How can a transport authority organise efficient and affordable public transport? Presentation on public transport regulation and contracting, including institutional framework, financial arrangements and different types of contracts. Presented as part of a UITP training programme for public transport experts, Johannesburg, October 2014.
Intelligent transportation systems (ITS) are advanced applications which, without embodying intelligence as such, aim to provide innovative services relating to different modes of transport and traffic management and enable various users to be better informed and make safer, more coordinated, and 'smarter' use of transport networks
Emerging Economies of the World: A Study | November 2016Suhel Goel
The study describes Emerging Market Economies (EMEs) their characteristics and a comparison with the Developed Economies of the world. The study brings to light the macroeconomic viewpoint on why to invest in EMEs and the risks one can face and ways to navigate them.
Lastly, importance of India as the most promising EME is highlighted in the study cum presentation.
Waiting Line Management Problem Solution, Writer Jacobs (1-15)Imran Hossain
This problem solution has been prepared by Abu Zafor, Abdus Salam and Imran Hossain of Islamic University, Kushtia of Management Department, Session: 2010-2011.
Blue Ocean Strategy – Air Asia Innovation & Blue Ocean strategy targeted non ...Rajesh Prabhakar
Air Asia did not target the traditional customers of Airlines and did not compete with the strong local player Malaysian Airlines but it focused on the multiethnic population of Malaysia that included Chinese, Indian, Indonesian, Thai, etc. who never traveled or cannot afford the airline fare.
This paper is written based on the researches of models and its applications in Real-Time Traffic Information. Firstly, this would be introduced briefly about traffic information system and some traffic sensors which are currently used to record and send data to centre. The major part will focus on explanation of models for estimation and prediction in Real-Time Traffic Information. Some standard models such as Regression Model, Bayesian Model and Probabilistic Graphical Model are applied to figure out many indicators in traffic system (the Level of Service, road network, congestion, etc.) and run processes of predictions, then, send the solutions to drivers or other relevant. Besides these models, some experiments from the project of Mobile Millennium which also helps to explain how these models apply in Real-Time Traffic Information would be introduced. Finally, some specified applications which are widely used in the world are also mentioned as the newest approaches in Real-Time Traffic Information.
Intelligent transportation systems (ITS) are advanced applications which, without embodying intelligence as such, aim to provide innovative services relating to different modes of transport and traffic management and enable various users to be better informed and make safer, more coordinated, and 'smarter' use of transport networks
Emerging Economies of the World: A Study | November 2016Suhel Goel
The study describes Emerging Market Economies (EMEs) their characteristics and a comparison with the Developed Economies of the world. The study brings to light the macroeconomic viewpoint on why to invest in EMEs and the risks one can face and ways to navigate them.
Lastly, importance of India as the most promising EME is highlighted in the study cum presentation.
Waiting Line Management Problem Solution, Writer Jacobs (1-15)Imran Hossain
This problem solution has been prepared by Abu Zafor, Abdus Salam and Imran Hossain of Islamic University, Kushtia of Management Department, Session: 2010-2011.
Blue Ocean Strategy – Air Asia Innovation & Blue Ocean strategy targeted non ...Rajesh Prabhakar
Air Asia did not target the traditional customers of Airlines and did not compete with the strong local player Malaysian Airlines but it focused on the multiethnic population of Malaysia that included Chinese, Indian, Indonesian, Thai, etc. who never traveled or cannot afford the airline fare.
This paper is written based on the researches of models and its applications in Real-Time Traffic Information. Firstly, this would be introduced briefly about traffic information system and some traffic sensors which are currently used to record and send data to centre. The major part will focus on explanation of models for estimation and prediction in Real-Time Traffic Information. Some standard models such as Regression Model, Bayesian Model and Probabilistic Graphical Model are applied to figure out many indicators in traffic system (the Level of Service, road network, congestion, etc.) and run processes of predictions, then, send the solutions to drivers or other relevant. Besides these models, some experiments from the project of Mobile Millennium which also helps to explain how these models apply in Real-Time Traffic Information would be introduced. Finally, some specified applications which are widely used in the world are also mentioned as the newest approaches in Real-Time Traffic Information.
