Posts Tagged ‘Ferries’

The purpose of this post is to provide some information on the history of the Opal rollout in Sydney since its introduction and to speculate on its future over the coming 12 months. It does not cover anything before Opal was introduced in December of 2012, but for those who are interested then the post Comparing Opal to Myki and TCard is well worth a read. For the purpose of clarity, some things have been simplified, for example only the rollout within Sydney is covered and when Opal was extended to multiple lines/routes in a short period of time they have been lumped together. Rollout information was gathered from Transport for NSW Media releases.

Opal’s Past

Ferries

Opal was introduced on 7 December 2012 on the Neutral Bay Ferry, with 200 people signing up for the initial trial. By 25 March 2013, 550 Opal cards had been registered. It was later expanded to include the Manly Ferry on 8 April 2013, and finally all ferries by the 30 August 2013.

Trains

However, take-up of Opal cards did not begin to gain traction until the rail network begun to be Opal enabled. The City Circle and T4 Line to Bondi Junction were the first to become Opal enabled on 14 June 2013. This was later expanded to Chatswood on 30 September 2013; then along T1 to the Central Coast via Strathfield, Macquarie Park, and Gordon on 31 January 2014; to Emu Plains a month later on 28 February 2014; and finally the entire Sydney Trains network the subsequent month on 28 March 2014. This was the moment that Opal take-up rates began to take off. In its first full year (2013), about 38,000 Opal cards had been registered. By 28 March 2014, just 3 months later, this had risen to 150,000 and by 23 June 2014 it had more than doubled to 340,000.

Opal card take-up and number of trips made - both total trips and free trips after daily/weekly travel cap reached. Logarithmic scale used. Click to enlarge. (Source: Author, data obtained from Transport for NSW media releases.)

Opal card take-up and number of trips made – both total trips and free trips after daily/weekly travel cap reached. Chart goes through to 23 June and does not include 30 June Hillbus rollout. Logarithmic scale used. Click to enlarge. (Sources: Author, data obtained from Transport for NSW media releases.)

However, this was slower than Transport for NSW had projected, with leaked documents showing that it had expected to reach the 150,000 figure by mid-February, at which point the actual figure was only 80,195.

Buses

The first bus route to be Opal enabled was the 594/594H route on 30 September 2013. This is a long route that goes into the Sydney CBD, but is also quite lightly patronised, making it a good first choice to test out Opal. It was soon joined by the more heavily patronised 333 route on 2 December 2013, then by routes serviced by buses from the Kuring-gai depot (14 April 2014), Waverly depot (28 April 2014), Forest Coach Lines (10 June 2014), and Hillsbus (30 June 2014).

Buses are the first mode of transport to have mobile Opal readers installed. Trains and ferries have Opal readers installed at stations and wharves which have fixed line connections, whereas the readers on buses are on the actual vehicles and transmit travel information via the mobile network. This means information is updated quite promptly compared to other smartcards, such as Melbourne’s Myki where Myki readers on trams and buses do not transmit their information until they reach a wifi spot back at the depot.

Fares

In 2011, Sydney had 443,000 bus users, 366,000 train users, and 27,000 ferry users each day (Source: Bureau of Transport Statistics, Public Transport Users in Sydney, p. 1). Opal has now been rolled out to the entire train and ferry network, and only a small part of the bus network, which suggests a captive market of just under 400,000 daily users. As of June 2014, the take-up of Opal cards reached 300,000. Not all holders of Opal cards would be daily users of the transport network, which suggests that there are over 100,000 users that have not yet taken up an Opal card.

This is likely due to a combination of a lack of awareness, concession holders and seniors whose Opal card have yet to be released, and a fare system that makes some users worse off under Opal compared to traditional magnetic stripe tickets. The issue of awareness is likely to take some time to flow through the system while concession and senior Opal cards is discussed at the end of this post.

The stumbling block in terms of fares for the take up of Opal is that there are 3 users who were worse off under Opal: ferry passengers, periodical ticket holders, and multimodal travellers.

Ferry passengers: When myZone was introduced in 2010, the new myMulti tickets gave unlimited ferry travel. This meant that a myMulti1 was actually cheaper for a regular ferry user than a myFerry Travel Ten. Opal fares were cheaper than the Travel Ten, but still more expensive than the myMulti, leading to a very low usage of Opal by ferry users (as low as 5% at one point). The Government responded by removing all ferries from the $46 myMulti1, and removing longer distance ferries such as the Manly ferry from the $54 myMulti2. The backlash from commuters led to a discount being offered, where ferry users were given a $52 weekly cap, rather than the normal $60 weekly cap, until 29 June 2014.

