Bus users may benefit from competition
Bus companies may have to compete for routes in a move intended to slow the pace of increasing fares for Wellington commuters.
Greater Wellington regional council has welcomed an announcement by Transport Minister Gerry Brownlee yesterday that will allow public-private partnerships for public transport.
The proposed change will let bus firms hold contracts for set routes. It is hoped increased competition will drive operators to improve services to attract customers.
Mr Brownlee said the Public Transport Operating Model would provide better value for money "by incentivising investment from the private sector and improving the design of public transport networks by regional councils".
The new model comes after Environment Canterbury faced a barrage of problems when it tendered out services in 2010, which culminated in police hauling buses off the road for being unsafe.
Environment Canterbury eventually changed documents so it could reject tenders deemed too low to run an effective service.
Greater Wellington economic wellbeing committee chairman Peter Glensor said the change would increase competition and benefit passengers.
"As well as giving operators more incentive to provide better services, the model gives them more financial certainty, which should encourage them to invest and be innovative in their businesses," he said.
"If we can grow patronage at a faster rate, of course that has huge benefits in terms of being able to share out the costs better."
That could mean an end to big fare hikes, although fares were unlikely to decrease, he said.
The model is subject to a law change. The council could then divide routes into "units" which companies would compete for through a tender process.
Passengers were unlikely to notice any change to services as a result, Mr Glensor said.
"It will also encourage genuine competition in our tendering process, something we haven't seen in Wellington for quite some time."
The Bus and Coach association also welcomed the change, saying commercial behaviour would bring benefits to public transport.