Have PT costs really gone up to justify the July Fare Increase claimed by the GWRC ?

The Greater Wellington Regional Council (GWRC) claims Wellington public transport commuters needs a fare increase to fund cost increases.  So what happened to the many millions in cost savings they previously announced when they awarded the rail service to TransDev and most of the bus services to Transit ?

This series of (long) posts looks behind the published reports and reviews the detailed Farebox Recovery Ratio calculation spreadsheets used to justify the fare increase.  This analysis uncovers a whole lot of issues with our PT costs and revenue never even mentioned by the GWRC.  It also highlights the creative accounting used to maintain the fare increase façade that PT costs have gone up when, in fact they have actually gone down.

The 1st Post, “What do you mean you saved $18M on Buses but spent it on the Trains ?”:

  • Lists the background of promised cost savings then the need for a fare increase
  • Shows the Farebox Recovery Ratio calculation spreadsheets indicate that the GWRC has made huge ($18.5M) savings in bus operating costs. But these spreadsheets show an equally massive ($17.9M) increase in rail operating cost
  • also outlines the refusal by the GWRC to provide Farebox Recovery Ratio calculation information until the Office of the Ombudsman intervened.

The 2nd Post, “They saved over $18M on the buses so are bus users now paying too much in fares ?

  • briefly outlines how the GWRC Farebox Recovery Ratio policy is used to set fares
  • showed $4.5M in bus fare revenue seems to have disappeared from the calculation
  • explains that this missing bus fare revenue is the reason why the Bus Fare Recovery Ratio stays just under the maximum permitted limit of 60% and explained why this is essential for any justified fare increase.

The final Post “The Fare increase is only needed because the GWRC added Rail Costs

  • shows that the apparent $17.9M in rail cost increase actually consists of $8.4M of rail cost increases from 2017/18 and the addition of a new $9.5M “Rail network renewal” cost item that was previously categorised as “Rail network Capex”
  • this analysis also shows that without the additional of the $9.5M Rail network renewals cost item, the planned fare increases to get $2.4M in additional revenue are not needed as bus savings under PTOM are much greater than real rail cost increases.

It is difficult to escape the logic that the GWRC added the rail cost item to the Farebox Recovery Ratio calculation because, without it, the huge savings in the bus costs removes the justification for its planned fare increase.  Without the fare increase, the GWRC would then need another $2.4M from ratepayers and the NZTA … turning the GWRC rates increase of 6.8% into an increase of over 7.5% or more !

It does seems to be an incredibly cynical move, even for an organisation such as the GWRC, to deliberately add the $9.5M in rail cost and remove $4.5M in bus revenue in order to get more money from unsuspecting commuters through increased fares.  There may be a sound and logical reason for these figures and the author is happy to be proven wrong.  But the GWRC does need to explain the issues raised in this analysis if it wishes to maintain its justification for a fare increase in July 2018.


 

One Comment

  1. Avatar Jim Walsh said:

    “But the GWRC does need to explain the issues raised in this analysis if it wishes to maintain its justification for a fare increase in July 2018.”

    Lol. You know how this works. Surely.

    01 Jun 2018
    Reply

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