Periodical ticket holders: Shortly after the 2011 NSW election, the Government announced a 9% discounts for periodical tickets: monthlies, quarterlies, and yearlies. The purpose was to encourage pre-payment and reduce waiting times to obtain tickets. However, this also meant that these tickets tend to provide a bigger discount than Opal can, and switching to Opal can mean paying more. Even factoring in days lost to time off for holidays/being sick, it is still generally cheaper to go with a periodical ticket rather than Opal largely due to the 9% discount. This appears to be the thinking behind the retirement of periodical tickets from 1 September 2014 – it will force public transport users (train users in particular) to make the switch to Opal by making it the de facto cheapest option.

Multimodal travellers: Arguably the biggest drawback of Opal is its lack of integrated fares. While it is an integrated ticket – the only ticket a public transport user needs, it lacks fully integrated fares – the same fare from Point A to Point B regardless of which or how many modes of transport are used. To it’s credit, Opal has provided integrated fares within modes for the first time – someone catching two buses sequentially will be charged only a single fare rather than two. But continuing to charge a separate fare for each trip made on a different mode means many users will pay extra on Opal compared to a myMulti ticket. The future of this issue is covered further towards the end of this post, and has been covered in quite some detail by David Caldwell at his blog (well worth reading for some detailed background information).

Opal’s Future

Buses

Having to install Opal readers on each bus, generally progressing depot by depot, means the rollout for buses is much less predictable from a user perspective than the ferry or train rollout was. One bus is not necessarily assigned permanently to one specific route, and a bus route is often serviced by multiple depots. So unlike with trains and ferries, where users of particular stations and wharves began to be able to use their Opal cards, in the case of buses an Opal card can be used if that particular bus is Opal enabled (as shown by the ‘Opal Bus’ sticker on the bottom right of the bus). As a result, the weekly NSW Government Gazette often indicates that Opal can be used on more routes than have been announced by Transport for NSW. This is because the former includes all routes on which any bus may be Opal enabled, while the latter includes all routes on which all buses are Opal enabled.

Opal enabled buses can be identified by stickers on the front. Click to enlarge. (Source: Transport for NSW)

Opal enabled buses can be identified by stickers on the front. Click to enlarge. (Source: Transport for NSW.)

The bus rollout is scheduled to be completed by the end of 2014.

Light Rail

The rollout of Opal to light rail is currently scheduled for 2015, with the rest of the transport network set to be completed by the end of 2014. This coincided with announcements that new trams would be delivered during 2014 to cater for the Inner West Light Rail extension to Dulwich Hill and the increased demand that it created. It suggested that Opal readers would be installed on the trams themselves and, with the original Variotrams almost 20 years old, speculation was that readers would only be installed on the new trams. This appeared to explain why Opal would not be available on trams until 2015.

However, poles for Opal readers have been spotted at multiple tram stops, which suggests that Opal readers will be installed at the tram stops themselves. This may not preclude them from being installed on the vehicles too, one possibility would be that only the busy stops have Opal readers installed. But it does raise the probability of having off-vehicle Opal readers.

Seniors and Concession Opal Cards

Opal cards for Seniors will arrive later in 2014. Already buses have stopped selling Pensioner Excursion tickets, requiring pensioners to pre-purchase their tickets. Supporters of the move argue that pensioners could just buy 2 tickets, keeping a spare for getting the bus in cases where no retailer is available nearby, and then purchase a replacement ticket for the next day while they are out; particularly given the change was announced months ago. Critics argue that the move is premature, given that Opal cards will become available for Seniors in a few months, and that this change should be delayed until they are made available.

No specific timetable has been made for Concession Opal cards, though they are most likely going to be issued by the relevant educational institution like current concession cards are. Whether institutions are just given a stack of Opal cards to hand out, if they issue dual student card/Opal card hybrids, or something else is unknown. It appears that they will not be rolled out until the entire network is Opal enabled at the start of the next academic year. High school students between the ages of 16-18 will be able to use the Child Opal card.

Fares

The retirement of yearly tickets on 1 September 2014 means that the earliest date for retiring all paper tickets is 1 September 2015. This is the stated end goal. Changes to ferry, train off peak, and periodical fares mean that Opal fares are now the cheaper option for those who currently use those ticket types; this will be a big incentive in pushing these people to adopting Opal.