The presentation discusses the fundamentals of Intermodal and Multimodal transportation in the context of urban areas. In the era of an epic need for mass transportation facilities, the supportive system also requires its place around. It was delivered during an expert talk on 7th October 2016 at BMCET, Surat.
It is the second metro project in India after Kolkata metro. Delhi Metro is a rapid transit system serving Delhi, Gurgaon, Noida and Ghaziabad in the National Capital Region of India.
GOI and GNCTD arranged all the capital required
Initial estimation of cost in 1996 was Rs 60 billion.
Revised estimation cost in 2002 was Rs 89.27 billion
Final cost of project approx. Rs 99 billion with Rs 7 billion savings.
Mr. E Sreedharan was appointed as project manger and managing and managing director in November 1997.
It shows the Working, Functions and Members of BRICS, objectives, important Summit, effects, advantages, disadvantages, financial Contribution and The BRICS Bank.
Outsourcing Bus Operations - How to make it Financially SustainableValoriser Consultants
Public Transport can not be sustainable without the government support. In Europe, Bus Transport is highly subsidized. However, India is still trying to find out the best solution for the bus transport in the cities. There is need to identify alternative revenue sources for the bus transport. The presentation highlights the existing contracting options in India.
The presentation discusses the fundamentals of Intermodal and Multimodal transportation in the context of urban areas. In the era of an epic need for mass transportation facilities, the supportive system also requires its place around. It was delivered during an expert talk on 7th October 2016 at BMCET, Surat.
It is the second metro project in India after Kolkata metro. Delhi Metro is a rapid transit system serving Delhi, Gurgaon, Noida and Ghaziabad in the National Capital Region of India.
GOI and GNCTD arranged all the capital required
Initial estimation of cost in 1996 was Rs 60 billion.
Revised estimation cost in 2002 was Rs 89.27 billion
Final cost of project approx. Rs 99 billion with Rs 7 billion savings.
Mr. E Sreedharan was appointed as project manger and managing and managing director in November 1997.
It shows the Working, Functions and Members of BRICS, objectives, important Summit, effects, advantages, disadvantages, financial Contribution and The BRICS Bank.
Outsourcing Bus Operations - How to make it Financially SustainableValoriser Consultants
Public Transport can not be sustainable without the government support. In Europe, Bus Transport is highly subsidized. However, India is still trying to find out the best solution for the bus transport in the cities. There is need to identify alternative revenue sources for the bus transport. The presentation highlights the existing contracting options in India.
Prof. José Holguín presented on improving the performance of freight systems at the Transforming Transportation 2015.
Transforming Transportation 2015: Smart Cities for Shared Prosperity is the annual conference co-organized by the World Resources Institute and the World Bank.
Lecture note of Industrial Waste Treatment (Elective -III) as per syllabus of Solapur university for BE Civil
Prepared by
Prof S S Jahagirdar,
Associate Professor,
N K ORchid College of Engg and Tech,
Solapur
Lecture Notes of Environmental Engg-II as per solapur university syllabus of TE Civil,
Prepared by
Prof S S Jahagirdar,
Associate Professor,
N K Orchid college of Engg and Technology,
Solapur
This will gives a idea about various types of flexible pavement failure in roads with a most specific pictures.This was the report submitted as an assignment at Nepal engineering college,Kumari club ,Balkhu kathmandu in MSC-TEAM classes.
Presentation by Leanne Farrow to MA/MSc students at the Institute for Transport Studies, October 2014.
www.its.leeds.ac.uk/courses/masters/itslectureseries
Leanne Farrow is a former ITS MSc student from Queensland, Australia Since joining JMP in 2007, she has worked on a range of projects for both public and private sector organisations, but has been particularly involved in local and regional transport policy, sustainable transport strategy development, spatial planning and the delivery of travel behaviour change interventions. Leanne has recently obtained the Transport Planning Professional (TPP) Qualification through the Chartered Institute for Highways and Transportation.
www.jmp.co.uk/people/staff/leanne-farrow
Presentation given on 28 November 2013 at the Institute for Transport Studies (ITS) www.its.leeds.ac.uk
By James Bennett from METRO www.wymetro.com
Covering the importance of Smartcards from the customer viewpoint, implementation, issues arising from implementation and the benefits associated with implementation.
