Mike Baird unveils plan to bust Sydney traffic congestion with new harbour rail crossing, tunnel

 
Topic moved from News by dthead on 17 Mar 2015 16:14
  bevans Site Admin

Location: Melbourne, Australia
Mike Baird unveils plan to bust Sydney traffic congestion with new harbour rail crossing, tunnelNew South Wales Premier Mike Baird has stepped up his sales pitch to sell the state's poles and wires, unveiling a $20 billion infrastructure plan outlining how his Government would spend the proceeds. The infrastructure plan includes a second harbour rail crossing, $2.4 billion to ease congestion on Sydney's roads and $6 billion for infrastructure in regional areas.

The centrepiece is a new Western Harbour tunnel, allowing up to 50,000 vehicles to bypass the CBD by linking the Gore Hill or Warringah Freeway with a West Connex extension at Rozelle.

Mr Baird said it would alleviate congestion on the Sydney Harbour Bridge, Anzac Bridge and the Eastern Distributor, as well as in the CBD.


Baird is following Abbott's lead. More road projects. How could you possibility fit more cars into the Sydney CDB and surrounds?

You also need to weigh up the amount of money being spent on the NWRL which is considerable.

The $400m for country rail is an interesting one. Hard to know if this is for infrastructure upgrades (track and associated assets) or new rolling stock?

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  Raichase Captain Rant!

Location: Sydney, NSW
Don't worry bevans, there's an election in four months. Given they can't trot out the promise of a new harbour crossing for rail, as they've been doing that all year, they need to announce some other big project that they don't have to follow through on.
  Raichase Captain Rant!

Location: Sydney, NSW
-The Inner West Light Rail - opened 2014
wxtre

Started by the previous Labor government. Most of the work was done by RailCorp prior to the line being handed over (under the previous government), with only the wires and stations to be added.

-Northern Sydney Freight Corridor Program - under construction

Hardly a MAJOR public transport project, which was partially federally funded IIRC to improve Melbourne to Brisbane freight transport. Hexham passing loop was also part of this project, which was again started under the previous governments reign.

-The North West Rail Link - under construction.

Yes, and the viability of sending metro trains into the suburbs and terminating them short at Chatswood is a discussion for another thread. Certainly not the original project that they were elected on, which was integrated into the network with DD suburban trains offering commuters a good chance at a seat for their journey directly into the city.

-The CBD and South East Light Rail - under construction

Yes, that is a project that the Liberal government can (so far) point to and say that they have started it from nothing in the first term of government.

-Parramatta Light Rail - being planned.

Yep, because the second harbour crossing has never been "planned" before being dumped right after an election... Considering the Liberals would probably like to hold onto seats won out west at the last election... I won't hold my breath until they break ground.

I am a stanch supporter of the local member in my area, who IS a Liberal Party bloke. He seems to be doing his best for the state, and in all my dealings with him, he is always interested in local happenings. He will have my vote again at the next election, because he deserves to keep his seat. I'm not going to blindly attribute public transport projects set in motion by other governments as his governments work.

Why not attribute the success of the Waratah project to the current government too, whilst we're at it? The groundwork was done by the Labor government, the Liberals just had the good fortune to be around for the delivery of most of the trains...
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Cities have freeways/toll roads and major arterial roads converge on the city, while much traffic is obviously city bound, there is also the portion of traffic travelling past the city that needs to be catered for. Building by-passes is a win win as it gets through traffic out of the city. Brisbane has been focusing on doing similar and same is common in Europe, although there much physically smaller cities often makes this less obvious.

Major infrastructure projects usually go past one term of govt, so quite normal for one side to announce/commit and the other side to open. Just as long as they announce/commit more than they open, especially in term 1, you are probably on a winner.

The 2nd harbour rail crossing has been talked about for decades, the tram tracks on the bridge was a stop gap until the Nth beaches railway was to be built. Again moving from talking to FEED or next step Feasibility study stage is a completely different step and moving forward.

