Fair Fares for Wellington - Bus Fares to Fund Increased Rail Costs

8/2/2019 Fair Fares for Wellington - Bus Fares to Fund Increased Rail Costs

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Filename: Document1 Page 1 of 15

FAIR FARES FORWELLINGTON !

Statement Supporting Quote/ Fact

Public Transport is a critical element of the Wellington Region. Itis provided by the Greater Wellington Regional Council(GWRC)1.

Buses are by far the most used public transport mode with 2/3rdsof all trips, followed by passenger rail.

Total passenger trips (million) on the public transport network2010/112

Rail Bus Ferry Cablecar

Total

Peak periods 7.4 11.6 0.05 - 19.05

Non-peak 3.7 12.7 0.05 - 16.45

Unspecified - - - 1.1 1.1

Total 11.1 24.3 0.1 1.1 36.6

Rail Bus Ferry Cablecar

Total

Peak periods 20.2% 31.7% 0.1% 52.0%

Non-peak 10.1% 34.7% 0.1% 44.9%

Unspecified 3.0% 3.0%

Total 30.3% 66.4% 0.3% 3.0% 100.0%

1Note: Public Transport is not funded or managed by the Wellington City Council or any other local council although they do provide bus lanes, shelters and other

infrastructure.2 GWRC Public Transport Plan


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Public Transport has two important roles: To provide essential transport to enable people who are

unable to drive to access social and other services. To provide an alternative to private cars

The bus service is the most accessible and provides mostaccess to essential services such as shopping and healthcare.Of special concern is the provision of public transport to thosewho have not alternative means of transport: children, students,disabled, poor and elderly.

The most vulnerable of our society rely on bus serviceswhen they need to travel.

The public transport system needs to serve dual strategic roles of: Providing access to basic community activities and services, in

particular to work and education, but also to other activities andservices necessary to participate in society such as healthcare,welfare and food shopping

Providing congestion relief at peak times to reduce the need foradditional road investment by providing a more environmentallysustainable alternative to private car for travel to work andeducation.3

Fares are based on a zone ticket system that is supposed to bethe same whether travel is by bus or rail.

However, most people use bus services for shorter distancesand passenger rail for longer distances. This is reflected in thedifferent use bus and rail in different fare zones.

Zones 1 3 are mostly bus users, with Wellington Citycommuters being, by far, the biggest bus users.

Zones 4 -14 are mostly rail users, (services intoWellington City from Petone, Tawa and places furthernorth).

Example:

Wellington to:

Estimated

Distance (km)

Mode share

Zone Bus Rail

1 Thorndon 2 99% 1%

2 Newtown 4 97% 3%

3 Island Bay 7 90% 10%

4 Petone 14 7% 93%

5 Porirua 21 1% 99%

6 Paramata 27 1% 99%

7 Upper Hutt 33 0% 100%

8 Paekakaiki 41 0% 100%

9 Paraparaumu 50 0% 100%

10 Waikanae 60 0% 100%

11 Featherston 70 0% 100%

12 Greytown 80 0% 100%

13 Carterton 90 0% 100%

14 Masterton 99 0% 100%Based on GWRC Information obtained under LGOIMA

3 GWRC Public Transport Plan


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The GRWC specifically recognises the reality that fares forzones 1 to 3 are mainly bus users while zones 4 to 14 are railusers in the GWRC Public Transport Plan. It states Buses canbe targeted by increasing fares for 1-3 zone trips ... and rail canbe targeted by increasing fares for 4-14 zone trips.

The fare system in Wellington is based on zones rather than modes(except for the ferry, airport bus and Cable Car which are regarded aspremium services and have their own fare structures). Therefore, if onemode is not achieving its farebox recovery target, it is difficult to introducea fare increase just for that mode, with some exceptions. For example, it ispossible to target increases at rail or bus services if one of these modesfalls below its target range. Buses can be targeted by increasing fares for1-3 zone trips (most bus trips are between 1 and 3 zones in length) andrail can be targeted by increasing fares for 4-14 zone trips (most rail tripsare between 4 and 14 zones in length). 4

4 GWRC Public Transport Plan


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The GWRC Long Term and Annual Plan highlights publictransport subsidy costs are going up again this year.

The costs of providing passenger transport services usually increase eachyear. The last year has seen an over 5% increase in costs with operatorsbeing reimbursed by Council through increased contract payments.5

What the GWRC does not tell the public is not all publictransport costs are increasing, the increase is due to higherpassenger rail costs.

