Transportation Planning Casebook/Sydney Ferries

Summary
Sydney Ferries Corporation is a TfNSW organisation that oversees ferry operations on Sydney Harbour and the Parramatta River.

Ferry operations on Sydney Harbour have been publicly owned and funded since 1951 when the state government acquired the failing private company, Sydney Ferries Ltd, which had suffered major losses since the opening of the Sydney Harbour Bridge in 1932. Just before the bridge opening in 1932, Sydney Ferries Ltd was transporting more than 40 million passengers per year. Twelve months later the number had dropped to 15 million. This had a major impact on the transport market. Before the opening of the bridge, ferry operations could be privately owned and operated because it was profitable. Small private operators - ferrymen - ran passenger and cargo services in the early to mid nineteenth century across Sydney Harbour, before larger companies monopolised the market in the late nineteenth and early twentieth centuries. Government owned and maintained wharves, and regulated safety, while the private sector owned and operated the ferry services.

Under public ownership, ferry operations were contracted to private companies between 1951 and 1975. Ferry services were then operated by the state government between 1975 and 2014. Since 2014 Sydney Ferries has again contracted its operations to a private company, Harbour City Ferries.



Timeline of Events
1789 - Rose Hill Packet is the first ferry on Sydney Harbour

Many small operators run ferry services throughout the 19th Century

1860 - the North Shore Steam Ferry Company Ltd forms the first major ferry service operator

1899 - Sydney Ferries Ltd takes over North Shore Steam Ferry Company Ltd and monopolises ferry services over the next 30 years

1919 - Royal Commission of Inquiry into Sydney Ferries Ltd

3 November 1927 - Greycliffe disaster. a ferry hits a mail steamship, breaks in half, and sinks, killing 40.

1932 - Sydney Harbour Bridge opens, ferry patronage drops significantly overnight. Sydney Ferries Ltd loses its profitability and begins to run at a loss

1938 - Rodney disaster: ferry watching the USS Louisville leaving port. Passengers suddenly moved from one side of the boat to the other and it capsized killing 19.

1951 - NSW State Government acquires Sydney Ferries Ltd to prevent it ceasing operations. The Sydney Harbour Transport Board, a state government agency, is formed to oversee the services. Private operators are contracted to take over ferry operations funded by government.

1974 - Public Transport Commission (PTC) is formed by NSW Government, and ferries, busses, and trains are completely publicly operated for the first time.

1978 - PTC becomes the Urban Transit Authority of NSW (UTA)

1989 - UTA becomes the State Transit Authority (STA)

2004 - Sydney Ferries Corporation is formed and takes over all ferry operations from STA

January 2007 - the Dawn Fraser hits a dinghy resulting in one fatality.

March 2007 - a ferry hits a whale watching ship, then hits the Pyrmont Bridge

28 March 2007 - Merinda-Pam Burridge Collision. A speeding ferry hits a private vessel which did not have navigation lights on. 4 people are killed on the Merinda, which was holding a party for Australian figure skating champions.

3 April 2007 - Bret Walker is appointed for the commission of inquiry into Sydney Ferries' operations.

November 2007 - Walker Report is published and recommends replacement of fleet and the privatisation of operations 2014 - Sydney Ferries contracts operations to Harbour City Ferries.

Safety & Regulation
Safety concerns have fuelled debates over ferry operations on Sydney Harbour for the last century. A harbour bridge was thought to be necessary to reduce the safety risks associated with harbour crossings: it was heard at the 1909 Royal Commission on Communication between Sydney and North Sydney that many passengers felt unsafe on board ferries."'Witnesses talked about ferry services and the demands placed upon them - The night trips across the harbour by the ferries are the cause of very disagreeable feeling amongst numbers of the passengers. If a boat stops, or a whistle is blown, there is, as a rule, great consternation; the passengers never know what is going to happen. You frequently hear the remark, 'There will never be a bridge here until a boat filled with 1,200 people goes down'. The expenditure of £2,000,000 to avoid a catastrophe of that kind would be well spent.'""Report of Royal Commission on Communication Between Sydney and North Sydney, 1909."In 2007, a commission of inquiry was called for after five deaths in two incidents involving Sydney Ferries' vessels.

