My blog’s RSS feed has been having problems. This has also affected some email subscribers. I think I’ve found the problem, so hopefully both are working again now.
Just a quick post:
The Age and Herald Sun reported yesterday that Metro Trains Melbourne made an annual profit of $29 million, on $786 million of revenue — despite still regularly missing punctuality targets.
I’m not sure the fact that they’re taking a profit is really a surprise. They’re a private company, and they wouldn’t be in this game otherwise.
Is the 3.6% profit high, or low, for a company earning $786m in revenue per year? I dunno.
Of course, if Metro misses targets, a lot of the blame should really be on the poor state of rail infrastructure – owned by the government. Upgrades are finally happening, but that follows decades of neglect.
I think the broader question is whether the taxpayer is getting value for money overall from the train network (regardless of whether the operator is private or public).
I’m particularly concerned that there’s such a huge amount of infrastructure/fleet investment (capex), as well as the fees to the operators (opex), but the service provision still has a strong concentration on commuter peaks.
This means that a lot of the assets are only being fully used for a few hours a day, despite strong travel demand at other times (both on the roads and on the trains).
A moderate increase in opex would provide for all-day high frequencies (eg most stations with trains at least every 10 minutes for most of the day) that make much more effective use of the overall spend, and better match current travel demand by making the system so much more useful for people.
How much money are we talking about? One estimate I’ve seen is $100m per year. To put that in perspective, that’s about the same cost as the 2015 fare changes that capped zone 1+2 fares, and introduced the Free Tram Zone.
While people welcomed the two-zone discount, it’s not clear if it made a big difference to patronage. The Free Tram Zone benefits CBD motorists, and crowds out fare-paying users – it might be a good example of what Chris Hale wrote in The Age last year: a public dollar frittered on fare discounting is invariably a waste, whereas that same dollar invested in better off-peak service gets great results.
And any increased spend on services would be offset by additional fare revenue from increased patronage, of course.
The idea that trains only run every 30 minutes after 7pm (and 20-40 minutes in daytime off-peak/weekends, despite crowding) is just crazy for a city of 5 million in the 21st century.
It’s high time it was rectified.