NWRL rail technology, yes they got voted in a standard railway, but the govt has had the foresight to look into the future and build something that can be expanded on using fit for purpose 21st century approach, instead of building a railway that is capable of hauling steam and freight trains, something the people of the NW and other areas in the future have no need for. Bradfield did the same moving away from steamers, so fortunate for the people of NSW the trend is finally continuing.
  djf01 Chief Commissioner

The 2nd harbour rail crossing has been talked about for decades, the tram tracks on the bridge was a stop gap until the Nth beaches railway was to be built. Again moving from talking to FEED or next step Feasibility study stage is a completely different step and moving forward.
RTT_Rules


Even in pre-election mode, the 2nd harbour rail crossing has a lot of hurdles to overcome.  Even now it's conditional on the privatisation of electricity assets (unlike the other major non-rail infrastructure projects), which neither side of politics has been able to get up despite 25 years of trying.  It also has to pass whatever feasibility studies are conducted (possibly none based on the NWRL & LR projects).  But it's also likely to need to pass a CBA if the Feds have anything to say about it.  

Quite frankly, I think it's an empty promise, one the Libs are hoping they don't have to keep, and hoping they can pin on Labor.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
The funding arrangement is almost identical to that also proposed by Qld Govt for almost exactly the same project. Ie sell assets to fund a 2 rail crossing across water to the city. So no unusual and I think we will see more of it.

The public want infrastructure then they need to learn it has to be paid for. Running up endless levels of debt is hiding reality as they either just ignore the debt and leave for another govt to resolve (common ALP approach), or raise taxes (rare).

I don't see it as a empty promise, they are placing the decision with the voter how it will proceed or if it will proceed. The rest of the approvals shouldn't be difficult and are expected part of process.

There is little justification for the state to own power stations anymore so selling is not a big deal in my mind, but I too would have objected to previous govt selling as I would not have trusted them with the money.

If the assets are not sold, the state like Qld will not be able to afford such a project for at least 10yrs.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Rail infrastructure projects pay for themselves through ticket prices do they not. I do not believe what you said is entirely true. It is a long term investment that has an initial outlay but that is recouped over a period of time.

On the issue of privatisation I believe it is better for the state to own public infrastructure especially essential services. Revenue governments would otherwise have is lost for a short term windfall. In the end society is worse off. Private companies generally do not have the communities best interests at heart.

Governments should lease assets for a term rather than selling it outright or take loans

Electricity is considered an essential service or utility. Like hospitals, water supplies, telephone, police/fire, ports and rail freight industries etc etc. It should be owned/controlled by governments. It is a liitle frightening that private companies own these assets and can hold society to ransom. In Victoria with privatised electricity prices rising it affects everyone, businesses and can endanger peoples health in the worse case.
wxtre

Hi,
Are we talking about the same thing? Since when does commuter rail have a positive cash return outside the likes of Singapore? Sydney Trains runs at about a 65% subsidy, Mel similar, Brisbane +70%. So there is nothing to be recouped, just more cost to be had. Capital and operational subsidy.

The $10B cost or what ever it is to build the harbour crossing has to come from somewhere. Options are simple
- Charge fares accordinly, will fail as no one will use it
- Increase state taxes/charges, unpopular
- Sell something
- defered expenditure

The Australian telephone system has been privatised for over 20 years, are you worse off?  Which hosiptal or Dr do you use? In some states the entire system is mostly private with govt patients funded seperately. Rail freight has been mostly privatised for over 15 years. The areas of freight considered CSO still run. Meanwhile the industry manages itself and advised the govt on track infrastructure needs.

Fact, Vic power prices have not resin disproportionally to the govt owned states. The bulk of your poer bill is not generation costs, which are mostly similar to 10 years ago, especially off-peak. Qld has suffered significant power increases due to govt defered maintanence and upgrades of the network and transmission. The Qld govt hospitals cannot even manage a payrole system that have years and $100m's to not even fully resolve. Many of our ports have been privately owned for decades and in many cases always were, other sold recently, have things gone backwards?  In Qantas service or CBA worse off now?

This govt must own everything is a well established failed model. Forces costs up, drives ineffiencency, prevents competition in areas that are well established insudtries and quite capable of operating on their own. Much of the power generation is already private, such as renewable generation,some recent coal power stations built new from scratch and co-gen. You also have the private sector with large take or pay contracts now selling power back into thge grid at peak times., buying more in off-peak.

The companies cannot hold the govt to ransom, what is their lever? Turn the power off? yeah right! The govt stil has the ability to change legistlation and sets the policy and has to agree to all price increases. The reality is that much of the so called revenue from these industries was often mis-spent or as a commerical return simply wasn't there as the govt manipulated prices to manage votes. Defered capital upgrades was rife in many former govt organisations, including NSW power in the eariler 80's and Qld power in late 90's and Qld SE water grid a few years later and the former NSWm Vic and Qld controlled sections of the interstate rail.

