There were two interesting announcements in the last few days.
On Friday Auckland Transport announced on Friday it has struck a deal with ferry operator Fullers to make changes to the commercially operated Devonport and Waiheke Island routes, but also a major change to how ferries will operate in Auckland in the future. the press release is a bit convoluted so let’s break it down.
Devonport services will come under full AT control the same as all buses, trains and other ferries (except Waiheke) in Auckland.
One key component of the agreements signed today is the full integration of the Devonport to downtown Auckland route into AT’s ferry network, meaning the service will no longer be a privately operated route exempt from New Zealand’s regulatory Public Transport Operating Model (PTOM). Contracts for Fullers360-operated services between downtown Auckland and Hobsonville Point, Half Moon Bay and Gulf Harbour have also been renewed.
This is a good outcome though it’s unlikely to make much immediate change for travellers given it was already treated as part of the network for things like integrated ferry fares. The services start under the new contract today.
Unlike Devonport, Waiheke will continue to be a commercial route (the last one in Auckland) but AT say a new agreement will make some improvements via a ‘Quality Partnership Agreement’ (QPA).
Fullers360’s passenger ferry services between downtown Auckland and Waiheke Island will continue to be exempt from contract regulation, but subject to new minimum service levels and extended legal minimum service withdrawal notice period.
Under the QPA, Waiheke residents will also be able to access a new AT HOP adult monthly pass which includes same-zone bus and train connections at either end of the ferry journey. The pass will be priced the same as the equivalent existing Gulf Harbour and Pine Harbour ferry monthly passes, providing a saving of 14% for commuters and will be available in the coming months.
AT’s Mark Lambert says that although Waiheke services will remain outside the regulated Public Transport Operating Model (PTOM), which means continued exemption from a contracted status with AT, there will now be much greater accountability as these services will be measured against AT’s service standards.
“AT recognises that the QPA for the Waiheke service does not involve removing the exempt status. But, as a negotiated outcome, provides immediate interim benefits for service levels, service certainty and fare prices, as we now step through the exemption review process led by government”.
Interestingly, in a separate fact sheet they provided, AT blamed a lack of funding for not being able to change this.
Considerable time was spent by both parties discussing the viability of Waiheke Island route under PTOM. We appreciate that many members of the Waiheke community have advocated for Fuller360’s exemption status to be lifted. However, the reality is, that under PTOM the service is not commercially viable without additional funding from Auckland Transport or central Government.
Though they also note that the government are currently reviewing PTOM and just last month Transport Minister Michael Wood stated he had started the legislative process to remove the exemption.
More New Ferries and change in ownership
Perhaps the most interesting part of the announcement though is that AT are changing the ownership structure of ferries, changing them to be more like trains where AT own the vessels and they will be used by whatever company is running the services. I think this is a positive change as long-term it will make it easier for new operators to enter the market and provide competition to Fullers.
Along with the change in ownership structure, AT are working with Fullers and using funds from the Climate Action Targeted Rate recently introduced by the council to design and build five new plug-in hybrid ferries. These are on top of the two electric ferries the government is mostly funding that were announced in April. They are also purchasing four existing ferries.
Auckland Transport Group Manager Metro Services Darek Koper says the move to AT procuring the new electric ferries will help increase the pace of Auckland’s transition to an all-electric and electric-hybrid ferry fleet.
“The plug-in hybrid ferries utilising design and innovation developed by Fullers360, Incat Crowther and HamiltonJet are in addition to the two EV Maritime fully electric ferries recently announced, increasing the government and Council investment in new electric or electric-hybrid vessels to seven, which will allow us to significantly reduce our emissions,” Mr Koper says. Q West will be builders for the first of these vessels.
“Passengers travelling on services like the Devonport route will be some of the first to travel on the new electric and plug-in electric-hybrid ferries, which will be comfortable, quiet and will deliver a fantastic experience for our passengers. The new partnership leverages the significant investment made to date by Fullers360 in design and development of new vessels for Auckland.
“The four existing fleet ferries are needed to maintain services while we build and transition to the new electric fleet, requiring investment to refurbish and retrofit with lower emission engines to help ensure that we are reducing our emissions and improving vessel reliability in the immediate term.”
Fullers actually announced these back in December so this is essentially AT taking them over, though with Fullers still helping on the project. AT say the first of the five new ferries are likely to arrive in mid-2024 though that could be impacted by supply chain shortages.
Half Price PT and Fuel Tax cuts extended
Yesterday the government announced they were yet again extending the fuel tax/road user charges discount and the half price public transport fares. This was initially meant to be a three month change but the government extended it by two months at the time of the budget. This time they’re pushing the changes out another five months to the 31-January 2023.
“We know that inflation is rising across the world, and cost of living pressures are making it tough for New Zealand right now. High fuel prices, particularly driven by the impact of the Russian invasion of Ukraine, are a global problem affecting households and businesses in New Zealand,” Grant Robertson said.
“That is why we moved in March to cut fuel excise tax by 25 cents a litre and road user charges by equivalent levels, along with halving public transport fares.
“At the time of the Budget we extended those reductions, and are now extending them again by more than five months until January 31 because we want Kiwis to have some certainty over the coming months in the face of volatile prices at the pump.
“The Treasury’s estimate is that the combined impacts of this policy will reduce headline inflation by 0.5 percentage points in the June 2022 quarter. Even though many commentators are forecasting that inflation will peak in the June quarter, it is likely to stay for some time at levels higher than we have seen in recent years.
“The global fuel price crisis is not leaving many untouched so we’re pleased we’re doing what we can to ease pressure on motorists,” Megan Woods said.
Transport Minister Michael Wood said since half price fares were introduced on April 1, public transport use has increased in the three largest centres, Auckland, Wellington and Christchurch.
“We know this makes a real difference for people feeling cost of living pressures, particularly lower income households. Because half price public transport will now be available for all New Zealanders until the end of January, the Community Connect scheme will now start on February 1 next year.
“This will also give more time for local authorities to put in place the systems required to efficiently administer the Community Connect scheme that will give those who have Community Service Cards half-price public transport permanently.
“Extending the reductions to fuel excise duty and road user charges will also help to reduce the fuel burden on the road transport sector, and in doing so keeping the cost of food and essential goods lower,” Michael Wood said.
Extending the fuel excise and RUC reductions until the end of January is estimated to cost $589 million. This is money that goes directly to the National Land Transport Fund to pay for building and maintaining roads, and funding public transport, walking and cycling initiatives. The cost to extend half price public transport is an estimated $63.1 million.
The extension is unsurprising given the price of fuel is now higher than it was before the 25 cents per litre was dropped. Combined it means the total amount of ‘lost’ tax the government is having to cover is now up to $1.174 billion. That’s a huge amount they’re paying just to maintain the status quo that their own plans say needs to change.
Though to be fair, for most people the viable alternatives to driving are actually reducing because due to the woeful reliability of public transport at the moment with up to 2000 services a day being cancelled in Auckland. So while the half price PT fare extension is welcome it is unlikely to do much to get more people using public transport.
There is also a bit of a tie in between this the PT half-price fare extension to the ferry news. That’s because Devonport and Waiheke were excluded from it due to being commercial services. AT have been covering the cost to include Devonport services given it would have been hard for them to be excluded from the Integrated Ticketing solution. Presumably this means the government will now provide half-price funding support for them. However, given it’s still a commercial route, the same is unlikely to be case for Waiheke services.