But there still remains one type of fare that often remains cheaper with paper tickets than with Opal: multimodal fares. This will prove to be the government’s biggest challenge. Transport advocates in Sydney have called for integrated multimodal fares for a long time, but governments have done little more than take baby steps in that direction. It’s not the Opal technology that is preventing this, but political will and a decision on who will bear any economic cost (the government or the travelling public).

So far the government has announced that trams and buses will enjoy integrated fares, with users charged a single fare based on the origin and destination of their journey. This is to prevent fares from increasing on the CBD and South East Light Rail which will force bus users to interchange to complete their journey. The North West Rail Link too will require users to transfer from a bus to a train, with buses from North West Sydney to the CBD to be converted into feeder services for the new rail line. It would appear logical that a similar fare integration would also be extended to heavy rail too, which would then mean that the 97% of public transport journeys not using ferries would enjoy fare integration. Given the similar per km fare cost for bus and train trips at the moment, this would also be relatively easy to do.

Monday: NSW Labor promises feasibility study for Western Sydney Light Rail

NSW Opposition Leader John Robertson committed the Labor Party to a $20m feasibility study into a Western Sydney Light Rail network if it wins next year’s state election. Parramatta Council has been pushing for a light rail network linking Parramatta to Macquarie Park and Castle Hill, and has funded its own pre-feasibility study into such lines. This mirrors the CBD and South Eastern Light Rail, currently under construction, where Randwick Council funded its own pre-feasibility study before the the then Opposition Liberal Party committed itself to a full feasibility study if it won office in the 2011 state election

This also follows revalations that the NSW Government is considering a Western Sydney Light Rail network after the publication of an official government document showing the light rail lines on a map of Parramatta. If this is the case, support for such a network could receive bipartisan support.

Wednesday: Dulwich Hill light rail extension boosts patronage by 30%

Patronage on the Inner West Light Rail Line has increased by an estimated 30% since being extended to Dulwich Hill last week. Although an additional 4 trams were obtained to maintain 10 minute frequencies on the line during peak hour, the increased demand has led to overcrowding and meant some passengers have not been able to board a tram.

Interior of a Sydney tram. Overcrowding is up on the Cityrail network. Click on image for higher resolution. (Source: Author)

The 30% increase in patronage on the Inner West Light Rail Line has led to overcrowding, similar to that in this image taken in 2013. Click to enlarge. (Source: Author)

It has also dampened the likelihood of school students being given free travel on trams to get to and from school until overcrowding is addressed. An additional 12 trams are currently scheduled to enter service over the next 18 month to replace the original 7 trams used on the line. Peak hour frequencies are set to increase to one tram per 7.5 minutes from 1 July this year, which will ease overcrowding.

Thursday: Real-time data for ferries and trams coming to transport apps

Real-time data, currently available for trains and buses, will soon be expanded to ferries and trams. There is no fixed timetable for when these will become available, but a spokesman from Transport for NSW hopes that they will be rolledout “within the next year”.

Thursday: Mobile phone reception now available on Eastern Suburbs Line

The Eastern Suburbs Line has joined the City Circle and North Shore Line in having mobile phone reception available in its underground tunnels. Sydney’s other major underground rail tunnels, for the Airport Line and Epping to Macquarie Line, were designed to include mobile phone reception for when the lines opened in 2000 and 2009 respectively.

Friday: Opal rolled out to South Coast and Southern Highlands Lines

Opal readers went online in the South Coast and Southern Highlands Lines, with the Blue Mountains and Hunter Lines to go online next week. 165,000 Opal cards have been registered to date. Opal readers are now being rolled out onto buses, starting with the Upper North Shore and Eastern Suburbs.

 

Follow up to fare setting post

Posted: January 15, 2014 in Transport
Tags: , , , ,

Correction: A calculation error was made in the initial post. These errors have been corrected (original figures shown struckout). The graphs have also been corrected. While these figures still support bus plus train fare integration, given the similar cost per passenger km for those 2 modes, it does make achieving this appear more difficult given that there is no longer a small gap in the fare charged per passenger km for those same modes. Therefore, doing so remains the most likely outcome, but would now require a large (circa 50%) increase in train fares relative to bus fares.

A post published here last week about fare setting resulted in a fair amount of interesting discussion, enough to warrant a follow up, starting with a recap.

Recap

When setting fares, one of two approaches can be taken: a cost based approach and a distance based approach.

