KEY POINTS:
You have to feel a certain sympathy for the Auckland Regional Transport Authority when it comes to the latest bus fare increases. Because of the Government-imposed, fake free-market transport procurement system Arta has to operate under, the bus operators have the public authority over a barrel.
Refuse to
accept the private operators' demand for a price rise and what do you know, the bus companies could turn around and say "the route is no longer 'commercial'. We're withdrawing our service unless you subsidise it".
The 7.8 per cent fare hike could be justified. But you and I and Arta have only the bus operators' word for it. Because under the one-sided procurement system, there is no requirement for Infratil or the others to open their books and prove bankruptcy looms.
Instead, a "cross my heart and hope to die" honesty system is employed whereby the independent accountants PricewaterhouseCoopers write to the bus companies each year on behalf of Arta and ask them to report movements in costs such as labour, road-user charges and fuel. The accountants process the replies, give each category a weighting and calculate the overall movement in costs.
Between June 2005 and August 2006, PWC reported a total weighted cost movement of +10.3 per cent for bus operators - so the overall fare rise of 7.8 per cent could be seen as a win for passengers.
But in the greater scheme of things there are more important things to be fussing about.
What we should be jumping up and down about is not the fairness of the fare rise but the failed New Right procurement model of which the fare system is a small part. It's a model that continues to cripple all attempts by Aucklanders to build the modern public transport system we deserve - and increasingly, want. Is it pure coincidence that in the 15 years the current model has been in place, bus patronage growth in Auckland has been the worst in Australasia - down 34 per cent relative to population?
Under the existing model the market gets first bite. Bus companies can cherry-pick the most popular routes and times, declare them "commercial" and register these services with the public authority. Arta is then left to call for tenders to fill in the gaps, offering subsidies to private operators to serve these less popular routes.
Worse, there is nothing to stop an operator subsequently declaring a commercial route no longer profitable and threatening to walk away unless a subsidy is granted.
In 2005, Stagecoach did this with 13 routes, forcing Arta to find an extra $8 million to add to its existing $40.6 million subsidy bill.
Another drawback with having "commercial" routes is that Arta cannot police, or punish, timetable irregularities. Yet ask any passenger - or lapsed passenger - and he'll tell you the biggest turn-off about this mode of transport is buses or trains that don't turn up.
Back in November 2005, when Infratil took over Stagecoach, I reported that Government bureaucrats had been engaged for some months in a review of this flawed system. We're still waiting.
Last May, Arta submitted a comprehensive critique of the system to Government. This coincided with Arta chief executive Alan Thompson's becoming chief executive of the Ministry of Transport. At the time, we dared to hope that this fortuitous move would ensure that Arta's procurement problems would not immediately disappear into Wellington's "bloody Auckland" rubbish basket. But so far, nothing.
The obvious answer is a publicly owned public transport system, integrating trains, buses and ferries into one comprehensive network. But that's never going to happen, so second best is the contracting model, as envisaged by Arta. In this, Arta would design an integrated network, with bus, train and ferry services complementing, rather than competing, then contract private operators to provide fixed-price, timetabled, services.
Fares would be set and collected by Arta, which would subsidise, with government agencies, the overall service. This reform would immediately make an integrated system of ticketing possible - something which individual Auckland operators have long refused to co-operate over.
A publicly controlled network would also make the holy grail of trains and buses running on time a more realisable goal.
With local elections looming, and the Government presumably hoping for a better start to the year in Auckland than the last one ended for them, giving Arta the tools to achieve its mission would be a good way to go.