Leasing is I think fine but more important to fixed monopoly infrastructure like transmission and commuter trains.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
It is a lie to say that trains are unprofitable in cities such as Melbourne and Sydney. In Melbourne 415,000 passengers use the city network each weekday and people pay high-fares. Some train-lines may be unprofitable but mainly outside of city areas that are subsidized by city commuters..

That article yesterday about the train operators Metro in Melbourne is telling. The tracks on the network are in a parlous condition. Metro are not conducting the maintenance on the line that is their obligation. That they are seeking to maximize profits by neglecting this responsibility. That is an example of how privatisation does not work because private operators cut corners to peoples detriment to achieve a higher balance sheet.

Governments around the world have privatized many utilities and public services I would agree. But I would say it has been detrimental. Once governments have sold everything the state is bankrupt because they have lost this revenue stream from owning profitable state assets. What do they sell then? Governments are also susceptible to corruption when arbitrary bodies do not function or regulators become tainted by private business. Prices can be artificially inflated and taxpayers money is funneled to private bank accounts. Also outsourcing of public services can cost more because governments pay a premium for private contractors and lose in-house knowledge and skills.

Also national security is an issue when all of our ports, mail services and rail infrastructure etc are owned by a foreign company all the profits go overseas and Australia is left without an industry. One example is Qantas Airlines selling this essential service is not allowed and is deemed contrary to the national interest and rules govern the ownership. No more than 49% of Qantas can be owned by foreign persons

Privitization is also falling out of vogue and are not seen as desirable as it once was, governments are more reluctant to privatize assets. Because people have seen the services decline and cost of these services rise.
wxtre

The Melbourne Suburban network is unprofitable, Brisbane commuters pay fare more and on a much smaller system and it looses even more money. Yes on some lines during peak they may run cash flow positive, but their timetables are not restricted to peak flow only and is completely irrelevent to the OP's statement.

The Melbourne franchise operation is so bad the opposite political party not in govt chose to follow the same path its strongly opposed in opposition 10 years before. I would also suggest that the Govt run Adelaide system was run so close to the ground it was either close or invest. The NSW interstate and intrastate network was also severly run down by the govt. Both probably more documented than Mel.

If the govt is using a utilility to prop up the Treasury then you know you are being ripped off. The govts of the world are not going broke after sale so this is a false statement. The ones that have gone broke is through tax evasion and spending more revenue than they take in. In reality they are now relying on asset sales to save their respective countries economies. Your arguement is also based on the fact that they are profitable state utilities. In many cases they are fat grossly overstaffed organisations stemmed of innovation, excessive middle management and controlling unions.

Outsourcing is more common in the private sector and its done for a reason. They give a particular task to a company who core is that task. Often this delivers much cheaper results and rids the primary organisation of running less core activities such as cleaning, IT etc. Doesn't work for all, but the trend is obvious. The larger the govt,  potentially the more exposure you have to corruption. At what point do you want to be spoon fed by the govt and when should the private sector run something, local shops, surely this supports your argument. Profits for the govt, govt controls price of basic goods, less duplication...its well known failed model.

How does selling the mail system risk National security? How does selling freight risk National security? How does selling a port risk National security?

How is selling Qantas a risk to National Security? What you have now is an airline failing to compete with foreign owned airlines and Australian's voting with their feet by choice. On home soil, Qantas failed to keep Virgin at 25% market share as was their prefered statement a number of years back. Had Qantas not started Jetstar to rid itself of the high over heads within Qantas, its OS services would be next to nothing.

Mind if you let us know what phone/internet company you use, what airline you use most, what bank, what car do you drive etc? If its not Telstra, Qantas/Jetstar, CBA/NBA/ANZ etc and a locally made car then you have no issue chanelling profits OS. I personally have no issue with profits, a miority of the business OS going OS if that company has demonstarted it can run something better than locals.

Privsatisation is hardly falling out of vogue world wide. Its still going strong in the developing and emerging markets. The developed world has mostly run its course.
  donttellmywife Chief Commissioner

Location: Antofagasta
Rail infrastructure projects pay for themselves through ticket prices do they not. I do not believe what you said is entirely true. It is a long term investment that has an initial outlay but that is recouped over a period of time.
wxtre


No they do not. You've mentioned this before and others corrected you.

