Urban Transport case study by Olivier CROUZIER

PPP in Syria PPP Workshop Damascus Urban Transport Case Study

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Case study 01/02/13

General Picture

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General Picture

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General Picture

Study on urban transport strategy (JICA 1999)

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General Picture

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Is there anything to do in regard to parking facilities ?

Data from The study on urban transport strategy (JICA 1999)

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From ISMF survey

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From ISMF survey

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General Technical Data From ISMF survey

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About current strategy

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Tendering Process ?

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Actual organisation and strategies Damascus Governorate Establish PT routes network Administering the routes licenses Pay a right to operate exclusively the lines Al Masri Company 2 routes, 55 bus Operating + maintenance + advertising

Public company 6 routes in Damascus 280 to 300 buses per day

In 2003 Revenues : SP 130 millions Expenses : SP 500 millions Salaries : SP 250 millions Low Tariffs

Rent the buses

ÂŤ out of the city Âť lines

Private companies 10000 microbuses, which entered the market in 1991 Large market share and operated by individuals 100 routes

400 new buses (24 seats)

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Actual allocation of responsibilities ? Governorate

Information (time tables) Infrastructure (free bus lanes)

No responsibility MOT or Governorate ?

Buses Tariffs policy

X (Public company)

Operation Maintenance Control of operations

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Public Company

Private Co.

PT routes network

Route licence ageement No definition of regulatory agency

Definition of lines

Regulatory Agency

X (?)

X (744 bus)

X (10000 minibuses)

xNew contract with Al Masri

X (?)

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PERCEIVED PROBLEMS The most common problems faced by bus systems (with links to a series of factors that affect the efficiency of a bus system) are: Too few buses or inadequate service capacity Unreliable service Irregular frequency Poor route coverage Excessive transfer requirements between routes Excessive fares Low profitability Excessive subsidy requirement Poor quality vehicles Poor safety performance Traffic congestion caused by buses Pollution caused by buses Mistreatment of passengers Violence between operators

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FACTORS INFLUENCING BUS SYSTEM EFFICIENCY Regulatory framework Fare control Enforcing rules and regulations Route planning Interchange facilities Through ticketing of tickets Operating structures and company size Vehicle size and type Fleet size Excessive Operating costs Operating practices Vehicle maintenance Bus utilization Revenue integrity Competition in the market Competition from the informal sector

Benchmark and indicators Role and importance of buses Total population in service area Total daily trips (excluding walk trips) Total daily trips by public transport Percent mode share to public transport Average daily ridership Average bus boardings per bus trip Average daily trips by bus Percent mode share to bus Network description Percent of urban area within 500 m of bus stop Fleet description Fleet size: buses No. of buses per 1000 people Average bus capacity Total fleet capacity Percent seated capacity Percent air conditioned (if appropriate) Average vehicle age

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Output performance measures Average availability percentage Average vehicle utilization rate (percentage of available buses actually used) Percentage peak only buses Average daily km per bus Average total daily place-km (place = seated + standing capacity) Percent lost km Km per breakdown in service Km per accident Passenger loading and adequacy of capacity Passengers per vehicle per day Average peak hour occupancy ratio at maximum load point Average distance travelled per boarding (km) Daily passenger km Average load factor (passenger-km/place-km)

Benchmark and indicators Staff Staff productivity indicators Total staff per licensed vehicle Drivers per licensed vehicle Conductors per licensed vehicle Other traffic staff per licensed vehicle Maintenance staff per licensed vehicle Administrative and management staff per licensed vehicle Kilometers per employee per day Kilometers per driver per day Days worked per year per employee Affordability Measuring affordability Average fare paid per boarding Average monthly wage Percent of monthly wage for 50 average boardings Financial performance Cost recovery ratio

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Diagnosis : Not only a public transport problem but a lack of global strategy Damascus Governorate Establish PT routes network Administering the routes licenses Proper scale ? Larger that Governorate Public company 6 routes in Damascus 280 to 300 buses per day

Management of the traffic Free bus lanes in heavy demand corridors Car parkings LRT or BRT or metro

Global Strategy ? Private companies 10000 microbuses, which entered the market in 1991 Large market share and operated by individuals 100 routes

a Fin

g? n i nc

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Alternate strategies What is Our Strategy ? • Dedicated only to urban transport or integrating all modes including parking • One step only or 1st step in the scope of a global strategy

