this post was submitted on 14 Apr 2024
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That's a good point. Pre-COVID there were about 70,000 journeys on trains alone per day in Wellington (based on something I remember reading years back when trains were broken). If those people are paying say $5 per trip, and the regional council and local councils pay $5 per trip (I seem to recall council subsidies being about half?), then that's $700,000 per day in revenue.
If we assume weekends are lower lets just look at about 250 work days a year. That's $175m per year to run the trains.
It would be interesting to know where the bulk of that sits. Is it cost of staff? Bill from Kiwirail for using lines? Debt costs for borrowing to buy units?
Depending on what exactly the bulk of the cost is would change what's worthwhile. Mostly staff cost? That would probably grow mostly proportionally as you add more passengers. Mostly kiwirail costs? The more trains you run the less it should cost per trip.
Though we could run free PT for 50 years if we don't build that $10B tunnel...
I suspect labour costs are the single biggest driver, you're not being paid to drive your car after all.
In theory, but a train (at peak times) has hundreds of people, two ticket checkers, and one driver. It probably costs $200k per year to run staff for a single train for 8 hours (say, $70k for a driver which are trained internally, and $55k for each ticket taker making a bit over minimum wage), plus some control people, cleaners, etc. Say $250k per train. Trains run almost 24/7 but probably 1 less staff outside of peak times, lets say double it to cover 24/7.
Let's ignore intercity and say each train line is an hour long max. Two hours return trip, trains every twenty minutes, so 6 trains to a line. 3 main lines = 18 trains + say 5 more for backups and the shorter Melling line.
18 trains x $500k per year = $9m a year. Probably some additional staff still. Let's double it - less management staff but higher salaries. So let's say $18m or even $20m.
This is still a tiny fraction of the $175m annual cost estimated earlier.
What dies a train carriage cost? It seems a couple of million per car ($210m for 70 cars).
If it was all borrowed, and assuming 6% loan over 20 years or so, it would also be less than $20m per year.
So far we have $40M in costs. Even if we assume I've underestimated or forgotten things in these categories and double it to $80M, we still have $95m to account for.
I can't think of other major costs except kiwirail charges. Is kiwirail charging almost $100m a year for Wellington to run (pretty) light commuter rail?
Edit: I just saw in my link that central government/NZTA paid for 90% of the trains in Wellington, so that cuts $40m off the cost leaving $135m to kiwirail or otherwise unaccounted for.
There's something else to consider, and that is all the people you lure off the road and onto public transport are not only now costing you money, but you also lose the revenue from them driving their vehicle, not only the RUCs or fuel excise, but the GST on all the running costs.
RUC isn't really extra money. Vehicles using roads damage them. Less vehicles means less potholes meaning less repair cost so to a certain extent that counteracts it (I doubt it's 1 for 1 but a large chunk least).
Plus we already pay for roads through rates (to some extent, councils also get money from RUC and petrol tax), no reason you can't socialise the road costs some more once you get more optional traffic off the road. Sure higher rates but you're getting free PT.
Another option often talked about is tolls. You could do that to recover the shortfall, though personally I'm against tolls in most cases as it feels like double dipping (we already have user pays through RUC and petrol tax, why not use the system we have).
As I mentioned earlier I'm not actually convinced that free public trandport is the right path, this was more a thought experiment (and I'm left wondering why running trains is so expensive!).
Even of the trains aren't free, it's mathematically true that every person who takes PT instead of driving reduces congestion by that amount.
It's not all that complicated a tasks to work out which has better value. If the money spent on roads will not reduce congestion by as much as the same amount spent on PT, then it's a fool's errand.
I think if you halved public transport costs (so it's clearly cheaper than driving) then you'll get a bunch more users. I knew many people during half-price fares that used public transport when before they didn't. I'd have full support for returning to the half price fares (so long as you had some way of mitigating pocmeting this since public transport is run by private companies since the law was changed to prevent councils running it themselves).
However, I'm less convinced that the second half of that cash is well spent. We would likely get most of the benefits from half price fares. You probably won't get the same benefit for money spent as you would for the first half, so you have to consider what that money would otherwise be spent on.
As an example, would you rather have free PT, or half price PT and rail to the airport?