When NZTA released its final farebox recovery policy a week or so back, I explained quite carefully why I thought it was an utterly stupid policy. It’s quite nice to see that the Auckland Regional Council (ARC) has made similar criticisms of the policy in their latest Transport committee meeting agenda, just as they made fairly similar points to me in their submission. The ARC document highlights much of what I think about the policy: that NZTA are going to a lot of work to ‘soften’ the impact of the policy, and in some respects to even pretend that their 50% average across the whole country isn’t really what the policy is all about – but just as I saw through that rubbish, the ARC has done the same:
Like the ARC, I’m glad that there seems to be more flexibility in the initial setting of farebox recovery ratios. I do think that more work needs to be done on working out where the different benefits of public transport investment are felt: what proportion is for road-users, what proportion is for the city in general and what proportion is for the individual using public transport. An interesting example is the soon to be reopened Onehunga Line, where the cost-benefit analysis showed that 85% of the benefits from that project were to road users. To me that seems like a pretty good argument that road-users, through NZTA, should be picking up 85% of the bill for that project. Somewhat unsurprisingly, when I raised that issue with NZTA they didn’t get back to me!
However, all this new flexibility and sweet-talking from NZTA avoids the matter that they’ve still come up with this random 50% number without any international justification or any further research having gone into why that’s the right number. Most of the talk from NZTA in response to that issue goes along the lines of “but over the past eight years the recovery ratio has dropped from 58% to 46% across the country, we don’t think it’s unreasonable to get it back up a bit”. Now that may be a fair point, but where’s the research showing that, as a whole, our urban areas are not better off with a recovery ratio of 46%? What if a bit more investment in public transport enables the removal of a few more thousand cars off the roads at peak time, leading to significant benefits for road users?
I know for a fact that many Australian and US cities have farebox recovery ratios far lower than Auckland’s – but they aren’t particularly worried about that issue, because they recognise the huge wider benefits of increasing public transport use has. They realise that if fares were to go up significantly, or services levels cut – to meet an arbitrary recovery ratio – the negative consequences (people shifting back to driving) would far outweigh the few dollars in subsidy saved.
Of course this is all not to say that we shouldn’t strive to get better value for money from our investment in public transport. We absolutely should eliminate the wasteful and stupid duplication of bus and train routes (like the 135 bus route duplicating the Western Line train), we absolutely should operate more buses as feeders rather than running all of them into the CBD (why can’t most Howick/Eastern buses terminate at Panmure and transfer their passengers onto the train there rather than running all the way into town after literally driving past the Panmure train station) and we absolutely should utilise the provisions of the PTMA to stop commercial operators “cherry-picking” the best routes so it’s possible to cross-subsidise less profitable routes from the more profitable routes – and therefore reduce the overall level of subsidy required. So there are clearly steps that we can take to get better value for money from public transport, but the money saved really needs to go back into the system: so we can run better frequencies on key routes and so that we can make the system faster, better value for money, and more convenient.
Putting in an arbitrary farebox recovery ratio could very well lead to a “death-cycle” for public transport, where in order to meet the ratio, we need to cut services or hike fares, which will further put people off using PT, meaning that fares need to be hiked further and services cut further to meet that arbitrary ratio. Meanwhile as people abandon public transport in their droves they jump back into their cars and start clogging up the roads again, not a particularly sensible outcome in my books – and all because someone plucked an arbitrary 50% figure out of thin-air without doing some proper research into what the actual ideal level should be.
Great job NZTA, thanks for confirming that you hate public transport.
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You state “An interesting example is the soon to be reopened Onehunga Line, where the cost-benefit analysis showed that 85% of the benefits from that project were to road users. To me that seems like a pretty good argument that road-users, through NZTA, should be picking up 85% of the bill for that project.”
There are two problems with the above approach. While the statement on face value could be true, most of the 85% of benefits are non-monetary (mainly time) benefits. The issue here is building and operating the line take cold hard cash. The line, in effect will take cash costs to provide non-cash benefits.
The second problem is there is no analysis that investing in a rail line is the best possible investment to improve public transport, what would happen is the equivalent cash was invested straight into a better bus service (bus lanes and traffic light priority could be more effective).
Finally, the most interesting point about the above statement (in a post about Fare Recovery Ratios) is you have not included the predicted fare recovery ratio of the Onehunga Line. What is it ? 50%, 20%, 10% … ?
Tony you’re right that most of the benefits are from travel time savings. I am actually sceptical of those benefits (see here: http://greaterakl.wpengine.com/2009/09/30/time-savings-benefits-real-or-not/ ), but if they’re going to be used to justify billion dollar expenditure on motorways like the Waterview Connection and the Puhoi-Wellsford holiday highway, then I don’t feel bad about pointing them out for a project that is probably costing about one hundredth of either of those two projects.
While you’re right that perhaps better “bang for your buck” could have been achieved through other PT improvements, the cost-benefit ratio of the Onehunga Line is around 3 – which by all accounts is excellent (compares with a BCR of 0.8 for the holiday highway for example, or 0.6 for Transmission Gully). Furthermore, many of the growth strategies for Auckland identify Onehunga as a major development node, and underline that it’s critical for major nodes to be linked into the “Rapid Transit Network”. This is a start in making that happen.
Finally, honestly I don’t care what the farebox recovery of the Onehunga Line is. The point is that it’s a good investment – as can be seen from its BCR of 3 and its good fit with Auckland’s growth strategies.
I really don’t see how this will achieve anything than a ‘death cycle’ as you call it for PT in the near future and all to save a few million dollars – a 2% cost overrun on the the holiday highway will probably gooble up 10 years of ‘savings’ that this plan achieves in PT.
NZRA perhaps..?
Good to see issue is getting some coverage around the country although not, weirdly, in Auckland which is one of the areas most likely to be affected.
http://www.odt.co.nz/news/politics/108338/quotfarebox-recoveryquot-will-add-fares-greens
http://www.stuff.co.nz/the-press/news/christchurch/3752905/Bus-fares-likely-to-rise
Wellingtonian and Hutt News had a piece on it too which isn’t online.
And the Bay News from Tauranga weighed into the debate today too. And yet, a strange silence has settled over Auckland on this issue 🙂
I doubt any research should show what the “right level” should be.
It really is a question of “how much do you think is acceptable”.
The question of “do we subsidise to public transport” should be separated from the question of “how much subsidy to public transport is acceptable to you”.
Some of the best public transport systems worldwide have lower % subsidy, not higher. And this I think is achieved by providing frequent services with a large scope of service hours that people are prepared to pay for and also organising networks for maximum efficiency (remove duplication, bus rapid transit to rail stations) etcetera.
Its true that Australian systems have woeful farebox recovery ratios. They’re around 30% or so, which is probably at the bottom of what is happening internationally. Now I’m speculating here, but many of our Australian cities do not have:
* proper cross town links (Melbourne has just got them with their SmartBus orbital buses)
* we operate buses in parallel to trains (because ‘Australians don’t like to transfer’ apparently), * we don’t feed our train stations with high frequency buses (because that is a “forced” transfer, nobody says anything about the lower frequency that results from that)
* services in the off peak are infrequent (this is where public transport has opportunity to expand market share)
* There seems to be this unspoken idea that public transport is for commuters, which leaves all day, general purpose trips like shopping etc market share to go to the car.
* Governments seem a bit slow on TOD around stations
If you put money into proper, frequent services people will flock to it and pay for it.