What are Our Objectives ? • Quality service objectives (existence of reliable time tables, travel time garanty, frequency of services, driving conditions, fare, safety), bus age, … • Enhanced operational efficiency (including maintenance) • Life Cycle Costing, • Leverage of Public Funds

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REFORM OBJECTIVES There are four main reasons for reforming a bus system. 1. City leaders decide that fundamental change is needed because the bus service is unsatisfactory. 2. Political decisions are made at a state or national level to introduce reform. 3. Reform is introduced in a city because the country is party to international agreements that require bus services to be provided in a different format. 4. Receiving international loans, domestic grants or domestic funding is dependent on accepting reforms.

Key reform objectives In all the above cases the objectives of reform are usually spelled out only in the broadest terms with perhaps just two or three key objectives being clearly specified. In recent years the key objectives in most cities have been : • Introducing competition for the right to supply bus services. • Creating a level playing field for this competition. • Clearly separating the operating function from the regulatory function. While these key objectives give a clear direction for reform, they leave considerable flexibility when it comes to bus system details. There are a wide range of operating structures to choose from.

Defining reform objectives It’s the responsibility of city public transport professionals to create a structure that meets the specific needs and objectives of the city while at the same time incorporating the reform objectives. The first step in this process, after assessing the current situation, is to define the city’s public transport objectives. Whether the need to reform is driven by internal political agendas or by external influences, the objectives may be grouped as: • Financial objectives • Operational or service objectives • Social objectives In many cases not all of the desired objectives will be achievable. Often some objectives will be incompatible with others or will be mutually exclusive. For example, the objective of reducing subsidies may be incompatible with the objective of keeping fares low. In fact, the types of fares charged and the average fare paid per passenger are fundamental considerations under any system reform. It will be necessary to prioritize your objectives. Prioritizing objectives is very useful in helping to determine the most appropriate bus system structure for your city.

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Define successive steps toward reform (within a coherent time frame) 2008 Institutional reforms Legal aspects

2009

2010

? To be changed on a yearly basis ?

New Management or EOT contact

New buses

Metro contact and implementation

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2012

New tariffs policy

New infrastructure (bus lanes)

2011

? Interactions

? BOT ?

2013

Example From BEOM feasibility study about a Public Transprt system for Damascus

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Example From BEOM feasibility study about a Public Transprt system for Damascus

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Give your best choice for allocation of responsibilities Urban authority (Steering commitee)

Regulatory Agency

New Operator PP Company

Private Co.

Definition of lines Information (time tables) Infrastructure (free bus lanes) Buses Tariffs policy Operation Maintenance Control of operations

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As each allocation represent a scenario, appraise its interest regarding your objectives Define criteria and do your appraisal mapping Urban authority (Steering commitee)

Regulatory Agency

New Operator

Private Co.

Your crireria

Sc1

Sc2

Sc3

Operational

Definition of lines

fFnancial

Information (time tables) Infrastructure (free bus lanes) Buses Tariffs policy

Scenario 1

Social objectives constraints Legal constraints

Operation Maintenance Control of operations

Criteria of private sector

Sc1

Opportunies/ Risks Benefits Constraints

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Sc2

Sc3

Possible allocations of responsibilities Urban authority (Steering commitee) Definition of lines

Buses

1st definition

Private Co.

Route licence ageement X

X (?)

X (1000) EOT

X (10000 minibuses)

X or GOD or MOT (roads) X? Management contract ?

Tariffs policy

New Operator PP Company

PT routes network

Information (time tables) Infrastructure (free bus lanes)

Regulatory Agency

Operation

Maintenance

Control of operations

X (?) External control

Quality procedures

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Project description • Passenger needs : Nb of trips (daily basis) on different subcontracted routes/lines • Definition of requested offer (nb of km, lines frequencies) • Description of subcontracted services : operation (bus driving), maintenance, information, ticket distribution, money collection and ticket control,… ? • Estimated cost of subcontracted services ? • Estimated revenues from clients • Options : Liberty for Tariffs policy or definition by the governorate or transport regulating agency, 01/02/13

Is that the final project ?

