RAIL - Back On Track Forum

Mascot doesn't have a special surcharge placed on it- just the 2 airport stations.

^ Agree re an Airtrain buyback, though I'm sure there's myriad reasons it won't happen.

My concern is mostly quality of service. The frequency and operating hours of Airtrain are severely constrained by what the private company's willing to pay. A surcharge to help recover costs is fine, because Airtrain's clearly discretionary travel, but it will never be a quality service until it's allowed to take a small hit.

https://www.airtrain.com.au/travelbubble/

Return for FREE* for a limited time only between Brisbane Airport and the City!

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To secure this great deal, book your ticket using the promo code Bubble for travel to or from the following stations South Brisbane, Roma Street, Central, Fortitude Valley, Bowen Hills, Albion, Wooloowin, Eagle Junction, and Brisbane Airport Domestic station.

Terms and conditions apply to this offer:

Offer must be used for a return trip.
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The offer is only available between the Domestic and International Airport stations and City Stations. The list of city stations includes South Brisbane, Roma Street, Central, Fortitude Valley, Bowen Hills, Albion, Wooloowin and Eagle Junction.
Not valid in conjunction with other offers.
E-ticket terms and conditions also apply to this offer.
Valid until further notice. All information is correct as of 14 April 2021. Airtrain reserves the right to make changes without prior notice and to withdraw the scheme at any time.

Brisbanetimes --> Airtrain's exclusive airport access risks making Brisbane an 'international joke'

QuotePressure is mounting on the state government to buy out the Airtrain's exclusive public transport rights to Brisbane Airport, lest the city become an "international joke" when the world arrives for the 2032 Olympic Games.

Brisbane City Council public transport chairman Ryan Murphy said City Hall wanted to extend regular public transport services to the airport.

Ultimately, he said, the council's high-frequency Brisbane Metro vehicles could serve that purpose, and such a link has been mooted in the project's forward planning.

The stumbling block is Brisbane Airtrain's 35-year monopoly on airport services – a condition of the Beattie government's public-private partnership to deliver the elevated train line to the domestic and international terminals.

That exclusivity is due to end in 2036, but Murphy said it was time to revisit that contract. ...

Brisbanetimes --> 'I don't know anyone who catches Airtrain': MP joins calls for end to monopoly $

QuoteQueensland's Labor government is coming under pressure from both the political left and right to tear up its longstanding exclusivity agreement with Airtrain to run public transport services to Brisbane Airport.

Greens MP Michael Berkman said the 35-year agreement, which was signed by the Borbidge Coalition government but came in force under the Beattie Labor government, had resulted in exorbitant fares and a disincentive for airport users to catch the train. ...

Quote from: ozbob on January 22, 2021, 07:15:01 AMUnder the BOOT scheme it is due to be transferred back to Government (QR) 2036, services commenced 2001.

In late 2012, U.K. pension fund Universities Superannuation Scheme bought Airtrain for A$110 million

QuotePremier
The Honourable Peter Beattie
Thursday, February 11, 1999

Brisbane Airport rail link to go ahead

The State Government has finalised arrangements for a privately-funded $200 million rail line to link Brisbane's central business district with the international and domestic airport terminals by 2001, Premier Peter Beattie announced today.

"An airport-city train link is essential if Brisbane is going to rank as a major international city and I congratulate all those who have played a part in making this link a reality," said Mr Beattie.

"Such a link is one of the few assets that Brisbane has been lacking and I am proud that once again we are demonstrating that Queensland is the action state. We're making things happen."

Making the announcement with the Premier were Airtrain Citylink Limited Chair James Cutts, Transport and Main Roads Minister Steve Bredhauer and Brisbane Lord Mayor Jim Soorley.

"This multi-million dollar rail link will bring enormous economic, employment and public transport benefits to Brisbane," said Mr Beattie.

"We expect the project to provide the equivalent of more than 500 full-time jobs during the 27-month design and construction period."

Mr Bredhauer said the link was a great boost for public transport in South-East Queensland, where it was important to promote public transport as a viable alternative to using cars.

"One of the best ways to successfully improve public transport usage is to provide infrastructure providing reliable, comfortable and easy travel such as the new rail link," he said. "It is significant that the project has attracted private funding because it shows the private sector has the confidence to invest in public infrastructure in Queensland."

