Subscribe to RSSGovt Confirms Fare Increases
The Government is providing $7m to meet a shortfall for Metro Rail in the current financial year- but make it clear today it’s pressing ahead with plans to make commuters pay more.
It confirms that does mean there will be fare increases.
It says its model for commuter rail will be that regional councils can competitively tender rail delivery. That presumably means Wellington could have Veolia run its services rather than KiwiRail/Tranz Metro.
The government now requires regional councils and KiwiRail to agree levels of service and costs for the rail network and rolling stock to be provided.
And the ministry of transport expects by the end of this year to wrap up its a working group made up of the key stakeholders on track access charges in order to bring about agreement on renewal costs and new track access charges and agreements between KiwiRail and regional councils.
It says that the shortfall for metro rail has been disguised over recent years by the significant government capital funding provided in Wellington and Auckland for rail upgrades, and operating losses for the old ONTRACK division of KiwiRail.
The government says with regional councils paying more, fares will go up but it’s the government’s expectation that these increases would be gradual and reflect better service as it improves.
Will Wellington commuters end up with Veolia?
Here are the government’s questions and answers on Metro Rail.
How much Budget 2010 funding is being appropriated for metro rail?
$7 million for the 2010/11 year as a contribution towards appropriate track access charges.
Why is this funding required?
This is a one off Budget appropriation to potentially meet a funding shortfall for metro rail renewals in 2010/11.
The funding will allow KiwiRail to undertake work to ensure the safety and reliability of metro rail networks in the Auckland and Wellington regions and allow scheduled services to continue operating until longer-term funding arrangements are confirmed.
Why is there a funding shortfall that needs to be covered?
Until now, KiwiRail has been unable to recover the full costs from its regional customers of maintaining and renewing the track network and the costs of providing train control and other services in the metro areas of Wellington and Auckland.
While costs associated with providing access to the metro networks have risen over the years, track access charges paid by the metro rail operators (in turn funded by the passengers, regional councils and New Zealand Transport Agency) have not kept pace.
This has mainly arisen because the various parties involved, through a period of mixed ownership objectives, have not been able to reach agreement on the fair apportionment of costs. The Government has agreed to provide a one off appropriation to cover part of this shortfall while agreement on the future apportionment of costs is reached.
A Track Access Charge Project is underway, and when completed will require significant changes for KiwiRail, Auckland and Wellington regional councils and the NZ Transport Agency that cannot be put in place in time for the 2010/11 year.
What is the new metro rail operating model?
The government has confirmed a model for the delivery of metro rail services in Auckland and Wellington. This enables regional councils to competitively tender rail delivery.
It also requires regional councils and KiwiRail to agree levels of service and costs for the rail network and rolling stock to be provided.
At present the costs of the metro-related infrastructure and services that KiwiRail provides to the regions are not being fully met by passengers, regional councils, and the New Zealand Transport Agency.
This shortfall has been disguised over recent years by the significant government capital funding provided in Wellington and Auckland for rail upgrades, and operating losses for the old ONTRACK division of KiwiRail.
Who is going to pay for the real cost of providing metro rail services?
Longer term, a fairer share of the costs of the metro rail networks should be borne by the passengers who use the services, the regional councils who are responsible for providing public transport services to their rate-payers, and the New Zealand Transport Agency, who subsidises public transport activities in New Zealand on behalf of the Crown.
To the extent that KiwiRail’s freight business also uses parts of the metro network, it will pay the full and fair cost of that access.
Will this mean fare increases?
Longer term regional council contributions and fare prices will need to be adjusted to meet a fairer share of the cost of using services.
It is the government’s expectation that these increases would be gradual and reflect the better service that current investment in infrastructure and new electric trains in Auckland will deliver in the coming years and the greater reliability and service timeliness in Wellington.
How are fare increases justified?
By the time the rail upgrade projects in Auckland and Wellington are completed, the government have spent more than $2 billion, in partnership with the regional councils, improving the metro rail services in both regions.
This includes new fleets of electric trains for both cities, improvements to the tracks (including double tracking the western line in Auckland and the line to Waikanae in Wellington, new branch lines to Onehunga and Manukau, improvements to the Johnsonville Line, and electrification of the entire Auckland network), and new and improved stations, including significant projects in New Lynn and Newmarket.
The Government acknowledges that this important work has caused disruptions for commuters but it is confident that the resulting improvements to service levels will more than justify any corresponding increase in fares.
Both freight and metro services use the same track network – how will costs of maintaining and upgrading this be met? Costs need to be shared fairly between different business users.
In the past this has not happened because of the difficulty in agreeing what a fair share of costs should be.
The Ministry of Transport is leading a working group made up of the key stakeholders on track access charges in order to bring about agreement on renewal costs and new track access charges and agreements between KiwiRail and regional councils.
Negotiations are expected to finish later in the year.
Why has this funding issue come about in the first place?
There have been big changes to the Auckland and Wellington metro rail systems funded by the government in recent years. Previously KiwiRail was funded for this work from one off, ad hoc and short term funding provisions.
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5 Comments
I wait with baited breath for road user and mainly trucking to be allocated their true level of tax (RUC)
Waiting, waiting, waiting, still waiting.
The only thing Auckland has in it’s favor are that the operating costs should reduce quite a bit when we get our new electric trains, this combined with the patronage increases that are happening and are expected should help to offset some of this
NZTA has to meet 60% of the increase anyway so as ratepayers we are up for $4 - $6 million which as Matt has said will hopefully reduce but $4 - $6 million out of a $650 million Supercity AT budget..? Not the end of the world…
“Eletricfication to the entire Auckland network” are they taking the piss? Pukekohe isn’t getting it and its part of the Auckland network….FAIL on a 1/2 pie job
Carl, the Pukekohe gap will be small. I’d expect they may electrify that part a few years later, with the next round of further improvements of the Auckland system. Once we get electric trains, the few diesels will look mighty outa date.