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.
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I would think that integrated ticketing with tag-on and tag-off posts will bring massive operating savings well before electrification. After all, it should massively cut staffing costs.
Ten million a year on fuel!
If they cut staffing to one driver and one manager per train that will be a big reduction. Not sure if I would advocate driver only operation, it’s great for security and customer service to have a knowledgable staff member with authority on board.
The conductor would then be replaced by a ticket checking group either roaming the network or fixed at britomart. But would the outer stations have electronic ticketing gates also?
Those EMU train crew costs seem exceptionally light
According to those figures the 57 EMUs would cost only $4.5 million in wages for both drivers and on board Train staff, Whereas now it costs $8.6 million now for just the drivers?????
Yes there would be savings from integrated ticketing and yes you would still need a group of roaming staff checking the network but that would be far less than what we need now.
Greenwelly – Yes they do seem a bit light but a couple of things to remember, almost all trains will be operated with 2 EMU’s, also as I mentioned there is a question around how much Kiwirail charge out for their drivers. I remember hearing a while ago that one of the reasons the SA sets weren’t used on weekends was due to the fact they needed Kiwirail drivers for them and they were charging much more than Veolia does. I suspect Kiwirail are using Auckland as a way to get some easy cash, aparantly they have 70-80 drivers based in AK and even if they were all paid 90k and solely decidated to passenger rail (some do freight) it would still be cheaper than what Kiwirail has charged.
I have heard that Kiwirail charge out their drivers at around $150 an hour. A pretty tidy profit I would imagine.
@Admin Its fairly standard practice to include all your overheads in charge out rates, So given that the Auckland council have a chargeout rate of $95/hr for a pool fencing officer, I suspect Kiwirail have no qualms about charging them $150 for a driver.
http://www.aucklandcouncil.govt.nz/SiteCollectionDocuments/6.1%20Fees%20and%20charges.pdf
Yes it is normal to include other overheads however I get the impression it is a forced cost because for a long time Veolia couldn’t train its drivers on SA sets. Once we get the EMU’s hopefully we will see some rationalisation of how this is done to get better value for ratepayers.
If we’re buying these trains, ie paying the interest, why won’t we own them, and do we want to? I guess be we I mean AT.
Yeah pretty weird to pay for something if you don’t end up owning it.
Personally I’m quite concerned that Kiwirail will use it as another opportunity to make money by setting the leasing costs higher than the interest payments, they will use some BS about admin costs and stuff like that but the reality will be Auckland helping subsidise a freight company. Also by them retaining ownership it means they can sell them back to us later for more money 🙁