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catching the train,the shine is a little tarnished

July 3, 2010

This article is a Melbourne centric look at the problems with a privatised public transport network and why I think it has not provided any benefits since its adoption by Victoria over 10 years ago and worse why it has instead added additional costs to an already strained and decaying service. The privatisation of the Melbourne Public Transport Network has not worked and is in this public transport user and observer’s opinion an abject failure; in particular I am referring to the Melbourne municipal railway network. The for profit mentality is no more able to run a modern reliable and efficient train network than the state funded public servants that had attempted to do so before them. Actually I would argue that this model is the least efficient and economically viable of all options that the government could have attempted or implemented.

Public transport has always been subsidised by the state government, in so much as the revenue from ticket sales does not cover the operating costs to maintain and run the network and this shortfall in revenue or more correctly the operating loss is covered for by the public purse. This situation is not unique to Victoria and is pretty much the standard practice around the world with the vast majority of public transport networks some what subsidised by governments. The basic fact is that the majority of public networks would not even be run if the only justification for them to continue to operate was that if they at the least cover their operating costs and break even. Governments don’t run these networks for profit but as a service to the public. The imperative to have a cheap and efficient transport network out weighs the economic imperative to make a profit. It is similar to a multitude of other services that governments subsidise for the public good, and fortunately there are other many other criteria and reasons used in allocating scarce resources apart from just making a return on capital.

This is not intended to be a political discussion as in Victoria both sides of the political divide is tarnished in their handling of this issue, it was the Liberal party that first implemented this farcical situation but successive Labor administrations have failed to end the farce and the status quo has remained, and even when presented with the perfect opportunity last year to end this failed experiment they instead just installed another operator. This misguided belief that some how Metro could do a better job than Connex in running the train system fails to address the underlying problems let alone fix them.

The privatisation model used in this case is both unique and novel, due to the nature of the asset and the lack of revenue to cover all of the outgoing costs. Metro are contracted to operate the network, they do not own any of the assets associated with the network such as tracks, stations and rolling stock, they however are responsible for revenue collection and are paid a monthly fee to cover the running of the system, this is a variable amount as fines are levelled by the government for non attainment of operating benchmarks such as punctuality and frequency of services. I am obviously not privy to the contract details as no doubt they are “commercial in confidence” a handy way for governments to hide embarrassing details they don’t want the public to know and securitise.

Another thing that confuses the situation is that anther government body called  they are responsible for aligning all the operators of the public transport network from the bus, tram, municipal train train services into a coherent working body. The ticketing system used is the same for all the operators of these services  and revenue is shared between all operators based on ticketing data obtained from the ageing but perfectly fine met card system. We however are also lucky enough to have a new world class ticketing called Myki that is in the process of being implemented but that is a story for another day. I did however write an early article that referenced the problems that I felt Myki has brought to the table that I recommend that you read if at all interested the link;  Public Transport it does not need to be hi tech.

I also want to make it quite clear that I do not see Metro the current operators of the Victorian municipal train service as the villains in this mess. Metro has an excellent track record when it comes to operating complex transport networks world wide, there is nothing to suggest that if the appropriate resources were allocated to this network the outcomes would not be vastly different. No I think that blame clearing lays at the feet of the current and previous governments of all political persuasions. Public Transport is treated as a joke in Melbourne and the current state of the Melbourne train network is testament to the years of under resourcing, neglect and mismanagement by our elected representatives. It is an ugly blight on Melbourne’s landscape and unless urgent attention is applied to the network it will continue to decay and eventually may grind to a halt.

I remember when Melbourne hosted the Commonwealth Games recently and how ashamed I felt that visitors to this great city would have to avail them selves of the joke that is the railway network. I am sure that Melbourne is not alone and that nightmare stories of neglect and mismanagement abound in cities all around the world, and it is a travesty of justice for those cities as it is for mine.

The following is my list of why I think that privatisation of the railway networks has resulted in failure. This list is not exhaustive and is my interpretation of what I see is wrong with the system; conversely I would have loved to also provide a list of positive outcomes that privatisation has brought the Melbourne train network but the cupboard is so bare my friends that even old Mother Hubbard would blush with embarrassment.

