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Why touted public transport savings from competitive tendering are too high

6 Jun 2017

A new report from Infrastructure Australia, Improving Public Transport: Customer Focused Franchising, and its associated technical report from Pricewaterhouse Coopers (PwC), will have state and federal treasurers salivating. The accompanying press release is clearly intended to set their fiscal juices flowing. It suggests that:

… subjecting the operation of Australia’s government-operated bus and rail services to competitive tender processes could save Australian taxpayers up to $15.5 billion by 2040…

This A$15.5 billion is the estimated high operational cost savings scenario, in present value terms (2016 prices; 7% real discount rate). Infrastructure Australia/PwC’s conservative savings estimate is still a very substantial A$11.6 billion.

The magic pudding is competitive tendering of a range of government-operated rail and bus public transport services, as well as Melbourne’s privately run bus services, which are not currently awarded by competitive tendering.

Just how realistic are these savings?

Read the full article by following the link to The Conversation.

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