Privatisation
Sydney Ferries has had a long history of movement between private and public operations. Originally, ferry services were born out of small private operations that developed over 100 years into a single company, Sydney Ferries Ltd. Government provided licences, safety regulations, and owned wharf infrastructure. The first major government intervention in ferry operations occurred in 1951 to save the failing Sydney Ferries Ltd. By 1975, all operations were completely government run and funded.

Calls to privatise ferry operations peaked in 2007 after a spate of accidents, including two fatal incidents occurred. In 2014, operations were handed back to the private sector, albeit under very a similar operational structure to the previous public company. The majority of the staff were kept, and some report that no real change was affected in the transition.

Narrative of the Case
The first ferry to run in Sydney by Europeans (and in Australia) was the Rose Hill Packet, which launched in September 1789 and carried cargo and passengers between Sydney and Parramatta. The Packet had a sail and was manually propelled with large oars, and was a government vessel. The journey between Rose Hill and Sydney sometimes took an entire week.

Small private operators - ferrymen - ran passenger and cargo services in the mid nineteenth century across Sydney Harbour. These operators lobbied local councils (called Boroughs) to provide and maintain wharves. This was the beginning of the relationship between private operators and government that remains to this day: government owns and maintains wharves, and regulates safety, while the private sector runs and own the ferry services.

In 1860 the North Shore Steam Ferry Company Ltd was formed, becoming the first major operator on Sydney Harbour. Government provided a licence for its vessel, the Kirribilli, to carry 60 passengers.

By 1899, demand for harbour crossings had grown substantially. The North Shore Steam Ferry Company was liquidated and taken over by Sydney Ferries Ltd. In 1900, Sydney Ferries Ltd purchased all the vessels and other property of two other operators, Parramatta River Steamers and Tramway Company Ltd, and then took over the Balmain New Ferry Co. in 1917. Sydney Ferries Ltd became a sizeable company, which was very profitable at the time. By 1932, the company was transporting more than 40 million passengers per year.

In 1919, a report of the Royal Commission of Inquiry into Sydney Ferries Ltd was published. The inquiry was launched because of ongoing disputes between local government organisations that owned and maintained wharves and Sydney Ferries Ltd. It was argued that the company should be publicly regulated because it had a monopoly on ferry transport on the Harbour.

This situation was changed in 1932 with the opening of the Sydney Harbour Bridge. By 1933, the total number of passengers transported annually on Sydney Ferries Ltd vessels had dropped to 15 million. Eventually, the company began to run at a loss, and in 1951 The NSW Government took over, forming the Sydney Harbour Transport Board.

The new government board funded ferry services, but contracted a private operator (Port Jackson and Manly Steamship Co., and later in 1972, Brambles Transport Industries) to run them.

In 1974 the Public Transport Commission was formed by the NSW Government. This was the first time one organisation took control of ferries, buses, and trains in Sydney, and the first time private companies were not involved at all in ferries on Sydney Harbour.

The period between 1951 when Sydney Ferries Ltd shut down, and 1975 when the NSW Government took on complete control of ferry operations and ownership is seen as the end of the first chapter of private enterprise on Sydney Harbour.

In 1978, the PTC became the Urban Transit Authority (UTA) of NSW (also known casually as the Underwater Travelling Association)

In 1989 the State Transit Authority was formed in restructure of the UTA, and in 2004 the ferry part of that organisation was separated. The government agency, Sydney Ferries Corporation was formed.

The Walker Report was a commission of inquiry into the operations of Sydney Ferries, delivered in 2007. Major recommendations included an overhaul of the ageing fleet and the privatisation of ferry operations. Walker stated that Sydney Ferries management was chronically undermined the NSW State Government.

Private enterprise has made a comeback on Sydney Harbour: since 2014 Sydney Ferries has contracted its operations to a private company, Harbour City Ferries.

The move back to private operations is attributed to Gladys Berejiklian, the Transport Minister at the time, who believes that governments should regulate transport operators, but private enterprise provides more effective operational services

Discussion Questions
What are the pros and cons associated with private enterprise in ferry operations on Sydney Harbour?

Some say the public ownership - private operation solution is a halfway solution and does not go far enough. In your opinion, what role should State Government play in Sydney Ferries?

How do safety incidents inform policy? In what ways can this be positive or negative?