Dimitrios Teologothis' presentation of The European Ports PolicyASCAME
Communication on EU Ports Policy and Proposal for a Regulation on Market Access to Port Services and Financial Transparency of Ports in Europe by the Head of Ports & Inland Navigation, European Commission DG MOVE. Made public at the MedaForum on Logistics and Transportation, Barcelona on June 18th 2013.
Given that the concept of ‘Total Transport’ has triggered much conversation in recent times, we thought it a perfect topic for discussion at the 2015 Trapeze UK Conference – to do so we turned to an expert in the field: Mark Hudson, Group Manager for Transport & Travel at Nottinghamshire County Council.
The Middle East has allocated nearly $250bn to various railway projects over the next 10 years with ambitious plan to build around 67,000km of railway tracks throughout the region. The region has the opportunity to build the world’s most advanced passenger and freight transport systems. The presentation touches on all aspects of railway development and strategies in the region including different Public private Partnership (PPP) models and financing / funding advice to better develop rail projects as a sustainable means of transport.
Integrated Transport Services - Cashless Transactions / Smart CardValoriser Consultants
Cashless travel on public transport is popular in developed countries and gaining some momentum in developing countries. India is still lagging in this area of area of Integrated Electronic Ticketing. Find out more about E-ticketing in India.
Transport for Cape Town’s role in encouraging public transportTristan Wiggill
A presentation by Ms Melissa Whitehead (Commissioner of Transport: TCT) at the Transport Forum special interest group proudly hosted by TCT in Cape Town on 10 December 2015. The theme for the event was: "Encouraging Public Transport". The topic of the presentation was: "Transport for Cape Town’s role in Encouraging Public Transport".
More like this on www.transportworldafrica.co.za
This presentation by Damien GERADIN, Partner, EUCLID Law, was made during the discussion “Taxi, ride-sourcing and ride-sharing services” held at the 65th meeting of the OECD Working Party No. 2 on Competition and Regulation on 4 June 2018. More papers and presentations on the topic can be found out at http://oe.cd/2gs.
This presentation by Susanna METSÄLAMPI from the Ministry of Transport and Communications (Finland) was made during the roundtable discussion on competition and innovation in land transport held during the 62nd meeting of the OECD Working Party No. 2 on Competition and Regulation on 28 November 2016. More papers and presentations on the topic can be found out at www.oecd.org/daf/competition/competition-and-innovation-in-land-transport.htm
European Practices in Organising Public TransportEric Trel
Developments in Europe show that competitive tendering of public transport service contracts leads to more efficiency and better quality. Presentation at the Tranzit conference in Cluj, Romania, April 2016.
ZGB - The Role of Generative AI in Government transformation.pdfSaeed Al Dhaheri
This keynote was presented during the the 7th edition of the UAE Hackathon 2024. It highlights the role of AI and Generative AI in addressing government transformation to achieve zero government bureaucracy
Preliminary findings _OECD field visits to ten regions in the TSI EU mining r...OECDregions
Preliminary findings from OECD field visits for the project: Enhancing EU Mining Regional Ecosystems to Support the Green Transition and Secure Mineral Raw Materials Supply.
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
Donate to charity during this holiday seasonSERUDS INDIA
For people who have money and are philanthropic, there are infinite opportunities to gift a needy person or child a Merry Christmas. Even if you are living on a shoestring budget, you will be surprised at how much you can do.
Donate Us
https://serudsindia.org/how-to-donate-to-charity-during-this-holiday-season/
#charityforchildren, #donateforchildren, #donateclothesforchildren, #donatebooksforchildren, #donatetoysforchildren, #sponsorforchildren, #sponsorclothesforchildren, #sponsorbooksforchildren, #sponsortoysforchildren, #seruds, #kurnool
Monitoring Health for the SDGs - Global Health Statistics 2024 - WHOChristina Parmionova
The 2024 World Health Statistics edition reviews more than 50 health-related indicators from the Sustainable Development Goals and WHO’s Thirteenth General Programme of Work. It also highlights the findings from the Global health estimates 2021, notably the impact of the COVID-19 pandemic on life expectancy and healthy life expectancy.
