Public transport is critical to Melbourne

COMMENT, Melbourne – In Melbourne broadsheet paper The Age, today there was a neat reminiscence on ‘trains’ from staff writer, Peter Hanlon.

“WE’RE on our way home for Dad’s funeral, his grandson and I. It’s good that we’re going by train; Dad worked 35 years for the railways, back in the days when human beings sold tickets, and machines that accepted only correct change were a dream for the future.”

He goes onto say…

“Whoever wins the next tender to run the state’s public transport would do well to acknowledge that there is another way. It involves people, and a little bit of effort. And it works.”

Background to the Melbourne problem:

Recently state leader John Brumby announced the Government would continue to outsource public transport.

It matters not the political reason he did so.

What matters is the implicit message:

The Victorian public service cannot be trusted to manage the transport, but a private company with higher costs from France, UK or the USA can manage transport.

As we will see, this makes no economic or any other kind of sense for railways.

Outsourcing and privatizing has its uses

Outsourcing is based on efficiencies delivered by economies of scale or at least expertise.

We outsource everyday.

It makes sense for us to outsource the production of soap, a messy, difficult and time-consuming job. If everyone produced their own soap we would likely use more energy than a single company mass-producing soap.

Similarly much of the fruit & vegetables we eat is best produced by farmers, not each of us in a small patch. If everyone had their own orchard or chickens efficient homes like apartments would not work.

It also makes sense for governments to outsource functions where there is an advantage in knowledge or efficiency overseas or interstate.

But rail systems are different.

The Bottom line of Rail Outsourcing

What efficiency gains can any company have if the infrastructure they are using is local?

Local staff, local railways, local rolling stock, local engineers.

In other words the same infrastructure a public institution would use.

Presumably multi-national companies get a volume discount in buying rolling stock.

But it is hard to believe this discount would be much different to that received by an astute government negotiator. Having negotiated many times with Government, I can assure you there are more astute negotiators in Government in many cases than private sector firms.

Especially when we consider that Government debt for purchasing capital items is also cheaper than private debt (more so after the recent Sub-Prime crisis).

And most government tenders are about stripping all profit out, so the consumers ends up receiving the results of the big company corner-cutting service to make a profit.

So there seems to be no logical reason, except politics.

What is the Implicit Message?

If there is no logical reason, except that the private company through the wonders of fairy-dust is somehow more efficient than a public department.

Then the implicit message is that the Victorian public service delivering services at cost using the same infrastructure is so wasteful that it cannot deliver a better service than a private profit-making company.

I’ll repeat that. Read it out aloud.

Victorian public service delivering services at cost using the same infrastructure is so wasteful that it cannot deliver a better service than a private profit-making company.

IS that what Brumby is saying here?

Because there is no economic argument, and the terms of the Audit Report quoted as justification appeared rather limited to find what they wanted to find.

Have Victorian Citizens got the Worst of All Worlds?

A private company propped up by government subsidies and controlled by government fines, employing the same infrastructure as a public department, and already bailed out by the taxpayers repeatedly.

The Government like citizens to hate Connex & Yarra Trams, because when citizens hate the operator we don’t question the system.

But fact is the system can never work the way it has been designed. It is set up to fail.

So why are we paying for the public service and a private company?

And more alarmingly why do we have rooms full of public servants if the new State Leader has so little faith in their performance?

Why have a public service then if they merely report on services delivered by others?

There is only one possible viewpoint. The reason is political.

The Brumby State Government merely seeks to avoid political responsibility, a strategy perfected by former NSW-leader Bob Carr. When the public is unclear who is responsible they are less likely to punish anyone.

Let us not make a rod for our own back, rather keep it as stick to hit the Opposition.

Former leader Kennett turned Victoria around, but do-nothing Bracks got the political benefit.

It appears the current State Government is choosing the least efficient solution for what can only be political reasons.

Most of us don’t care what the solution is, as long as the trains and trams work.

Having lived on a great public transport route I can tell of the immeasurable decline, which is especially noticeable this year. Unclean trams, broken trams more often than daily, slow response times to broken-down trams.

Woe betide living more than 5km outside the city, from the horror stories published daily.

It is not under-staffing that destroys transport. It is merely inefficiency in planning and delivery of services.

Which is the point of outsourcing in the first place. Greater efficiency. Supposedly.

If the State Leader does not believe the Public Service operating at cost-price can do a better job than a profit-making company from the other side of the world using the same people and resources, well… I want a refund on my taxes.

Perhaps they just want us to drive even 1-5 km distances.

Whatever they want, the Government clearly do not care enough to fix the woeful state of trains and trams that has reduced Victoria to a state almost the level of the NSW.

Where does Melbourne public transport rate?

Unlike a lot of writers I have been to German, French, US and European cities.

Frankfurt, Zurich, Munich, Paris, Strasbourg, Vienna, Boston, and many other cities have better transport than Melbourne. Even London’s tube is far more complex and delivers better standards.

This Government seems to think it’s public servants are not able to run the railways.

Having met public servants and private corporations in the State of Victoria I can assure you there is very little difference in the people. The system and the political incentives are the issue. There is no ‘will’ to make the transport work.

The reality is that many Government’s don’t want to make a ‘rod for their own back’.

So once again Victoria’s potential declines because of political cynicism.

Take care,

Christopher

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