Some public transport operators fear for the future of the Transport Agency after the Government stops ploughing money into the sector to prop it up.

Public transport has been "hammered" by Covid-19, with a huge drop in passenger numbers, but for the time being the agency - with the Government's help - is covering all costs associated with the virus.

But there are fears in the sector about what happens if the extra money dries up.


Buses, trains and ferries kept running under alert levels 3 and 4 for essential workers, despite operators not charging for tickets - and in some centres the free fees lasted longer.

During alert levels 1 and 2 the physical distancing rules - which have now been canned - drastically reduced capacity to roughly a third of pre-Covid levels.

The NZ Transport Agency Waka Kotahi stepped in, paying for 100 per cent of the costs associated with Covid, including extra staff, cleaning and PPE.

It shelled out $91.3 million till the end of June, and has allocated another $111m through to the middle of next year - the end of the financial year.

The Government has given the agency an additional $210m to be spent on public transport to keep the buses and trains running.

Dr Pim Borren from the Bus and Coach Association said operators were extremely worried about what could happen if the money tap was turned off.

"There's not an endless pot of gold that the Government can keep adding money to.

"We know that Covid is costing the Government so much money - and ultimately taxpayers so much money that they can't keep funding everything forever - and that's the concern."

Wellington's East by West Ferry. Photo / RNZ; Dom Thomas
Wellington's East by West Ferry. Photo / RNZ; Dom Thomas

Dr Borren said the closed borders meant income streams from the tour, coach and charter have been decimated.

He said operators were facing additional costs implementing the new driver rest and meal-break rules.

At the weekend, the Transport Minister Phil Twyford announced Waka Kotahi will be phasing in a Living Wage base rate for drivers.

Dr Borren said operators were locked into long-term contracts and he was worried the additional money kicked in by the Government would not cover these large costs.

"While that money may be guaranteed for this year, what's going to happen for the remainder of these contracts? These are nine-year contracts.

"We need to have some confidence that the Government is going to continue to fund those large additional tranches of money in a fair and reasonable way under a normal contract variation process."

Photo / 123RF
Photo / 123RF

Dr Borren said he was not confident the Government has a plan that addresses the sector's concerns, and operators feel shut out from discussions.

"I strongly encourage regional councils, NZTA and the Government to work with operators, to work with our association, and to ensure that we create a much more certain environment so that we can have confidence that these businesses are going to be able to survive this dreadful economic time."

Regional councils and Auckland Transport contract operators to provide public transport services.

The revenue from fares pays for about 40 per cent of it, with the remaining roughly split between regional rates and Waka Kotahi.

Local Government New Zealand president Stuart Crosby said he met with Waka Kotahi's chief executive last week and the issue was definitely on the agency's radar.

"Because it's a big impost for them, and of course they're losing revenue as well, particularly in the Auckland area as people aren't driving so much and they're not getting the various taxation through fuel taxes, etc.


"So it's quite a significant issue that will land back on the Government's table."

Crosby said so far they were getting good support from the Government - but they needed to keep having robust discussions about funding.

Greater Wellington Regional Council transport committee chair Roger Blakeley said a positive indication in his area was the recent bounce-back in passenger numbers to about 70 or 80 per cent of pre-Covid levels.

"And even at the weekend we're finding we are at 100 per cent of what the patronage was pre-Covid.

"So the public seems to be saying that they trust public transport and want to continue to use public transport. So that's really encouraging, both for us and for the bus operators.

He said nonetheless the sector would likely need additional support for at least another couple of years.


"It's always possible that we'll get more waves of Covid infections, and the Government seems very clear [that] that is possible.

"So we think there'll be a need for ongoing government support probably above what they normally provide, not just this year, it's probably several years going forward issue."

Waka Kotahi said in a statement it is working closely with regional councils and Auckland Transport in modelling scenarios, including possible changes to services to meet the "new normal".

It says it is regularly reviewing how much extra it is paying out to cover Covid-19 costs.

A spokesperson for the Transport Minister Phil Twyford says New Zealanders should be rest assured public transport will continue to be adequately funded by the Government."