So the average of a 5% increase in overall costs hides that: Bus subsidy spending is static, in fact less than inflation ! The public transport cost increases are for passenger rail

to enable the GWRC pay for:o increased train operating costs including increased

track charges from KiwiRailo the new Matangi trainso upgraded track as well as new power, signalling

and train repair facilitieso its purchase of the railway stations and station

carparks from KiwiRail and also to overhaul them.o the expected $80M cost to refurbish the older

Ganz-Mavag trains. The cost of trolley bus operations are significantly more

than the cost of diesel bus operation.

Rail passengers now have new trains and refurbished stationswhile there has been no service improvement for bus users.

Based on GWRC Information obtained under LGOIMA

5 GWRC Report 12.79 - Annual Public Transport Fare Review 2012

$4,248,475

$7,922,454

$13,069,251

($1,052,496)($243,731)

$412,127

$(4,000,000)

$(2,000,000)

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

2010/11 2011/12 2012/13 2013/14

Rail Costs Increases from 2010

Bus Costs Increases from 2010


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Passenger rail has been the top priority for GWRC investmentover the past decade and is planned to get the vast majority offuture investment in public transport (77%) as well.

Meanwhile bus PT users face a service with falling subsidylevels and minimum investment funding. Bus investment ismainly to keep the current trolley buses6 on the road (10%). TheGWRC plans to invest a meagre $4M (2%) in bus infrastructure(shelters and bike racks) between now and 2022 !

4.3 Major infrastructure projects7This plan includes the following significant programme of new andupgraded public transport infrastructure. Projects can only proceed whenfunding approval has been obtained.Project description Total cost Year(s)48 new two-car Matangi trains* $8 million 2012/13Refurbish Ganz Mavag trains $79 million 2012-17Rail infrastructure renewal and minorimprovements**

$49 million 2012-22

Rail rolling stock heavy maintenance andminor improvements***

$78 million 2012-22

Regional Rail Plan reliability andfrequency upgrades

$52 million 2015-20

Trolley bus overhead networkinfrastructure renewals

$36 million 2012-22

Bus shelters and interchanges $3 million 2012-22

Electronic/integrated ticketing $39 million 2013-16Install bike racks on buses $1 million 2017/18Customer information systems $2 million 2012-22Total $347 million

* Significant expenditure on the new Matangi trains has already beenincurred. The total expected cost for the trains is $236 million** This includes station and carpark upgrades*** This includes the modification of SE cars for use on the Wairarapa Line

6Trolleys have environmental benefit but do not improve the bus service to users and can only be used by a minority of bus commuters.

7 GWRC 2012 2022 Long Term Plan


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To help pay for increased costs, the Regional Council is againraising public Transport Fares It is both government and GWRCpolicy that users pay their fairshare of the costs of publictransport.

An increase in fare levels is likely to be needed to maintain the requiredcontribution from passengers ... If the passenger contribution was to drop,the ratepayers and NZTA would have to contribute more. A 3% revenueincrease equates to a $0.7m impact on rates ...5

This year the Regional Councils recommended approach toincrease the PT passenger contribution is a 3% increase of allfares across all zones

Cash fares are calculated by adding 6% to the currentfare rounded to the nearest 50cents. If this is more thanthe current fare, the cash fare is increased. Thiscalculation means cash fare increases for Zone 3 andabove.

All Multi-trip Tickets (e.g. bus cards, 10-trips and monthlypasses) are simply increased by 3%.

Zone 3 cash fares will increase 10% !

The GWRC is asking for submissions on this proposed fareincrease as part of its annual plan. Submissions close onFriday, 4th May 2012.

ProposedCash

Proposed Cheapest FareOn a per trip basis* % Increase from current fare

Zone Cash Bus Card Rail Monthly Cash Bus Card and Rail Monthly

1 $ 2.00 $ 1.65 $ 1.18 0% 3%

2 $ 3.50 $ 2.66 $ 1.90 0% 3%

3 $ 5.00 $ 3.38 $ 2.53 10% 3%

4 $ 5.50 $ 3.98 $ 2.84 9% 3%

5 $ 6.50 $ 4.86 $ 3.47 8% 3%

6 $ 8.00 $ 6.18 $ 4.41 6% 3%

7 $ 9.00 $ 7.00 $ 5.00 6% 3%

8 $ 10.00 $ 7.83 $ 5.59 5% 3%

9 $ 11.50 $ 8.84 $ 6.31 4% 3%

10 $ 12.50 $ 9.72 $ 6.95 4% 3%

11 $ 14.50 $ 11.12 $ 7.95 7% 3%

12 $ 15.50 $ 11.95 $ 8.53 6% 3%

13 $ 17.50 $ 13.18 $ 9.42 6% 3%

14 $ 18.50 $ 14.05 $ 10.04 5% 3%

* Cheapest Bus = Snapper/Smartcard/Platinum (3 Zones). Cheapest Rail = Monthly Rail Pass

Fares increased from current fares are highlighted



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The GWRC has increased fares continuously since theyintroduced to zone fare system in 2006.

