References

Although permits and licenses are often found in systems with sparse monitoring or regulation, their legal nature is best used by authorities with the capacity to enforce them. A concession contract is an administrative act through which the authority confers on a natural or legal person the temporary provision of a public service, using assets in the public or private domain. In practice, however, private operators use these very same assets through permits or licenses (and, in some cases, without even them).

Authorizations

Authorizations (permits or licenses) may provide the legal framework needed to enable a transportation authority to establish, monitor, and enforce an efficient level of service. Key factors include whether permits or licenses include a definition of requirements, levels and conditions of service, and obligations. To meet broader objectives, not only should authorizations provide for a minimum level and quality of service, but the transportation authority should also have the capacity to monitor and enforce compliance effectively.

Instruments complementing authorizations

Where authorities seek to promote sectoral reorganization to ensure a more efficient provisioning of services, permits and licenses may be used in combination with other instruments. Permits and licenses are usually associated with an atomized market structure. But aggregated planning, operation, or fare collection may be included as a requisite for obtaining a permit or license. This requirement can be supported by legal instruments implemented by the private or public sector (depending on local regulations), such as business collaboration agreements. For example, being party to such an agreement may be among the obligations or requirements for obtaining or maintaining a license or permit (see appendix A for the example of Medellín).

Many of these examples can effectively advance the objective of greater urban mobility. The solutions described in this chapter are relatively simple, localized solutions that are completely independent of PPPs.

REFERENCES

Behrens, R., D. Mccormick, and D. Mfinanga. 2015. Paratransit in African Cities: Operations,

Regulation, and Reform. New york: Routledge. eros, e., s. Mehndiratta, c. Zegras, K. Webb, and M. c. Ochoa. 2014. “Applying the General

Transit Feed specification to the Global south: experiences in Mexico city, Mexico—and

Beyond.” Transportation Research Record 2442 (1): 44–52. Gómez-lobo, Andrés, and Guillermo Muñoz. 2019. “Medium-sized cities BRTs—Technical

Assistance colombia.” Project ID: P166117. World Bank, Washington, Dc. Hoyos Guerrero, A. 2019. “Diagnosis and Recommendations: executive summary

Medium-sized cities BRTs—Technical Assistance—colombia.” Project ID: P166117. World

Bank, Washington, Dc. http://documents.worldbank.org/curated/en/789621553760806281 /pdf/Diagnosis-and-Recommendations-executive-summary.pdf.

Mehndiratta, s., and c. Rodriguez. 2017. “From Nairobi to Manila, Mobile Phones Are changing the lives of Bus Riders.” World Bank, Washington, Dc. https://medium.com/world-of -opportunity/from-nairobi-to-manila-mobile-phones-are-changing-the-lives-of-bus -riders-f36adc387925.

Williams, s., A. White, P. Waiganjo, D. