We will assess whether the fares that the operators have proposed having regard to stakeholder feedback, the level of competition the operators faces, the costs of providing the services, and other factors, such as the financial impacts on passengers and operators and whether the service creates an ‘external benefit’, for example, avoided road congestion. The full list of factors we must consider is set out in section 124 of the Passenger Transport Act and the Terms of Reference.
For the Sydney Harbour and Central Coast routes, passengers have a number of choices of how to travel between the route locations, including other public transport options, and by car. This means that if operators’ fares are too high, they would lose customers to their competitors. Because the fares are likely to be market driven (we note that these operators are currently charging less than the maximum fares set by IPART), we do not consider that it is necessary to review their costs.
For other operators, we think a more rigorous approach is needed as they face little or no competition – there is either no alternative transport option except for private boat, or travel by road either takes significantly longer than by ferry. Our starting point for these operators is to set fares equal to the forecast efficient costs of providing the services, minus other revenue to the operator (such as government payments for providing school travel), divided by the forecast number of fare paying passengers. We have engaged the Centre for International Economics (CIE) to provide us with expert advice on the efficient costs of providing these ferry services.