When a public asset is privatised, maintenance suffers. This is something well known, a company only interested in making money for it’s shareholders will always seek ways to cut costs (and cutting maintenance costs is a good way to do this).
Take heed New South Wales, this is the lesson that Victoria has learned the hard way.
In November 2007, Singapore‘s SMRT Transit and Hong Kong‘s MTR Corporation Limited expressed interest in taking control of Melbourne’s suburban rail network from Connex in November 2009, when their contract was to be reviewed.
On 25 June 2009, Connex lost its bid to renew its contract with the Victorian Government. Hong Kong backed and owned MTR Corporation took over the Melbourne train network on 30 November 2009, operating as a locally themed consortium Metro Trains Melbourne. MTR is a non-public railway owner and operator in Hong Kong where it is well known for constructing Transit Oriented Developments (TODS) around its stations.
In 2006, Professor Paul Mees and a group of academics estimated in their article “Privatisation of Rail and Tram Services In Melbourne: What Went Wrong?” that privatisation had cost taxpayers $1.2 billion more than if the system had remained both publicly owned and operated. With the franchise extensions in 2009, taxpayers will pay an estimated $2.1 billion more by 2010.
Dr. John Stone wrote in his article “Melbourne’s public transport: performance and prospects after 15 years of ‘privatisation’”
Is Melbourne’s model of single – mode franchising serving the city well?
… franchising is not bringing costs down or improving operational efficiency.
This is despite significant patronage growth, and is contrary to the predictions of the early proponents of franchising.
He also made mention of “the lack of accountability for MTM’s increased maintenance payments”.