The Guardian 7 November, 2007
Privatised Sydney ferries: jobs, cuts, costs?
Bob Briton
Sydney Ferry workers and the travelling public could be among the first casualties of a new wave of privatisation being considered by the NSW Government. A report released last week by Bret Walker SC into the neglected and troubled service made a host of recommendations including public-private partnerships that would hand the running of vessels and routes to one or more private companies. Local and overseas operators have already been sniffing out these new government-backed profit-making opportunities. The Maritime Union of Australia (MUA), which represents many of the service’s workers, has committed itself to working to develop a world class public transportation system but will resist the handing over of the vital and historic service to the private sector.
"We are on board with the findings [of the Walker Report] about forming single bargaining units and having more simplified and functional industrial relations arrangements at Sydney Ferries," Sydney MUA Secretary Warren Smith told the media last week. "What we don’t want is our iconic ferry system turned into a cross city tunnel debacle. Public transport should remain in public ownership and be under the control of governments which are accountable to the people."
Poor management and a lack of investment have left the now-corporatised ferry service struggling to provide a reliable, comfortable and affordable service. In the past 15 years it has had 12 chief executives, including Sue Sinclair who was sacked last year without appropriate authority by Transport Minister and Deputy Premier, John Watkins. The current fleet of 31 vessels has been described as a working museum that includes the four Freshwater Class ferries that have served the Manly route for the past 25 years.
Minister Watkins has ruled out making the investment needed to fix the service. He has been pushing the line that the service needs to be an "arms-length" private concern with the government simply specifying routes and monitoring fares through the state’s Independent Pricing and Regulatory Tribunal (IPART). Tribunal chief executive Jim Cox told The Australian Financial Review last week that, while productivity gains could be made and costs could go down, fares could not.
Workers and commuters have well-grounded fears that the privatisation of routes would be accompanied by attacks on wages, reduced services and higher fares. A well-orchestrated campaign in favour of privatisation has included allegations of over-staffed vessels, inflated wages and an inflexible "workplace culture". The MUA has rejected these claims. "Wages at Sydney Ferries are on a par with community standards and reflect all penalty rates, overtime and allowances. In fact very few workers would have the same degree of flexibility as workers at Sydney Ferries", Warren Smith said.
Sydney taxi magnate Reg Kermode is reported to be interested in the ferry service as is TransdevTSL — a partnership between Transfield Services and French transport corporation Transdev. Geraud Boursin of Veolia has said his company would be ready to take over the service in the second half of next year. Incidentally, Labor has received $278,996 in campaign donations from Transfield and $120,650 from Veolia/Collex. Coalition parties received $153,300 from Transfield and $103,742 from Veolia/Collex.
All NSW taxpayers should be concerned that a public private partnership (PPP) is being proposed as a taxpayer-friendly solution to the ferry service’s problems. "PPPs involve cherry-picking of services, more pressure for cost-cutting. It raises particular safety issues", Sydney University Professor Frank Stilwell wrote in a submission to the Walker Inquiry. "It may involve asset stripping — as for example, the ship repair yards in Mort Bay, Balmain. It doesn’t take a great stretch of the imagination to see that the private proprietor might see they could get a better return by using that for high-rise luxury apartment waterfront dwelling than for providing ship repair services."
Sydney has also had the experience of the taxpayer-fed, privately-run Sydney Airport Rail Link. The government shut down the bus service to force passengers onto the four-stop link to Central. A one-way ticket on the service costs $11.60 — roughly four times the cost to travel a similar distance on the regular network.
The MUA’s campaign material makes the following points in defence of public ownership and control of Sydney’s ferries:
Profit Motive: Private ownership dictates that the profit motive overrides all other considerations. The subordination of social responsibility to profit is a disaster waiting to happen. Profit driven corporations are inherently undemocratic and will serve only those who can pay regardless of what is best for the community.
Accountability: Sydney ferries as an iconic public transportation provider is fully accountable to Government.
Private enterprise will not be accountable to Government or the public.
Service Cuts: Social obligations to areas on our harbour that are the least profitable will be jeopardised.
Non-profitable areas will be axed regardless of the social necessity that these services provide to local communities. Public transport is not about profit. Privatisation is. The two are irreconcilable.
Market Forces: The market will make choices about the future of one of Sydney’s most beautiful and well recognised institutions. Handing over the iconic features of our city and its transportation services to market forces will lead to decisions based on the interests of share holders and not the travelling public or the people of Sydney.
Downsizing and Job Losses: Slashing jobs is the quickest and easiest way to increase profits. Some jobs that are the first to go are in areas not essential to the creation of profits. These jobs more often than not relate to safety critical areas. This is twofold and relates not only to safety in maintenance areas but also in areas that provide protection to passengers at night, especially the old and disabled.
Passenger Safety: In a privatised Ferry service there would be pressure on safety critical areas. If safety costs too much or impedes profit then some safety related activities can be pared back. This is not acceptable but is an inherent feature of profit driven enterprises.
No doubt community organisations will join the MUA’s campaign to defend this vital branch of Sydney’s public transport system as the seriousness of this latest threat becomes clear.
Minister Watkins is reported to be considering his options and will announce his decision next year. He will have a lot on his mind in the months ahead. A new private-enterprise "metro" line between Malabar and West Ryde is also on the drawing board. And, of course, the Iemma Government has to mull over the Owen Report, which recommended the privatisation of parts of NSW electricity utility.