With very few exceptions, passenger rail fares in Australia do not come remotely close to giving governments or whoever enough money to pay for the infrastructure, like the tracks, stations and trains.

With very few exceptions, passenger rail fares in Australia do not come remotely close to giving governments or whoever enough money to just operate the service, let alone pay for infrastructure.


It is a lie to say that trains are unprofitable in cities such as Melbourne and Sydney. In Melbourne 415,000 passengers use the city network each weekday and people pay high-fares. Some train-lines may be unprofitable but mainly outside of city areas that are subsidized by city commuters..
wxtre


It is not a lie. It is very, very true.

It is so true that I cannot fathom how you think otherwise.

With some difficulty, you can get the relevant numbers out of the PTV and similar annual reports.

Payments to rail and tram operators for providing services (not buying trains or building track) were $1.4 billion in the 12 months to June 2014 and $930 million for bus services. V/Line got $300 million of those payments - leaving $1.1 billion for metropolitan rail and tram.

In the same period across the state about $800 million in fares for all modes were collected, of which about $100 million went to V/Line. That leaves $700 million in fares for metropolitan rail and tram, and buses.

$700 million of fares, even if you pretended that it was all paid by metropolitan rail and tram travellers, is less than $1.1 billion paid for metropolitan rail and tram operations.

And its actually worse than that - the payments to metropolitan rail operators are net of them now getting 70% of farebox revenue, in addition to the direct payment from the state - based on some DPTLI figures I think that ends up being equivalent to about another $330 million of cost - $700 / (1.1 + 0.93 + 0.33) gives a cost recovery of ~30%, which is what is typically reported.

So take the current "high" fares, and multiply them by three. Then you might be in a position to claim that fares cover the cost of operating the services. But that still doesn't give you any money left over to actually pay for the upfront cost of building the infrastructure.

There is little justification for the state to own power stations anymore...
RTT_Rules

Note that the funds being discussed here from electricity privatisation isn't from sale of generators - in NSW they are already mostly private, it is from the sale of the distribution network - the poles and wires down the street. There is a significant difference - it is easy to have competition between generators because you have (and have to have) multiple generators selling into a common grid.

But in a particular area there is only one distribution network. I don't have an issue at all with privatised maintenance and management of a network, but when you have private ownership of a monopoly network I think there are quite a few examples where things don't turn out all that well.
  djf01 Chief Commissioner

This govt must own everything is a well established failed model.
RTT_Rules


Got one word for you:   Enron

I'm no fan of the government ownership model, for the reasons you've outlined.  But equally privatisations done wrong can be (and in the electricity industry often are) much worse.

If privatisation allowed decisions to be made that increase economic efficiency, then there is a clear benefit.  But all too often privatisations are done for purely financial reasons (as in to disguise how government services are financed).  Inevitably the public bears a disproportionate amount of the risk, but because it's hidden away in the "commercial in confidence" clauses of the contracts or GBEs involved, it doesn't appear to the state's balance sheet in the same was simple (and for governments extremely cheap) debt finance does.

In the case of electricity distribution, the (as far as I'm aware, and I'm not interested enough to become all that expert on it) the NSW GBE model has proved the best on the eastern seaboard, with the least amount private gaming the regulatory system.
  donttellmywife Chief Commissioner

Location: Antofagasta
I would agree in theory privatision sounds like a panacea for inefficiently woes that government departments have but in reality it is different. Reports have actually found there are no benefits to consumers with privatisation and has instead it has resulted in large financial losses to the public.
wxtre

In reality, when former state owned organisations have been privatised into competitive markets we've all generally ended up better off.  It is only the fringe lunatic element that still thinks that organisations like the Commonwealth Bank should still be government owned.

Were the reports that you allude to read the same ones that made you think that public transport in Australia ran at a profit?

I have my concerns about privatisation in monopoly situations, but blanket statements like yours are just ridiculous.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE


Note that the funds being discussed here from electricity privatisation isn't from sale of generators - in NSW they are already mostly private, it is from the sale of the distribution network - the poles and wires down the street. There is a significant difference - it is easy to have competition between generators because you have (and have to have) multiple generators selling into a common grid.

But in a particular area there is only one distribution network. I don't have an issue at all with privatised maintenance and management of a network, but when you have private ownership of a monopoly network I think there are quite a few examples where things don't turn out all that well.

