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 Home Resources Event Pages 2004
Privatisation of rail and tram services in Melbourne: What went wrong?Wednesday Night at the New International Bookshop Program, 7 July 2004 Paul Mees, Urban Planning Program, Faculty of Architecture, Building and Planning, University of Melbourne, 3010, Australia.Background Paper to a Response to the Presentation on ‘Revitalisation of the Tram System in Melbourne’ by Yarra Trams CEO Hubert Guyot in the for the Australian Fabian Society. ABSTRACT: Melbourne's urban rail and tram systems were privatised in 1999, using a concessioning or franchising model similar to that employed for British Rail in the 1990s. The Melbourne franchise agreements promised improved services, increased patronage, reduced government subsidies and no real increase in fares. However, within two years it became apparent that these predictions had been over-optimistic, and subsequent negotiations saw the departure of one of the three franchisees and a renegotiation of agreements with the remaining two operators leading to substantial increases in subsidy levels. This paper reviews the Melbourne privatisation experience, to assess the extent to which it has produced benefits, the reasons the original predictions were not met and the extent to which the problems were avoidable. It concludes that, although the Melbourne franchises were expressly designed to legally transfer revenue risk to the private operators, they failed to achieve this as a matter of practicality. Download File: |
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