Mr Cutts said it would take just over two years to build the link, with construction due to start later this year. Design work would start this month.

Airtrain would build 8.5 km of new rail, linking the existing Queensland Rail network near Toombul to the Airport, said Mr Cutts.

Most of the link would be elevated and feature two stations - one at the international terminal, the other at the domestic terminal.

Passengers would be travelling to the Airport by train by mid-2001, Mr Cutts said.

"Services will run directly from the Airport to the City and to the Gold Coast by linking into the Citytrain network run by Queensland Rail," Mr Cutts said.

Mr Beattie said the State Government had finalised agreement on the basis that Airtrain would build and operate the rail link to the airport at the company's expense.

The project had been approved on the basis that Airtrain would pay for the project in return for the right to operate the rail link for 35 years.

After 35 years, it would be turned over to the State Government.

Brisbane Lord Mayor Jim Soorley said Brisbane City Council had played a key role in bringing Airtrain to fruition.

"Council, as a major land holder along the route, gave the project full support because we recognised the significant benefits of Airtrain to the city," Cr Soorley said.

"We receive a valuable rail corridor for residents and tourists linking the city and the Gold Coast to the airport," he said.

"At the same time it will help reduce traffic congestion and assist in maintaining our city's air quality," Cr Soorley said.

^ https://web.archive.org/web/20120226175125/http://statements.cabinet.qld.gov.au/MMS/StatementDisplaySingle.aspx?id=25119

BRISBANE AIRPORT RAIL LINK DEADLINE EXTENDED
Published Tuesday, 02 September, 1997 at 12:00 AM

Minister for Transport and Main Roads
The Honourable Vaughan Johnson

https://statements.qld.gov.au/statements/26

====

Joint Release with Joan Sheldon MLA, Deputy Premier, Treasurer and Minister for The Arts and Vaughan Johnson MLA, Minister for Transport and Main Roads
Published Tuesday, 21 April, 1998 at 12:00 AM

Deputy Premier, Treasurer and Minister for the Arts
The Honourable Joan Sheldon

BRISBANE AIRPORT RAIL LINK DEED SIGNED

https://statements.qld.gov.au/statements/2668

The Coalition Government and Airtrain Citylink Ltd have entered into a legal agreement which will lead to the construction and operation of a rail link to Brisbane Airport.

Deputy Premier and Treasurer Joan Sheldon, in a joint announcement with Minister for Transport and Main Roads Vaughan Johnson, said today that a deed had been formally signed which would allow Airtrain, a private sector proponent, to finance, design, construct, maintain and operate the Brisbane Airport Rail Link (BARL).

Mrs Sheldon said the execution of the deed would allow Airtrain to begin on-site construction of the rail link by July.

"The construction program allows Airtrain to meet its obligations within two years and allow the rail link to be operational by June 2000, in time for the Sydney Olympics," she said.

Airtrain, whose shareholders are Macquarie Corporate Finance Ltd, Transfield, Reduct Pty Ltd and Clarke and Kann, was awarded an exclusive mandate by the State Government in May 1996 to develop a detailed proposal for a rail link to the Brisbane Airport.

"Under the subsequent proposal, Airtrain indicated it would commit $190 million of private sector funds for the construction, operation and maintenance of the rail link.

"Airtrain has told us that the project will provide 400 jobs for its two year construction period and 50 full time equivalent positions for its operational phase."

"The signing of the deed represents a major milestone in the implementation of State policy on Private Sector Involvement in Public Infrastructure and Service Delivery.

"Airtrain has proposed a dedicated rail link joining the existing North Coast line at Eagle Junction," the Treasurer said.

Mr Johnson said that the rail link would transport passengers to two elevated stations one adjacent to the Brisbane International Terminal and the other to the Brisbane domestic terminal.

Under terms of the agreement, Airtrain will transfer the Brisbane Airport Rail Link back to the State Government after 35 years.

Mr Johnson said the Airtrain proposal had been underpinned by detailed engineering and project definition and a financial feasibility study.

"This project will have significant positive ramifications for the people of south-east Queensland, not only in terms of increasing transport options to Brisbane Airport but also environmentally by reducing a large number of road trips," Mr Johnson said.