Missed that, point taken and agree with your 2nd paragraph
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Got one word for you: Enron

I'm no fan of the government ownership model, for the reasons you've outlined. But equally privatisations done wrong can be (and in the electricity industry often are) much worse.

If privatisation allowed decisions to be made that increase economic efficiency, then there is a clear benefit. But all too often privatisations are done for purely financial reasons (as in to disguise how government services are financed). Inevitably the public bears a disproportionate amount of the risk, but because it's hidden away in the "commercial in confidence" clauses of the contracts or GBEs involved, it doesn't appear to the state's balance sheet in the same was simple (and for governments extremely cheap) debt finance does.

In the case of electricity distribution, the (as far as I'm aware, and I'm not interested enough to become all that expert on it) the NSW GBE model has proved the best on the eastern seaboard, with the least amount private gaming the regulatory system.
djf01

I would have said most is done for economic reasons.

- Lower unit costs
- More efficent services
- Reduce excessive staffing
- More competitive services with players in other countries and states
- Reduce the loss making service or simiply improve the rate of return
- In a mature market, let market forces under govt policy guide the direction
- Introduce often multi national experience and open up the existing staff to other way
- Removes the govts exposure to large capital expenditure and required upgrades and replacements

I think in part the reason pace is slowing in the developed world regarding privatisation is that the gains are diminishing as former govt departments are corporatised and laws such as job for life are removed, unions powers reduced etc.

With regard to govts access to cheap loans, this is partly true, but only if you can maintain a half decent credit rating. Very large multi nationals with budgets exceding many small - medium countries are often better managed would be exposed to similar borrowing costs. Govts also have a bad habit of taking capital put aside for capital upgrades/replacement and not paying off debt which means cheap interest rates are actually more expensive.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
I would agree in theory privatision sounds like a panacea for inefficiently woes that government departments have but in reality it is different. Reports have actually found there are no benefits to consumers with privatisation and has instead it has resulted in large financial losses to the public. Price rises have been highest in states with privatised electricity networks.

Privatisation also undermines society. As utilities are controlled by individuals rather than society as a whole. You see this recently with the Royal Mail sale in the UK. A company once owned by the people is now owned by wealthy overseas investors and individuals. It is strange that western politicians condemned the Russians when they privatized the state assets the late 1980s. Saying that Russia was a corrupt state controlled by Oligarchs. But when the same occurs in the west and state assets are funneled to private individuals they change their outlook. It is a double standard.
wxtre

Staying within Australia, there is no evidence that large prices rises were due to privatisation because there was no dispartity. Most if not all the price rises have been well within the govt controlled sectors and CO2 tax. Additionally price rises are still regulated by the govt.

However going OS, if the prices have gone up, its more likely because the govt was underselling the power, thus preventing an economic rate of return for the assets and distroying the arugments that the govt makes money out of these assets. Generation price is a small fraction of the domestic power price, just google the spot price in Australia at any one time outside peak then look at your bill.

How has any of the privatisations anywhere in Australia, undermined society? Has the postal service for the average joe in the UK been degraded since sale? Note, mail as a whole is decreases and some countries like NZ are decreasing mail deliveries/week as a result. Also check your facts, the postal service was never owned by the people. It was owned by the Crown, yes there is a difference. We the people are purely share holders and probably not even that in a large organisation. The govt in Australia actually own the asset, not us and like any large scale company the "board" so to speak has the right to manage it as they see.

The only British privatisation I've read much about was British Steel and if there was ever a govt owned basket case that was it. The coal mines were probably just as bad. Mostly shutdown by the govt (Iron Madem), there has been very little interest in mining coal ever since because they lost so much money and for over a century on a regular basis held the country to ransom.

Historical FYI, The Titanic nearly didn't sail and only did with a greatly reduced passenger load because the White Star Line managed to transport coal from USA on another ship and cancelling its return service and with trains out of coal nation wide, many passengers simply couldn't get to the ship. All thanks to yet another British National coal strike which was regular until closure of the mines.

Again, what industries do the pro-Nationalists propose to be govt owned, because there is no limit. Do they want Coles, printing services, Petrol Stations, all hospitals (ask a Canadian about this, those with cash or private insurance travel to USA and my Norwegian freinds has seperate insurance and travel to other EU for elective surgery to avoid the govt owned system because its so great). What about coal mines? GSR? Again return to airline Duopoly? bring back ANL Line? what about insurance? Should the govt buy up all the private generators, oil refineries is popular govt control in Venezuela. where do you want to stop and why?