The first approach is to require fares to represent the cost of providing the service. The more expensive it is to provide that form of transport, the more expensive the fares should be. This uses price signals to encourage passengers to travel on the mode of transport which costs the least to provide. The average cost of transporting a passengers a single km on each of the different modes works out to: $1.27 $0.96 on a ferry, $0.79 on a train, and $0.59 $0.79 on a bus. This suggests that, given a similar length journey, fares for buses and trains should be equal, while ferries should be about 115% 22% higher than for buses and trains, and fares for trains should be 34% higher than for buses. However, the average fare for a passenger traveling a single km on each of the different modes works out to: $0.41 $0.31 on a ferry, $0.17 $0.23 on a bus, and $0.13 $0.15 on a train. Thus, ferry fares are 141% 35% higher than buses (too high: they should only be 115% 22% higher), while train fares are actually 24% 35% lower than buses (too low: they should be 34% higher the same). Thus, in order to properly represent operating costs, ferry fares would need to be cut by 11% 9% and train fares would need to be raised by 57% 53%, with bus fares remaining steady.

2014-01-15 Operating cost per km

The second approach requires fares to represent the distance traveled by passengers, effectively integrated fares. Two people traveling 1km on public transport should be charged the same, regardless of which or how many modes of transport are used. This ensures that passengers use the most efficient and effective route to reach their final destination, rather than prioritise one that minimises transfers. As previously mentioned, the average fare for a passenger traveling a single km on each of the different modes works out to: $0.41 $0.31 on a ferry, $0.17 $0.23 on a bus, and $0.13 $0.15 on a train. Thus, in order for fares to be the same for traveling the same distance, ferry fares would need to be cut 59% 35% and trains would need to be raised 31% 53%, with bus fares again remaining steady.

2014-01-15 Fares per km

The previous post concluded that if integrated fares was the goal, then it would be easier to achieve fare parity for trains and buses, given the smaller disparity in fares similar operating cost per passenger km than compared to that between ferries and buses/trains.

Update: The following paragraph was added at 3:03PM, 15 January 2014

However, doing so would require a 50% increase in train fares relative to bus fares. This does not necessarily mean a change in the base fare. For example, much of this is possible via the removal of heavily discounted periodical fares for trains, which account for 45% of train users, that appears to be occurring with the rollout of Opal.

Followup

This conclusion is based on certain assumptions which do not always hold up well, some of which have been pointed out in comments to the earlier post.

2014-01-14 TandemTrainRider

The post assumes that the fare per km and cost per passenger km are constant within each mode. In reality, these vary wildly based on things like total distance (short trips have higher fares per km than long distance ones), availability of concessions (children/pensioners/students pay a lower fare than working adults), geographic location (highly patronised inner city services cost less per passenger km than sparsely patronised outer suburban services due to costs being divided among a greater number of passengers), etc. As a result, claiming that fares cannot be integrated because one mode costs more than another overlooks the fact that each mode is made up of a number of routes, some of which will have higher costs and some of which will have lower costs.

[tweet 421381662245543936 align=’center’]

The figures used also only consider operating costs, and not any capital costs. This is most significant for trains, which require a large up front investment in the form of railways, often underground, whereas for buses and ferries these costs are often small or nil. It could be argued that these are sunk costs: they have already been made and cannot be reversed, so should not be considered in decision making. It is also the case that rail operating costs (2013: $4.0bn) are many times the size of its capital costs (2013: $1.6bn) according to Railcorp (p. 8) But given the billions being spent on expanding and maintaining the rail network, it remains difficult to eliminate capital costs entirely from consideration.

David Caldwell made a strong case in favour of including ferries in any multi-modal fare integration in one of the comments to a post he wrote about Opal back in 2012. It’s too long to replicate in its entirety here, and the post itself is even longer, but both are definitely worth a read.

2014-01-14 Alex

Finally, there is also the possibility that different modes of transport may retain their differing fares, but with only a single flag fall per journey. The dual standard currently applied by Opal is worth noting here as currently two trips made one after another are considered a single journey for the purposes of reaching the 8 journey per week level after which all travel is free, yet each trip within that journey has a separate fare. Each of those fares has a flag fall component (akin to the $2.50 flag fall paid to a taxi driver for merely boarding the taxi) and a distance component (which increases roughly in proportion to the distance traveled). It would be quite achievable to remove the flag fall, but retain separate fares for different modes.

