Unhappy Public Transport Marriage Likely To End
September 18th, 2008
The stoush between the Auckland Regional Transport Authority and bus operators in Auckland over who should have control over the city’s subsidised bus routes should not come as any surprise. The uneasy partnership between public and private sector organisations in the provision of public transport has been an uneasy marriage world-wide which has frequently lead to acrimonious disputes. Right now the private sector operators of London’s underground are at loggerheads with London transport officials over a multi-billion dollar blowout in the cost of upgrading the city’s tube train services. Privatised monopolies never lead to lower costs.
Divergent Interests. The fundamental problem with this sort of Public Private Partnership is the divergent interests of the public and private sectors. The private sector enter into such agreements to make money whereas an entity such as ARTA has entirely different priorities – to provide as big a spread of services to the public for the lowest possible cost. In the case of Auckland, ARTA clearly does not think this has happened. The level of subsidy paid to the operators has more than doubled in recent years to $93m per annum. There has not been a corresponding doubling of bus patronage and rising costs cannot be responsible for all the subsidy increases.
Investment Concerns Unfounded. Operators claim there is nothing wrong with making a profit on their operations, which is an entirely understandable response from their point of view but the profit can only be made at the expense of bus users and other ratepayers. Take out the profit margin and in theory you should have lower fares and/or more money to provide more services. Claims investment will dry up if ARTA takes control is misleading. The overwhelming majority of the money pumped into public transport comes from the public purse in the first place.
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