Metro Transport buyout clears the way for a light rail future
27 March 2012
Down at the Brushtail Café the news that the O’Farrell Government had bought out Metro Transport Sydney, owners of the monorail and operators of the light rail, was greeted with almost saturnalian rejoicing. Drinks were on the house and Joadja herself got quite tipsy.
The mainstream media focussed on the decision to pull down the monorail, but the big story was the Liberal government’s de-privatisation of the light rail service.
MTS ran the light rail under a weird contractual anomaly. The trams started running in 1997 and MTS was given a lease over the former freight line and a contract to run the service for thirty years. It also had the right of first refusal to run any future extension.
Apart from the federal and state money that went into setting up the service and building the first extension (from Wentworth Park to Lilyfield), light rail was virtually the only unsubsidised public transport service in Sydney – an unusual and anomalous arrangement .
At the time Treasury and the transport bureaucracy was resolutely opposed to light rail and didn’t expect the dinky little line –the brainchild of federal Labor and state Liberal enthusiasts – would ever amount to more than a boutique service. They hoped that high, unsubsidised, fares would cripple patronage and kill it off. We may infer that they cunningly sold the deal to the Greiner Government on the basis that the no-subsidy arrangement was bracingly Thatcherite. Probably nobody in the Ministry of Transport gave much thought to the owners’ blanket right to run any future extension to the system because they didn’t think light rail had any future. As for the owners, they had to be content with the hope that they’d cornered a strategic position that might eventually give them a lock on the new mode.
A decade later, the tide began to turn in light rail’s favour. And it soon became obvious that no responsible government could live with a contractual arrangement that was messy, opaque, and gave one company an open-ended monopoly. In the closing months of the Labor administration, many began to ask why the government hadn’t renegotiated the deal to put the light rail on the same footing as Sydney’s private bus operators.
Now most people think that the private companies that dominate bus services in the outer suburbs operate like any normal company by making a profit from sales (in this case of tickets), but it ain’t so. The government pays the operator to service a route according to an agreed timetable. The operator collects the fares and gives them to the government, which therefore picks up the shortfall between the fare box and the total cost of running the service. Nowadays the government buys the buses as well.
The ideological centrepiece of the system is “contestability”, which means that every few years, the contract to operate the service goes out to tender and the government makes a choice based on some combination of price and reputation for reliability.
In Sydney the private buses are badged as though they were truly independent businesses, but we don’t really have private buses, they’re privately-badged government bus services. Only the management is private.
Most people don’t regard the “private” buses as remotely as ‘real’, efficient or permanent as the government-run Sydney Buses, and indeed in some cities in Australia and overseas (Perth is an example) the privately-managed buses look just like the government–managed ones.
Why this complex rigmarole? It’s basically a free-enterprise figleaf – a way for conservative governments (including Labor of course) to pay homage to current capitalist ideology. It’s also a way of distancing the government from any problems that may arise. When the public jack up about services they can say “It’s not our fault the 666X is never on time, you’ll have to direct your complaints to RapidexTrans”, and if bad service persists, they can slap the company with a mild fine or a reprimand.
But the bottom line is that, as light rail expands to become an essential mode in Sydney’s public transport mix, the government has to run the service itself or under the contestable private management model. Full marks to Gladys Berejiklian for taking this taking this vital, basic, step.