I read with interest today that Mr Steven Joyce, Transport Minister is to make the MetroRail services in New Zealand contestable. In essence, the government will own the new rolling stock that will hit the Hutt Valley next year, (and Auckland) and will lease these to the service provider. Currently KiwiRail is the service provider.
“The model builds significantly on the best of what we already have in place, and will ensure the operation of commuter rail services is contestable, so that we get the best possible service for commuters at the best possible price”.
KiwiRail will be able to bid to operate the services alongside other train operators, but all bidders will face the same price to lease the trains, and to access the track.
“This move will ensure that while KiwiRail owns the trains, it is not necessarily the case that they operate the services. They will have the opportunity to bid, but it is the regional transport authorities alongside NZTA who will determine the successful operators,”
This is a laudable business model given the current structure that the tranzmetro services do not pay their own way and in effect were the reason that KiwiRail ended back in Government hands.
“That is appropriate as it is the regional organisations and NZTA that provides the public transport subsidies that make the services viable.”
Further to that Mr Joyce also advocated further enhancements on current practice by implementing contracts that reward or penalise service standards:
“Performance-based contracts ensure the train operator is rewarded for providing reliable services and penalised when they don’t. We will ensure that operators have sufficient control over their operations to ensure they can be held accountable for performance.”
I hope, along with the many Hutt commuters that the standard of service improves to the point where it can be called a service, and not a joke. No doubt the last decade has seen when this service was placed in private hands that it was raped of value, with no attention or money spent on infrastructure maintanence or development.
The result, that the government repurchased the business established KiwiRail and has started on this long process of redevelopment, in the hope at the end to pass it on to private hands again.
The circle of business continues, but at least at this point the government is putting in place caveats on performance.
One would have to wonder who would step into the fray to be a regional rail service provider. Currently Aucklands service is run privately by Veolia (following masive reinvestment in regional rail by the government) and also the bus service in Wellington by a Scottish private company (I think).
The question on every Hutt rail commuters mind is first, get the service to the level that you can call it a service that people willing pay for. It has to be a viable, reliable, cost effective alternativeto other transport.
The second outcome if successful in the first, is how much will this new and improved service cost once placed in the hands of a private contractor. The balance generally of all of this business structuring and performance contracts is nearly always in the end the user, the commuter.
Are they the one going to foot the bill through increased prices to make this service profitable again?