The Guardian 9 February, 2005

Private bus operator fails

Peter Mac

Western Sydney's private bus crisis worsened last week, with the collapse of the firm Westbus. The allocation of routes formerly operated by the failed Harris Park Transport to Westbus was not enough to save it from insolvency.


Westbus, formerly Bosnjaks Bus Services, was sold at an overvalued price to British-based multinational National Express several years ago. Doubtless pressured to make super profits quickly, Westbus purchased two regional bus firms, borrowing heavily from its parent National Express, to whom it now owes some $93 million.

It did not work. Service squeezes caused many Westbus passengers to seek alternative means of transport. The number of outer-western Sydney passengers has now fallen in recent years.

It is possible (although unlikely) that Westbus could have traded its way out of trouble. However, last November the Carr government introduced measures to enforce fare cuts and rationalise private bus routes.

These initiatives were prompted by major disparities between private and state-government bus fares, and by inadequacies in private bus routes, which have traditionally reflected bus company profitability and rivalry.

Private firms seek to service routes of highest patronage, and tend to ignore less densely-populated suburbs. In the 1920s these inadequacies forced the state government to replace private operators with a state bus service.

However, the state bus routes stretched not much farther westwards than Strathfield. Post-war governments merely tried to impose order on the private bus services, particularly regarding their routes, rather than to extend government bus services to the predominantly working-class outer western suburbs, now home to the bulk of Sydney's population.

The Carr government was no exception. Under political pressure over inadequate services and high fares on private routes, the former (and not missed) Minister for Transport, Michael Costa, sought to regroup the operating routes.

He also demanded reduced fares, and announced a planned major rise in public transport fares.

The intention was to provide a uniform fare level for both private and public buses. This would have reduced competition for the private firms.

It would also have had a long term advantage for the private firms. Public perceptions about the superiority of public transport would be reduced, thus facilitating the eventual privatisation of government services.

However, the government's inducements were not enough for the private companies, particularly Westbus, which needed more profitable routes and higher fares at all costs, to service its massive debts.

Westbus currently carries 20 million passengers per year, and 11 million school students. It also employs some 800 people. The administrators have said they will pay employee entitlements, but in view of the Ansett experience, this sounds distinctly hollow.

The administrators are continuing services and the Carr government has been forced to provide a state government school bus service.

But it will not be enough. Private interests are incompatible with providing essential public services, as clearly demonstrated by the appalling exit prices at the privately-operated Sydney private rail stations, and the whole sorry history of privatised transport in Victoria where the government was forced to step in.

The blindingly obvious answer is for the government to take over Westbus and to take measures to extend government transport services to the whole Sydney metropolitan area.

That is most unlikely to happen. The government's actions have clearly demonstrated a commitment to a reduction in the state's role in the provision of public services, particularly public transport.

And last week the new Minister for Public Transport, John Watkins, paid tribute to his predecessor and refused to commit the government to taking over Westbus.

"I am confident the business will continue to operate, and deliver the level of service the people of western Sydney need and deserve", he declared.

The bitter irony of his words will not be lost on western Sydney residents. Greens MP Lee Rhannon later stated:

"John Watkins should end the discrimination against Sydney residents and take over the Westbus fleet immediately. For too long the people of western Sydney have had to endure private bus services that are more expensive and less comprehensive than the public bus network in inner Sydney.

"If Mr Watkins picks another profit-driven, cost-cutting private bus company to take over the Westbus services, it'll just mean more of the same for long-suffering transport users in the west.

"Westbus' insolvency is a unique opportunity for the people of north-western Sydney to get superior government-provided services. Mr Watkins should seize his chance to make a real difference.

"Private bus companies are about making money, while the government is about providing services. When it comes to buses, passengers must come before profit."

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