The PTUA policy on privatisation was adopted in 1997 with overwhelming support from the PTUA membership. Since that time, privatisation of public transport has occurred.

However, the PTUA remains opposed to the privatisation of any public transport service in Victoria. Control should not be handed to private operators who are not accountable to the community. We do not oppose private operators having a role in providing public transport, provided the community retains control over timetables, fares and common infrastructure.

Competition in theory, and in practice

We particularly oppose the split of public transport into separate operators by mode. The split of tram and train services into four separate operating companies between 1999 and 2003 did untold damage to the integration of both day-to-day operations and customer service, with some system maps altered to show only particular companies’ lines, and many trains in the fleet altered to be unusable on half of the lines.

Some operators worked to compete with each other, such as Yarra Trams advertising inner-city carpark+tram travel packages to train travellers. And changes to tram stops and to stations such as Melbourne Central made interchange between services more difficult and time consuming.

The current integration of marketing, signage and such is a step in the right direction, but must be backed up by an overhaul of services and timetables so the system is integrated in fact, not just appearance.

Cars are the dominant mode of transport in Melbourne, and public transport can only compete with cars if it provides an integrated, cheap, quality alternative, whether in public or private ownership.

Managers of arterial road systems have never been deluded into thinking they could improve cost recovery by privatising the road system and creating several road builder-operators that compete for traffic. Road traffic engineers and planners know the value of a centrally coordinated system, as public transport operators and politicians seemingly do not.

Public versus private ownership

The PTUA maintains that there was no advantage gained by placing the assets of the system in private ownership. Experience, here and overseas, has shown that the result of privatisation is deteriorating service, together with escalating costs for passengers and taxpayers.

Private companies have required substantial subsidies, over and above their original contracts, to run public transport services. Available information indicates that the subsidies paid to the privatised train and tram operators are around 50% higher than those formerly paid to the PTC to run the same services, even after adjusting for investment in rolling stock. Transport Ministers themselves have admitted there were no real cost savings from privatisation. Fares have also increased faster than inflation, so that passengers are footing the bill for privatisation as well. The PTUA is opposed to using public money to subsidise profits of private operators rather than returning it to the community in the form of better services and a more liveable city.

Britain’s sell-off of public transport, touted as the ideal to which ours would aspire, had disastrous results. Privatised services there suffered patronage declines and greater fare increases than those which remained public. It is believed that Britain now has the most expensive public transport in the world. There have been a number of serious fatal accidents in Britain in the past few years. For many of these, the finger has been pointed at private infrastructure companies cutting costs. The PTUA does not want to see Victoria proceed down this road.

Managing the System

Since privatisation, Melbourne’s private operators have breached many aspects of their contracts and been allowed to get away with it by lazy bureaucrats. As part of the contracts, some minor extensions to the system (such as trains from St Albans to Sydenham and trams from Mont Albert to Box Hill) were to be paid for by the operators. However, the cost of these projects was shifted back to the Victorian taxpayer.

The PTUA believes that unravelling this mess will require resuming public control of the system. What will be needed is a Transport Authority with the power to set timetables for all transport modes, whether publicly or privately operated. The model for this is the Verkehsverbund (‘Transport Community’) in many cities in central Europe. An example is Zurich’s ZVV, which coordinates fares, timetables, and funding for the mostly private operators in the Canton of Zurich. A new Transport Authority should, as a minimum, renegotiate contracts with private operators to ensure services are provided on a ‘gross cost’ basis with the Authority being fully accountable for growing patronage across the entire system.

Reviewed: September 2011