Re: [Vic] Age: Train fare pledge dumped

[mauried@tpg.com.au (Maurie Daly)]

On 4 Jan 2001 03:21:21 GMT, amorton@mudguard.ee.mu.oz.au (Anthony
Morton) wrote:

>Maurie Daly <mauried@tpg.com.au> wrote:
>
>>Vline passenger when it was Govt operated was generating in fare
>>revenue of 6.5 c/per net pass km ,and had operating costs of 33.7
>>c/per net pass km, ie costs 5 times the revenue.
>>(Source BTCE Analysis of the Rail Deficit Table 40).
>
>That 33.7c figure doesn't really mean much.  It includes notional interest
>calculated by the Commonwealth Grants Commission on all Federal rail grants
>dating back 100 years.  For its own peculiar reasons the Grants Commission
>treats public transport as a 'trading enterprise' to be charged interest on
>grant monies, while roads (for example) are a 'social service' attracting
>zero interest.
>
>I don't know how this phantom debt is handled post-privatisation, and I'm
>not sure if anyone outside the government does.  I suspect that the notional
>interest payments are absorbed by the government as the owner of the
>infrastructure.  Thus the subsidy to the private operators covers real
>operating expenses only, a much lower figure.


What then is the "true cost " of operating rail services in
Victoria,or indeed anywhere else in the country for that matter.
>
>In any case, there are plenty of regional public transport systems around the
>world with reasonable fares and good cost recovery.  These systems don't
>have a 'natural advantage' over Victoria's, but they do make an effort to
>encourage large numbers of paying passengers.  If Vline's cost recovery is
>poor it's because the standard of service is so poor that few people use it,
>and those that do mostly travel on concession fares.

The concession fares are a real problem as they totally distort the
market place ,but its a bit simplistic to say that Vlines cost
recovery is poor simply because they dont get enough passengers.
There simply may be not enuf passengers available in the first place.
Rails advantage over other forms of transport ,(like the car) improve
as the number of passengers per train increase and the distance the
train travels increases.
Also , the distribution withing Victoria of large towns outside the
CBD makes it hard for trains to work.
Apart from Geelong (which has a good train service) there simply arnt
many large towns which are a long way from Melbourne.
Large in the sense of NSWs Wollongong or Newcastle or Qlds
Rockhampton,Townsville,Mackay, Cairns etc.

If we look at a company like GSR for example who are currently the
only private rail operator running trains in Australia without the
benefit of Govt subsidies ,(I am looking at their Adelaide - Perth
trains which arnt subsidised),their fare structure indicates that
their costs must be around the 11 - 30 c/per net pass km , given that
GSR doesnt make huge profits.
Given also that they run very few and very long trains which also
advantage the cost efficiencies of rail then its likely that these
costs are as low as GSR can make them.
The cost structure of NXP since it runs far more trains with far fewer
cars means that its cost structures must be  higher , which means that
fare recovery is still far below true operational costs.
I would welcome any indications of what NXPs costs are.

MD
>.