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Identify ÂŤ Tariffs covering operating costs Âť and define your subsidy policy

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Identify ÂŤ Tariffs covering operating costs Âť and define your subsidy policy Example From BEOM feasibility study about a Public Transprt system for Damascus

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Revenues/Expenses Computations (Excel table)

b To

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urb e y th b ed s o p pro

po s n tra

rt e p x rt e

PPP optionsâ&#x20AC;Ś

Works & Services Contracts

Management & Maintenance Contracts

Operation & Maintenance Concessions

Build Operate Transfer Concessions

High

Low Extent of private sector participation

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Full Privatization

PPP optionsâ&#x20AC;Ś Types of Contract

Asset Capital ownership Investment

O&M

Commercial Duration Risk (yrs)

Service Contract

Public

Private & Public

Public

1-2

Management Contract

Public

3-5

Lease

Public

Private

8-15

Concession

Public

Private

25-30

BOT / BOOT

Public & Private

Private

25-30

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Revenues/Expenses Computations (Excel table)

rt e p ex t r po act s n t a r n t o c n rba cted u the f sele y b o d m e r pos the fo o r e p g to b To ordin Acc

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CASE STUDY GUIDE Performance indicators. This table compares selected performance indicators for the cities The city problems. This table summarizes each of the city studies, identifying each problem issue and giving a reference to it in the source document, together with a summary of the diagnosed source of the problems, the actions already taken to confront it and the further reforms proposed to address it. The problem categories. This table collates the information on the basis of the different categories of problem identified, and brings together the different ways in which the problem has been addressed in different countries The reforms proposed.This table categorizes the information in terms of the types of reform proposed, setting out the actions already taken and the degree of success achieved. The influence of industrial structure. This table examines the relationship between the industrial structure in the different cities and the types of problems arising. 01/02/13

Choose the TOR among existing PPP contracts In transition countries

Developped countries

Accra

Copenhaguen

Addis Ababa

Helsinki

Bangkok

Oslo

PPP contacts Bid for tenders

Bogota Chennai Dakar Hanoi Recife Santiago Sri Lanka 01/02/13

Content of the Contract Section One: Standard Conditions of Contract Part 1 Preamble, introduction of parties, definitions Part 2 Duration of contract, effective date Part 3 Description of the work – reference to Schedules 1, 2 Part 4 Description of the obligations of the Operator – reference to Schedules 3, 4 Part 5 Payment basis – reference to Schedules 5 and 6 Part 6 Obligations of the City Part 7 Reporting requirements, rights to information, access, monitoring, inspection Part 8 Mechanisms for review, notification of unsatisfactory performance, requirements for corrective action, warnings, intervention, replacement Part 9 Mechanisms for changes to schedules of work and associated payments Part 10 Mechanisms for roll-over of contract Part 11 Termination of contract Part 12 Settling of disputes Section Two: Schedule of attachments defining the specific conditions applicable to route or service [Details of the name, number, identifier of route or service] Schedule 1 Specification of the Route to be Operated and the Level of Service to be provided Schedule 2 Minimum Vehicle Capacity and/or Vehicle Specification Schedule 3 Specification of Standard Tariffs to be applied Schedule 4 Monitoring of Service Performance and compliance with revenue collection and tariff procedures Schedule 5 Calculation of any Service Support Payments payable to the operator for the satisfactory operation of the contracted services

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TABLE OF CONTENTS 1

PURPOSE AND SCOPE OF THIS DOCUMENT ..................................................... 6 1.1 1.2 1.3

EXECUTIVE SUMMARY.......................................................................................... 8 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11

CONTEXT ............................................................................................................. 16 INTENDED APPLICABILITY OF THIS REPORT........................................................... 17 TRANSPORT SERVICES CONTRACTS ......................................................................17 SCOPE OF CONTRACTED TRANSPORT SERVICES .................................................... 18 CONTEXT OF COMPETITIVE TENDERING ............................................................... 19 CLIENT-SUPPLIER RELATIONSHIP ......................................................................... 20 ALLOCATION OF RISK........................................................................................... 21 GROSS-COST AND NET-COST CONTRACTS............................................................ 23 ADMINISTRATIVE STRUCTURES AND PROCEDURES ............................................... 24 CONTRACT MANAGEMENT ................................................................................... 25 SPECIFICATION OF ROLES ..................................................................................... 27 DEFINING THE SCOPE OF TRANSPORT SERVICES ................................................... 27 ALLOCATION OF INITIATIVE ................................................................................. 28 QUALITY IMPROVEMENTS .................................................................................... 29

