Tuesday, October 27, 2015

Privatising ACTION buses rejected by ACT Government, reform still needed to improve bus services

Shane Rattenbury - Minister for Transport Reform
The recent announcement of the creation of Transport Canberra, a single agency to oversee ACTION buses and Capital Metro, followed on from policy work performed by the ACT Government aimed at improving public transport service delivery and realising efficiencies. Introducing light rail will bring about a massive change to public transport usage and patronage. Transport Canberra will begin work on integrating light rail and ACTION services from July 2016. Light rail will commence services in 2019.

As part of this process, a review into ACTION bus services was commissioned and delivered by MRCagney. The major focus of the report so far has been on the recommendation that privatising ACTION Buses be considered. It advises that the privatisation of ACTION buses would cut costs and improve services.

The government has rejected this option. The government has announced that it will be  retaining ACTION in public ownership and will attempt to bring about service improvements and industrial reform through negotiation with the workforce.

Earlier in 2015, Minister Rattenbury said that 'no option was off the table' in regard to reform of the ACTION bus service.

ACT Light Rail would hope that transport reforms are focussed on expanding bus services to support light rail operations. Introducing light rail is proven to increase bus patronage. Gold Coast bus services have seen a patronage increase of 22% alongside the light rail line. Reducing ACTION Bus services will lead to a continued counter productive spiral in use. Strategies to encourage bus patronage need to be introduced to arrest decline. Light rail is one of these strategies. Paid parking in the Parliamentary Triangle is another.

Punishing people into using public transport is not going to work, but providing a better option than private motor vehicle use can work. Public transport that is reliable, frequent and attractive will attract increasing patronage.

Reform is needed in ACTION. Its workforce is well paid and the fleet is relatively modern. Issues with timeliness and satisfaction are worrying. Performance and productivity must be improved, and this must be a condition of any new enterprise bargaining agreement.  If there is a change of government at the Assembly election in 2016, the privatisation of ACTION may be revisited.

ABC summarises the key stats from the MRCagney report
Other recommendations from the MRCagney report were:

  • the Government would save almost $5.5 million each year by bringing ACTION driver pay and conditions in line with other operators
  • Changing trip caps and moving to distance-based fares would save ACTION money
  • Outsourcing would deliver savings of as much as $47 million each year 
  • Outsourcing vehicle maintenance and other functions were the most plausible options for improving efficiency and attractiveness of services 
  • 116 bus services after 8pm on weekdays could be removed from the timetable due to low patronage 
  • Bus drivers would go back on an award rate as opposed to generous EBA conditions if the network was privatised

Observations from the report:

  • Canberra's buses recorded an operating loss of $11 million last year 
  • ACT taxpayers paid $7.20 in public funding per passenger, twice what other similar public and private bus operations received
  • since 1999 fares paid per passenger dropped 23%
  • Cost per passenger has increased 38% over a 4 year period
  • Only 17 per cent of ACTION's costs are recovered through fares, significantly lower than other public and private networks in Australian and New Zealand.
  • Gross operating cost levels are 40 per cent above the levels of private operators, and 10-15 per cent above the levels of other public operators
  • One of the major problems hampering the performance of Canberra's bus networks,  is an "expensive and inflexible" enterprise agreement with drivers  
  • The average number of passengers on the services was 5.2, a low rate for services running 62 hours per day
  • Customer satisfaction dropped from 87% to 65% over the last 5 years
  • Bus patronage increased at only half the rate of population. 
  • 97 per cent of Canberra's population is served by at least one route
  • 15.2 per cent is served by only one route
  • On-time running of bus services has been "well below the target set by the ACT government"
  • total gross costs have grown considerably and the network's trends compare unfavourably with most metropolitan bus operations in Australia. 

ABC Online reports: ACTION buses to merge with Capital Metro as ACT Government ignores privatisation recommendation:

"Canberra's bus network will merge with Capital Metro, as the ACT Government ignores a strong recommendation to privatise ACTION.
A Government-commissioned report into the functioning and costs of running ACTION buses found savings of almost 50 per cent a year, or $47 million, could be made if the network was outsourced.
The MRCagney report recommendation was also strongly supported by the views of the World Bank on government-run public transport.
"All the evidence indicates that the adoption of an outsourcing policy is highly likely to be substantially more effective than other plausible policy options in improving the cost efficiency and enhancing the attractiveness of the services ... increasing patronage and fare revenue," the report said.
But, in response to the report, the ACT Government said it would instead merge both ACTION buses and the proposed Capital Metro system into a single agency known as Transport Canberra.
"Retaining the ACTION bus service in public hands also maintains the Government's full capacity to devise bus routes that meet community needs including for disadvantaged groups, rather than focussing solely on questions of efficiency," the Government said.
"The Government's chosen approach will keep the public asset in public hands and protect fair working arrangements for our workforce."

"The Government is also already taking forward MRCagney's practical recommendations around discouraging the use of cash [to speed up boarding buses] by trialing the cashless 202 from Gungahlin and promoting all-door access at busy corridors."

The Canberra Times report that "ACT government won't sell ACTION buses despite calls from expert review"

The ACT government has rejected expert calls to privatise ACTION, instead promising to improve services and increase public transport use by combining buses and light rail in a new stand-alone transport agency.

The report, received by the government in March but not released until this week, said privatisation would take several years to complete and would involve significant transition costs to the taxpayer. A sale would be in line with World Bank research on the cost of running public transport systems.
The new Transport Canberra agency will begin working on integration for buses and trams from July 1, 2016. Trams are set to begin running by 2019 or 2020.

Assistant Minister for Transport Reform Shane Rattenbury said any changes to pay and conditions for drivers and crews would require negotiations with unions as part of a new enterprise agreement, due in 2017.
"Clearly an expenditure review is focused on delivering business efficiencies," he said. "The government has looked at this review in light of that and our broader goals of making sure we're delivering a transport system that assists those in our city experiencing transport disadvantage.
"This is a public asset and the government wants to retain ownership of it so we can continue delivering services."

Mr Rattenbury said customer service would be central to any decision making by the new agency.
Decisions are still to be taken on whether the ACTION brand will be retained for Canberra's buses, or how existing senior public servants, including Capital Metro Agency director Emma Thomas, will be incorporated into the new agency. ACTION management, which has been part of the Territory and Municipal Services Directorate, has been reorganised this year.
The new agency could also prompt a stand-alone public transport ministry to be created before the October 2016 election, potentially allowing retiring Deputy Chief Minister Simon Corbell to hand over responsibility for the tram line.

ABC Canberra News report from 27 October

WIN News report from 27 october

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