"Detailed patronage studies have been undertaken for the project by Airtrain, forecasting rail passenger numbers of around 2.3 million for the first year of operation.

"Airtrain has forecast patronage figures to rise to 4.6 million in the fifth year, and eventually to 16.5 million by 2035.

"The obvious positive impact, both environmentally and from a co-ordinated transport perspective, will be enormous," said Mr Johnson.

A draft Impact Assessment Study has been completed and is currently on display at Brisbane City Council and the Department of Environment.

The problem we all have is that the BARL Deed was to compensate Airtrain for the cost of construction.

If the MPs want the Airtrain line to join the rest of the network in a fare sense then Airtrain is rightly entitled to financial compensation.  Additionally Airtrain does have exclusivity rights under the BARL Deed.  So you can forget about Metro buses for now, unless Airtrain is either compensated financially directly or brought out by the state.

====

Queensland Parliament Hansard  Matters of Public Interest

https://documents.parliament.qld.gov.au/events/han/2022/2022_10_25_DAILY.pdf

Maiwar Electorate, Public Transport

Mr BERKMAN (Maiwar—Grn) (8.17 pm): There are so many parts of my electorate for us to be
proud of. Whether it is the beautiful jacaranda lined streets, the walks along the river or the Mt Coot-Tha
Summit, it is pretty hard to beat in so many ways. However, we are also winning on a less satisfying
front—that is, Coronation Drive is consistently one of the most congested roads in Brisbane and it will
remain that way unless both the Brisbane City Council and this government seriously invest in better
public transport for the west side.

I had hoped we might get some progress from the LNP council's recent bus network review, but
they seem to have completely ignored the west side. Instead of using the new metro as an opportunity
to design a properly integrated and connected network, they are tinkering at the edges while they
continue to pour billions of dollars into road widening. The state government have not given us any
reason to hope for improvement either. I wrote to the transport minister asking whether they would
commit some real funding and work with council to coordinate a proper review to account for Cross
River Rail and the metro. I am yet to get a response.

Locals consistently tell me that if they had access to frequent and affordable buses they would
be far more likely to get out of their cars and leave them at home. Right now, folks in Bardon have no
easy way to catch the bus to important centres in the electorate like Toowong and St Lucia, which is
the second biggest generator of trips in the whole city. Fig Tree Pocket residents are still waiting for a
bus along the eastern side of the suburb up Jesmond Road or regular buses to Indooroopilly and the
city outside of peak hours. In the growing Long Pocket area, the single bus service—the 417—is
incredibly infrequent, unreliable and totally inadequate on weekends.

If the government genuinely cared about fixing traffic, reducing emissions and making our cities
more accessible, they would invest in more high-frequency buses, inter-suburb connections and
dedicated bus lanes along main corridors like the Centenary Motorway. They would not continue to
prioritise car-centric, short-term sugar hits like road-widening projects. They will spend billions to
duplicate a highway, but will not upgrade the train stations across the state that still fail to meet disability
access standards. If this government wanted to tackle our traffic woes and help Queenslanders out in
a cost-of-living crisis, they would make public transport free.

Ms Boyd: Oh, make it free! Someone has got to pay for it.

Mr BERKMAN: Oh, the histrionics are back! Right now, fares cover only about 10 per cent of the
total running costs for the transport network. Why is the government obsessed with wringing money
from Queenslanders for such basic services especially when it is such a small proportion of the cost?
Why not make developers pay with a windfall gains tax or increase gas royalties so that everyone can
get public transport for free? The federal government's fuel excise cut is gone and petrol costs are
through the roof. Now is the perfect time to encourage people to leave their cars at home with free
fares. Not only would it deliver hip-pocket relief for Queenslanders but also it would cut a whole lot of
costs from our public transport system, specifically the hundreds of millions of dollars being poured into
a privatised ticketing system which will cost well beyond the $371 million that has been poured into it
already. How much are they spending on ticketing enforcement, on court and police costs for fare
evasion, all to cover that measly 10 per cent of the cost of delivering public transport?

Governments are meant to use our taxes to provide basic services like public transport. You are
meant to fund infrastructure for public benefit, not make deals with private corporations to wring
Queenslanders dry for profit. The secret deal with QBIC for the ticketing system is one example; the
Airtrain is another. Why is the minister defending this 35-year contract for a private provider to keep a
monopoly on public transport services around the airport? What part of 'making Queenslanders pay a
private company $20 for a 20-minute trip' sounds like a good deal to the government? It is
embarrassing.