This session provides a comprehensive overview of the latest updates to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly known as the Uniform Guidance) outlined in the 2 CFR 200.
With a focus on the 2024 revisions issued by the Office of Management and Budget (OMB), participants will gain insight into the key changes affecting federal grant recipients. The session will delve into critical regulatory updates, providing attendees with the knowledge and tools necessary to navigate and comply with the evolving landscape of federal grant management.
Learning Objectives:
- Understand the rationale behind the 2024 updates to the Uniform Guidance outlined in 2 CFR 200, and their implications for federal grant recipients.
- Identify the key changes and revisions introduced by the Office of Management and Budget (OMB) in the 2024 edition of 2 CFR 200.
- Gain proficiency in applying the updated regulations to ensure compliance with federal grant requirements and avoid potential audit findings.
- Develop strategies for effectively implementing the new guidelines within the grant management processes of their respective organizations, fostering efficiency and accountability in federal grant administration.
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
2. CONTENTS
Part A – Public Transport REGULATION
• Actors
• Market
• Regulation
• Transport Authority
Part B – Public Transport CONTRACTING
• Types of contract
• Risk allocation
• Incentives
• Annual updating
UITP training 10 October 20142
3. WHY PUBLIC TRANSPORT?
Developments in Africa:
• Fast growing cities
• Economic development
• Increasing congestion
• PT is needed to keep cities accessible
UITP training 10 October 20143
4. UITP training 10 October 20144
0
1,600
3,000
6,000
9,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Parked car Private car Motorcycle 12m bus 18m bus
Passengers per hour per lane
5. WHY REGULATE?
• Fast growing demand for transport
• Informal sector cannot meet transport demand
• Daily competition does not lead to good transport
• An integrated network requires management
• Better quality and bigger scale require investments
UITP training 10 October 20145
6. WHAT IS NEEDED
1. Transport planning:
• design a network and define the service level
to meet transport demand
2. Organisation of the transport market:
• licenses, concessions or service contracts
3. Operators need access to bank credits:
• bank requires long term concession or
contract
UITP training 10 October 20146
7. OPERATORS
UITP training 10 October 20147
• Identified by authority
• Routes and services approved
by authority
• Pays taxes
• Requirements on service
quality and safety.
• Professionalization
Formal Operator
• Not known by authority
• Operator focuses on profitable
routes and times
• Often pays no taxes
• No requirements
Informal Operator
8. OPERATORS
UITP training 10 October 20148
• Public ownership
• Dependent of government
• Focus on political demands
and budget
• Focus on customer satisfaction
and public opinion
Public Operator
• Private ownership
• Dependent of shareholders
• Focus on profit and return
on investment
• Focus on fare revenues
Private Operator
9. TRANSPORT MARKET
• Open market:
• Daily competition,
• Each operator optimizes his own business,
• Based on fare revenues only
• Regulated market:
• Transport Authority = regulator
• Competition is limited to tendering of transport
concessions or contracts
• Operators have a stable business and access
to credit
• Customers profit from an integrated network
UITP training 10 October 20149
10. MARKET REGULATION
UITP training 10 October 201410
Direct
Management
Delegation
(out‐sourcing)
Public
company
Public
company
Private
company
Authority initiative Market initiative
Authorization
(concession)
Open Market
(or licenses)
Public
company
Private
company
Private
company
Monopoly
Competition FOR the market
(tendering)
Competition
IN the market
Partly subsidizedPartly subsidized Not subsidizedNot subsidized
12. FINANCING OF PT
Model 1: open market, licence or concession, without
subsidies
UITP training 10 October 201412
OPERATOR
OPERATOR
PASSENGERS
Transport Authority
OPERATOR
Fare revenues
13. FINANCING OF PT
Model 2: contract with subsidy
UITP training 10 October 201413
OPERATOR
OPERATOR
PASSENGERS
Transport Authority
OPERATOR
Fare revenues
Subsidy
14. FINANCING OF PT
Model 3: contract with service fees
UITP training 10 October 201414
OPERATOR
OPERATOR
PASSENGERS
Transport Authority
OPERATOR
Fare
revenues
Service
fee
If fare revenues < service fees,
then subsidy is needed to fill the gap.
