Before November 2007, the Victorian ALP state government will be forced to make a decision on whether to renew private contracts with Connex and Yarra Trams, or take the public transport system back into public hands. The problems that have plagued the system, including safety and quality of service, have been prolonged and heightened by the running of public services by private companies for profit.
The newly released ‘transport and liveability’ package is a band-aid solution that cannot hope to fix the deep-rooted problems. By June this year privatisation will have cost $1.2 billion more than under a public system, and well over $2.1 billion by 2010. The expiry of private contracts in 2008 provides a cheap and efficient opportunity to smoothly right the wrongs of an insufficient and ailing public transport system.
In spite of this clear alternative, the Victorian ALP has already signaled that it will not re-nationalise the system, even when such a plan is in the direct interests of the commuting public. This is precisely because the ALP has wedded itself to the private sector, particularly through public-private partnerships, and cannot see the way out.
The total failure of privitsation is so clear that even Jeff Kennett, the architect of privitsation, has been forced to concede: “We now pay billions in subsidies to the private operators, which was not the idea.” Kennett may be unaware but companies don’t exist to improve ordinary people’s lives, they run to make a profit for their shareholders, and it matters very little where those profits come from.
After milking consumers dry with above-inflation fare increases every year, the public transport companies have continually sought to squeeze more out of the government through extra subsidies, ‘investment’ and limitation of liability, using the threats of imminent collapse or pulling out, as National Express did in 2003.
However, there is a simple way out. If no notice is given before 30 November 2007, Melbourne’s trains and trams will revert to public ownership at 3am on 30 November 2008 without the risk of compensation claims.
If this is the case we need to ask why would the government continue with the unnecessarily expensive and failed private operation of public transport?
Because the ALP has abandoned their commitments to public ownership and committed itself to propping up the private sector. Despite the embarrassing pullout of National Express in 2003, the government rushed to reassure the market that it had no intention of operating public trains and trams. In fact, it planned to reintegrate the tram and train networks after spending more money fixing the problems and put the entire system up for tender within 12 months.
Just before abandoning its operations, National Express demanded that the government bail it out to the tune of $130 million and underwrite all future losses. When the ALP refused and offered only $90 million, National Express decided to walk away. The collapse totally undermined Labor’s ability to justify its Partnerships Victoria program, which involved a series of joint government-private sector projects.
These included a plan to pay $300 million to the Civic Nexus consortium to build a Melbourne country rail terminal and to award the company a 30-year contract to run the station. Scandalously, CityLink contracts also make the toll road operator Transurban eligible for compensation if public transport was ‘free or near free’, echoing the recent fiasco of Sydney?s privately owned cross-city tunnel.
Basically, there are two possibilities: extending the failed private contracts, or allowing their lapse and thus re-nationalise Victoria’s public transport system. Re-nationalisation is the only viable alternative in economic and social terms, paving the way for a vast improvement in our living conditions.
By Will Kaplan