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Connex profits far outstrip penalties for crap service

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Should public transport be nationalised so that services are prioritised over profit?
Yes
72%
 72%  [ 8 ]
No
27%
 27%  [ 3 ]
Total Votes : 11

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sherrife Scorpio

Victorian Socialists - people before profit


Joined: 18 Apr 2003


PostPosted: Mon Jun 02, 2008 12:48 pm
Post subject: Connex profits far outstrip penalties for crap serviceReply with quote

Quote:
MELBOURNE's public transport operators are being paid more money to provide worse service, analysis by the Public Transport Users Association shows.

Booming patronage on the city's trains and trams has led to a surge in ticket payments to transport operators Connex and Yarra Trams - far outstripping the increase in penalties they are being forced to pay for more late or cancelled services.

Connex received $174 million in revenue from ticket sales in 2005. The figure jumped to $225 million in 2007, while fines increased from $22.5 million to $28.4 million.

Yarra Trams had a similar increase in revenue that far outstripped a big increase in fines between 2005 and 2007.

Daniel Bowen, of the Public Transport Users Association, said more of the increased revenue had to be invested back into improving the system and not paid as profits to the privatised public transport companies.


http://www.theage.com.au/national/transport-fares-outstrip-penalties-20080601-2kkb.html

So as anyone who uses it would know, the public transport system has got steadily worse in the past few years, yet there is actually no incentive for private companies to do anything because their profit levels are still through the roof. Isn't that fantastic.

Quote:
What are the drawbacks? (of public-private partnerships)

Critics argue that taxpayers will end up footing the bill for PPP.

According to a survey conducted for by Labour Research Department for the GMB union, the 'rent' for PFI projects in the health service alone will top £13bn.

The union says profits for the companies involved will total between £1.5bn and £3.4bn over the next 30 years, about £5 a year for every tax payer in the country.

In some cases, such Fazackerly prison in Liverpool, the initial cost of the project has, it is claimed, been paid back within two years, leaving 23 years of pure profit from the construction.

There is also evidence that some early PFI projects have not been up to standard.

Private companies have been accused of cutting corners in order to maximise profits.

One big criticism of PFI is that the only way companies can turn a profit is by cutting employees' wages and benefits.

Unions talk of jobs being 'privatised'.

Their members are shifted into the private sector, where they have fewer employment rights and benefits such as pensions and childcare.

One of the most famous privatisations under the Conservative government, British Rail, has been widely criticised.

Railtrack - responsible for track, signals and stations - has been taken into administration by Labour amid huge debts, and the rail network may in future be run by a not-for-profit company.


So after they've made billions of dollars in profit without reinvesting any of it into improving the service, they'll just let the government takeover the debt. It's a win-win situation!

We should really look forward to more private involvement in providing essential services in the future Rolling Eyes Evil or Very Mad

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David Libra

I dare you to try


Joined: 27 Jul 2003
Location: Andromeda

PostPosted: Mon Jun 02, 2008 1:47 pm
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Here in Canberra I believe the ACT government is in control of the bus system, and although it has improved recently, it has been pretty average at times.... would it really make that much difference?
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John Wren Virgo

"Look after the game. It means so much to so many."


Joined: 15 Jul 2007


PostPosted: Mon Jun 02, 2008 2:17 pm
Post subject: Reply with quote

so you'd rather see your taxes being used to subsidise the system? someone has to pay for it. can't have it all ways.
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sherrife Scorpio

Victorian Socialists - people before profit


Joined: 18 Apr 2003


PostPosted: Mon Jun 02, 2008 3:20 pm
Post subject: Reply with quote

Jock McPie wrote:
so you'd rather see your taxes being used to subsidise the system? someone has to pay for it. can't have it all ways.


Subsidise the system? Didn't you read the article? Connex earned $225 million dollars in revenue!!

Sure, not all of that is profit, but I guarantee that a lot of it is. That could be money reinvested into public services, especially increasing the number and breadth of public transport to deal with the coming environmental crisis.

But nah, it's fine. Let's let overseas investors reap profits at the expense of providing services to ordinary people.

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Last edited by sherrife on Mon Jun 02, 2008 3:25 pm; edited 1 time in total
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John Wren Virgo

"Look after the game. It means so much to so many."


Joined: 15 Jul 2007


PostPosted: Mon Jun 02, 2008 3:24 pm
Post subject: Reply with quote

sherrife wrote:
Jock McPie wrote:
so you'd rather see your taxes being used to subsidise the system? someone has to pay for it. can't have it all ways.


Subsidise the system? Didn't you read the article? Connex earned $225 million dollars in revenue!!

Sure, not all of that is profit, but I guarantee that a lot of it is.


yes, but my point is for years the state governments ran the public transport system at a loss. so, the alternative to the partnership is to hand it back to the state to run.