15. WHY SUBSIDY?
• In urban transport the operating speed is low and
that makes transport costly. Lower speed means
more vehicles and more drivers for the same
service.
• If salaries rise due to economic development,
operating costs will increase.
• Better quality transport leads to higher operating
costs (e.g. BRT, LRT).
UITP training 10 October 201415
16. WHO DECIDES WHAT?
UITP training 10 October 201416
OPERATIONAL
Short term
How to produce and deliver
these service?
TACTICAL
Medium term
Which services can help to
achieve the goals?
Level Focus Responsibility
STRATEGIC
Long term
What do we want to achieve?
With what resources?
Politicians
Operators
Transport Authority
17. WHO DECIDES WHAT?
UITP training 10 October 201417
Level Actors Role
STRATEGIC
Long term
National Government
Legal framework
National transport policy
Financial support local government
Local Government
Transport policy
Budget
Fare Policy
Local regulations
TACTICAL
Medium term
Transport Authority
Public transport network
Service levels
Contracting operators
Ticketing system
Information and marketing
Investments in infrastructure
OPERATIONAL
Short term
Transport Operators
Transport operation
Investments in rolling stock
Customer services
18. TRANSPORT AUTHORITY
• A Transport Authority plans and manages the
transport (on urban or regional level)
• Tasks include the management of public transport
and may also include roads, traffic management,
parking and NMT.
• Examples:
• Gauteng Transport Commission (envisaged in
the Gauteng Transport Master Plan)
• Transport for London (TfL)
UITP training 10 October 201418
19. TRANSPORT AUTHORITY TASKS
UITP training 10 October 201419
1. Market organisation
Elaborate market regulation and procurement strategy
Elaborate a standard contract
Give advice on the regulatory framework
2. Management of budgets and assets
Elaborate fare revenues, operating costs and need for subsidy
Define fares and revenue allocation
Define ownership of infrastructure, fleet and systems
3. Defining level of service
Define the route network and transport modes
Define operating hours and frequencies per route
4. Procurement and contracting
Elaborate tender documents
Tender procedure and evaluation of bids
Contracting
20. TRANSPORT AUTHORITY TASKS
UITP training 10 October 201420
5. Monitoring and payments
Monitoring of operators’ performance
Determination of service fees, bonuses and penalties
6. Integrated approach
Ticketing
Information, marketing and promotion
7. Infrastructure
Bus terminals and bus stops
Dedicated bus lanes and priority at traffic lights
8. Possible other tasks
Traffic management
Parking management
Promotion of Non-Motorised Transport
21. TA CHALLENGE
UITP training 10 October 201421
Strike a balance between
‐ encouraging entrepreneurship of operators
‐ ensuring the social dimension of public transport
‐ ensuring service quality and customer satisfaction
22. TA COMPETENCES
UITP training 10 October 201422
Multidisciplinary and highly skilled team
Transport planning
Transport operation and infrastructure
Intelligent Transport Systems (e.g. electronic ticketing)
Procurement expertise
Financial expertise
Legal expertise
Asset management
23. GET STARTED
1. Check the budget: room for subsidy or not?
2. Check the legislation: are you in the position to
regulate the transport market?
3. Start in one part of the city (call it a pilot).
4. Elaborate demand forecasts, network design and
service level.
5. Calculate fare revenues and operating costs. If
necessary, go back to step 4.
