Action for Public Transport (NSW)

This submission from Action for Public Transport responds to the Wharf Access Policy: Draft Position Paper (March 2013). It provides an overview of our concerns, and responds to each of the sixteen recommendations in the draft policy. We would be happy to meet with you to clarify any issues arising from our submission or to provide further information.

Executive Summary

1. Action for Public Transport would like to see greater use made of Sydney Harbour for transport, and an improved customer experience. We see the policy framework regarding wharf access in a wider context, and advocate an approach differing from that set out in the current draft policy. Our view may be seen as more traditional in light of the radical changes proposed in the draft wharf access policy.
2. We advocate continued regulation of all scheduled ferry services meaning that wharf access would be tied to the service contract.
3. We recommend the rollout of Opal smartcard ticketing to both public and private ferry services, and this should be a condition of the service contract.
4. Further we recommend that all ferry services on Sydney Harbour, regardless of which company operates the service, be marketed under one brand to simplify the customer experience.

Action for Public Transport

Action for Public Transport (NSW) was formed in 1974 and is a transport consumer group operating around Sydney. We are not tied to any business organisation, trade union, political party or government department. However, we frequently liaise with governments, transport operators and other commuter and environmental groups, both in Australia and overseas. More information on our activities can be found on our website – http://www.aptnsw.org.au/.

Two philosophical approaches to the provision of maritime transport infrastructure

From a reading of the draft policy we understand that it is based on a decentralised, deregulated model which aims to eliminate the need for government subsidies for any new ferry services on Sydney Harbour. We question this approach for three reasons. First, all members of the community benefit from the provision of public transport services which result in reduced road congestion, and lower levels of air pollution. We believe it is fair and equitable for all beneficiaries of reduced congestion and pollution to contribute towards the cost of providing public transport. Second, public transport facilitates higher residential densities, leading to reduced commuting times, and a more liveable city. Therefore a taxpayer funded subsidy towards the cost of providing public transport is logical, and a widely accepted model globally. Third, the deregulated model proposed here has little by way of a proven track record. Government funding and regulation makes possible a more centralised approach to service provision based on sound transport planning, integrated fares and marketing. Action for Public Transport believe this is the best way to ensure services meet passenger needs and are provided in an efficient manner.

Deregulated Cost-Neutral Ferry Services

We believe that deregulated cost-neutral ferry services are almost certain to be small scale, niche services with very limited hours of operation. The argument they can be provided at no cost to the taxpayer can easily be countered by the inevitable reality that they will make very little impact, and may be somewhat transitory given the changing proprietorship of ferry companies over time. With increasing residential densities in suburbs around the harbour foreshore, and increasing road congestion, it would make sense to build ferries even larger than those currently owned by the government and operated under a franchise agreement with the private sector. This would not be possible under a deregulated cost-neutral model of service provision.

No Evidence that Cost-Neutral Ferry Services will be Successful

What the draft policy fails to consider is that there is no evidence, particularly from recent experience elsewhere, that the proposed deregulated cost-neutral services might be commercially successful. We can cite instances where trials of new private ferry services on Sydney Harbour have failed commercially in recent years. These include the Rozelle Rocket in 2010, and before that Parramatta River services operated by Palm Beach Ferries in 2006. The privately operated high speed services to Manly are an exception to this rule, largely because of unique geography, longer journey times on alternative forms of transport and the history of government operated high-speed services to Manly which ended in 2008. Subsidised ferry services have accounted for the vast majority of ferry services on Sydney Harbour over recent decades, and will inevitably do so in the future.

