Against the ‘Privatisation’ of Transport

Please support efforts to keep public transport in public hands. Sign the petition at https://ourtransport.org.au/take-action/

Public transport is a public service that needs to be run for the public good, not the private profit. The privatisation of public transport is an ideological obsession of the right, which consistently makes baseless claims in order to further this ideological agenda. Privatisation consistently fails to live up to the hype of its proponents and typically does not provide any benefits for the travelling public or the taxpayer. It is purported that the privatisation of services will deliver benefits such as a more reliable and innovative service delivery as well as better value for money for taxpayers. None of these things are true. Instead, a decrease in services, higher costs, and poorer outcomes for workers and commuters alike are the only things that are realistically achieved by the privatisation of public transport. 

This is currently a major issue in New South Wales. The New South Wales State Government has plans to privatise the state owned State Transit Authority, and contract out its services to private bus operators. This comes despite the fact that previous sales of State Transit operated services under the current government failing to deliver on their promises. Across bus and ferry services in Sydney and Newcastle, private operators replacing State Transit have not been able to provide a better service, and in many cases, have actually delivered worse outcomes than those achieved by State Transit.

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Privately run transport services are worse than government delivered ones – Transport NSW Blog Collection

One of the most common claims surrounding privatisation is that it will help improve reliability of services. This is simply not true. In Region 6 (Inner Western and Inner Southern Sydney), bus services were sold to Transit Systems in July 2018. Since then, Transit Systems has only met key performance indicators (KPIs) for on time running and customer satisfaction three times in over 20 months. On average, nearly 10% of all Transit Systems in Region 6 services ran late, no better than the last 20 months of State Transit operation. Over the same time period, services operated by State Transit average an on time running rate of over 96%. This demonstrates that privatising bus services has not improved the reliability of bus services at all.

The NSW Government points to the fact that services operated by private operators in Western Sydney consistently perform better than State Transit run services. Whilst true, this isn’t a fair comparison. Traffic on the backstreets of Western Sydney is much more consistent and less congested than the roads in the Inner City areas that State Transit operates. In fact, the experience of Transit Systems in the Inner West underscores that it is the operating conditions, not the private operators that are allowing for more reliability in service operations. The only solution that will lead to a sustained improvement in on time running in State Transit operating areas is additional bus priority infrastructure. Private operators can’t magically part traffic and they most certainly cannot build infrastructure on publicly owned roads. To improve reliability, the NSW Government needs to invest in more bus priority infrastructure rather than spending time privatising services.

The reliability argument can also be translated to rail services. Whilst we cannot access on time running data for privately run trains or trams in Sydney, comparisons of services elsewhere in Australia or overseas demonstrate that privately run rail services are highly unreliable. Privately run trains in Melbourne are the most unreliable in Australia and consistently suffer from cancellations and breakdowns at a much higher rate than all other cities. This is despite being the only major city that has a privately run rail system in Australia. For many years after privatisation of rail services in Melbourne, services would be randomly terminated before the terminus and turned around in order to decrease late running. This would leave commuters stranded and decreased overall reliability of the rail network. The Victorian Government later restricted the practise. In the UK, privatisation of rail services saw cancellations double and overall services levels decrease. This demonstrates that government run services are more reliable for commuters than privately run services.

In addition, the idea that privatisation delivers more innovative services is laughable. In fact, it appears that ‘more innovative services’ has become a codeword for service cuts. Across the Inner West and Newcastle, there has been reductions in frequency of services, the closure of bus stops and cancellation of routes across the network. The most notable “innovation” that has been introduced to date by private operators is the introduction of “On Demand” bus services. However, according to high profile transit planner Jarrett Walker, these demand responsive services are highly inefficient and areas serviced by such services are usually better serviced by better fixed route services to increase patronage instead of removing fixed route trips in favour of demand responsive options.  In the Concord area of the Inner West of Sydney and the southern suburbs of Newcastle, there has been an overall cut to transport services through the replacement of fixed route transport by “On Demand” buses.

Beyond the counter productive “On Demand” experiment, there has not been any significant innovations to transport service, and the service offering has not become more innovative. Typically, private operators have developed highly inefficient and ineffective service offerings on public transport. This is evident across Western Sydney where service levels are significantly lower than the Inner City and in cities overseas such as Auckland. Innovation in public transport hasn’t been delivered by the private sector, and it would be misguided to believe that it would be delivered in the future. 

Further, that privatised services offer better value for money for taxpayers is an ideological fantasy of the right. State Transit is one of the most cost effective and efficient operations in the world thanks to a cost cutting drive in 2017. Purported cost benefits are actually based on costs considered in a decade old Infrastructure Australia report, which didn’t take into account the potential for the public sector to also achieve the same cost base that private operators did. State Transit offers one of the lowest costs per passenger cost bases in transport today. Other government run transport services tend to be highly cost effective as well. In Victoria, cost to taxpayer of private rail operators were up to 50% higher than the cost prior to the privatisation of services. The way that privatisation achieves the promised cost efficiencies – cutting driver pay, cutting maintenance and cutting services. The key argument here is that this doesn’t make a service better value for money, it simply represents cuts to essential spending. Our bus drivers don’t deserve have their pay cut to minimum wage, the public doesn’t deserve to catch poorly maintained buses and they don’t deserve service cuts. Private operators pay their drivers significantly less than public operators do across Australia. The average private sector bus driver is estimated to earn over $20 000 less than the average public sector bus driver.