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sherrife Scorpio

Victorian Socialists - people before profit


Joined: 18 Apr 2003


PostPosted: Mon Jun 02, 2008 3:27 pm
Post subject: Reply with quote

Evidence it was running at a loss?

Or was it just Kennet's neoliberal propaganda?

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spoljar Libra



Joined: 16 Mar 2004
Location: Lynbrook

PostPosted: Mon Jun 02, 2008 4:11 pm
Post subject: Reply with quote

Jock, I think Sherriff may be right in that I have yet to find any evidence saying that the public transport system was being run at a loss before being privatised.

My understanding is that Kennett privatised the system in order to pay state debt not because it was necessarily losing a tonne of money. I doubt he would have been able to flog off all the states assets if they were completely unprofitable.
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punkologist Aries

Barwick goals, the pies are home!


Joined: 07 Jul 2003
Location: Level 2 Ponsford Stand

PostPosted: Mon Jun 02, 2008 4:24 pm
Post subject: Reply with quote

Totally agreee Sherrife
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nomadjack 



Joined: 27 Apr 2006
Location: Essendon

PostPosted: Mon Jun 02, 2008 4:27 pm
Post subject: Reply with quote

Trains and trams ran at a substantial loss prior to privatisation - around $1.2 billion per annum if I remember correctly. There is plenty of research around to support this. Omar, think you'll find that connex is really struggling to turn a reasonable profit in Victoria.

There is no question that any publicly owned transport service would need to be significantly subsidised by the taxpayer. The question is whether or not that would constitute a good use of taxpayers money. In my opinion there is no doubt that it would be worthwhile, particularly given problems with gridlock in the city and with environmental problems in general.
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John Wren Virgo

"Look after the game. It means so much to so many."


Joined: 15 Jul 2007


PostPosted: Mon Jun 02, 2008 4:32 pm
Post subject: Reply with quote

spoljar wrote:
Jock, I think Sherriff may be right in that I have yet to find any evidence saying that the public transport system was being run at a loss before being privatised.

My understanding is that Kennett privatised the system in order to pay state debt not because it was necessarily losing a tonne of money. I doubt he would have been able to flog off all the states assets if they were completely unprofitable.


for some reason i recall the pre-kennett years when the system was losing money hand over fist. i suspect that was the reason for privatising. and, i'm trying to locate evidence to support this statement.

sec and gas & fuel would have been revenue earners.

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sherrife Scorpio

Victorian Socialists - people before profit


Joined: 18 Apr 2003


PostPosted: Mon Jun 02, 2008 6:25 pm
Post subject: Reply with quote

Myki is a public-private partnership. The government is not doing anything, it's just funding contractors to do the work.
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Black_White Scorpio



Joined: 19 Mar 2001


PostPosted: Mon Jun 02, 2008 7:19 pm
Post subject: Reply with quote

We in the country can only dream about having a "crap" public transport system.
In fact we can only dream of having any public transport system!
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stui magpie Gemini

Prepare for the worst, hope for the best.


Joined: 03 May 2005
Location: In flagrante delicto

PostPosted: Mon Jun 02, 2008 8:21 pm
Post subject: Reply with quote

My recollection is similar to Nomad's, the system was losing money hand over fist. Kennet flogged it off but the companies who bought in did so because they believed with their overseas experience they could make them profitable.

I seem to recall there was originally at least 2 different companies running the trains, one of them pulled out after a few years of losing money and the government (might have been under Bracks) convinced Connex to take on the rest.

I can symathise with Member, coming from the country to Melbourne in 1985, I thought the availability of Trams and Trains was sensational compared to what I was used to.

Even now, I reckon the services have improved since privatisation. Anyone who complains about modern trams and trains never rode one of the old rattly things.

Their biggest issue at the moment is collecting revenue. Even though they're making decent coin, their expenses would mean they're making bugger all.

My opinion on nationalising things (under any government) is that it's a bad idea and leads to more beaucracy and ineficiency, leading to worse service at higher cost. (if not to the direct user then to the rest of us)

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nomadjack 



Joined: 27 Apr 2006
Location: Essendon

PostPosted: Mon Jun 02, 2008 8:25 pm
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Nice one Greg. Somewhere in the middle of the story you managed to leave out the Kennett government's botched privatisation agenda. Not that you are partisan though Rolling Eyes
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nomadjack 



Joined: 27 Apr 2006
Location: Essendon

PostPosted: Tue Jun 03, 2008 11:15 am
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Was talking about Kennett's botched privatisation of Victoria's public transport system Greg, which I though was what we were discussing. Or do you think the privatisation model adopted by Stockdale and friends for our train and tram services was an effective model?

BTW as stupid as Jolly was, I don't have a lot of sympathy for dumb investors who chase unrealistic returns and then whinge when their risky investments go belly up.

And Omar was right. You obviously have no understanding of what fascism is.
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