6. Define route packages.
7. Elaborate a standard contract.
8. Tender route packages.
UITP training 10 October 201423
24. CONTENTS
Part B – Public Transport CONTRACTING
• Types of contract
• Risk allocation
• Incentives
• Annual updating
UITP training 10 October 201424
25. CONTRACTING
UITP training 10 October 201425
Level Actors Role
STRATEGIC
Long term
National Government
Legal framework
National transport policy
Financial support local government
Local Government
Overall transport policy & strategy
Budget
Fare Policy
Local regulations
TACTICAL
Medium term
Transport Authority
Public transport network
Service level
Contracting operators (tenders)
Ticketing system
Information and marketing
Investments infrastructure
OPERATIONAL
Short term
Transport Operator
Transport operations
Investments in rolling stock
Sales and customer services
26. ContractingContracting
CONTRACTING
UITP training 10 October 201426
Direct
Management
Delegation
(out‐sourcing)
Public
company
Public
company
Private
company
Authority initiative Market initiative
Authorization
(concession)
Open Market
(or licenses)
Public
company
Private
company
Private
company
Monopoly
Competition FOR the market
(tendering)
Competition
IN the market
Partly subsidizedPartly subsidized Not subsidizedNot subsidized
27. PROCUREMENT
UITP training 10 October 201427
Contract
specifications
Service
execution
Monitoring,
payment
Negotiations Contract
Direct award
Service
execution
Monitoring,
payment
Call for
tenders
Pre-
qualification
Bid
preparation
Bid evaluation
& selection
Contract
Tendering
28. CONCESSION VS. OUTSOURCING
Concession for public transport
• Gives the Operator the RIGHT to deliver services on
certain routes (or in certain areas).
• The Operator takes the revenues and operates on his
own account. There are no subsidies involved.
• The Operator focuses on profitable routes and hours.
Public Service Contract (PSC) for public transport
• The Authority BUYS services from the Operator.
• The Transport Authority defines network and services.
• The contract specifies services, service fees, risk
allocation and incentives to steer the focus of the
Operator.
UITP training 10 October 201428
29. CONCESSION VS. OUTSOURCING
Concession:
• If a city has ONLY ONE operator
• If there is no subsidy involved
Service contract:
• If a city has MORE THAN ONE operator and the
Transport Authority design the network
• If subsidies are involved
UITP training 10 October 201429
30. PUBLIC SERVICE CONTRACT
Definition
A Public Service Contract is an agreement
between a competent authority and an operator
on the delivery of public transport services
for a specified service fee
and under specified conditions.
UITP training 10 October 201430
31. PUBLIC SERVICE CONTRACT
UITP training 10 October 201431
defines
checks
fulfilment
of
receivesgrants
SERVICES
fulfils
CONTRACT
claims
granting
of
PAYMENT
Transport
Operator
Transport
Authority
32. PUBLIC SERVICE CONTRACT
Public Service Contracts can be arranged regardless
of:
• Ownership: public or private companies
• Award procedure: direct award or competitive
tender
• Financial support: with or without subsidy
UITP training 10 October 201432
33. CONTRACT DURATION
• The recommended contract duration for bus
transport is 10 years, equal to the economic lifetime
of a new bus.
• 10 years is a long time …
Should it be 10 years fighting or dancing? A lot
depends on the quality of the contract.
• 10 years is a long time …
and meanwhile a lot can change (transport
demand, fuel prices, new developments , …).
The contract needs to have a procedure for annual
adjustment of services and annual indexation of
service fees.
UITP training 10 October 201433
34. FINANCIAL RISKS
UITP training 10 October 201434
Cost risk Production costs
Labour costs
Energy/fuel costs
Maintenance costs
Overhead costs
Revenue risk Fare revenues (income)
Network and timetable
Service Quality
Fares
Transport Demand
Marketing
Fraud and Control
Type of risk Risk related to Derive from
Market risk
Development transport demand
Economic Development
Urban planning and mobility
Motorization, congestion, parking
Oil prices and salary levels
35. PERFORMANCE RISKS
UITP training 10 October 201435
Type of risk Risk related to Derive from
Performance risk Quality of service provision On-time performance
Trips cancelled
Service Personnel
Cleanliness
Safety and Security
Productivity risk Operational Speed Congestion
Infrastructure
Traffic management
Infrastructure
risk
Availability of infrastructure Availability
Quality
Maintenance
Reputation risk Public Opinion Quality of services
36. CONTINUITY RISKS
UITP training 10 October 201436
Type of risk Risk related to Derive from
Investment risk Investments for operation Contract duration
Contract termination
Regulatory risk Changes in regulation Environmental regulations
Tax regulations
Labour regulations
Transport regulations
Competition risk Competition other operators Exclusivity or competition allowed
37. BUSINESS MODELS
Definitions
1. Deficit Coverage
the Operator keeps the fare revenues and may receive an
additional subsidy to cover the deficit (if any). Deficit and
subsidy may differ per month.