This government's commitment to privatisation and outsourcing is embarrassing. I do not know
anyone who catches the Airtrain. I am interested to know if anyone here does. We cannot wait until
2036 to review that monopoly Airtrain contract. The government should bring the airport service into
public hands and make it free or at least cheaper for everyone to use. They could do it as part of the
Cross River Rail project. They could have some long-term vision. Put an end to the secret deals with
private contractors, invest in long-distance connecting services and high-frequency inter-suburb buses.

Let go of this ridiculous neo-liberal 'someone has to pay for it' mantra and ditch the hassle and expense
of fares. Not only would it make the trip along Coronation Drive a lot more pleasant but also across
Queensland it would reduce traffic, pollution, cut living costs and give people real freedom to move
around their communities.

Sent to all outlets:

Brisbane Airtrain is up in the sky!

28th October 2022

Good Morning,

We note recent discussion on the Brisbane Airtrain including an article at Brisbanetimes 'I don't know anyone who catches Airtrain': MP joins calls for end to monopoly ' https://www.brisbanetimes.com.au/national/queensland/i-don-t-know-anyone-who-catches-airtrain-mp-joins-calls-for-end-to-monopoly-20221026-p5bt1w.html which refers to the fact that Brisbane Airtrain Rail Link (BARL) Deed, which was signed in 1998 by the State Coalition Government, gives Airtrain exclusivity for public transport to Brisbane Airport. The agreement is due to expire in 2036. See BRISBANE AIRPORT RAIL LINK DEED SIGNED https://statements.qld.gov.au/statements/2668 April 1998.

This discussion follows from matters raised by Mr Berkman MP for Maiwar in Parliament 25th October 2022.
( Queensland Parliament - Hansard  Matters of Public Interest https://documents.parliament.qld.gov.au/events/han/2022/2022_10_25_DAILY.pdf Maiwar Electorate, Public Transport).

The facts are fairly simple. It was Airtrain Citylink Ltd that committed $190 million to the construction, operation and maintenance of the rail link from Eagle Junction to the Brisbane Airport.  In turn the Government of the day gave Airtrain exclusivity until the expiry of the agreement in 2036.  At which time the railway returns to the State.

If Brisbane City Council want to run buses to the Airport they would be required to compensate Airtrain financially. If fares on the Airtrain were brought in line with the rest of the fare structure in SEQ, similarly, Airtrain would have to be financially compensated.

The only option to open public transport access and significantly reduced fares would be for the State Government to buy out the BARL Deed agreement with Airtrain.

Airtrain is not the villain here, they built the line and have the protection of the BARL Deed. They are reasonably entitled to a return on their significant investment.

With the 2032 Olympics on the horizon, perhaps it is time to consider buying out the agreement.  Clearly, this is a matter for the State to decide.

Best wishes,
Robert

Robert Dow
Administration
admin@backontrack.org
RAIL Back On Track https://backontrack.org

Facebook ...

They have some options. They can negotiate with Airtrain to provide either a variable or block subsidy.

Although this will cap the total profit the company could make, it also caps their losses and reduces their risk.

This asset is being held for a pension or investment fund, as part of a portfolio.

They are not trying to maximise profit per se, but profit per unit risk, where risk is defined as the variance or fluctuation in the income stream.

In other words, they may be willing to do a trade and receive a subsidy. The question is whether Minister Mark Bailey wants to pay.

https://twitter.com/railbotforum/status/1585742252571209728

Quote from: #Metro on October 28, 2022, 07:16:42 AMThey have some options. They can negotiate with Airtrain to provide either a variable or block subsidy.

Although this will cap the total profit the company could make, it also caps their losses and reduces their risk.

This asset is being held for a pension or investment fund, as part of a portfolio.

They are not trying to maximise profit per se, but profit per unit risk, where risk is defined as the variance or fluctuation in the income stream.

In other words, they may be willing to do a trade and receive a subsidy. The question is whether Minister Mark Bailey wants to pay.