The Reserve Bank Inflation Index states inflation since Quarter 32006 is 15%.

Comparing the proposed fare increases to 2006 highlights: Since 2006, the GWRC has increased most rail-only

zones fares (Zones 6 to 14) less than 30% Since 2006, the GWRC has increased all bus dominated

zones fares (Zones 1 to 3) over 30, 40 even 50% While all public transport users have had had to manage

fare increases above the rate of inflation, most bususers face public transport cost increases of twothree and nearly FOUR times the rate of inflation !

2006 2006 CheapestProposed % Cost Increase

Since 2006

Zone Cash Bus Pass/Card Rail Monthly Cash Bus Rail

1 $ 1.50 $ 1.20 $ 0.86 33% 37% 37%

2 $ 2.50 $ 2.00 $ 1.43 40% 33% 33%

3 $ 3.50 $ 2.26* $ 2.00 43% 54%* 27%

4 $ 4.00 $ 3.20 $ 2.29 38% 24% 24%

5 $ 4.50 $ 3.60 $ 2.57 44% 35% 35%

6 $ 6.00 $ 4.80 $ 3.43 33% 29% 29%

7 $ 7.00 $ 5.60 $ 4.00 29% 25% 25%

8 $ 8.00 $ 6.40 $ 4.57 25% 22% 22%

9 $ 9.00 $ 7.20 $ 5.14 28% 23% 23%

10 $ 10.00 $ 8.00 $ 5.71 25% 22% 22%

11 $ 11.00 $ 8.80 $ 6.29 32% 26% 26%

12 $ 12.00 $ 9.60 $ 6.86 29% 24% 24%

13 $ 13.00 $ 10.40 $ 7.43 35% 27% 27%

14 $ 14.00 $ 11.20 $ 8.00 32% 25% 25%

* Go Wellington Gold Pass replaced by Platinum Pass in 2010 22% Rises under 30%

40% Rises over 40%



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Fare increases are claimed to be set in using the policies of theGWRC Public Transport Plan. Key Policy 7.1 aims to sharecosts fairly between passengers, NZTA and regional councils byreflecting the private benefits received by passengers.

This essentially means that passengers should pay for at leasthalf the cost of their fare.

Policy 7.1: Ensure that fares paid by passengers reflect the degree ofprivate benefit received from public transport services.

This is the regions farebox recovery policy, prepared in accordance withNZTAs National Farebox Recovery Policy. The National FareboxRecovery Policy requires that fares nationally cover at least 50% of publictransport operating costs nationally in the medium term. The NationalFarebox Recovery Policy aims to share costs fairly between passengers,NZTA and regional councils by reflecting the private benefits received bypassengers ... 8

The Regional Public Transport Plan contains a number of fares policies, ofwhich the farebox recovery policy is most relevant. The fareboxrecoverypolicy provides for fares to cover a target of at least 55-60% of costs. 9

The need to keep the Fare Recovery Ratio above 50% with

increased rail costs is the key reason that the GWRC uses tojustify the fare increases.

2012/13 2013/14 2014/15

User contribution target 45-50% 45-50% 45-50%User contribution (assuming no annualfare increase)

45.0% 43.2% 41.1%

User contribution (assuming a 3% farerevenue increase annually)

46.1% 45.3% 44.1%

The table shows that without a 3% increase in fare revenue, the usercontribution will fall to the very bottom of the Council target level in2012/13, and then fall below the level in the years after that. ...

This indicates that a 3% annual increase in fare revenue is needed to

keep the user contribution within the Council target range (and a slightlyhigher increase is perhaps needed in later years).9

8GWRC Public Transport Plan



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What the council report does not point out is: Because rail fare increases are far less than rail cost

increases, Rail Fare Recovery Ratios are falling

Because bus fares to increase but bus costs are static,Bus Fare Recovery Ratios are actually increasing !

The increased fare for bus users hid the fact that railpassenger do not pay their share of the costs andthe rail fares do not meet the minimum fare recoverypolicy.


44%

46%

48%

50%

52%

54%

56%

58%

2010/11 2011/12 2012/13 2013/14

Bus User Fare

Recovery

Rail User Fare

Recovery

Minimum Fare

Recovery


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The other important measure of private benefit is the fare cost incomparison to car costs. The GWRC approach is to comparethe discount fare with the equivalent car trip (for a 1501 - 2000cccar).

