OPIN­ION

Kapi-Mana News - - OPINION -

Welling­ton re­gion bus and train trav­ellers may have paid over the odds for their bus fares.

Al­though the New Zealand Trans­port Agency has spec­i­fied that at least 50 per cent of the cost of pro­vid­ing pub­lic trans­port must come from fares, Greater Welling­ton has cho­sen to charge more.

The coun­cil has cal­cu­lated that 50 per cent on a dif­fer­ent ba­sis to the agency. The agency ex­cludes cap­i­tal ex­pen­di­ture for the pur­poses of cal­cu­lat­ing op­er­at­ing costs.

That is an en­tirely ortho­dox ac­count­ing prac­tice, be­cause cap­i­tal ex­pen­di­ture re­sults in no change to a busi­ness’ debt-equity po­si­tion.

How­ever, the coun­cil has cho­sen to in­clude some of the costs of new Matangi trains and the rail up­grades in their op­er­at­ing costs and there­fore ar­rived at a much higher to­tal.

Last year com­muters paid $84 mil­lion in fares for coun­cil­sub­sidised pub­lic trans­port, 57 per cent of the $147.5 mil­lion that it cost Greater Welling­ton to pro­vide pub­lic trans­port.

That’s $10 mil­lion more than they could have.

There is some jus­ti­fi­ca­tion for the coun­cil’s po­si­tion.

It funds both bus and train ser­vices, but it only owns and pays for the trains.

Pri­vate own­ers bear the cap­i­tal costs of buses and re­cover those costs through fares and Welling­ton Re­gional Coun­cil sub­si­dies.

Ex­clud­ing cap­i­tal costs from the train op­er­at­ing cost cal­cu­la­tion low­ers the ap­par­ent op­er­at­ing cost for trains com­pared to buses.

The New Zealand Trans­port Agency set the rules for de­ter­min­ing fares on the ba­sis of their own for­mula and pre­sumed,

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