The passenger perspective

Action for Public Transport strongly supports evidence-based decision making. Logically, the design of public transport services, including ferry services, needs to take into account customer expectations. Many passengers own a car and could choose not to use public transport. We know from the deliberations of the Independent Pricing and Regulatory Tribunal, and from the introduction of the Sunday Funday Family Ticket, the level of fares will influence the decision to leave the car at home and take public transport. Cheaper fares attract higher levels of patronage on public transport service including ferry services. We know that service frequency will also influence the decision to choose public transport. To stimulate debate we list below what we believe to be the key expectations of passengers:-

• Integrated ticketing is essential because if you take the ferry you will most likely need to use another mode of transport as well. Deregulated cost-neutral ferry services will have their own unique ticketing system and fare structure which will be completely separate to other modes of transport. Opal Card is being rolled out on government owned ferries, public and private buses, trams and train services across metropolitan Sydney. The government has indicated that Opal Card will not be offered on private ferries, meaning they have been effectively been shut out of integrated ticketing and as a consequence will look like working museums in the eyes of passengers.
• Passengers need simple to follow information at wharves. Electronic signage on wharves indicating the destination of the next departure is not available on wharves where the slot system operates. Action for Public Transport believes that this is unsatisfactory. It is important to remember that passengers who embark on the wrong ferry will still be required to pay a fare on that service, and may also find that the ferry may not return them to their wharf of embarkation, leaving them to pay a costly taxi fare to reach their intended destination.
• The hours of operation of ferry services should match those provided on other modes of transport. Most public transport services in Sydney operate from 6.00am to midnight, seven days a week. Passengers need this flexibility to find services that meet their travel needs. Limited hours of operation will discourage patronage.
  We are also concerned that this policy will result in cruise and charter vessels being used as ferries, as well as a number of smaller craft. Passengers would obviously prefer large purpose built ferries that have plenty of seating and multiple wide gangways to facilitate quick embarkation and disembarkation.

Ensuring High Utilisation of any new finger wharves at Barangaroo

Action for Public Transport is concerned that if the proposed new finger wharves at Barangaroo are allocated to deregulated cost-neutral ferry services, they will remain underutilised due to unlikely commercial success of these services. This may lead to cruise operators seeing an opportunity to use these wharves for cruises, when they should be used exclusively for scheduled ferry services. We are concerned that a facility built for scheduled ferry services could become a cruise and charter facility. There is a dedicated cruise and charter boat facility at the adjacent King Street Wharf development. If at a later stage the government, in an effort to promote better public transport, denies cruise operators access to these finger wharves, there will be an industry backlash. We believe that the government should signal at an early stage that these new wharves are for scheduled ferry services only, will be gated with passengers requiring an Opal Card to enter the wharf, and will never be available for use by cruise and charter vessels.

Disincentives to expand the Sydney Ferries network

Action for Public Transport strongly supports the expansion of the Sydney Ferries network to service new foreshore developments, and to ease crowding on existing services. We are concerned that the expectation that the private sector will be able to provide deregulated cost-neutral ferry services will act as a disincentive to expand the current government ferry network. We are also opposed to allowing private operators to operate services in parallel with Sydney Ferries, potentially profiteering from the busiest wharves such as Taronga Zoo. However, based on the history of the Palm Beach Ferry Service along the Parramatta River in 2006 which ran in competition to Sydney Ferries, we do not believe that passengers will not choose the private deregulated service over the subsidised service because of the price disincentive.

Slot Allocation for Ferry Services

We agree with the industry feedback cited in the draft policy that slot allocation does not work well for scheduled ferry services. These services tend not to gain traction in the market place with many potential passengers unaware the service operates. While the industry has asked for longer term access agreements, where these relate to scheduled ferry services we want them tied to a service contract. We are also concerned the new policy will lead to higher wharf fees. In regard to Barangaroo, we would prefer that one operator gained control of all services to operate from the proposed three new finger wharves. The operation of large ferries with frequent departures requires exclusive wharf access.

Progressive and Regressive Wharf Access Charges

A proposed schedule of wharf access fees is provided in the draft policy indicating higher charges for larger vessels. We believe that charging higher wharf access rates for larger commuter ferries is counter-productive. Small ferries operating commuter services increase congestion around wharves, and significantly, carry fewer passengers. The high levels of congestion currently experienced in Sydney Cove are a good example of this problem. Sydney Cove is currently very congested. Better use would be made of wharf infrastructure if operators were encouraged to purchase larger vessels for scheduled ferry services. The charges should scale downwards for the increasing size of vessels to reflect the shortage of suitable berths. However, the progressive scale is suitable for charter boat operators because the economics of the charter industry are very different to commuter ferry services.