The argument here that Treasury would be opposed due to the loss of fare revenue is valid. But Treasury has already appeared to have lost that fight on single mode fare integration, given that the fare for two bus trips is now calculated as though only one was used. However, this was likely achieved because the distance component of bus fares is the same for all buses, and so it would be difficult to extend this to other modes until two or more modes have similar fare calculation methods.

That is why the previous post recommended that buses and trains adopt similar fare bands. This is easiest for buses and trains because the disparity in fares between them (24%) is much lower than that for ferries and buses (59%).

Correction: A calculation error was made in the initial post. These errors have been corrected (original figures shown struckout). The graphs have also been corrected. While these figures still support bus plus train fare integration, given the similar cost per passenger km for those 2 modes, it does make achieving this appear more difficult given that there is no longer a small gap in the fare charged per passenger km for those same modes. Therefore, doing so remains the most likely outcome, but would now require a large (circa 50%) increase in train fares relative to bus fares.

Achieving multi-modal fare integration requires a journey to charge the same fare regardless of which or how many modes of transport were used to make it. Doing so would mean charging the same fare per km for different modes. While this is very easy for single mode integration (and is why Opal is allowing single mode fare integration), and relatively easy for bi-modal fare integration on buses and trains, the main obstacle appears to be ferries. One possible solution would be to exclude ferries from multi-modal fare integration.

A more detailed analysis of the figures behind this proposal is found below.

Click to enlarge. (Source: Transport Overview - Volume Eight 2013, NSW Auditor General, p. 38.)

Click to enlarge. (Source: Transport Overview – Volume Eight 2013, NSW Auditor General, p. 38.)

In 2013, trains were the mode of transport with the highest cost per trip: the average trip incurring operating costs of $13.07 to provide, of which $2.57 is paid for by way of fares. Ferries were the next most expensive: those figures being $8.49 and $2.77 respectively. Buses were the cheapest mode of transport: at $3.02 and $1.44 respectively.

NOTE: The figures above are for 2012 for ferries (as the franchising of Sydney Ferries means the 2013 figures are not comparable). Meanwhile, only government STA buses are included for the buses figure, these account for 71% of trips in NSW and serve the dense inner city parts of Sydney therefore cost less per trip than private bus operators due to the higher patronage levels. All following figures include both STA and private bus operators.

The trouble with these figures is that they do not take into account trip lengths. For example, the average train trip was 16.7km, while the average bus ferry trip was 8.9km and the average ferry bus trip is even shorter at 6.7km. So all other things equal, the average train trip would cost more to provide and should result in a higher fare than a bus ferry trip, the same again for buses ferries compared to ferries buses.

2014-01-15 Operating cost per km

Controlling for trip length provides the cost of providing transport for each mode by km. The relative cost of trains falls to reach parity with buses and ferries swap, while buses ferries remain the cheapest most expensive mode of transport per passenger km. Transporting a passenger 1km costs $1.27 $0.96 on a ferry, $0.79 on a train, and $0.59 $0.79 on a bus.

2014-01-15 Fares per km

Meanwhile, the long average trip lengths for trains means that passenger contributions to covering costs via fares drops substantially for trains, to the point that it falls below that of buses. The fare paid by passengers to travel 1km is $0.41 $0.31 on ferries, $0.17 $0.23 on buses, and $0.13 $0.15 on trains. This disparity is important if inter-modal fare integration is to be introduced, as fares for any given distance should be roughly equivalent between buses, trains, and ferries in order to achieve it.

This would allow passengers to be charged a similar fare for travelling the same distance, regardless of which or what combination of modes of transport they use. Opal will see transfer penalties within modes (e.g. bus to bus or ferry to ferry) eliminated, but not between modes.

2014-01-09 Farebox cost recovery per km

However, when looking at what proportion of operating costs are covered by fares, ferries recover only slightly more than buses, despite operating costs and fares being much more per km. As a percentage of total operating costs, farebox cost recovery for ferries is 32.6%, for buses is 28.7%, and for trains is 19.8%.

Ferry passengers pay almost two and a half one and a half times as much in fares to travel 1km than bus passengers ($0.41 vs $0.13 $0.31 vs $0.23), yet their contribution to operating costs is only slightly more (32.6% vs 28.7%). Meanwhile, ferry passengers pay over three times twice as much in fares to travel 1km than train passengers ($0.41 vs $0.13 $0.31 vs $0.15) yet their contribution to operating costs is only one and a half times as much (32.6% vs 19.8%). This is a very expensive way of achieving a similar cost recovery.

