NSW taxpayers cop cost of Sydney Light Rail revenue shortfall

With fewer people than expected using the light rail, it can be revealed the contract struck by the NSW government allocates the risk of shortfall in fare revenue to the taxpayer.

The Sydney Light Rail carried an average of just 10 passengers a minute on both lines in its first full year, as the contract saddles the taxpayer with the fare shortfall.

As officials are desperate to continue a trend of slowly increasing passenger numbers, it can be revealed the contract struck by the NSW government allocates the risk of shortfall in fare revenue to the taxpayer.

In the first full year of both lines operating, there were 4.45 million trips on the Randwick line and 4.55 million trips on the Kingsford Line - 28 per cent of the 31.4 million trips predicted in the business case.

The light rail carried an average of 10 passengers a minute in its first year. Picture: Richard Dobson

The figures average to about 10 passengers per operating minute between April 2020 and March this year - below maximum capacity of 225 people per minute.

The project has been long-dogged, with a cost blow out from $1.6B to $3B with a legal dispute and payout to Spanish contractor Acciona.

But Transport for NSW chief operating officer Howard Collins pointed to improving numbers, with 66,000 trips recorded last Thursday.

Even among senior government ministers the patronage is scoffed at.

Treasurer Dominic Perrottet was overheard by Labor in parliament house jibing Transport Minister Andrew Constance: “A great idea for a stimulus measure that wouldn’t cost us a dollar would be providing free transport on your light rail”.

“Nearly every part of this project has failed and now the people of Sydney are voting with their feet and refusing to use it,” Labor’s Transport spokesman Chris Minns said.

“To enter a contract where taxpayers have to subsidise this failed project is a monstrous misuse of taxpayer money.”

An under-utilised light rail travels through the CBD at midday on Wednesday. Picture: John Grainger.

Mr Collins offered a staunch defence, noting patronage across the whole transport network declined about 80 per cent at the height of the pandemic.

He said keeping farebox revenue within the purview of the government meant services did not suffer when patronage was down.

“We contract transport operators to provide a service, with KPIs for timeliness cleanliness and overall satisfaction to incentive better performance,” he said.

“Unlike other countries, Australia doesn’t typically require the operator to hit a certain level of patronage. This is because we want them focused on what customers care about, not promoting ticket sales.

“Further, where operators have not achieved a patronage target in overseas markets, the taxpayer can end up footing the bill or services are reduced which is completely at odds view of public transport as a social good.”

Mr Collins said journey time on the light rail had improved by about 30 per cent.

The November 2020 Transport for NSW Customer Satisfaction survey showed 96 per cent satisfaction among light rail users.