Wellington Scoop
Network

Local ownership (‘or control’) of buses sought by Regional Council

News from Greater Wellington Regional Council
The regional council is urging significant change to the Public Transport Operating Model (PTOM) to bring transport assets under the control of regional councils to create greater certainty in delivering quality public transport services.

“We strongly hold that, for regional councils to be truly strategic in planning and providing world-class public transport, we need to have stronger control of critical infrastructure such as buses, depots and charging infrastructure,” says council chair Cr Daran Ponter.

“We are asking for the ability to own or control our assets to ensure we have this option available to us when we make investment decisions.

“Owning, or at least controlling, these assets is key to minimising the risks to delivering public transport, which have been plainly evident in the Wellington region as a combination of industrial action and driver shortages has hampered service provision. We are looking for a strong signal from the Government that it will back regional council ownership and allow the sector to re-set public transport.

”We want to strengthen our communities’ confidence and pride in our public transport, which will only come with us re-setting some of the underlying frameworks and we want to work closely with the Government on a funding model that will lead to that outcome.”

According to the regional council’s submission, a change to ownership of public transport assets would provide a range of benefits.

“Ownership or at least control of the assets will strengthen our role in providing public transport, allowing us to move from the side lines on significant issues such as employee terms and conditions and workforce planning. It will bring us influence and the ability to play a stronger role in ensuring continuity of service delivery,” says the chair of the Transport Committee, Cr Roger Blakeley.

Cr Blakeley also noted that the council considers public ownership of the bus fleet, either directly or through a Council Controlled Organisation (CCO), could provide benefits such as greater flexibility and agility in distributing the bus fleet to meet demand.

“This arrangement would enable us to take a more strategic and financially beneficial approach to procuring and financing fleet purchases, and in so doing, reducing private profit margins on acquisition. It would also provide security and continuity of fleet availability in our region.

“Greater Wellington has put considerable thought into the current funding and financing model in place in our region. We don’t believe the current model is making best use of public finances. It also places all financial risk onto councils, with few associated financial benefits.

“A model based on more active ownership by councils of key public transport infrastructure would better balance the risk profile for the public good. The overall outcome would be a stronger, more reliable and more resilient fleet and service,” says Cr. Blakeley.

Read it in full
The Regional Council’s submission on the PTOM review.

17 comments:

  1. Helene Ritchie, 18. June 2021, 10:42

    This is good but … Councillors Ponter and Blakeley, you can do this now. You don’t need to get any ‘signal’ from the government. But you’ll need funds … huge amounts from the Government to buy the buses, cancel contracts etc. Even if, then when? In the meantime, we need a reliable, affordable, carbon reducing bus service now.

     
  2. Wayne, 18. June 2021, 13:57

    I think a much better idea would be that the Hutt Valley portion of the Metlink Network and all its assets be handed over to the Hutt City Council – that way we would have local knowledge In charge. The Regional Council could look across the water and see how a bus service should be run.

     
  3. Ray Chung, 18. June 2021, 14:40

    I don’t mind Wellington’s bus service being passed back to Regional Council control as long at they undertake to not increase the cost to ratepayers. I don’t mind if they need to increase fares as long as service reliability is increased. If the council needs more money, they should make savings within their own organisation and cut the subsidies given to the Manawatu commuter train and seawalls in the Wairarapa and Kapiti and let the local councils pay for these.

     
  4. GK, 18. June 2021, 16:12

    Wayne: Last thing the region needs further fracturing and fragmenting of public transport network. The network needs more integration (rather than disintegration)…

     
  5. Pete, 18. June 2021, 17:33

    Has anyone actually costed bringing the buses into public ownership?

     
  6. Wellington Inc, 18. June 2021, 18:01

    We agree the buses need to be fully in public ownership. The hybrid model doesn’t work – where the private sector partner can too easily exploit the relationship. If the enterprise was fully commercial, like the airport, I’d say fully private is best. But in the case of the buses where significant public funding is necessary and desirable, it needs to be 100% public owned.

    Rather than run by the Regional Council though, how about a separate entity, like Auckland Transport, responsible for all the region’s public transport services?

     
  7. Roger Blakeley, 18. June 2021, 19:12

    Helene: Under the present model, public funds (taxes and rates) fund the private acquisition of public transport assets. This sees the long-term good dependent on short-term commercial interests of private companies. This is not working well currently for the ratepayers and commuters of Wellington. Nobody is suggesting cancelling contracts. If the Govt agrees to change the PTOM model, that would likely take effect from the end of the current 10 year bus contracts in 2028. We want to deliver a reliable, affordable, carbon zero bus service, and to get that we need better terms and conditions for bus drivers.

    Ray: If the Regional Council procures the buses directly, through the Local Government Funding Agency, supported by our high credit rating, we are able to borrow at cheaper rates of interest than commercial operators. The cost of procurement is lower. Also, the Regional Council as a public service agency is not required to make a profit. There is a place for some public ownership to control costs, enable reinvestment in the public good and ensure reliable service.

