GWRC 2018/19 Annual Plan Fare Review

  • The 2018/19 Fare Review reported these Farebox Recovery Ratios: Rail 49.9%; Bus 59.6%; Total 55.1%.
  • The report recommended a 3% fare increase is needed.
  • The supporting spreadsheet based these ratios on the following: Rail Revenue: $51.4M; Rail Cost: $103.1M; Bus Revenue: $50.3M; Bus Cost: $84.4M.

2018 Annual Fare Review Report

On the 14th March 2018, the Greater Wellington Regional Council (GWRC) considered the “2018 Annual Fare Review”. This report included a reiteration of 2016/17 Farebox Recovery ratios but curiously not the ratios for the 2017/18 Annual Plan Fare Review or the 2017 Better Metlink Fares Review:

Table 1 Farebox recovery and user contributions for 2016/17

Indicator Target Forecast 2016/17 Actual 2016/17
A. Long-Term Plan – User Contribution (existing)
User contribution 45-50% 47.5% 48.4%
B. Regional Public Transport Plan – Farebox Recovery Policy
Overall farebox recovery 55-60% 57.2% 57.3%
Farebox recovery by mode
Rail 55-60% 55.7% 56.4%
Bus 55-60% 57.3% 56.6%
Ferry 80-90% 82.6% 82.9%

The report also outlined the expected Farebox Recovery ratios for the 2018/19 that include revised PT costs:

3.5 Budget provision re-check

This section responds to Council’s recommendation to determine if a different budget provision for fare revenue is required, and as a result, whether fares need to be further adjusted.

Table 2 below provides an assessment of the fares package (with the general 3% fare increase) using latest operating costs for the year 2018/19. The figures report against the new user contribution target set out in the draft 2018/28 Long Term Plan and the farebox recovery targets set out in the PT Plan.

Table 2 Farebox recovery and user contributions for 2018/19

Indicator Target Forecast 2018/19
A. Long-Term Plan – User Contribution (existing)
User contribution 35-50% 40.4%
B. Regional Public Transport Plan – Farebox Recovery Policy
Overall farebox recovery 55-60% 55.1%
Farebox recovery by mode
Rail 55-60% 49.9%
Bus 55-60% 59.6%
Ferry 80-90% 81.5%

The table shows that with latest costs applied to the NZTA formula5, overall farebox recovery changes slightly from the October 2017 estimate (54.2%) to 55.1%, which is just within the PT Plan target range of 55-60%.

By mode, the figures show quite a divergence from the 2016/17 actual figures – with rail well below past actuals and bus above past actuals. This can be explained by:

* the move to gross-based contracts for bus (no net contracts)

* the changes to commercial services (some commercial services will be contracted and some will be exempt)

* significant increase in forecast rail expenditure, including: network track access charges, passenger service fee, network renewals

* savings from new bus contracts.

Taking account of the new information on costs for public transport and changing context for public transport, it is not considered necessary or appropriate to change the budget provision for fare revenue in the draft Long Term Plan, or make a further adjustment to fares.

The Farebox Recovery Ratios in the 2018/19 Annual Plan Fare Review are notable for the following key points:

  • Weirdly the report Table 1 has 2016/17 Fare Review figures but excludes the 2017/18 Fare Review figures that was actually the basis of the 2017 Better Metlink Fare Review costs and Revenue not included.  Why does the 2018/19 Fare Review not include the figures from the the previous year ?
  • The Overall Farebox Recovery Ratio of 55.1% is just above the minimum level and similar to that expected under the Better Metlink Fares Review.
  • That a 3% fare increase is included in this review in order to meet the GWRC Farebox Recovery Policy minimum of 55%
  • The Rail Farebox Recovery Ratio has fallen by a very large amount from 59.3% in 2017/18 to 49.9% in 2018/19 which is far below both the 55% GWRC Farebox policy minimum and even below the 50% minimum required under NZTA Policy.
  • In contrast, the Bus farebox recovery ratio has risen from 56.0% in 2017/18 to 59.6% in 2018/19 which is just under the GWRC Farebox policy maximum permitted level of 60%.

The minutes of the 14th March GWRC Council meeting accepted the 2018 Fare Review report including “a 3% fare increase for the 2018/19 to offset the shortfall in fare revenue as a result of the new fares package agreed by Council on 31 October 2017”.

2018/19 Fare Review Supporting Calculations

The GWRC refused to provide the supporting fare review calculations

The Farebox calculation spreadsheets were requested from the GWRC on the 20th of January 2018.  The GWRC responded that:

GWRC will provide you with a copy of farebox recovery calculations as part of reporting on compliance with the farebox recovery policy and review of budget provisions in LTP, once it is finalised and after the Council meeting on 14 March 2018.
(8 March 2018 communication from GWRC)

On the 16th of March, after no further communication from the GWRC, I sent the following request:

Can the GWRC please provide an update on when the requested information that was promised to be provided after “the Council meeting on 14 March 2018” will be provided ?

Another couple of weeks went by and … nothing.  A complaint was made to the Office of the Ombudsman.  The investigator made contacted on the 4th of April saying he had contacted the GWRC.  Two days later, on the 6th of April, the GWRC finally released an edited versions the Farebox Recovery calculations used in the 2018/19 proposed annual plan … over three weeks after the GWRC promised it would be provided.

Summary of the 2018/19 Farebox Recovery Ratio Calculations

An edited version of the GWRC Farebox Recovery Spreadsheet (with edits in BLUE) is available here.

Below is a summary version of the 2018/19 Long Term Plan farebox recovery ratio calculations contained in the farebox recovery ratio calculations:

Mode Fare revenue (excl. GST) Supergold reimbursements (excl. GST) Total revenue (excl. GST) PT Subsidy Operating Costs Operating costs excl. GST Farebox recovery
Formula Revenue+Supergold Total Revenue+PT Subsidy Operating Costs/Total Revenue

SG* Bus Exempt














Rail network renewals













Ferry 1,355,796 73,177 1,428,973 323,409 1,752,381 81.5%
Cable car 2,397,843 83,157 2,481,000 2,481,000 100.0%
Total 97,873,619 7,740,823 105,614,442 86,118,511 191,732,953 55.1%

*SG = Super Gold

Revenue Notes on Revenue Cell Reference Cost Notes on Cost Cell Reference
Bus $50.3m $7.4m less than in 2017/18 [Calc-proposed!G20] $84.4m $18.6m less than in 2017/18 [Calc-proposed!G39]
Rail $51.4m $0.9m more than in 2017/18 [Calc-proposed!F20] $103.1m $17.9m more than in 2017/18
(including “Rail network renewals” of $9.5m)
Total PT $105.6m $6.4m less than in 2017/18 [Calc-proposed!E20] $191.7m $0.6m more less than in 2017/18 [Calc-proposed!E39]

The overall farebox recovery ratio is 55.1% [Calc-proposed!E41] which is just above the 55% minimum required by GWRC policy and, by some amazing coincidence, almost the same as estimated by the Better Metlink Fares Review.  But, behind the scenes, both the revenue and costs have changed massively and these changes requires further detailed analysis.