DESIGN OF CONTRACTS ...................................................................................... 31 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10

CONTRACT PHILOSOPHY ...................................................................................... 31 CONTRACT DESIGN .............................................................................................. 31 CONTRACT STRUCTURE........................................................................................ 32 EXAMPLES OF STANDARD CONTRACT AND SCHEDULES........................................ 33 SUB-CONTRACTING OF SERVICES .......................................................................... 35 FORCE MAJEURE ..................................................................................................36 TERMINATION ......................................................................................................36 AUTOMATIC RENEWAL AND CONTRACT ROLL-OVER ............................................ 37 BONDS AND FORFEITURE ...................................................................................... 38 ARBITRATION AND DISPUTES ................................................................................ 39

OPERATIONS MANAGEMENT ................................................................................ 49 PARTICIPATION IN CUSTOMER-FACING SERVICES ................................................. 49 BRAND IDENTITY .................................................................................................50 FITTING OF EQUIPMENT ........................................................................................ 50 REVENUE PROTECTION ACTIVITIES ....................................................................... 51 ACCESSIBILITY REQUIREMENTS ........................................................................... 52 ENVIRONMENTAL REQUIREMENTS ....................................................................... 52 INSURANCE .......................................................................................................... 53 LICENCES ............................................................................................................. 53 CERTIFICATION ....................................................................................................53 REQUIREMENT TO NOTIFY .................................................................................... 54 ENTITLEMENT TO INSPECT.................................................................................... 54

CONTRACT MANAGEMENT ................................................................................ 55 8.1 8.2 8.3 8.4 8.5

PAYMENT BASES ..................................................................................................43 BONUSES AND PENALTIES ..................................................................................... 44 GROSS COST AND NET COST PAYMENTS............................................................... 45 REVENUE SHARING AGREEMENTS ........................................................................46 MONEY FLOWS .....................................................................................................47 PAYMENT TIMING .................................................................................................48 RETENTIONS......................................................................................................... 48

OPERATIONAL MATTERS.................................................................................... 49 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12

CLIENT-SUPPLIER RELATIONSHIP................................................................... 27 4.1 4.2 4.3 4.4

CONTEXT ............................................................................................................... 8 TRANSPORT SERVICE CONTRACTS..........................................................................8 ESTABLISHING THE CLIENT-SUPPLIER RELATIONSHIP.............................................9 ALLOCATION OF RISK........................................................................................... 10 ALLOCATION OF INITIATIVE ................................................................................. 11 CONTRACT MANAGEMENT ................................................................................... 12 CONTRACT PHILOSOPHY AND DESIGN ................................................................... 13 CONTRACT STRUCTURE........................................................................................ 14 EXAMPLES OF STANDARD CONTRACT AND SCHEDULES........................................ 14 GUIDANCE ON TECHNICAL ASPECTS OF DESIGN OF THE CONTRACT ..................... 15 CLOSING REMARK................................................................................................ 15

APPROACH TO TRANSPORT SERVICE CONTRACTS .................................... 16 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10

6.3 6.4 6.5 6.6 6.7 6.8 6.9

ORIGINS OF THE DOCUMENT................................................................................... 6 REFORM OF UPT IN THE ECA REGION ....................................................................6 STRUCTURE OF THIS REPORT .................................................................................. 7

INFORMATION FLOWS ........................................................................................... 55 REPORTING REQUIREMENTS ................................................................................. 55 MONITORING PERFORMANCE ............................................................................... 56 CONTRACT ADMINISTRATION ............................................................................... 57 CONTRACT MANAGEMENT AND ENFORCEMENT MECHANISMS ............................. 58

EXECUTIVE SUMMARY OF ADMINISTRATIVE PROCEDURES REPORT ..59

9.1 CONTEXT ............................................................................................................. 59 9.2 THE CORE TASKS OF THE COMPETITIVE TENDERING CYCLE .................................60 9.3 KEY DECISIONS FOR THE TRANSPORT AUTHORITY ................................................ 60 9.4 FLOW CHART OF THE PROCESS.............................................................................. 62 9.5 Guidance on Competitive Tendering Processes 63

OUTPUT DEFINITION AND PAYMENTS ............................................................ 40 6.1 6.2

SPECIFICATION OF THE SERVICE OUTPUTS ............................................................ 40 SPECIFICATION OF THE SERVICE QUALITY ............................................................ 43

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