will simply cut costs and the service will decline, discouraging passengers and ultimately resulting in fewer people using it: higher subsidies per passenger, and traffic, equity of access and livability impacts on our cities.

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5 Replies to “Save money! With privatisation!”

  1. It would be worthwhile including something about Melbourne’s recent experience in contracting the 903 and some other routes to Transdev, based on a cheaper quote. Despite many years of experience within ptv and its predecessors on contracting bus services, they seem to have got this one wrong. One in 5 are late, many services are cancelled, and patronage is has fallen. This was reported in The Age, and also in a reddit forum.

    https://www.reddit.com/r/melbourne/comments/67cm6h/one_in_five_transdev_buses_run_late_as_passenger/

  2. As for one in 5 late, it may sound bad but really need previous operators figures to compare.

    Though Transdev seem to fail in lot of areas I dare say they’ve actually improved with on time running.

    For example worst route in that article 220 use be much worse under MBL days, In MBL days even just bus on Sundays use be 30 minutes late! You dont get that any more. There is also other examples espically on ex MBL routes which were known for thier mass late running at any time off the day.

    Though there seems to off been improvment to on time running reason its hard get high figure is lack of bus priority(remember they got even less priority than trams) There spots of bus network where delays are very erattic can be up to 30 minutes dekays eg Collins St, Spencer St, Dudley St. When got such delays and so littile bus priorty even with new run times there littile hope of having such at target of 85% on time.

  3. While Transdev’s on-time running of MBL routes may have improved, that’s due to large increases in timetable padding. While that may have been necessary, that’s not due to Transdev’s improved operation of the system.

    Indeed, Transdev’s operation of the former Ventura/National Bus routes is abysmal, with declines in on-time running, services delivered and therefore, patronage. That’s despite much padding being added to the timetable on most routes.

  4. @JamesA Under MBL days looking at run times, layover shifts never happened. That only started happening under Transdev. So they should least get credit for that.

    As for ex National routes your right many being have lot issues under Transdev. Though depends on the route. Most of manningham routes are having issues.

    But the Garden City/Latrobe Uni routes doing better than before. These were another set routes that late running issues(though not as bas as MBL routes) and the previous 259/251/253, 246/250/251 corridor was rather confusing.

    The Fishermens Bend routes were winners in 2014 when got fair few extra trip(though they quickly filling up)

    The there long list of issues that affect any Transdev route in general that didnt have before.

    Shortage of buses(More buses now needed in peak but no growth in fleet hence shortage of buses)

    Poor Maintenance(Meaning more breakdowns meaning missed trips

    Graffiti(Graffiti not cleaned so builds up over many months till gets very bad)

    Poor Consultation(Like over now scrapped Greenfield changes)

    So overall though might few good things they’ve done overall there seems be more bad than good performance from Transdev

  5. @JamesA Also extra time on ex MBL routes is more realistic than padded run time thats there just in case of delays i.e Sita 427/428
    and previously 420

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