I remember the good ol days of govt owned Telecom, good their bloody gone. I'm still with Telstra and they phone me every 6mths to make sure everything is ok, offer a better deal etc.

While I agree not every privatisation has gone well. Usually due to lack of reality check by both sides, but the sucesses greatly out ways the failures in Australia.
  djf01 Chief Commissioner


Historical FYI, The Titanic nearly didn't sail and only did with a greatly reduced passenger load because the White Star Line managed to transport coal from USA on another ship and cancelling its return service and with trains out of coal nation wide, many passengers simply couldn't get to the ship. All thanks to yet another British National coal strike which was regular until closure of the mines.
RTT_Rules


Interesting fact.  But are you *really* arguing that striking British coal miners saved over 1000 lives in the Titanic disaster?
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Interesting fact. But are you *really* arguing that striking British coal miners saved over 1000 lives in the Titanic disaster?
djf01

Not arguing anything apart stating and interesting bit of historical trivia at stating the disruption govt owned utilities have caused in the past. Yes it happens less today for other reasons. We also don't know how many people died due to strikes
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
There is an article today in Guardian about privatisation of the East Coast Rail.People may be interested to read it.

East coast rail has been too successful – quick, privatise it
http://www.theguardian.com/commentisfree/2014/nov/27/privatising-east-coast-rail-rip-off
wxtre

The article is interesting, yet very poorly written as this is too much sarcasm making the facts hard to read.

He also states the East Coast Line uses less subsidy but also generated revenue.

Regardless Australian commuter rail cash flow negative o their own for the govt, any arguing other needs to wake up and smell the flowers.  The reason they continue to operate is part historical and public support but also operate as cost avoidance in road infrastructure and healthcare.

The system may cost more to run now, but you need to ask why first? Does it move more people? Running more trains that loose money means you will overall cost more to run however the cost per person per km should drop.

There is a similar much better written article written and researched about the Mel privatisation on the WWW and it clearly states the it is difficult to tell how the Mel privatisation process has benefited the system as the expected savings were not achieved and under Kennent they actually made greater improvements before sale. but was it a case of the govt changes grabbed all the low hanging fruit? Would under continued govt ownership the system have improved until now? Its also stated the gains in other states over the same time frame may be due to the other state govts looking very closely at Mel as an example of what they could do and used that lever and bench mark to keep the unions in line and the Management to shape up as the middle and upper Management jobs are at greater risk of being replaced than blue collar sector. ie number of drivers varied little between govt and private hands, but individuals in middle and upper management would be replaced with the franchises own people.

One thing many Melbournittes will always remember was the very long tram strike just before the Grand Prix leaving the trams in the street for weeks. If you ever want to give a govt excuse to privatise, that was it.
  djf01 Chief Commissioner

Not arguing anything apart stating and interesting bit of historical trivia at stating the disruption govt owned utilities have caused in the past. Yes it happens less today for other reasons. We also don't know how many people died due to strikes
RTT_Rules

Yes, sorry Shane.  I forgot to add the Wink after that comment to denote it was just attempted humour.
  donttellmywife Chief Commissioner

Location: Antofagasta
The East Coast rail-line mentioned in the above article, it brings in around £1bn to the state per annum. You question what the rationale is when profitable business for the government are sold off to overseas governments and private individuals.
wxtre

Per annum means "per year".  The linked opinion piece says £1bn since 2009, i.e. over four or five years.

Whether the business is profitable or not is a distraction.  The question is whether it makes sense for it to be government owned or not.  That's a pretty hard case to make when all the other similar businesses are already private.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
RTT_Rules The article is quite poorly written. And I personally do not like the Guardian as a newspaper.

But the points in the article seem to echo the personal sentiment of the people in the UK. From reading comments on several newspapers. It was similar with the Royal Mail privatization recently the public did not want this to occur from polling. The Royal Mail was a profitable state asset and with large real estate holdings. Now overseas premium courier services like TNT and DHL (partly owned by the German government) who charge higher costs are entering market. It is okay for business but for people who cannot afford to pay these premium rates such as low income earners and it is not localized.

The East Coast rail-line mentioned in the above article, it brings in around £1bn to the state per annum. You question what the rationale is when profitable business for the government are sold off to overseas governments and private individuals.