That is the main opposition within the transport bureaucracy to multi-modal integrated fares: ferries cost more to operate per km than buses and trains, so passengers should pay more per km to use them (and they do). So if fares are to be integrated, there are two ways of making ferry fares the same as for bus and train fares: (1) ferry fares can be cut, or (2) bus and train fares can be raised. It has to be one or both, it cannot be neither.

The former would cost the government in the form of foregone fares. This is because fares (for all modes of transport and for both public and private operators) are collected and retained by the government. It is particularly problematic given the fare cuts and freezes brought in as part of myZone and Opal, along with limiting fare increases to inflation since 2011, have already reduced potential fare revenue.

The latter would be unpopular, and the government seems reluctant to do this while it is rolling out Opal in the fear that it will be tarring what has otherwise been a fairly successful rollout. The last thing it needs is for the public to associate Opal with fare increases. But with farebox cost recovery falling as low as it is, particularly for trains, it would be unlikely that the government would not seriously consider this option in the coming years.

However, as the discrepancy in fares applies more to ferries than to buses and trains, where fares and are similar enough, one option would be to remove Opal’s transfer penalties between buses and trains, leading to integrated fares for passengers who take both trains and buses. This would require equivalising fares for both trains and buses (including the off-peak discount currently only applied to trains), then considering a journey made up of consecutive train and bus trips to be a continuous trip with a single origin and destination. This would then be used to calculate the fare. This is only possible under Opal’s fare system, as it has eliminated periodical train tickets and travel ten bus tickets which each complicate the fare calculation process.

2014-01-09 Fare by trip length

A quick look at the fares for all modes of transport shows that all fares other than those for ferries are actually quite similar at various trip distances. This would make fare integration for all non-ferry modes achievable without significant difficulty. It would also importantly allow for passengers in the catchment area of the North West Rail Link (NWRL) to not face a transfer penalty once the NWRL begins operating and they are required to catch a feeder bus before catching a train the rest of the way.

Note on figures used in this post:

Most figures were obtained from the Transport Overview – Volume Eight 2013, NSW Auditor General (pp. 31, 38) and Household Travel Survey 2010/11, Bureau of Transport Statistics (pp. 14, 39). All figures were for the year ended 30 June 2013, except for: (1) ferries where a shift to franchised operation made the 2013 figures not comparable and so 2012 figures were used, and (2) average trip lengths where the most recent figures available were for the year ending 30 June 2011 (average trip lengths for ferries were estimated with the available data).

Transport for NSW’s Opal smartcard begins operating on the 333 bus today. While the bus trial began earlier with the 594-594H bus, this represents the first major bus route to begin operating with Opal, and one that also feeds into the Eastern Suburbs Line on which Opal also currently operates.

Opal brochure stating that the 594/594H and 333 bus routes will form part of the trial for buses. Click to enlarge. (Source: Beau Giles)

Opal brochure stating that the 594/594H and 333 bus routes will form part of the trial for buses. Click to enlarge. (Source: Beau Giles)

This rollout was previously hinted at by the inclusion of the 333 bus route in the Opal brochures (image above), and by the expansion of Opal top-up locations to places along the 333 route to Bondi Beach (image below).

Opal top up locations have begun to pop up between Bondi Junction and Bondi Beach, suggesting the 333 will be the next bus route on which Opal will be rolled out to. All other top up locations are near train stations and ferry stops on which Opal currently operates. Click to enlarge. (Source: Beau Giles)

Opal top up locations began to pop up between Bondi Junction and Bondi Beach well before the 333 was confirmed as the next bus route on which Opal would be rolled out to. All other top up locations are near train stations and ferry stops on which Opal already operated. Click to enlarge. (Source: Beau Giles)

This suggests that Opal top up locations are a good predictor of which routes Opal is set to be rolled out to.

Opal top ups at these locations would be consistent with the next Opal route passing through both Coogee and Randwick (such as the 373, 373, or 314).  But the low number also suggests that this could be some time away.

What has been confirmed is that the next expansion of Opal on the rail network will be on the Northern and North Shore Lines, out to the Central Coast, followed by the Western Line. Both of these are scheduled to occur in the first quarter of 2014. However, based on past experience, Opal’s rollout has generally happened 1-4 months ahead of the initial timetable, so this could occur as early as December (unless Transport for NSW decides to pause the rollout during the Christmas/New Year period).

