One of the things that PT opponents and especially rail opponents like to bring up is the operating costs that are needed to run the services. Those costs can be quite high so I thought I would have a look at how things are now and compared them to what is likely to happen in the future.
First up lets look at the current situation. Figures from early last year shows that all up it cost about $87m to run rail services in the city which is obviously a massive figure so where does that money go. The table below shows the breakdown of that money.
Some of those things are pretty straightforward however some of them probably need a bit of explaining. The Veolia contract covers all of the passenger facing staff as well as about half of the drivers. There will also be costs in there for all of associated support staff but even so it is a pretty large chunk of cash and it would be nice to know more about where that money is going. Track access has recently seen a huge increase after the government forced Kiwirail to charge more. The number of services being run has increased since I first saw these figures as has the price of fuel so all up there will be substantial extra costs.
One issue that really isn’t clear is how much Kiwirail are charging out for their driver hire, this is especially important as I understand most of the new drivers are coming through them. I have heard rumors that Kiwirail charge out their drivers at a higher price so the more Kiwirail drivers there are the higher the operating costs go.
So what can we look forward to when our electric trains start rolling? I haven’t seen the business case for electrification but handily in one of the appendices to the CBD tunnel BC there is some information on this. It notes that Kiwirail and ARTA’s aspiration is to have 57 EMU’s running on the network (the current tender process is for 38 of these). The table below shows the operating and maintenance costs of each EMU although most trains will consist of two EMU’s coupled together.
So based on 57 EMU’s we get a total of $22m. Now if we compare that to the first table we can guess that this EMU cost will replace the fuel costs, maintenance, Kiwirail driver hire and probably at least half of the Veolia contract, all up that is about $52m. That represents quite a big saving on what we have now while also giving much more capacity than we have now. Interestingly the difference the two amounts just mentioned happens to be roughly what it would cost per year to service the loan the government is giving Kiwirail to purchase the new trains which doesn’t seem like a coincidence to me.
So my guess is that operating costs will end up being similar to what they are today however the EMU’s will be operating more services with much more capacity across the network. Add to this the new trains will be faster, quieter, and smoother than what we have now and patronage will continue to rapidly grow which means that the amount of subsidies per passenger will drop.