     
  8. Helene Ritchie, 18. June 2021, 19:12

    Roger thanks for telling us any major change would be eight years away and you are locked into your current contracts. I/ we agree they are not working! I also in theory want public ownership of public assets for essential public services. But given the costs to (re) achieve that, it’s somewhat unlikely now. The horse bolted in 1992 when WCC sold out. I opposed that vigorously (and was the only submission to do so).

    You need to focus on the current mess and get us out of it. PTOM is a distraction. The issue is how to achieve reliable affordable carbon reducing public transport with good conditions and remuneration for enough drivers.

    Wellington Inc: The airport is not fully commercial, it is reliant to a great (but constrained) degree on landing fees from our subsidised airline and is part owned by WCC. That example is not relevant here. Buses are funded by a mix of taxes, rates and fares. Profit making bus companies add cost to us all and complications like we are seeing now.

     
  9. John Lawes, 18. June 2021, 23:13

    I disagree with Ray Chung’s comment on subsidising the Capital Connection train service. If he bothered to take a trip on it to Otaki he would see how many people from there use it to get to work in Wellington. And they are Regional Council ratepayers.

     
  10. Concerned Wellingtonian, 19. June 2021, 5:52

    Otaki train travellers are heavily subsidised by Wellington ratepayers. This subsidy should stop.

     
  11. michael, 19. June 2021, 9:40

    I would like to know what penalties are involved when the bus companies do not provide the service as contracted. I cannot understand why this seems to have been allowed to go on. If the buses are going to be taken over by local ownership then it can’t be the Regional Council, given their track record.

     
  12. Roger Blakeley, 19. June 2021, 16:56

    Helene. We are taking short term measures to reduce the disruption currently caused by bus cancellations. First, it is important to recognise the problem that is causing these cancellations. In the wake of COVID-19 we have a shortage of bus drivers. There is a shortage of skills right across the NZ economy, at least in part because of border travel restrictions, and commercial driving including bus driving is no different. There is also an issue about terms and conditions for bus drivers – it is not surprising that bus drivers are being attracted to other commercial driving opportunities, which offer better remuneration and less stress. That is compounded by a significant cohort of bus drivers over the age of 60, who are following Govt directions to stay home if they are not feeling well. The result is we are up to 60 bus drivers short in total across the two main bus providers. Actions: 1)we have offered top up to Living Wage for all bus drivers, 2)we are supporting national Fair Pay Agreement for bus drivers; 3)while 97% of our services across the region are running smoothly, we are making timetable changes in Wellington City services from July to reduce unplanned cancellations and so give commuters greater reliability of services they choose.

     
  13. Cr Daran Ponter, 19. June 2021, 20:13

    Michael – the bus companies receive abatements (penalties for cancelling or not running services, running services late and running the wrong size buses.) Most likely that private sector operators will still deliver services – the proposal is more about the assets (depots, charging facilities and buses). Besides the GWRC has only made a submission. It is up to government to decide.

     
  14. Ray Chung, 20. June 2021, 13:43

    Many thanks for this Roger, it’s much appreciated. It’s interesting, we keep being told that the wages are the reason why we can’t get enough bus drivers so last night I caught a bus over to Kilbirnie and asked the bus driver what he thought was the reason why we couldn’t get enough drivers and he didn’t think the deterrent was the money but that many drivers didn’t want to work such long hours and preferred to drive intercity buses and the big B-trains. He loves his job and enjoys seeing such a variety of passengers. Regarding the cost, I consider $3.20 on a snapper card for a one hour journey across town to be really good value.

     
  15. Ray Chung, 20. June 2021, 13:53

    Hi John Lawes, I’m advised the GWRC subsidy for the Capital Connection train service is over $110,000 for each passenger per year from Palmerston North so do you consider that to be a good use of ratepayers money? We could buy each of these passenger a new Lexus annually and it’ll be cheaper for the ratepayers. If there are oodles of passengers from Otaki to Wellington, then perhaps it’ll be an option to run the train from there? Would it be better value to run a bus from Palmerston to Otaki to meet the train there?

     
  16. Julienz, 20. June 2021, 15:43

    Ray Chung – any idea what the subsidy per passenger is on the Johnsonville Line? Given the fact that most off peak services have two staff and are almost empty of passengers, I would guess it is pretty high.

     
  17. Mike Mellor, 20. June 2021, 19:37

    Ray C, with the Capital Connection subsidy estimated to be in the range of $3-$9 per trip (i.e. about $1500-$4500 pa) in 2015 – your figure seems to be a pretty massive increase. What’s the source of your information? And you seem to have lumped all the subsidy on to just the minority of passengers who board at Palmerston North rather than spread it across all passengers – which would be the usual thing to do. Could you clarify this?