While I would agree that unions and bureaucracy can be bloated and this can cause issues with efficiency and cost. Similar to the ABC, with people glued on past their used by date. But the other side is when they privatized V/Line rural and regional railways were closed and services were reduced.
wxtre

There needs to be more information on why the publically owned operator can make a buck out of it and why the private sector didn't. 2009 was a tough year for the UK and this might have had more to do with it.

Times are changing and as I mentioned before, the privatisation that has taken place to date has helped changed the way govt operations operation at many levels. More govt departments know that its lean up or be out sourced. With a much smaller overall public sector you now have more new employees coming in from the private sector where as a few decades ago the two pools of people rarely mixed. Note, after exposure to the Australia public sector I never ever applied for a public sector job again and I know many others doing similar, ironically I work for a govt owned business in UAE and its as fat, bloated and lazy as I remember from Australia, some do work hard, but not all. My Sis in law and her HB work in the Qld public sector as contractors in IT, they still often see approval forms with 20 signatures and many other interesting ways of doing things so I guess things have not changed too much.

What killed the public sector was almost the inability to be sacked/made redundant. When I left school in late 80's, one friend worked for the Com Bank and the only way to be sacked was to be caught stealing money. Another went to SRA and even this was unlikely to lead to dismissal.

The closures of rail services in V/line were approved by the govt and since then how much has been returned? Meanwhile in govt owned QR land, how many lines have been closed in last 20 years and the bulk of non bulk or rack load regional trains have been deleted. NSW govt and WA govt have been happy to close regional lines and put grain onto road, so I don't think the Vline argument is relevant.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Sorry I interpreted the article incorrectly in my sleepy state. You are correct. But still the point I was making is it is profitable.

In 2013-2014 it paid £217m to the treasury, and since 2009 East Coast has returned more than £1 billion to the the taxpayer, all of which will be re-invested in the service. Directly Operated Railways, the state-owned group that was parachuted in to rescue the line in 2009. DOR took control in November 2009 after National Express admitted it could no longer afford to run the line.
wxtre

If the money is returned to the taxpayer, I highly doubt it will be all re-invested.

Also if private ownership had been retained it doesn't mean they would get all the profits. In large engineering projects we often control the profit of the suppliers to costs + to say 14-15%. Just like when the services are losing money the govt provides a subsidy there are incentive payments/profit sharing to encourage the operator to reduce costs, once the service is in profit there is a profit sharing arrangement with the govt.
  bambul Station Master

Location: Sydney
EDIT: Added note 3.

Returning to the original topic of this post, the iNSW report shows that more money is going to Sydney public transport ($8.9bn) that on roads ($7.3bn). If you consider that the cost to the government for roads is likely to be less (as they will be partly paid for by tolls), then the proportion of government funding to public transport is much higher than half.

WestConnex Northern and Southern extensions ($1.8bn[1])
Western Harbour Tunnel ($4.5bn[1])
Miscelaneous Road Improvements ($1.0bn)
TOTAL = $7.3bn

Parramatta Light Rail ($600m[2])
Sydney Rapid Transit ($7.0bn[3])
Western Sydney Rail Upgrades ($1.0bn)
Bus Rapid Transit ($300m)
TOTAL = $8.9bn

Source: http://www.infrastructure.nsw.gov.au/media/42984/inf_j14_871_sis_report_book_web.pdf (pages 10 and 26)

NOTE [1]: The report does not include this amount in the $18.9bn to be raised from the 99 year lease of the electricity distribution network, stating instead that it is a tollroad. I don't think these roads can be funded entirely from the tolls, though I'm sure a sizeable portion can be. I've been extremely conservative and assumed no toll revenue here and public transport still gets more than roads.
NOTE [2]: This is in addition to the $400m announced in the 2014 budget, which takes total funding to $1bn. I've again been conservative and only counted new government funding committed.
NOTE [3]: This is in addition to the $3.4bn announced in the 2014 budget, which takes total funding to $10.4bn. I've again been conservative and only counted new government funding committed.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
As a guide I would say that roads can be partially to fully funded by their respective tolls and the fuel and tax on that fuel used along the way is off to the govt.

PT, fares have no chance of funding the capital as they rarely cover the operating cost, but it also needs to be acknowledged that the money spent on the railway option is far less than the road option over 25-30 years.

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