2. Net Cost Contract
the Operator keeps the fare revenues and may receive a
previously determined, fixed subsidy.
3. Gross Cost Contract
the Transport Authority keeps all fare revenues and pays the
Operator a service fee for delivered services (mostly: amount
per vehicle kilometre).
UITP training 10 October 201437
38. BUSINESS MODELS
Risk allocation
UITP training 10 October 201438
Business model Revenue risk Cost risk
1. Deficit Coverage Transport Authority Transport Authority
2. Net Cost Contract Operator Operator
3. Gross Cost Contract Transport Authority Operator
39. BUSINESS MODELS
UITP training 10 October 201439
Pros and cons
1. Deficit Coverage
This model is common in Eastern European and former Soviet countries.
The Transport Authority bears all risks.
2. Net Cost Contract
This model is applied in some cities, e.g. in France, Netherlands.
The Operator bears all risks.
Condition: the Operator is allowed to optimize the fares and the network.
3. Gross Cost Contract
This is the most widely applied model. E.g. all bus transport in London.
Each risk is allocated to the party most equipped to manage the risk.
The Transport Authority holds all keys for optimizing the urban transport.
Condition: Electronic Ticketing System is used by all Operators.
40. BUSINESS MODELS
UITP training 10 October 201440
Concession
Public Service Contract
Deficit
coverage
Net Cost
Contract
Gross
Cost
Contract
41. GROSS COST CONTRACT
UITP training 10 October 201441
Financing model 3: contract with service fees
OPERATOR
OPERATOR
PASSENGERS
Transport Authority
OPERATOR
Fare
revenues
Service
fee
If fare revenues < service fees,
then subsidy is needed to fill the gap.
42. GROSS COST CONTRACT
Example City X
• 1 bus operator
• 10,000,000 bus km per year
• Gross Cost Contract, 10 year
• Service fee: USD 1 per vehicle km
(+ annual indexation)
• Contract value: USD 10M per year
• Bonuses for performance above target
• Penalties for performance below requirements
UITP training 10 October 201442
43. CITY X
Situation 1: Operator
performs well; cost and
revenues are in balance
UITP training 10 October 201443
Performance Fee (USD M)
10M km 10
Incentives 0.5
Total fees 10.5
Costs -9
Profit 1.5
Source Amount (USD M)
Fare revenues 10.5
Fees Operator -10.5
Result 0
OperatorOperator
Transport AuthorityTransport Authority Operator: makes profit
TA: no subsidy needed
Passengers: satisfied
44. CITY X
Situation 1: Operator
performs well; cost and
revenues are in balance
UITP training 10 October 201444
Performance Fee (USD M)
10M km 10
Incentives 0.5
Total fees 10.5
Costs -9
Profit 1.5
Source Amount (USD M)
Fare revenues 10.5
Fees Operator -10.5
Result 0
OperatorOperator
Transport AuthorityTransport Authority
Performance risk
Cost and investment risks
Revenue and market risks
45. CITY X
UITP training 10 October 201445
Performance Fee (USD M)
10M km 10
Incentives 0
Total fees 10
Costs -10
Profit 0
Source Amount (USD M)
Fare revenues 10.5
Fees Operator -10
Result 0.5
OperatorOperator
Transport AuthorityTransport Authority
Situation 2: Operator is not
efficient
Operator: makes no profit
TA: makes profit
Passengers: satisfied
46. CITY X
UITP training 10 October 201446
Performance Fee (USD M)
9M km 9
Incentives -0.5
Total fees 8.5
Costs -9
Profit -0.5
Source Amount (USD M)
Fare revenues 9.5
Fees Operator -8.5
Result 1
OperatorOperator
Transport AuthorityTransport Authority
Situation 3: Operator is not
efficient and performs less
Operator: makes small loss
TA: makes profit
Passengers: not satisfied
47. CITY X
Situation 4: Operator
performs well,
but passenger demand falls
(or politicians decided to
lower the fares)
UITP training 10 October 201447
Performance Fee (USD M)
10M km 10
Incentives 0.5
Total fees 10.5
Costs -9
Profit 1.5
Source Amount (USD M)
