Estimating the Costs of Wellington Bus and Rail Services

The Greater Wellington Regional Council (GWRC) 2019/20 Annual Plan Public Transport (PT) estimates it will cost $304M to provide Metlink PT services which are funded by fares, subsidies, loans and Transport Rates. This is a lot of money … in fact the GWRC spends more on providing public transport than all other activities combined.  This post outlines the costs for Metlink PT services provided by the Greater Wellington Regional Council (GWRC) to the Wellington Region and how the model for allocating these costs to each Territorial Local Authority (TLA).

Every year the Greater Wellington Regional Council (GWRC) Annual Plan includes estimating the costs to provide the region’s public transport service.  The GWRC planning also estimates the expected PT fare revenue and the Transport Rates needed to help (along with NZTA subsidies) make up the difference between the costs and revenue.  Finally, the GWRC allocated the Transport Rates to be collected from residential, business and rural ratepayers from cities across the region.

One major change from the implementation of the Public Transport Operating Model (better known as PTOM) in July 2018 was to provide much greater access to PT cost information which the GWRC previously kept secret as “Commercial in Confidence”.

More specifically, the 2019/20 Transport Rates and the 2019/20 Farebox Recovery Ratio calculation spreadsheets were provided in response to official information requests and these spreadsheets include all the costs for PT services split between bus and rail which are:

A) As required by PTOM, the GWRC released the original tender prices of each of the 18 bus “unit” contracts. This is important because it is the only detailed bus cost information released by the GWRC.

B) Release under LGOIMA: 2019/20 Farebox Recovery Ratio calculation spreadsheets. This is important because it assigns the purpose of each cost or revenue line to bus, rail or something else. The contracted expenditure for bus and rail services is redacted but bus expenditure can be estimated from the PTOM bus contract information above giving:

C) Release under LGOIMA: GWRC 2019/20 Proposed Rates Calculation Spreadsheet.  This calculates the different rates allocation across ratepayer groups including the Transport Rates allocation.

D) Release under LGOIMA: GWRC 2019/20 Transport Rates detailed cost and revenue Spreadsheet . This is important because it has a complete view of all cost and revenue by accounting category (eg revenue, government subsidy etc) as well as the amount required to be collected for the Transport Rates. The contracted expenditure for bus and rail services is redacted.

The last source contains a detailed item-by-item account of Wellington PT service costs and revenue that can be summarised as follows:

NOTE1: All figures in this analysis are to the nearest dollar.  This does not mean to imply the modelled information is accurate to the nearest dollar but only to confirm the costs are accurately being calculated at each phase of this analysis.

NOTE2: This analysis is focussed on who should pay the $70.4M in GWRC Transport Rates for bus and rail PT services and excludes the $1.1M in Transport Rates that supports the Taxi/Mobility PT service.

Bus and Rail Costs for each area

By combining the information from the above sources, it is possible to split, on a pro-rata basis, the total $304.4M cost into the cost for bus services and cost for rail services under the GWRC accounting categories. From the published PTOM Bus Unit data, an estimate of the bus service costs to each LTA are Wellington City (64%), Lower Hutt (18%) etc. can be generated:

The rail service cost split can be estimated from the rail commuters from the Wellington 2013 Census Journey to Work Appendices ( multiplied by the average distance travelled to provide passenger kilometres for each city in the region (See Rail Cost Modelling for more details):

Allocating Network Costs to bus and rail services

There are two other GWRC PT costs are:

  • the Total Mobility (called “Taxi”) service costs of $3.2M.  This analysis excludes this costs and the $1.1M in Transport Rates that supports this PT service.
  • Network Costs of $29.6M are not directly counted against a particular PT mode.

Network costs are an important part of delivering the regions bus and rail PT services and so must be included into the overall costs.  This analysis allocates the Network Costs on a pro-rata basis from the bus and rail costs outlined above using the following table:

Using these percentages we can divide the $29.6M Metlink Network costs between the bus services:

and the rail services:

Adding the Bus Network costs and Rail Network Costs to the Bus Costs and Rail Costs gives a grand cost total for the Wellington PT service by LTA:

Estimated Bus and Rail Costs to support PT to each area

The above table shows the GWRC cost estimate to provide the Metlink bus and rail service to the Wellington City and the rest of the Wellington Region which is outline in the following table: