Vic: Connex wants more subsidies to run Melbourne rail network

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Vic: Connex wants more subsidies to run Melbourne rail network

MELBOURNE, Dec 17 AAP - Train operator Connex will require a "substantial increase"

in fare subsidies if it is to take over Melbourne's suburban rail network in 12 monthstime.

Both Connex and Yarra Trams must re-tender for their franchises after that period underan interim plan announced by the state government today following the withdrawal of trainand tram operator National Express.

Connex director Bob Annells said while ticketing systems and timetabling had been dramaticallyimproved since privatisation in August 1999, an increase in subsidies was still needed.

"It will be a substantial increase," he said of any new agreement.

"Significant subsidies are paid to every public transport operator in the world andwill continue to be.

"You can't run this type of system at a profit unless you put ridiculously high faresin place and that's not going to happen."

Mr Annells welcomed the announcement there would be sole train and tram rail operatorsafter the interim agreement, but said the service was still not viable despite extra governmentmoney.

"I want to make it clear that it still does not place this franchise in profitability," he said.

"There is financial support from the government which is much appreciated, and thereare a range of reform initiatives by the government in relation to the existing franchiseswhich we also appreciate.

"We will still be working with the government very hard to put in place a long-term,sustainable arrangement."

However the company remained confident such an agreement could be reached.

"We will only leave if we are beaten in a tender by somebody with whom the governmentbelieves is an acceptable operator who is prepared to take a greater risk and bid a lowersubsidy profile than we are," he said.

"And if there is somebody out there that's prepared to do that, and they're acceptableto the government, well then we would lose, fair and square.

"(But) I think the environment for tendering is not as robust as it was in 1998-99."

Mr Annells said major capital works rail projects such as the refurbishment of FlindersStreet Station were not affected by the interim agreement.

AAP db/gfr/mg/bwl

KEYWORD: TRAMS CONNEX