Fare revenues 9.5
Fees Operator -10.5
Result -1
OperatorOperator
Transport AuthorityTransport Authority Operator: makes profit
TA: less revenues, subsidy
needed
Passengers: satisfied
48. WHO OWNS WHAT?
Typically, in urban transport with more than one
operator and competitive tendering:
• Authority owns the infrastructure (bus lanes, stops,
stations, e-ticketing system, …)
• Operator owns the fleet and depot
UITP training 10 October 201448
Many exceptions:
• Authority may own also fleet and depot, operator
only brings in staff and management.
• Light rail: mostly the Authority owns infrastructure,
fleet and depot.
49. INCENTIVES & MONITORING
General
• Bonuses for stimulating performance above targets
(e.g. more passengers)
• Penalties for not complying with requirements
(e.q. clean vehicles)
UITP training 10 October 201449
50. INCENTIVES & MONITORING
Focus
Incentives may focus on input, output or outcome.
Example clean vehicles:
• Input: vehicles should be cleaned every day
(based on inspection)
• Output: vehicles should be clean
(based on inspection and/or complaints)
• Outcome: customers should be satisfied about
cleanliness of the vehicles
(based on customer satisfaction survey)
UITP training 10 October 201450
51. INCENTIVES & MONITORING
Conditions
• Requirements, targets and performance should be
reasonable, objective and measurable.
• Bonuses and penalties should be applied
regularly, in order to influence Operator’s
behaviour.
• Awarding of bonuses and penalties should be
based on a monitoring programme.
UITP training 10 October 201451
52. ANNUAL ADJUSTMENT
10 years is a long time …
The contract should contain a procedure for annual
adjustment (instead of amending the contract):
• Adjustments of network and timetables (within a
margin of x%).
• Adjustment of the service fee by means of
indexation.
UITP training 10 October 201452
53. CONTENTS OF A PSC
1. Scope: lines, operating hours, frequencies
(operation plan in appendix)
2. Duration of the contract and start of operations
3. Right and obligations of the Operator:
• e.g. the right to propose timetable changes,
• e.g. the obligation to implement network
changes after Authority’s decision.
4. Rights and obligations of the Authority:
• e.g. the right to inspect vehicles on safety,
• e.g. the obligation to coordinate with traffic
police on measures to ensure operating speed
UITP training 10 October 201453
54. CONTENTS OF A PSC
5. Requirements:
• Fares
• Ticketing
• Maximum % of canceled trips
• Replacement of defect vehicles
• Punctuality
• Traffic safety
• Customer services
• …
UITP training 10 October 201454
55. CONTENTS OF A PSC
6. Use of systems:
• e-ticketing,
• passenger information,
• vehicle tracking,
• traffic priority
7. Ownership and maintenance of assets:
• infrastructure, fleet, depot, systems
8. Procedure and time schedule for annual
adjustments
UITP training 10 October 201455
56. CONTENTS OF A PSC
9. General conditions:
• Applicable law
• Arbitration in case of disputes
• Termination of the contract in case of
repeated non-compliance
• Farce Majeure
• …
UITP training 10 October 201456
57. A GOOD CONTRACT …
An effective service contract requires a good balance
between the interests and risks of:
• Customers
• Transport Authority
• Operator
And a good balance between:
• Technical aspects
• Commercial aspects
• Legal aspects
UITP training 10 October 201457
58. Thanks for your attention
and success in your work
UITP training 10 October 201458