The reality of Sydney’s privatisation model is that it is the same buses, on the same routes with the same drivers for the most part. The only way that they can actually achieve a lower operating cost is to spend less in areas that need the spending. It is also important to note that private companies need to make a profit from these services, whilst the government doesn’t. This means that instead of reinvesting any profits back into better services as the government operator would, the profits will go to the shareholder of the private operating companies. 

Most of the problems that the government claims are present with State Transit can actually be fixed by the government itself. Service reliability has been impacted by bad timetabling and insufficient layover time between trip to make up for delays. The government sets timetables and service levels. Reliability is also impacted by a lack of proper investment in infrastructure. The government controls infrastructure spending and what infrastructure gets built. The government can introduce innovations and any private sector innovations in NSW still require government approval. Finally, private operators would be lucky to even match the cost per passenger of State Transit, a cost which the government has to cover regardless of who operates the service.

In the UK, public transport patronage fell 50% as a result of privatisation in the 1980s. In Newcastle, overall services were cut by more than 20%. In Sydney, private operators of services once in government hands have failed to deliver the innovations and service improvements that were promised. Transit Systems and Keolis Downer have delivered service worse than the previous State Transit services across the Inner West and Newcastle did. Privatisation isn’t the silver bullet to deliver a more reliable and innovative service at a lower cost. Instead, bus drivers get a pay cut, money spent on maintenance is decreased and all profits get shipped offshore.

Please support efforts to keep public transport in public hands. Sign the petition at https://ourtransport.org.au/take-action/

References

Currie, G. (2016). Public Transport Issues in Melbourne. Retrieved from http://publictransportresearchgroup.info/wp-content/uploads/2017/02/PRESENTATION-2016-ALP-Public-Transport-Issues-in-Melbourne.pdf

Donaldson, D. (2017). Franchising: why privatising public transport doesn’t live up to the hype. Retrieved from https://www.themandarin.com.au/79973-franchising-privatising-public-transport-doesnt-live-hype/

Our Transport. (2020). HELP UP KEEP OUR BUSES PUBLIC. Retrieved from https://ourtransport.org.au/take-action/

Public Transport Users Association. (2015). POLICIES: PRIVATISATION. Retrieved from https://www.ptua.org.au/policy/privatisation/.

Salena, G. (2017). Why privatisation won’t make Sydney’s buses run on time. Retrieved from https://www.theguardian.com/australia-news/2017/jul/09/privatisation-wont-make-sydneys-buses-run-on-time-and-expect-new-problems

Rail Tram and Bus Union (n.d.) Privatisation would puts profits before passengers. Retrieved from http://www.rtbu.org.au/privatisation_puts_profits_before_people

Transport for NSW. (2020). World class transport operators invited to register for bus tenders. Retrieved from https://www.transport.nsw.gov.au/news-and-events/media-releases/world-class-transport-operators-invited-to-register-for-bus-tenders

Transport for NSW. (2020). Buses – On-time running. Retrieved from https://www.transport.nsw.gov.au/data-and-research/passenger-travel/buses-on-time-running

Walker, J. (2015). No, Let’s Not “Uber” Our Bus System. Retrieved from https://humantransit.org/2015/05/no-lets-not-uber-our-bus-system.html

2 Replies to “Against the ‘Privatisation’ of Transport”

  1. You are very passionate about not privatising. Having worked with both Govt and Private operators my take on their objectives is that many of them are the same. This is because budgets and incentives should drive them this way no matter who they work for. Staff still want to deliver a better product. It most likely is a leaner operation when Private but I have also seen Yarra Trams invest in innovation when state operators resist.

    When it comes to timetables and frequency and routes, its the Govt the determines this. Even in Vic (where I am) many operators request route changes, which never get approved by the state.

    The end goal for either entity running PT is improved service, improved frequency, a good place to work, employee benefits, asset management (assets are still owned by the state).

    The public need to pressure Govt so that PT as a service does not go backwards.

    Like

  2. Such a good insight, if you look into the history of the reasons State transit came into being , one could just wonder why do they want to reverse things. The undoing of the services as an entity of which is overseen by the Ministry of transport and its step down to Transport NSW , should hold the key to all their findings on the underperforming of the transport. The buck stops with them, to pull up their sleeves long before they put out all their analytical results . We have been looked at from different sides , and what you can see is simply letting things role to a stage where this so called think tank is ready to fit the blame on just the operator . It is to be noted as the article written that infrastructure for bus stops layover stops and monitoring bus priority areas has gradually reduced . We are aware that one would say a lot is done in area ‘a of B lanes, B lights etc , but the congestion has also increased. Most of the analysis are made from boardrooms and fresh out of Uni graduates who given a desk and everyone seems to have arrived get his pound of flesh . Alas we live in a creeping in culture of do as directed.

    Like

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