Opal was initially said to be completely rolled out “by 2015”, but more recent announcements have begun to mention “end of 2014” instead, a sign that the rollout is on or ahead of the initial schedule. Opal was rolled out to all ferries in August earlier this year, while there is still no word on when it will be rolled out to light rail, other than the “end of 2014”.

Opal cards will be extended for trains through to Chatswood and also accepted on all government owned ferries from this Friday 30 August, putting the roll-out 4 months ahead of schedule. Buses will begin accepting Opal cards by the end of 2013, with the roll-out (excluding trams) expected to be completed by the end of next year.

Opal roll-out as of 30 August 2013. Click to enlarge. (Source: Transport for NSW)

Opal roll-out as of 30 August 2013. Click to enlarge. (Source: Opal website)

“The full potential of the new electronic ticketing system is the ability to travel across ferries, trains and buses by the end of 2014. Planning for light rail is in development.” – Source: Opal Website

Trains were added to Opal on 14 June 2013, 2 weeks ahead of of the scheduled “2nd half of 2013”, while the Chatswood extension comes 1 month before the scheduled “4th quarter of 2013”, and the completion of the ferry roll-out is 4 months before the scheduled “end of 2013”. This means the roll-out to buses (4th quarter of 2013) and both the Northern and Western train lines (1st quarter of 2014) could also begin before their scheduled dates.

After the initial trial on the Eastern Suburbs and City Circle Lines, Opal will then be rolled out progressively onto the North Shore, Inner West, Northern, Western, and South Lines. (Sources: Transport for NSW, Cityrail, modified by author)

Original schedule: After the initial trial on the Eastern Suburbs and City Circle Lines, Opal will then be rolled out progressively onto the North Shore, Inner West, Northern, Western, and South Lines. (Sources: Transport for NSW, Sydney Trains, modified by author)

However, what remains missing is how Opal will handle multi-modal fares. Transfers on a single mode, such as from ferry to ferry or train to train (including when passengers leave the paid area of the station in the case of the latter) do not have fare penalties applied. This means that someone catching a ferry from Manly to Circular Quay and then another ferry to Balmain just pays the single fare, while someone who catches a train from Bondi Junction to Town Hall and then back again within 60 minutes also only pays a single fare. (It remains uncertain whether transfer penalties between buses will also be removed or if they will be retained as is currently the case.)

What is missing is journeys made up of trips on 2 different modes of transport, where the only fare integration is the daily $15 fare cap and free trips after the first 8, which roughly equates to the existing myMulti fare option. But this means that passengers are financially encouraged to avoid multi-modal trips, even when it is more efficient from a time or cost to the government perspective. This is not ideal, and should be addressed. If not during the current Opal trial, then soon after it is fully rolled out.

Otherwise, it will lead to problems when the North West Rail Link and CBD and South East Light Rail open, both of which will rely on converting existing bus services into feeder buses for passengers to transfer to rail.

Discussion on the need for and how to achieve an infrastructure boom, particularly in light of a fading mining boom, is continuing.

The need for an infrastructure boom was outlined here on this blog last week, and a few days after in an article on The Conversation, by Peter Sheehan from the University of Victoria. In it, Prof Sheehan explains that the mining boom has three phases: (1) rising resources export prices relative to import prices, (2) an expansion in mining capacity via investment in the resources sector, and (3) an increase in the quantity of resources exported. Each of the three leads to the next, later dropping back due to cause and effect. For example, rising prices of iron ore eventually lead to a greater quantity of iron ore exports, which brings iron ore prices back down again. It is the first two phases which have peaked and beginning to drop back down to normal, while the third is starting to pick up steam.

Prof Sheehan predicts that mining investment, the second of the three phases, has just recently peaked at $100 billion in 2012-13, but could fall to about half that in the next two years. Demand management is therefore needed to maintain investment and employment, thus preventing a recession. Given Australia’s infrastructure deficit, which he estimates at $700 billion; he calls for finding ways to commit to $200 billion in infrastructure projects over the next few years, thus filling the expected $50 billion a year hole left by falling mining investment. With state governments lacking significant revenue generating opportunities, he calls for federal government involvement; if not through direct funding then via guarantees. Other funding options include the sale of existing assets to build new ones, known as “recycling assets”; or through the private sector.

