Commuters, Ratepayers Hit In Wellington’s PT Cost Crisis

Wellington public transport users face a 3% increase in their fares this year and the capital’s council is fretting about how it’s going to deal with mounting public transport costs. at a time too many people have been put off using the present trains.

It’s proposing a 2.2% increase in rates for the next year but a report to the  council meeting on the rates issue has revealed a shock over the cost of its contract with Tranz Metro for the suburban train service.

The report revealed that

• The latest budget estimates from Tranz Metro show increased costs of $2.4 million.  Greater Wellington’s share (the regional council)  is $963,000.
• The council has to make up the difference to the operator between fare revenue and actual costs.
• Patronage on trains continues to drop because people are put off by the unreliable service, compounded by the work on getting the service ready for the new electric trains
• The council said further work “is to be undertaken to agree a budget with Tranz Metro.”
• The cost of maintaining rail rolling stock is forecast to increase because of increases in the fleet size with the arrival of the new Matangi EMUs in 2010/11, and the maintenance requirements of those trains.
• For budget purposes, a 3% public transport fare revenue increase has been forecast during the next financial year.
• The council has said it will be in serious trouble if passengers don’t return to the trains

A drop in Wellington passengers has deepened the problem

Council chair Fran Wilde says that the council still plans to deliver those major public transport improvements, as well as better flood protection to affected communities, “but we have tightened up spending in other areas and focused on being as efficient as possible.

“If contracted or committed spending associated with the new Matangi trains, real time public transport information and additional flood protection was removed, Greater Wellington would be proposing a rates decrease of 2.4% for the 2010/11 year, such being the extent of cost management throughout the organisation. Transport upgrades and flood protection will continue to have a significant impact on our budget in the next few years.

“We will need to see how we can manage the 9.4% rates increase projected for the 2011/12 year, again without being able to change the contracts in place for major capital items.”

Ms Wilde says unexpected risks in the coming year which could affect all this included “ movements in oil prices and interest rates and rail track access charges and infrastructure costs.

And we’ll see more and more councils wrestling with the problem of funding public transport, thanks to the new Government farebox recovery plan. That’s  the revenue collected from public transport passengers. A farebox recovery ratio measures the contribution fares make to the cost of providing public transport services, and is typically expressed as a percentage. This as government money shifts to building more motorways.

We should see an announcement any day about the details of  Auckland’s bus and train fare increases.

FAREBOX RECOVERY PLAN; Earlier concern
Farebox – The Trojan Horse