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.
>
>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.

All true enuf.
I just wonder whether the potential population base in rural Victoria
is enuf to make a profit making rail service viable.
Australia is generaly by world standards sparsely populated for the
size of the country,and this is the case in Victoria as well.
You certainly cant make a profitable operation out of running 3 and 4
car trains all around the state.
Much cheaper to run busses up to 4 cars.
Busses also dont have to pay track access charges.

>
>>Whilst Govt rail operators can operate continuously and make
>>losses,the private sector cant.
>>It has to at least break even.
>
>I think you'll find that National Express does make a profit once you factor
>in the government subsidy and performance bonuses.  It's just that the
>profits aren't as high as they'd like.
>
>>And theres no point in blaming the Private operator.
>>The problem is privatization of the service.
>
>I entirely agree.  As Paul Mees always says, you can't blame private companies
>for being rational profit maximisers.  The shareholders of National Express
>expect them to be making money, not providing good public tranport for the
>sake of good public transport.  This of course puts them at odds with the
>people of Victoria.
>
>The government's duty however is to the people of Victoria, not the
>shareholders of National Express.  You can draw your own conclusions.
>
>>If the Govt is unhappy about the fares rising,it is fully free to
>>subsidise the fares to keep them constant.
>>Cant somehow see this happening though.
>
>If the government were now to increase their subsidy so as to maintain fares
>at their old level, it would amount to a successful blackmail attempt by the
>private operator on the State of Victoria.  Private operators aren't entitled
>to receive a higher subsidy just because they want it.
>
>On the other hand, the government could threaten to reduce their subsidy on
>the grounds that they can now expect to collect more fare revenue.
>
>Regards,
>Tony Morton
>
>Public Transport Users Association             http://www.ptua.org.au/
>
Govts generally have multiple reasons for privatization of public
services.
One being ideology and the other to cut their own costs by pretending
that somehow the private sector can do things so much more efficiently
than can the public sector.
>From what Ive seen of NXPs services, in general they are a carbon copy
of what Vline pass was operating when it was Govt run,so I cant see
how the operation can be any cheaper ,and if some of the operation is
ending up as dividends to NXP shareholders ,then this must be absorbed
by higher fares.
The only way to bring fares down is by introducing genuine competition
into the rail passenger business,of which currently there is none.
Of course the argument will be that this is too hard,or that the
market cant support multiple operators.
If NXP are expected to introduce new rollingstock, high speed services
etc,then fares can only skyrocket to pay for it all.
Glad I dont live in Vic anymore.

MD