Two sides to this.  Would Airtrain vary the BARL Deed?  Perhaps they would if the financial compensation was sufficient.  But would the Government do it knowing they will have it in 2036 anyway?  It is an interesting situation.  Personally, I would love to see the State take it back asap.  But I don't think that is going to happen.

Well the State Government and possibly BCC need to work together and start talking to Airtrain.

There is nothing for nothing.

If they try nothing, nothing will happen... if they pay nothing, nothing will also happen.

Minister Bailey and LM Adrian Schrinner need to have a meeting with Airtrain.

I believe the NSW Government had similar issues with Airportlink in Sydney. Green square, for example, had a private fare for entry and Sydney domestic and international still do.

They got into negotiations and I believe now the NSW Govt pays a shadow toll for each passenger recorded which reduces the price for passengers. (Update - Green Square and Mascot only).

This isn't really too different to what happens to other private operators in the Translink system - they are all subsidised.

Although in Sydney, public bus isn't prevented from going to the Airport. There's is a bus from Bondi junction to there.

(I will also point out Perth's new Airport train is $5 and every 15 minutes all day. Both cheaper and more frequent.)

I'm going to post some material relevant to this, and will let members have a look at that. I don't have time to read it all in detail. In 2036 when the BARL deed expires, the asset will also be at the end of its life. There is a possibility that transfer of the asset at that time might require significant maintenance work to be done.

https://en.wikipedia.org/wiki/Airport_Link,_Sydney

QuoteFrom opening, all stations on the line charged a Station Access Fee to use the line, as well as the standard fare. In March 2011, it was announced that the NSW Government would cover the cost of the station access fee at Green Square and Mascot stations, meaning that passengers no longer need to pay a surcharge to access these stations.[24]

To compensate Airport Link Company, the Government pays the company a "shadow" station usage fee at a fixed contracted rate of approximately A$2.08 per entry and exit of these stations.[14]

Impact of Fare Reform on the Sydney Airport Rail Link
https://www.pc.gov.au/inquiries/completed/airport-regulation/submissions/subdr124-attachment.pdf

Impact of Fare Reform on the Sydney Airport Rail Link Sydney Airport Corporation Limited 
https://www.pc.gov.au/inquiries/completed/airport-regulation/submissions/sub046-appendixa.pdf

Removing or reducing station access fees at  Sydney Airport
https://www.parliament.nsw.gov.au/lcdocs/inquiries/1789/Final%20Report%20130228.pdf

Removing or Reducing Station Access Fees at Sydney Airport - NSW Government Response
https://www.parliament.nsw.gov.au/lcdocs/inquiries/1789/NSW%20Government%20Response%20Removing%20or%20Reducing%20Stati.pdf

Quote from: ozbob on October 28, 2022, 07:21:45 AM

Quote from: #Metro on October 28, 2022, 07:16:42 AMThey have some options. They can negotiate with Airtrain to provide either a variable or block subsidy.

Although this will cap the total profit the company could make, it also caps their losses and reduces their risk.

This asset is being held for a pension or investment fund, as part of a portfolio.

They are not trying to maximise profit per se, but profit per unit risk, where risk is defined as the variance or fluctuation in the income stream.

In other words, they may be willing to do a trade and receive a subsidy. The question is whether Minister Mark Bailey wants to pay.

Two sides to this.  Would Airtrain vary the BARL Deed?  Perhaps they would if the financial compensation was sufficient.  But would the Government do it knowing they will have it in 2036 anyway?  It is an interesting situation.  Personally, I would love to see the State take it back asap.  But I don't think that is going to happen.

From what I have heard there are significant compensation payouts should the state acquire the airport line which was done to attract the private sector.

I wouldn't go off Wikipedia articles about Sydney's airport line. NSW Government renegotiated the contract when it went into administration and continued with the same model with the new owners. The new owners have been trying for ages to renegotiate the terms and I believe this was one reason why Westpac sold their majority share. Brisbanes airport line never got into financial difficulties so the original terms from the 90's still remain.

In regards to the stopping pattern changes apparently there was a grey area around the wording for contract services. And with the time penalty being 90 seconds slower for stopping at 2 extra stations both parties agreed to the changes in good faith.

And no additional mtce is required on the line. All work is undertaken by Queensland Rail. From what I have been told there are also contracts in regards to this so that private operators can't cheap out on the line when it comes up to it being transferred to the state. Only station staff and cleaning services are handled by private parties hired by the airtrain.

