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A tale of two different rail cities

By Richard Allsop - posted Thursday, 17 September 2009

The differences between the public transport systems in Australia’s two largest cities have been graphically highlighted recently.

In Melbourne, the details of the contracts with new private train and tram operators were made public. These contracts confirmed that the mix of value-for-money spending and service improvements which have characterised ten years of privatisation will not only continue, but be further enhanced.

The following day, Sydney also had a transport announcement, which was that three construction consortia had been asked to bid to build Stage One of the Sydney Metro. This sounds like good news, but with a price tag of $4.8 billion, the first stage of the metro will be largely duplicating other public transport services, at enormous cost, while doing nothing to solve Sydney’s real transport problems.


While traditionally having the highest proportion of journey to work trips made by public transport of any Australian city, Sydney has now been the laggard in patronage growth for many years. By contrast, Melbourne has led the way nationwide with double digit increases in patronage for several consecutive years.

Twenty years ago Melbourne’s public transport was clearly worse than Sydney’s, a six-week union tram blockade of city’s streets symbolising just how dysfunctional the system had become.

A key reason for Melbourne’s public transport renaissance since then, and its recent ability to attract more people to public transport, has been the Kennett government’s decision to privatise the operation of Melbourne’s trains and trams. While it has not all been plain sailing, since the original contracts with private operators were let in 1999, the existing rail operator, Connex, and tram operator, Transdev TSL, trading as Yarra Trams, have both delivered significant improvements for commuters.

Sometimes, the operators became victims of their own success as the patronage boom they induced caused problems such as over-crowding which, in turn, led to operational delays. They were not helped by the fact that the Victorian Government was slow to respond to the patronage boom and often seemed prepared to let the operators carry the can for problems that were really issues for government under the terms of the contracts.

The new operators, Metro Trains Melbourne (MTM) and Keolis Downer EDI (KDR), will both bring new perspectives, strong international expertise, and ambitious plans to Melbourne’s trains and trams respectively. MTM is a joint venture including MTR Corporation, which operates services to more than 99 per cent punctuality in Hong Kong.

The continuing involvement of the private sector in the provision of public transport services will achieve the impressive double of keeping costs under control for the eight-year time span of the new contracts and deliver several new customer service initiatives. Where new money is being invested it is in the key area of maintenance which will ensure that some of the remaining practices from the days of government-operation are finally eradicated.


The contrast with New South Wales could not be starker. Sydney’s rail system has still not seen the sort of efficiency measures undertaken in Melbourne in the 1990s.

A benchmarking study, undertaken last year, found that by retaining train guards and keeping staff at low patronage stations the NSW Government is paying $130 million more than it should to operate its metropolitan rail system. As well as those potential savings it is also clear that similar efficiency gains could be made by adopting more efficient maintenance practices for both rail infrastructure and rolling stock.

Yet, despite the obvious need, the NSW Government shows no sign of pressing for these gains. By contrast, in the 1990s in Victoria, the Kennett Government removed train guards and tram conductors, reduced the number of station staff, and streamlined maintenance practices in a comprehensive reform agreement that the public transport unions ended up accepting without strike action. These gains were then entrenched by privatisation.

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About the Author

Richard Allsop is a Research Fellow at the Institute of Public Affairs. He was Chief of Staff to the two Transport Ministers in the Kennett Government and has had a range of other roles in federal and state politics, as well as private sector experience. He has a Masters in History from Monash University and is currently undertaking his PhD. Richard has written on Australian political history for various publications and has also worked on the Nine Network's election night coverage of federal and state elections since 1993.

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