The 2011 fixed and operating cost estimate from the AutomobileAssociation (2011) is 63.1cents per kilometre for a 1501 -2000cc petrol car. Comparing the proposed increased fares tothe equivalent car cost shows:

the proposed fares for longer distances (Zones 4 to 14),all fares are significantly cheaper than the equivalent cartrip. In particular, rail monthly pass passenger are payingunder of the cost of the car trip for distances above 30kms (i.e. Upper Hutt and Paraparaumu)

the proposed fares for shorter distances (Zones 1 to 3),most cash and discount fares are more expensive than

the equivalent car trip !

The proposed fares do not encourage reduced car usage forthe most popular bus based trips while appear to be excessivelygenerous to passenger rail users.

The cost of car use is the other area identified in GW policy as being afactor to consider as part of the fare review. Council policy is for publictransport fares to be competitive with the cost of an equivalent car trip. 10



0%

50%

100%

150%

Thorndon

Newtown

IslandBay

Petone

Porirua

Paramata

UpperHutt

Paekakaiki

Paraparaumu

Waikanae

Featherston

Greytown

Carterton

Masterton

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Cash Fare as % of Car Cost

Bus Card Fare as % of Car Cost

Rail Monthly as % of Car Cost


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Many Wellington City bus users remember the Go WellingtonGold Pass giving 40% discount off the cash fare. They alsoremember its removal in the 2010 Fare Review. The GWRCnegotiated the reduction in contract price with bus operators toensure that the financial benefits of the[fare] increase flow toGreater Wellington.

Despite widespread protests, GWRC and Go Wellington did notnegotiate the retention of the monthly Gold Pass discount to GoWellington bus passengers.

With the new fares, regular bus passengers can only getbetween 18 and 33%11 off the full cash.

The process for contract negotiation is relatively straightforward, and wellestablished. The process includes calculations of the revenue increases tothe operators (and thus the reduction in contract price), and includesassessments on revenue of the negative patronage impacts. It should benoted that the Committee resolution was that the fare increase would onlybe introduced in the event that the financial benefits of the increase flow toGreater Wellington i.e. operators should be no better off or worse off fromthe Council introduced fare changes.GWRC Final 2010 Fare Increase Report.12

Gold Pass customers travelling three zones are receiving a more than 40per cent discount on the cost of their travel. A permanent discount at thatlevel just isn't sustainable.Go Wellington 2010.13

11Eventually Go Wellington introduced the 3 Zone Platinum Pass giving a 33% discount, much less than the 40% discount of the Go ld Pass.

12GWRC Report 10.361 - 2010 Fare increase update

13 Letter to the Dominion Post 9 th September 2010 from Mark Williamson, General manager, Go Wellington


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Although the GWRC did not support keeping the discount GoldPass for Go Wellington bus users, it continues to support arange of even more generous discount fares for passenger rail.This includes off-peak cash fares and school term passes andthe very popular rail monthly passes that offer discountsbetween 41 49%.

Cheapest Fare Discount

Zone Example Bus Card Rail Monthly

1 Thorndon 18% 41%

2 Newtown 24% 46%

3 Island Bay 33% 49%

4 Petone 28% 48%5 Porirua 25% 47%

6 Paramata 23% 45%

7 Upper Hutt 22% 44%

8 Paekakaiki 22% 44%

9 Paraparaumu 23% 45%

10 Waikanae 22% 44%

11 Featherston 23% 45%

12 Greytown 23% 45%

13 Carterton 25% 46%

14 Masterton 24% 46%Based on GWRC Information obtained under LGOIMA

It probably costs the GWRC about $3million per year in extrasubsidies to fund the special discount fares to rail passengersuch as the Rail Monthly Pass. There is no requirement in thefare policy to do so, in fact GWRC fare policy is supposed topromote integrated ticketing and travel.

Now the new trains are here, there is also no justification for

extra subsidies to rail users, the council should be modeneutral !


$-

$2.00

$4.00$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Smartcard per trip

Monthly per trip


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The GWRC is proposing, in the same Long Term Plan, theintroduction of integrated ticketing. The Fare Structure Reviewis already underway

This will require all mode specific tickets such as the rail monthlyand off-peak to be aligned with the equivalent bus fares.

Principles to be considered when undertaking the review are set outbelow:

... Equitable users across the network pay the same for equivalent

services

Interestingly this years Auckland Transport Fare Reviewrecognises the gap between bus and rail fares and it proposesequalising the cost of travel for bus and train users.