Scheduled deregulated ferry services as a Trojan Horse

Action for Public Transport remains concerned that private operator’s main goal is to secure prime positions for their cruise operations, and operating a few scheduled commuter services may help them gain access the wharves with prime positions. In the past we saw Captain Cook Cruises maintain its exclusive use of Jetty No. 6 at Circular Quay by operating commuter ferry services at a loss, but using the wharf as a base for their more profitable cruises. Whilst the new policy may stop this happening, what is to stop operators using the same wharf for scheduled ferry services and cruises?

Recommendations

This policy needs further development, and we ask that the implementation date be put back to allow time for further consultation and research into the effects of the proposed policy. We would be happy to be involved in this process. Further, we believe that all ferry services on Sydney Harbour should be regulated.

1. We support the retention of exclusive access for Sydney Ferries. We want exclusive access rights to be granted in the future, especially for the three new finger wharves at Barangaroo.
2. Rather than give priority to regulated ferry service at commuter wharves, we would prefer all ferry services to be regulated.
3. Use of commuter wharves on the Sydney Ferries network by private operators will only encourage ‘cherry picking’ by profit focused operators which is not in the public interest. This type of action would negatively impact the financial viability of all operators involved.
4. A comprehensive plan is required for ferry services on Sydney Harbour. An ad hoc approach will result in a substandard ferry system.
5. Charter operators must be excluded from some wharves.
6. How will this be measured?
7. This approach is suitable for cruises and charters
8. It should be made clear to applicants that there is limited availability for the berthing of charter vessels.
9. Wharf access should be tied to regulated service contracts
10. Scheduled ferry services must have priority at all times.
11. Proposals for access should be assessed on their potential benefits, so priority should be given to scheduled ferry services.
12. Scheduled commuter services should be charged at a lower rate than cruise vessels.
13. We do not support competition allowing two operators to call at the same commuter wharves unless the destination of the services is different. We do not support the introduction of commuter wharf permits.
14. This recommendation has been omitted from the published draft policy.
15. We would prefer there was one brand for all ferry services on Sydney Harbour, and one sign at each wharf listing all departures. In the meantime, the right to place signage on commuter wharves should only be given to operators holding a service contract with Transport for New South Wales for that wharf.
16. We ask that charter wharves and any signage be clearly distinguished from commuter wharves.

Conclusion

We have argued for wharf access policy to be considered in a wider context. We would like scheduled ferry services to remain regulated, and for the Opal Card to be extended to all ferry services on Sydney Harbour. This means that all services will receive a government subsidy. If the government’s proposed policy framework was adopted then we would forgo the benefits that come with an effective public transport system. Cost-neutral ferry services are unlikely to achieve commercial success because they do not meet the expectations of passengers.

The motto of Transport for New South Wales is "the customer is at the centre of everything we do", but do the actions of the ministry support this claim? The proposed deregulation of the ferry industry fails this test. In the development of the draft wharf access policy, customer interests have come last. Even more significant than the government’s blithe disregard for their own rhetoric, is the failure of this policy to address Sydney’s transport needs.

Action for Public Transport believes that the aims of policies should be based around the public interest. In the case of this draft policy, the government is trying to maximise revenue from wharves, and operators who are trying to maximise profit. The draft policy should integrate various perspectives and determine what compromises need to be made.

We recommend that the government takes time to rethink this policy, and release a revised policy for comment allowing adequate time for public and stakeholder consultation. We would be very happy to meet with you to further discuss any of the issues raised in our submission.


Graeme Taylor
Convenor
Action for Public Transport
grtaylor@aptnsw.org.au