Inquiry should consider contestability and privatisation of QR services

One of the alleged benefits of public provision of services is that levels of service and reliability are higher than for private provision, but the crisis engulfing Queensland Rail at the moment suggests we should question that purported benefit. It should now be obvious to us all that QR is a sclerotic, inefficient Government bureaucracy that needs shaking up. A good way to do this would be to be privatise the rail services QR provides, and this should be an issue for consideration in the inquiry into the “timetable meltdown” (See today’s Courier-Mail). Indeed, the Queensland Commission of Audit advocated such privatisation in 2013, recommending that (on p 1-29 of the Executive Summary):

“City passenger rail services and network infrastructure be opened up to contestability, like bus services, to allow different providers, including private providers, to bid to operate services and maintain below-rail assets in a particular franchised area under franchise and lease arrangements.”

While rail privatisations have had a mixed record around the world—they have had much better results in Victoria than in the UK, for example—the failure at QR is so bad that it is hard to see how we could make matters worse through privatisation, and there is a very strong likelihood we would improve both efficiency and reliability, and the Government would get the benefit of substantial savings in the provision of rail services.

As I predicted at the time of its release in 2013, the Queensland Commission of Audit report is having a very long shelf life (see Commission of Audit report an impressive guide to reform of Qld Government). Regrettably, that in part reflects inertia in public sector reform and the survival of bureaucratic dinosaurs like QR. It is time for a new approach.

QCA_report

The Queensland Commission of Audit report will have a very long shelf life.

Update: I have amended the last sentence of the second last paragraph to remove reference to “privatisation proceeds” and refer instead to savings in the provision of rail services that would occur if rail services were made contestable.

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6 Responses to Inquiry should consider contestability and privatisation of QR services

  1. robsonap0 says:

    I suspect this is a another “nice in theory” solution, but in practice it often doesn’t work out as anticipated … this would need to be very carefully managed otherwise you would be replacing a public monopoly with a private one. The experience in Australia and overseas is not a good sign this can be managed easily.

  2. Katrina Drake says:

    I feel there is more to this story than we are being told to date – it will be interesting to read the Premiers investigation of who knew what when.

    Why do I say this? A shortage of train drivers ? – but there are no vacancies for train drivers advertised on the Queensland Rail careers page ? http://careers.pageuppeople.com/544/caw/en/listing/

    Train drivers starting salary $45,000, average $60,000, Senior $75,000 , in the good-time in the Pilbara over $100k+. Fully paid on-the-job two year training. Excellent conditions in a capital centre.

    Compare that too air-pilots. Training – you pay for your own, with a VET-FEE-HELP $93,000 loan. Starting Salary of $40,746. Then years flying in remote communities working up hours required to join a regional airline. Yet, there does not appear to be a pilot shortage, an oversupply in fact, judging by the number of un-employed pilots.

    It will be interesting to know – how a driver shortage came about ?

  3. Glen says:

    Interesting that around 200 train drivers have been made redundant by Aurizon over the last 2-3 years, most of these would have been diesel loco qualified but some would have had enough training to be easily qualified across to domestic services. I would suggest this is about money as usual, each train driver earns between $100k – $150k a year made up with some very generous shift allowances so the full cost of each position would be around $250k a year, that’s a million dollars a year for every 4 drivers.

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