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Action for Public Transport (N.S.W.) Inc.
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IPART to Help CityRail Count Costs
posted Tuesday 7 August 2007
The Independent Pricing and Regulatory Tribunal of NSW (IPART) has called tenders for "a suitably qualified consultant to provide assistance in estimating the efficient cost of providing CityRail's regular passenger services and to forecast its efficient operating and capital costs for each of the next five financial years..... The review will establish a framework for the Tribunal's future annual fare decisions for CityRail."
The tender document, which can be viewed on IPART's
web site,
says that the purpose of the consultancy is to:
- provide an asset class inventory that identifies which of CityRail's assets directly relate to the provision of its regular passenger services;
- review recent benchmarking studies previously undertaken by CityRail and, if necessary, undertake further benchmarking to overcome any information gaps;
- undertake extensive consultation with CityRail to provide a detailed analysis of CityRail's cost structure and the allocation of its costs;
- develop a methodology for allocating costs between the different CityRail sub-networks;
- estimate the efficient operating and capital costs associated with the provision of CityRail's regular passenger services;
- identify causes of cost inefficiency;
- identify technical or managerial constraints that may prevent CityRail achieving efficient costs;
- indicate the scope for a forward-looking productivity adjustment; and
- indicate a transition strategy that would enable CityRail to move toward a more efficient cost structure.
A draft paper will be available for public consultation in January or February 2008.
While this all sounds very progressive, APT feels that it raises some questions:
- why is CityRail unable to perform these functions for itself?
- will this study compromise IPART's independence when conducting future fare reviews?
- why are fare rises being proposed now, before cost efficiencies have been identified and implemented?
- why does the consultancy not include the other side of the ledger - namely, increasing patronage and income?
- will the review cover the current inefficient method of fare calculation and collection?
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