Fare rise cuts use of train

01:18, May 05 2014

Two fare increases in the past year on the Capital Connection have resulted in a drop in passenger numbers but a boost in revenue.

However the train is still not financially sustainable, raising questions over the long-term prospects of the Palmerston North to Wellington train.

KiwiRail staff will provide an update on the service's performance at a Horizons Regional Council public transport committee meeting tomorrow.

The meeting comes about half way through the two-year reprieve KiwiRail announced for the train last Easter following months of speculation it would be axed.

"When KiwiRail announced that the service would continue operating until June 2015, it determined it would have to raise average ticket prices by 40 per cent and daily patronage would have to increase by 61 passengers in each direction," a report written for tomorrow's meeting says.

However, the report says, instead of increasing passenger numbers have fallen since a 10 per cent fare increase in April, which was followed by a similar increase about six months later. "Overall patronage for the 2012-13 financial year was 145,590. This is down from the 2011-12 financial year patronage total of 158,972. This was a 9 per cent loss in patronage," the report says.


Committee members would receive more detailed info on passenger numbers at tomorrow's meeting.

The report did state marketing efforts by regional, district and city councils between Palmerston North and Wellington may have slowed the fall in passenger numbers.

The report says that revenue has increased because of the fare increases, but not by how much, however the service was still financially unsustainable.

Labour's Palmerston North MP Iain Lees-Galloway said it was no surprise the two fare increases had been followed by a drop in passenger numbers.

The expectation that the train turn a profit was inappropriate, Lees-Galloway said, and not a condition placed on any other public transport service in the country.

"The Capital Connection is well utilised when you compare it with other commuter services," he said. "The only problem here is it's not being funded by a commuter service."

The train is run under KiwiRail's TranzScenic brand and does not attract a subsidy from central or local government like other commuter trains in Wellington.

A submission was made to NZTA by Horizons and the Greater Wellington Regional Council in 2012 to introduce a subsidy to the service but the request was denied.

Lees-Galloway said KiwiRail was in a tough spot as it was trying to meet the demands of the Government's transport policy. Labour's yet to be released policy would consider the Capital Connection to be a commuter service, he said.

KiwiRail had warned that if losses on the Capital Connection blew out then the service would be scrapped before the end of the two-year period announced last March.

Manawatu Standard