Quote from: HTGBrisbanes airport line never got into financial difficulties so the original terms from the 90's still remain.

The following suggests that view is not the case... they have called in an insolvency firm to shore up the business. This suggests that although the line is profitable, it comes with significant risk of loss. Hence the value that a negotiation and subsidy could bring to the table... if the Queensland Government wanted that.

A subsidy isn't an acquisition... so should not trigger compensation payments. However, I would try and get more trains into the timetable during the day.

AIRTRAIN SOLD TO UK FUND
https://www.businessnewsaustralia.com/articles/airtrain-sold-to-uk-fund.html

QuoteTHE sale of Brisbane Airtrain to a UK superannuation scheme is finalised.

USS Axle, a subsidiary of Universities Superannuation Scheme Limited (USS), recently completed the $110 million acquisition of Airtrain Holdings Limited.

Restructuring firm called in to assist troubled AirTrain
https://www.couriermail.com.au/business/restructuring-firm-called-in-to-assist-troubled-airtrain/news-story/015291d5242b96330b381b92995bdc43

QuoteAn insolvency, advisory and restructuring firm has been called in to help Brisbane's AirTrain service after revenue fell dramatically due to a lack of flights amid the COVID-19 crisis. The Australian reports that McGrathNicol has been tapped to provide advice on the troubled business.

The situation is this.  As HTG as outlined, significant compensation is payable under the BARL Deed if exclusivity is broken.  Simple fact.

Patronage on Airtrain is back to pre Covid levels too by the way.  They would want a lot of compensation to miss out on the Olympics bonanza as well.

I would expect Airtrain would be around ~ $135 million to buy out.

Members can discuss whether that would be worth it or not.

The State should have bought the operator out when the opportunity arose and spent less money on roads in the airport precinct.  Oh well.

Metro. They never went into full administration. And they didn't renegotiate any contracts with the state government which makes your point mute. And 135 million is under quoted. It would be significantly more than that.

Quote from: SurfRail on October 28, 2022, 11:34:35 AMThe State should have bought the operator out when the opportunity arose and spent less money on roads in the airport precinct.  Oh well.

QuoteMetro. They never went into full administration. And they didn't renegotiate any contracts with the state government which makes your point mute. And 135 million is under quoted. It would be significantly more than that.

An estimate is just that, an estimate. But I think that is the ballpark. I would guess that their after-tax profit is about $8 million per year.

At a 3% growth rate over the next 14 years that would give an unadjusted value of about ~ $135 million. Or an adjusted value of around ~ $109 million. These figures are dynamic as the value of a firm is the sum of its future income stream adjusted for the time value of money. And future revenues are subject to uncertainty.

The USS superannuation fund bought it in 2012 for $110 million, so that is an independent external check that is also consistent with the above estimates...

... if they hold on to their asset, maybe get a bit of growth, they will get their money back IMHO. Just.

QuoteIn late 2012, U.K. pension fund Universities Superannuation Scheme bought Airtrain for A$110 million.[5]

https://en.wikipedia.org/wiki/Airport_railway_line,_Brisbane

Airtrain suffered enormous losses after opening
https://www.afr.com/companies/airtrain-is-on-the-right-track-20050509-jkx40

QuoteAirtrain began falling short of traffic forecasts soon after it began operating in May 2001. But with the total book value of the Airtrain development written down from $178.8 million to $43.1 million it would be easier to make a healthy return on equity, Mr Pelly said.

^ That is a serious loss in value, the company lost about 75% of its value (2005 figures).

That said, they consider Ipswich a growth market... so no complaining when CRR comes online and Airport trains go to Ipswich...

Quote"Ipswich [a city 32 kilometres west of Brisbane] is one of our substantial growth markets," Mr Pelly said.

There is another possibility here, among the ones we went over which were:

- Buy now
- Subsidise now
- Wait it out

And that is

- Buy later

The Queensland Government could wait until 2031, a year before the Olympics. At that point they would buy Airtrain out. I would guesstimate the value of Airtrain then would be ~$45 million (in 2022 $). That would be cheaper and mean the line was ordinary fare for the Olympics.

Airtrain cannot be forced to sell.  In 2031 they would probably not be interested if still running the show.