Auckland Transport states (bold added for emphasis)

For a number of years train users have enjoyedsignificantly lower fares than bus users. We now have 2,000train services a week, the rail network and facilities have

been substantially upgradedincluding the first phase of theManukau train station which opened for service yesterday.

This years increase in rail fares removes that inequity withbus and simplifies the fare structure prior to the fullintroduction of[the integrated ticketing] HOP[card] nearthe end of this year.

Auckland Transport said today it has completed its annual review of bus,ferry and train fares.

The review is based primarily on recovery of cost increases including fueland labour, and equalising the cost of travel for bus and train users.

Auckland Transports Manager, Public Transport Operations, MarkLambert says, In general fares have not kept pace with cost increasesover time. As a result of this years review, some bus and ferry fares and

most rail fares will increase between 10 cents and 90 cents but many faresremain the same.

For a number of years train users have enjoyed significantly lower faresthan bus users. We now have 2,000 train services a week, the rail networkand facilities have been substantially upgraded including the first phase ofthe Manukau train station which opened for service yesterday.

This years increase in rail fares removes that inequity with bus andsimplifies the fare structure prior to the full introduction of HOP near theend of this year.14

14 Auckland Transport Press Release 16 April 2012


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Two out of every three public transport users relies on busservices to get to work, shops and school. Bus users are alsothe most used by the vulnerable members of our community,including children, students and the poor.

So why raise 1 3 Zone fares that are mainly bus usersjourneys when:

Bus users have not had any major investment in betterbus services or interchanges apart from 60 trolley buses.

Rail passengers constitute only 30% of public transport users yet receive amajority of operational subsidy and 75% of future investment in publictransport. This has resulted in provision of new Matangi trains, station,track and other rail investments.

Why not instead raise Monthly Rail Fares that give rail users extradiscounted fares not available to bus users because:

Rail users now travel to refurbished rail stations to ride in newMatangi trains replacing the old English Electrics.

No significant investment in bus services are planned. 74% of the $347M public transport investment is for rail including acomplete refurbishment of the Ganz-Mavag units costing $80M.

Most bus users face fares increase of more than 40%since the introduction of the zones in 2006.

Most rail fares have increased less than 30% since the introductionof the zones in 2006.

Bus users are now funding more than their share of publictransport bus services and the fare increase will increasethe user contribution.

Rail users are now paying the minimum 50% required by policy andthe planned fare increase will reduce their contribution to rail costsbelow the this level even though it is against GWRC policy.

Rail user fares are much less than the equivalent car costs . . . Bus user fares are similar or greater than the

equivalent car costs . . . council policy is to attractpeople out of cars but this will not happen if the bus costsmore than taking your car.

council policy aims to share costs fairly ... by reflecting the privatebenefits received by passengers but rail users appear to receivevery generous benefits from their heavily subsidised rail fares whenmeasured against equivalent car costs.

Bus users will only have access to basic discounts, somewill be less than 20% . . . the GWRC chose to let GoWellington eliminate the monthly Gold Pass in 2010.

Rail users can get large discounts (41 - 49%) on their monthly andoff-peak tickets. The extra subsidy costs $3M but is not required byGWRC fare policy.

The special rail discount fares will have to be reduced to align withbus fares anyway under integrated ticketing, as is already proposed

in Auckland. The rail only fares must go as part of integratedticketing so why not start now ?


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ConclusionNo-one likes to raise public transport fares, especially when so many are reliant on thisservice. But these costs have increased so rail users can travel in new trains onupgraded track and use upgraded stations.

The approach of the GWRC is to raise fares equally for both bus and rail users. Itseems doubly unfair in raising fares on bus users who cannot benefit from the new

trains when their own service will receive little service improvement. In effect,increased bus fares are being used to pay for increased rail costs.

It is equally unfair to raise bus fares when the GWRC continues to give rail usersmuch cheaper fares through monthly rail passes that are not available to bus users.

The GWRC also appears to ignore that many bus users are our most vulnerable, thedisabled, unemployed and children, who have little money and little choice.Continuing to raise the travel costs to these people when there are fairer alternativesseems almost heartless.

An increase on rail monthly passes would generate more than enough funding toenable the GWRC to not increase the 1 3 Zone tickets that are used by buscommuters. This option was not considered . . . but it should be.

It is simply not fair to increase the cost to bus users to pay for rail user costs.

Make a submission to the GWRC Annual Plan and tell them what you think !

Tony RandleChair, Johnsonville Progressive Association

FAIRS FARE ! DONT INCREASE 13ZONE TICKETS.

Fair Fares for Wellington - Bus Fares to Fund Increased Rail Costs

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