Policies: Privatisation

The PTUA remains opposed to the privatisation of any public transport service in Victoria on the grounds that 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 the provision of public transport, as long as the community retains, via a publicly accountable authority, control over timetables, fares and common infrastructure.

Competition in theory, and in practice

The PTUA especially opposes 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. Some essential network capabilities were weakened, 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 and to undermine public transport generally. For instance, Yarra Trams (under a former operator) marketed inner-city carpark+tram travel packages to train patrons. And changes to tram stops and to stations such as Melbourne Central made interchange between services more difficult and time consuming for passengers.

The more recent systemic efforts to integrate marketing, liveries and signage have been a step in the right direction, but must be backed up by further reforms 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 will not compete with cars unless and until 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 an increased cost burden for 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 public transport 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.

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 lax administrators and elected governments. For instance, train services are often altered to skip stops to maintain punctuality targets, with the government seemingly unable to prevent it.

The PTUA believes that unravelling this mess requires no less than the reassertion of public control of the system. What is 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.

PTUA policies

Reviewed: September 2015