Rail 599: Australia: how not to run a railway

The Australian railways offer an almost object lesson in how not to build and run a rail network. Indeed, the very notion of network is problematic there since disputes between 19th century engineers led to no fewer than trains using 22 gauges being developed and even today nine are still in use.

I was in New South Wales in July and travelled extensively by rail. It was largely a dispiriting experience, despite the magnificent scenery and the sight of kangaroos hopping in the dusk on the line out of Canberra. The experience raised very fundamental questions about the relationship between government control and subsidy in a state-run system under successive state and federal governments whose horizons never stretch beyond the next election, and rarely even that far, with, inevitably, much resonance with the situation here.

The New South Wales network is divided into two, CountryLink for long distance trains and CityRail for the extensive network in the Sydney area. They are both, actually, State owned (by the NSW government), but operate as two separate businesses to such an extent that I could not buy a ticket at the CountryLink counter for a trip to Newcastle which is 100 miles away which, I had thought, seemed rather far for a suburban rail service. Not so. CityRail covers anything in the Sydney region (and I did remember Network SouthEast went to Weymouth!).

The journey between Sydney and Newcastle is pretty with plenty of waterside views of the various inlets and rivers it crosses, and a host of exotically named stations: you go from Woy Woy, to Wyong and then Wyee! Most of the Australian rail industry is , of course, geared towards freight traffic with massive flows on certain routes, and passenger trains are usually an afterthought, except in suburban areas, generally used by relatively poor people or not at all. The fares are incredibly cheap and pensioners in New South Wales, can go virtually anywhere in the state for a flat fare of $AU2 50, in other words £1.25p!

There are widespread concessions on longer journeys too. Pensioners are entitled to a couple of journeys per year and single mothers can also get concessionary rates. In a way this seems like a positive move, attracting poorer people onto an economically sustainable form of transport. Unfortunately there are several resulting negative side effects. Trains in Australia, as a friend of mine who has lived there for 25 years told me, ‘are generally considered as only suitable for the working class and the poor, and have a very poor image’.

The setting of fares is, like in the days of British Rail, a hot political issue which effectively means that they have been kept artificially low. For example, I paid $AU18 (£9) for that journey to Newcastle one way – since as the rather ticket office clerk told me with rather bad humour, they don’t sell returns – a fare that is available any time of the day. Actually, they are just getting round to introducing off peak fares on the Sydney suburban system, and it is causing something of a political fuss!

Now low fares are generally a positive policy but combined with the lackadaisical attitude of the very heavily unionised staff and a lack of investment in the trains, the railway has a rundown feel which needs both money and management expertise. The trains are pretty slow, given the number of stops and low speed restrictions, which means few people consider them as an alternative to the ever full highways. Only one other person at the conference where I spoke had like me used bike and rail to get there. The car rules in Oz.

There is new rolling stock coming through but at the moment most of trains are the Bombardier double deckers used on the French RER system and in the Netherlands. They are grim inside, with hard seats – not much fun for the near 3 hour journey to Newcastle – lots of graffiti, filthy carpets, ageing seats and toilets that of the type found on Indian Railways.

This raises an interesting issue about keeping fares down. Does that become a barrier to investment? Is too much money focussed on subsidies rather than capital spending? Since the railways are in state hands, there is always that reluctance to put fares up. And, indeed, low fares should attract people onto the railways. There is, as ever, the need for balance and I would veer, generally, to keeping down fares. But frankly $AU2 50 to travel anywhere for the over 60s is a bit daft and is just pandering to the Grey vote, as, of course, does the free bus policy here which absorbs huge amounts of subsidy that may be better spent on investment in improving public transport.

In Britain we suffer the opposite, as fares are galloping ahead of inflation, which itself is rising fast. Since fares can never reflect the overall value to society of running a railway, there is widespread acceptance that there is a need for some subsidy. But railways across the world agonise about what that level should be.

Don’t fall into the trap of thinking that private sector involvement would rescue Australia’s railways. The government has had its fingers badly burnt over the line from Sydney to the airport. The scheme, which was supposed to be a Public Private Partnership under which the government did not pay anything, has turned out to be a horrendous white elephant and ended up costing the state a fortune. The original contract for the line, completed in 2000, specified that passengers would pay a premium of $AU10 (£5) for a single journey and while that does not sound much compared with the price of the Heathrow Express, taxis are relatively cheap in Sydney and people are used to paying low fares. Instead of the expected 48,000 daily passengers, there were just 14,000 and the consortium which built the line went bust and the railway had to be bailed out at a cost of $AU800m (£400m) leaving passengers and the state with a very ‘sub-optimal’ situation: a line that hardly anyone uses, which means the roads are ever more crowded and the state has wasted a large amount of money.

It goes back to one of the recurring themes of this column. If the government involves the private sector in building large infrastructure schemes, it ends up having to service a huge debt which, in turn means high fares and therefore far lower usage which means that society does not benefit as much as it should. I stood by High Speed One recently with a film crew waiting for trains to pass and there was sometimes an hour’s gap between them! Even the introduction of the Kent domestic services will leave plenty of empty paths.

In Australia it is clear that the politicians are far too involved in the running of the railway, but then, oddly, that is the case in the UK where, as one very senior rail industry insider put it to me on my return, ‘we have the worst of both worlds, with government micromanagement of the industry and the private sector not being allowed any freedom’. So it seems that wherever railways lie on the private/public spectrum, they endure the same problems of government interference, lack of investment and poor management.

Stagecoach must be stopped

The increasing use of barriers which I wrote about late last year (Rail 580) has become a major controversy in Sheffield, raising raises wider questions about who runs the railway and owns its structures.

Sheffield is an elegant Victorian station much improved lately and highly popular with local people who use it as a thoroughfare as it is in a slight dip between a major housing estate, Park Hill, which is currently the subject of a major regeneration scheme, and the town centre. Stagecoach now wants to cut off the main route through the station because it wants to install ticket barriers which would mean local people having to walk a long way round.

The local community is in uproar. The press is on the case and the various ‘stakeholders’ such as South Yorkshire Passenger Transport Executive and Sheffield Council are adamantly opposed to the scheme. They argue that Stagecoach is merely a temporary incumbent of the station, its tenant as it were, whereas they paid for the improvements to the station. Certainly it was not Stagecoach. In other words, a private company is trying to deny a local community access to facilities for which they have paid.

One Stagecoach executive was aghast at the hostility its scheme has engendered. So why doesn’t Stagecoach quietly drop this plan which, according to some railway insiders, would in fact do little to boost revenue anyway? The reason lies in the complex nature of the franchising process and the contracts which result from it. The plan for barriers was part of its successful franchise for East Midlands Trains but Stagecoach had little idea the hornet’s nest it was stirring by putting the idea in the bid. Now however, it has become a franchise commitment, set in stone which means that the Department for Transport expects it to be carried out.

Stagecoach, which has not given much explanation as to why it is so committed to the scheme, says there is a footbridge that could still be used but this would require a deviation and is not a very pleasant way through. That misses the point, too. The continuous stream of people crossing through the station ensures that it is a much more secure place than if only rail passengers used it.

The head of East Midlands Trains is an excellent young railwayman, Tim Shoveller, who came from Virgin and clearly inherited this mess from the bid team. If Stagecoach is the customer-responsive organisation it claims to be, then its senior executives should ensure that young Shoveller is allowed to dig get them out of this mess and restore the company’s good name in the Steel City.

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