connies coming back

Connie comeback may solve city's transport woes

* Reid Sexton and Peter Munro
* July 13, 2008

Reinstating tram conductors would save hundreds of millions of dollars now lost through fare evasion, generate more revenue through increased public transport use and ease Melbourne's traffic congestion woes.

These are the key findings of research commissioned by The Sunday Age, the results of which have gained enthusiastic support from transport experts and unions who are urging the State Government to consider it.

Rolling out conductors across the tram network could deliver income to the value of $250 million over the next decade in revenue currently lost to fare evasion, the study has revealed. That windfall would defray the cost of employing about 1100 conductors to sell tickets and provide assistance to passengers on every tram running in Melbourne, according to transport economist John Odgers.

In the decade since the last conductors worked on Melbourne's trams, there have often been nostalgic calls for their return, especially given the cost blow-outs of the delayed smartcard ticketing system, myki. But Mr Odgers said that, sentiment aside, "it would be economically justified to reinstate Melbourne's tram conductors".

Mr Odgers, from RMIT's school of management, found the net expense of bringing back conductors would cost less than $12 million a year, averaged over the next decade. But that figure could drop further, after taking into account "very substantial and sustained" benefits, such as increased security, comfort and customer service on trams.

The likely jump in patronage and extra ticketing revenue, as well as the subsequent reduced road congestion, could actually turn tram conductors into a cash cow for the state's beleaguered public transport system.

The report shows a modest 1% boost in patronage could generate $38.2 million in extra ticketing revenue over the next decade — the equivalent of 9480 commuters swapping their cars for trams — while cutting Melbourne's traffic congestion costs by $115.1 million. These figures have been adjusted for inflation over the 10-year period, using a discount rate of 7.5%.

"I would strongly encourage the Government and Yarra Trams to very seriously and quickly rethink their stated refusal to countenance the reintroduction of tram conductors," Mr Odgers said.

Nicholas Low, director of the Australasian Centre for Governance and Management of Urban Transport at Melbourne University, urged the State Government to "very carefully consider" the report, saying, "$12 million to support the tram network does not sound like very much."

Public Transport Users Association president Daniel Bowen said the group's own studies had found that putting staff back on every tram and train station in Melbourne would be cost neutral.

"We can see clear benefits from bringing conductors back," he said. "It would not only be a popular outcome but obviously advantageous to cutting fare evasion and having better customer service and security on trams.

"We believe it would be cost effective and definitely beneficial to the system. Even the $12 million-a-year cost, the worst-case scenario, is peanuts compared to the total cost of running the transport system and a tiny amount compared to the astronomical cost of the myki smartcard system."

But Public Transport Minister Lynne Kosky defended the current system of onboard Metcard machines and random ticket checks by 265 inspectors or "customer service" staff.

"Evidence suggests that the current method of fare collection is far more cost efficient than employing conductors," a spokesman for the minister said. "What would have been staffing costs is instead invested into infrastructure."

Metcard, which arrived three years late, was designed to reduce costs across the tram network. However, the removal of conductors has led to a boom in fare evasion, up from just 1.7% of passengers in 1996 to 25% in 2000. Metlink claims it has fallen from 14.2% to 10.1% in the past two reported years, but it is thought by some insiders to be much higher. The report works on an average figure of 13.5%.

Mr Odgers said the reintroduction of tram conductors would create 835 new jobs — adding to the network's 265 customer service staff. The report states that about 1100 conductors would be needed to cover the entire system, which is comparable to the number of drivers Yarra Trams currently employs.

Each conductor might earn about $48,000 a year, including penalties but not superannuation. In today's dollars, the total overall costs of employing about 835 conductors would be around $369 million over the next decade, once payroll tax and other costs are included.

But the expected savings from reduced fare evasion would reduce the total net cost to $119.5 million, or $11.95 million a year, the report found.

Metlink chief Bernie Carolan said the return of tram conductors would not cut fare evasion to its previous levels because around 20% of the fleet's trams are now several metres longer than the older models.

He said that projected growth also cast doubt on whether 1100 conductors would be enough to adequately man the network and said the cost of reinstating them would be higher than what the report said because it did not include back-office costs.

RMIT transport expert and advocate Paul Mees said the cost of reinstalling conductors across the network was a fraction of the Government's subsidies to private operators of the state's transport system.

He said The Sunday Age study was further proof myki was not only unnecessary but a waste of taxpayers' money. "Sometimes you just have to face up to the fact you've made a mistake. Bringing conductors back would mark the start of a return to an intelligent system … one that people will be happy to use," he said.

The Government was forced to inject another $350 million into myki in May, which will now cost $850 million to create and $550 million to operate over its 10-year lifespan. The Government has promised to start rolling out the system next year, but initial tests of the smartcard in Geelong have shown a 10% failure rate due to software glitches.

Rail, Tram and Bus Union official Phil Altieri said myki's flaws strengthened further the case for bringing back tram conductors.