  • The State Government uses it’s supposed non ownership as a way to deflect blame, if the trains are not running on time or any other problem it’s the operators fault. There is also no singular body responsibility for coordinating the whole system and because of that it is easy for blame to be shifted. It would appear that even the government minister that should be responsible takes a hands off approach or simply ignores the problems.
  • The system is poorly resourced, the network is old and degrading and the funding required to maintain let alone improve the service is sadly lacking.
  • By contracting a private commercial operator to run the service it just adds another layer of costs to the equation further lowering any possible reinvestment in the system.
  • Networks need to be planned and managed, by separating the ownership of assets away from the operator reduces an incentive to manage and improve those assets. This is a network whose foundation was laid over 100 years ago, and is in constant need of maintenance, the bare minimum is not enough.
  • Fining the operator for poor performance that is so well out side of their scope to fix serves no other gaol that to look like you are doing something. It’s a stick approach that has failed to work repeatedly and that maybe it is time to try the carrot. If an operator can’t obtain the desired standards either the standards are too high or there are other issues hindering that outcome that first need to be addressed.
  • Every time we change an operator and so far I can count 4 times already why is a rebranding of the trains, stations and uniforms worn by the staff required? I can imagine that this is a huge costly exercise that redirects scare resources that could be used to improve the network to a futile PR exercise. Why could we not just name the train network independently of the operator that runs it? and thus avoid this costly and often repeated waste.
  • If the new operator is really just a new management team with exactly the same employees and resources available as the previous operator why should we expect to see any tangible improvement if no other variables has changed. Worse still is that Metro has since taking over the network has consistently performed worse than their predecessors Connex. Expecting a different outcome when the same resources are at play is patently absurd.

I feel that if we want improved train services in Melbourne that we need to lobby our politicians and let them know that this is a matter of huge concern. I find it reprehensible that in this day and age that with the focus so much on reducing carbon emissions and that motor vehicles being a large contributor to this problem that there is still no renewed focus to not only improve but also to expand the train network. If the government is serious about public transport and I guess you would say that I am not at all convinced of that prospect, then they need to firstly acknowledge that there is a problem and secondly apply the appropriate resources the network so badly needs.

What do you think? Do you have an efficient, reliable and adequately resourced train network where you live? Please leave me a comment I would love to hear what you have got to say, thanks.

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2 Comments leave one →
  1. Michael B. permalink
    July 3, 2010 8:25 pm

    This is a big topic but I agree with almost every point you make, Bemused Australian Individual.

    Breaking a few issues down however:

    “The for profit mentality is no more able to run a modern reliable and efficient train network than the state funded public servants that had attempted to do so before them. “: Actually, as you point out later, the state funded public servants are still running and regulating many aspects of the system.

    “Public transport has always been subsidised by the state government, …….”: Actually before the government started taking it over towards the end of the nineteenth century, public transport was provided by a patchwork of private operators (Prahran and Malvern Tramways Trust, for example) albeit with the aid of varying degrees of government patronage.

    “I am obviously not privy to the contract details as no doubt they are “commercial in confidence” a handy way for governments to hide embarrassing details they don’t want the public to know and securitise. “: Yes, governments are accountable to the public in a number of ways where the ‘private’ sector is not (or is mainly not): Freedom of Information legislation, for example.

    “It would appear that even the government minister that should be responsible takes a hands off approach or simply ignores the problems.”: Kosky is is the best-known example of that!

    “…….the network is old and degrading…….” and “This is a network whose foundation was laid over 100 years ago,…….”: Just because something is old doesn’t mean it’s inherently bad; the fact that much of the old infrastructure is still working is a tribute to those who built and paid for it. In fact much of the ‘new’ infrastructure is much more vulnerable to power and computer failures and the like, while some of the old equipment can still function in those circumstances (so long as those sufficently qualified to operate it have not been gotten rid of). An example is manually operated level crossing gates, which are consistently acknowledged as being much safer and idiot-proof than more ‘modern’ versions. A lot of this is down to the contemporary obsession with workforce downsizing and counter-productive automation for the sake of automation.

    “Every time we change an operator and so far I can count 4 times already why is a rebranding of the trains, stations and uniforms worn by the staff required?…….this is a huge costly exercise that redirects scare resources that could be used to improve the network to a futile PR exercise.”: That’s because marketing and branding are ‘sexy’ while increasing service frequencies and ensuring adequate staffing are not.

    At the end of the day, it’s a cheaper short-term fix for governments to encourage reliance on road transport, which is why they continue to do it.

  2. July 4, 2010 2:28 pm

    Thanks Michael I am glad you like and agreed, I am going to do some other articles on our tram’s and buses. I will update the article to provide some clarity to the points you mentioned. again thanks for the read and do pass on it others if you think they may enjoy.

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