The requirements for private sector involvement in building infrastructure was recently discussed by Garry Weaven, Chairman of the investment company Industry Funds Management (the relevant part begins 3 minutes into the 10 minute interview). Mr Weaven’s main concern is about how much risk the private sector bears in relation to infrastructure projects. Recent financial failures such as the Cross City and Lane Cove Tunnels in Sydney or the CLEM7 and Airport Tunnels in Brisbane have made the private sector wary of new toll road projects. He points out that “[these deals have] been put together by syndicates who are only concerned to extract value out of making the deal happen, not out of the long term value of the project”. However, the value he refers to appears to be value to the private investors, rather than to the community. While such projects were a financial failure from the investor’s perspective, the community obtained brand new pieces of infrastructure in each case, often at no cost to the taxpayer due to funding coming from user access fees.

However, Mr Weaven suggests that there are around $50 billion in Australian super funds and foreign pension funds available over the next 5-10 years which could be used for infrastructure in Australia. This would go a long way towards the $200 billion target that Prof Sheehan called for in The Conversation article above. But much of this can only be accessed if investor concerns about risk are addressed.

When asked what could be done to reduce investor risk, Mr Weavan provided a number of possibilities; such as guarantees, cash, equity, or loans. But his focus was on having governments build a project first in order to prove traffic levels with a given toll level, then selling it to the private sector. This is the model that is being used for the NSW Government’s WestConnex toll road, a project that Mr Weaven also praised for being funded by the sale of Port Botany (an example of the asset recycling mentioned earlier).

Map of the proposed WestConnex alignment showing it connecting to the City West Link. (Source: WestConnex – Sydney’s next motorway priority, Infrastructure NSW, p. 17)

Map of the proposed WestConnex. Click to enlarge. (Source: WestConnex –
Sydney’s next motorway priority, Infrastructure NSW, p. 17)

Such proposals are not magic bullets to every infrastructure project, the devil is in the detail. Indeed, the inability of public transport to operate at a profit means those projects will almost certainly have to be entirely built and owned by the government, though franchising of their operations to the private sector is an option, as currently exists with buses and ferries in Sydney. With this in mind, $50 billion would put a serious dent in the infrastructure Australia needs in coming years.

But it will not pay for all Australia’s infrastructure needs. Nor can state governments pay for the remaining shortfall on their own. The federal government, with its superior revenue raising powers, needs to play a key role in paying for infrastructure. And here it is disappointing to see that Opposition Leader Tony Abbott continue to refuse to fund any urban rail infrastructure projects.

Mr Abbott originally claimed on April 4 that the Commonwealth has “no history of funding urban rail”. This was soon proven to be incorrect, as while the Federal Coalition may have had no history of funding urban rail the Commonwealth Government absolutely did. When asked about it at a press conference in Western Australia last week, Mr Abbott accepted that the current Federal Government had funded urban rail, but that this was the first time a Commonwealth Government had done so. This is also inaccurate, given that Commonwealth funding for urban rail dates back to the early 1990s, when the Building Better Cities program funded such rail projects as the Pyrmont Light Rail or the Y-Link for the Cumberland Line, both in Sydney. Urban planning and public transport were so neglected during the inbetween years of the Howard Government that when the Rudd Government took power in 2007, Infrastructure Minister Anthony Albanese claimed that he had found “not a single urban planner in the entire Commonwealth Public Service – not one”.

The federal Liberal Party's transport policy consists exclusively of road projects, with no committments to public transport. Click to enlarge. (Source: Our Plan Real Solutions For All Australians, Liberal Party, page 32)

The federal Liberal Party’s transport policy consists exclusively of road projects, with no committments to public transport. Click to enlarge. (Source: Our Plan Real Solutions For All Australians, Liberal Party, p. 32)

Mr Abbott has previously outlined the need for additional infrastructure, and he should be commended for recognising this problem. He also stated his view on Infrastructure Australia’s (IA) role:

“Under the Coalition, Infrastructure Australia would assess all these projects, publish cost benefit analyses for them, and provide a recommended order of priority for Commonwealth funding. If the government varied Infrastructure Australia’s priorities it would need to argue a national interest case for doing so against the yardstick of what makes the most economic sense.”Tony Abbott (April 2011)

However, by failing to argue the national interest in both promising to fund road projects that are not on IA’s priority list and then ruling out the funding of urban rail projects that are on its priority list, Mr Abbott has not lived up to his earlier commitment to lessen Australia’s infrastructure deficit with an apolitical and evidence based approach. This is disappointing, and should be revisited by the Federal Coalition with a view to funding urban rail projects.