$24m to cover rail shortfall
A drop-off in train passenger numbers has seen the Greater Wellington Regional Council borrow $24 million to fund the shortfall.
The drop has combined with other factors such as the region’s failing water infrastructure to mean fares and rates will continue to increase, and the regional council will be in a $1.2 billion deeper debt hole in a decade’s time.
Regional council transport committee chairperson Thomas Nash said shortfalls, caused by Covid-19 and people working from home, were similar in the two previous years but those were covered by Waka Kotahi NZ Transport Agency.
In the just-ended financial year, it was funded by the regional council via borrowing. The shortfall was $24m, which the council was borrowing to cover.
Nash said the largest single driver of the drop was Mondays and Fridays, when many people choose to work from home.
This was an international trend to the extent that London’s tube now had all-day off-peak fares on Fridays and offices were moving after work drinks to Thursdays.
The longer the commute, the more likely people were to work from home, he said.
New Zealand’s work from home culture came from Covid lockdowns in 2020 which saw all but essential workers having to stay home. As restrictions eased, it has been reported that workers never returned to the city in the numbers they once did.
The issue has been blamed as a major driver in central Wellington’s large number of shuttered shops and struggling hospitality outlets. More recently, public service cuts, rising living costs, and a reduction in central city parking has added to the reported downtown woes.
Papers to a regional council transport committee meeting yesterday show that in June, the most-recent reported month, buses and trains came in with $3.5m less fare revenue than budgeted. For the year to June, the number was $43.4m, of which $24.5m was a shortfall in train fares.
But that was all under a budget set before Covid and the council was now “aligning our forecast with a new reality”, Nash said.
That meant the number of train passengers was not expected to go up for a few years but the costs to run the service continued to rise.
Fares were expected to continue to rise with inflation while the council and Waka Kotahi would also need to keep increasing funding. But the goals in the new long term plan meant the council should not have to borrow to fund the gap again, he said.
However, rates went up this year partly to cover the gap and the regional council is forecasting its rates take to go from $252m this financial year to $415m by the 2033-34 year – a 65% increase.
Meanwhile, the regional council expects to increase debt levels for each year of its 10-year plan. Its debt level now sits at just over $1 billion but is but is expected to grow to $2.1b in a decade. Water supply and public transport are the two major forecast increases.
Nash expected train patronage would pick up again towards the end of the decade as new trains arrived for Wairarapa and Palmerston North services.
Regional councillor Simon Woolf said KiwiRail had left the network so “brittle” that Wellington’s train service could not provide “continuity of service”.