A lot of money pre, during and post Olympics will be on offer.

My hunch is if there was to be a deal it would be best in place by 2025 to coincide with the new Citytrain network. 

You are still wrong and pulling figures out of nowhere Metro. You are also still ignoring breach of contract. That's the penalty. Not how much the line cost to buy, how much they make or operate or how it depreciates over time. It's breaching the contract that's going to set the state government back. Airtrain knows this. They saw what happened with Sydney. The state knows this. And everybody knows the state isn't in a position for an expensive legal battle with high stakes compensation. Even if you go we only want the railway line that's still in breach of the exclusivity part of the contract. That's the kicker that makes this not really feasible and with the olympics coming up they know they have exclusivity when it comes to public transport getting to and from the airport which Sydney doesn't have. But don't expect pollies to mention any of this as they will just jump on the bashing bandwagon like they did with 7 car trains.

As Bob said airtrain can't be forced to sell. That's why the whole BOOT scheme is set up to be highly favourable for the private sector as they take the risk and should it go tits up the state can swoop in and get it at a bargain. Remember it's not a state asset. There are stipulations that both parties agree to such as QR being the mtce and rollingstock provider while airtrain remains the owner until a certain date before it's transferred to the state.

Airtrain in nsw went to the state asking for extra money upfront and in return were able to change certain parts of the contract. That's what enabled the shadow payment you go on about. This is why you can't compare the two. This helped the state in the long run while not taking on the risk and it helped airtrain in the short term. Now that airtrain is up and at full steam the owners can't maximise the original profits because of the new deal signed. As I said this was why westpac the majority shareholder sold its stake. None of that in terms of contract renegotiation has happened here with our airtrain.

Also Brisbanes airtrain is one of the few highly profitable passenger lines.

QuoteYou are still wrong and pulling figures out of nowhere Metro.

I gave my estimate and how I arrived at that, and I also showed what the sale value was in 2012. They are both in agreement.

Nobody is suggesting that Airtrain be forced to sell. I certainly haven't suggested that - the use of force.

Of course you can compare them. It is not necessary for circumstances to be "identical twin" to compare them or draw relevant conclusions.

Given that the company has already been sold between different investors, I have little doubt they will sell for the "right" price (for them) to anyone, voluntarily.

In any case, the options have been laid out, none of them are really appealing:

- Wait it out
- Buy it now
- Buy it later
- Subsidise it

Brisbanetimes --> Airtrain in negotiation to exit contract, ending airport monopoly

QuoteBrisbane's privately run airport rail service could soon be put in public hands, with the Queensland government and Airtrain in negotiations to bring the 35-year contract to a premature end.

Should those negotiations be successful, fares on airport train services could be slashed to be in line with the rest of the network.  ...

... Public transport advocate Robert Dow, from lobby group Rail Back on Track, said the ultimate goal of the negotiations should be to fully integrate Aitrain into the wider network fare structure.

"We'd welcome the return of air train to the state government with the proviso that it operates as part of the normal city train network," he said.

"Same fare structure, same timetable." ...

https://twitter.com/ozbob13/status/1588044653471100929

Facebook ...

Wow this is massive news! And a big win for commuters!!!

I can see patronage absolutely skyrocketing (pun intended) when you can get to the airport for five bucks!

Very interested to hear about the terms of the contract exit though. How will Airtrain Corporation be compensated? I'm assuming it's a financial payout...

There you go. After a lot of discussion on this forum saying it is not possible etc etc, look at that.

Sometimes you just need to approach the other party and talk it out.

Amazing.

Keep and open mind. There are often always options.

Well done Mark Bailey.

This would open the door to a Skygate DFO station. Whether or not that would be beneficial is another question entirely, but it would be good to have the potential.

QuoteBut patronage never lived up to expectation. Pre-COVID, in 2018-19, Airtrain patronage was about 1.5 million trips — well short of the 4.7 million it had forecast for 2004 and nowhere near the 19.6 million expected by the end of the contract in 2036.

