$1.2 billion in extra subsidies shows public transport should be back in public hands: experts
Media Release, Sunday 9 April 2006
More than $1.2 billion has been wasted on additional public transport subsidies since private operators took over Melbourne trains and trams in 1999, according to Melbourne researchers.
The researchers, led by Dr Paul Mees from the University of Melbourne’s Urban Planning Program in the Faculty of Architecture, Building and Planning, say the figure could rise to $2.1 billion by 2010.
The researchers have produced a report on public transport ownership in Victoria, proposing that a publicly-owned transport management organisation should replace the current private management model.
The report will be presented at the University of Melbourne on Monday 10 April at 12 midday in the University’s Jim Potter Room, Old Physics Building.
The report also reveals what Dr Mees said were previously “secret” franchise agreements between the State Government and Connex and Yarra Trams. The agreements are due to expire on 30 November 2008, and can only be renewed if the Government gives notice by 30 November 2007.
“If the Government doesn’t renew the franchises, Melbourne’s trains and trams will revert to public ownership in 2008, without the risk of compensation claims,” Dr. Mees said.
The report’s authors are calling on the Government not to renew the franchises. “It would be a tragedy if the Government passed up the opportunity to put the public interest back into public transport,” Dr Mees said.
The researchers have based the report on subsidy figures released by the Auditor-General late in 2005, and figures released by Connex and Yarra Trams shortly afterwards. The independent report is the first analysis of this information.
“Extra subsidies in Victoria have doubled the cost of running trains and trams, increasing from $280 million in 1999 to $560 million this year,” Dr Mees said.
“Train, tram and bus operators now receive $1.2 billion a year in subsidies and fare revenues. This is more than world-class overseas operators such as Vancouver’s Translink spend, but we still have an inadequate system.”
Dr Mees also noted that no other city in the first world had followed Melbourne’s lead to create a privatised public transport system.
“We have become a salutary example of why privatised urban public transport does not work – all the best systems across Europe and North America remain under the control of public agencies,” he said.
The researchers say a new system needs to follow the example of some of the best operators around the world. The report compares Melbourne’s privatised system to Translink in Vancouver, which last year displaced Melbourne as “the world’s most liveable city”; Zurich’s Zurcher Verkehrsverbund, seen by many experts as the best urban public transport operator in the world; and Perth’s Transperth, said to be Australia’s best operator.
The current annual budget, made up of subsidies plus fare revenues totalling $1.2 billion, and which the researchers say could increase if the private operators are successful in their lobbying for subsidy increases, is twice the budget of Translink. This is despite the fact Melbourne has only 1.4 times as many public transport users.
“In effect we are paying around 30 per cent more for a system that is used 30 per cent less,” Dr. Mees said.
“It is time for Melbourne to develop an efficient public transport system where reaping profits is subordinated to the common good.”
The report’s full list of authors is Dr Paul Mees, University of Melbourne; Dr Patrick Moriarty, Monash University; Mr John Stone, Swinburne University; and Associate Professor Michael Buxton, RMIT University.
The report will be available online from Monday morning at www.abp.unimelb.edu.au, but journalists can access a copy on Sunday from Matt Johnston or Paul Mees on 0437 367 490 (Matt) or 9419 9183 (Dr Mees).
MEDIA OPPORTUNITY:
**What:
Launch of the report “Put the public’s interest back into public transport,” by Cr Janet Rice, Chair of the Metropolitan Transport Forum and Mayor of Maribyrnong. Dr Mees, Dr Moriarty, Mr John Stone and Associate Professor Michael Buxton will also provide an address and be available for interview.
**When:
12pm, Monday 10 April 2006
**Where:
Jim Potter Room, Old Physics Building, University of Melbourne
Map: www.pb.unimelb.edu.au/CampusMaps/Parkville.pdf
To arrange parking call Matt Johnston 8344 0561 or 0437 367 490
For more information:
Dr Paul Mees
Faculty of Architecture, Building and Planning
University of Melbourne
Tel: 8344 8731
Home: 9419 9183
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