Sunday, July 10, 2005

Public Transport Privatisation: What Went Wrong?

Posted by AmishThrasher at 11:43 pm
Jeff Kennett
The Trains were Jeffed
Well, it's Sunday night and, perhaps unsurprisingly, none of our politicians have replied to the e-mail about public transport. Apparently politicians aren't accountable on weekends (just kidding... politicans are unaccountable on weekdays too). As I said, half of the interest in this excercise in what replies we get back from them - just as interesting is what sort of replies we get, and how promptly. Here's an excerpt from an informative article on how privatisation has damaged the system to read while we wait: (click the link for the full article)...

Public transport privatisation in Melbourne: What Went Wrong?
Privatisation was heralded as leading to improved services, though the introduction of new and refurbished rolling stock, improved punctuality and reliability, increased service levels and innovative service and marketing policies.

The first change passengers noticed was the rapid loss of the modest degree of system integration that had existed under the PTC. Each operator redesigned vehicles, timetables and stops in its own livery, and began to treat the other operators as rivals - a pattern that would be familiar to observers of the post - privatisation scene in the UK. For example, for many months timetables for train services operated by Hillside trains could not be obtained from Flagstaff, Melbourne Central or Parliament Stations, which are operated by Bayside Trains - even though the Hillside services called at those stations. Even the operators eventually conceded that this did not constitute an improvement in services by announcing, in April 2002, their intention to reinstate common 'branding' and a common livery for vehicles and infrastructure (Sunday Age, 7/4/02, p. 1).

The extent to which the new measures amounted to a reversion to the situation that had applied under the PTC was underscored by the suggestion (see above) that the operators might even revive the PTC's brand-name, 'The Met.' However, when the re-branding was launched in August 2003, it emerged that the 'Metlink' brand-name and livery would be applied in addition to those of the private operators, not as a replacement, further confusing the picture for patrons.

The principal aspects of service quality that have been reported on since privatisation are cancellations and on-time running. The media has widely reported that these have improved since privatisation. It is true that there have been modest improvements since the first set of figures, covering the 3rd quarter of 1999, were released, but these figures do not represent the true pre-privatisation situation. The reason for this is that reliability levels had deteriorated in the lead-up to privatisation, due to operational problems associated with the splitting of the rail and tram networks to form four separate entities. These problems were particularly serious in the case of the rail system. So an accurate comparison would be with the situation, and the trend, before the commencement of privatisation.

The Auditor-General of Victoria noted in 1998 that the Public Transport Reform Program had produced a considerable improvement in the PTC's punctuality and reliability, and that the situation was expected to continue to improve (Auditor- General 1998, Part 5). Comparisons are complicated by the fact that some of the definitions used have altered (see note to table 2), but it appears that the situation deteriorated in the lead-up to privatisation due to the disruptive effects of preparation for privatisation. Although punctuality and reliability have improved since 1999, they are no better than was the case in 1997, as can be seen most clearly in the figures for cancellations, the definition of which has not changed. Given that the situation was improving under the PTC, it appears that privatisation has produced no improvement, and possibly a deterioration.

Some improvement in service levels was also promised as part of the franchise agreements, notably in the case of Yarra Trams, which undertook to upgrade daytime weekday service frequencies on all its routes to 10 minutes. Five of Yarra's ten routes already complied with this under PTC management; the remaining three ran every 12 minutes and have since been upgraded to 10 (7.5 in one case). In addition, the franchise agreements provided for two modest network extensions: a two-kilometre extension of tram route 109 to Box Hill and a seven km extension of the St Albans rail line to Sydenham. These were all genuine improvements, but were comparable to similar service and network expansion that had already taken place, and which would presumably have continued, under PTC control.

What was widely anticipated, although not explicitly provided for in the franchise agreements, was that the requirement to increase fare revenue would lead the operators to introduce innovative service, fare and marketing strategies. To date, there has been little evidence of successful innovation. A number of changes were introduced (e.g. 'shopper express' services on Hillside trains; single-mode yearly tickets by both rail operators), and withdrawn after a short time.

The major lasting new product has been Yarra Trams 'park-and-ride' scheme, whereby motorists parking at three city-edge car parks receive free tram travel as part of the cost of their parking. Some patrons of this service are likely to have formerly driven their cars all the way to the city centre, but given that the park - and - ride stations are on the edge of the CBD, the overall reduction in pollution and traffic congestion is likely to be minimal. Another effect of this program is likely to be a transfer of passengers who currently use public transport to travel all the way to the city, providing a classic instance of 'wasteful competition' that is likely to worsen environmental outcomes. Presumably for this very reason, National Express, who operated both Bayside Trains and Swanston Trams, did not introduce a similar scheme.
The failure to better the PTC's performance in service provision and innovation is the principal reason why the private operators have failed to meet their patronage and revenue targets. It is clear from the revenue projections that an immediate, dramatic improvement in standards was expected to flow from privatisation; it is equally clear that this has not occurred and shows no sign of happening.