While it’s certainly essential for Auckland to have a well functioning rail system, as we’re a growing city with little ability to squeeze more out of our roads particularly easily, the ‘turning around’ of Auckland rail system over the past decade has undoubtedly been an expensive – but necessary – task. I won’t go into the capital costs of the projects in this post, because I don’t have much of an issue with them – all the money we’ve spent so far on upgrading the rail system has been on projects that make pretty good sense. What I’m particularly interested in is the ongoing operating cost of the rail system, and how we might be able to reduce that.
In the 2009/2010 financial year (recent data is probably available but this is easy to find), we spent around $69 million on operating the rail network, and got in around $20 million in fares – meaning a subsidy of just under $50 million was required: I’m not going to do the normal thing of dividing this amount by the number of trips to work out a “per trip” subsidy cost and then go and compare it to buses, because that’s silly as your average rail trip is much longer than your average bus trip – therefore generating much greater congestion relief benefits and also meaning that trains need to be operated much longer distances, adding to the cost.
However, overall I think it’s pretty clear that in the longer term we want the rail system to fund itself to a greater degree than the current 29% farebox recovery level the table above suggests.Fortunately, much of the recent capital expenditure, including ongoing projects like electrification and integrated ticketing, is aimed at improving the efficiency of the network. Integrated ticketing should do away with the need for so many on-board staff (as an aside, there were two people selling tickets on the platform at Henderson station around lunch-time earlier this week when I was catching a train, meaning that on-board staff were able to sit around not having to do much) while electrification should help save significantly on the $10 million a year currently spent on diesel, and the $15 million or so a year spent on maintenance.
In short, it seems logical to me that as these two projects in particular start to roll out, we should be able to run a much leaner rail system, reducing the cost of many aspects of providing rail service. Yes, we will have longer trains once electrification is completed, but we won’t have more peak time trains (thanks to the Britomart bottleneck) so it should be possible to significantly reduce the rail network’s operating cost. In fact, I’m pretty sure that the business cases for both integrated ticketing and electrification relied upon such savings.
I do wonder though whether this will happen. There doesn’t seem to be much competitive tension in getting a good contract price out of Veolia providing rail service, and we have learned from analysing PTOM that the bus market is pretty uncompetitive when it comes to tender prices. I think it’s essential that, over the next few years, Auckland Transport works really hard to show how investments in the rail network are helping it become much more efficient so we can get that farebox recovery rate up and start proving to a sceptical government that rail investment is good value for money.