Revenue - 1.5 million trips x $20 = $30 million per year revenue
Expected Profit - $30 million x 0.2 = $6 million per year +/- some uncertainty value (Assume 20% profit margin, after paying off QR, taxes etc)
Sum of future revenue - 14 years left x ($6 to $8 million profit per year) = $84 - 112 million

Expected present value of Airtrain - around $84-$112 million

Note: I haven't discounted the future cash flows, as I think over time the patronage would grow at a rate of about 3% to be in line with wider economic and population growth. But I also expect the interest rate/discount rate to be around 3% as well, so the two numbers cancel.

Disclaimer: These are just my opinions here, not professional financial or legal advice. Don't rely on them.

Quote from: #Metro on November 03, 2022, 16:51:53 PM

QuoteBut patronage never lived up to expectation. Pre-COVID, in 2018-19, Airtrain patronage was about 1.5 million trips — well short of the 4.7 million it had forecast for 2004 and nowhere near the 19.6 million expected by the end of the contract in 2036.

Revenue - 1.5 million trips x $20 = $30 million per year revenue
Expected Profit - $30 million x 0.2 = $6 million per year +/- some uncertainty value (Assume 20% profit margin, after paying off QR, taxes etc)
Sum of future revenue - 14 years left x ($6 to $8 million profit per year) = $84 - 112 million

Expected present value of Airtrain - around $84-$112 million

Note: I haven't discounted the future cash flows, as I think over time the patronage would grow at a rate of about 3% to be in line with wider economic and population growth. But I also expect the interest rate/discount rate to be around 3% as well, so the two numbers cancel.

These are just my opinions here, not financial or legal advice. Don't rely on them.

Only issue is the Olympics is definitely going to bring in a lot of extra patronage which you haven't accounted for.

Double Annual Patronage in 2032 for Olympics Scenario

The Olympics is so far away and there is so much uncertainty around that, that it doesn't change today's value of Airtrain by much.

Even if the entire yearly patronage of Airtrain doubled in 2032 due to this event, this would only change Airtrain's valuation by about say $7 million or 6-7%.

The ballpark is still going to be centered around the $100 million mark.

Quote from: #Metro on November 03, 2022, 16:56:55 PMThe Olympics is so far away and there is so much uncertainty around that, that it doesn't change todays value of Airtrain.

Even if the entire yearly patronage of Airtrain doubled in 2032 due to this even, this would only change Airtrains valuation by about say $7 million or 6-7%.

The ballpark is still going to be centered around the $100 million mark.

Of course. It's just something to be considered. The reality is the Government needs to offer a price which will be of lesser risk to Air-train whilst still being enough to not result in them foreseeably losing out. As such, the Olympics would need to be considered at least to some extent.

Quote from: #Metro on November 03, 2022, 16:31:01 PMThere you go. After a lot of discussion on this forum saying it is not possible etc etc, look at that.

Sometimes you just need to approach the other party and talk it out.

Amazing.

Keep and open mind. There are often always options.

Well done Mark Bailey.

I don't think anyone has said it is not possible, it always has been possible it is the matter of the quantum of financial compensation that would be paid.

Now that it is out the open the fact that negotiations have been going on is no surprise to all. 
I have known for a while but made a committment to keep it quiet.

And this is not an absolute guarantee yet.  The negotiations have to be successful,  clearly the financial compensation amount acceptable to Airtrain and the State.

I think they will be more than happy to sell.

The government is always able to cover its costs because it holds the power of taxation. If it makes a loss, no worries. Conversely, a private business would go broke and investors would lose out - in this case private UK pensioners. You might have also noticed that the competing Skybus also pulled out and shut down on 4 July 2022. Transport services are not known for being highly profitable.

By doing a deal, the UK pension fund can get the certainty of their money right now and invest in something better.

The Queensland Government is also in a very good position to know a reasonable value for Airtrain.

Because:
- The fare levels are public
- The patronage is more or less public from the Go Card data
- The Queensland Treasurer knows how much Airtrain's input production costs are because they contract QR to run the services for them

It is about as transparent as a glass box!

Quote from: #Metro on November 03, 2022, 17:06:07 PMThe government is always able to cover its costs because it holds the power of taxation. If it makes a loss, no worries. Conversely, a private business would go broke and investors would lose out - in this case private UK pensioners. You might have also noticed that the competing Skybus also pulled out and shut down on 4 July 2022.

True, but they still won't want to be swindled. They would have an estimate for the safely expected profit for the next 10 years and the Government will need to meet it, or at least come close to it.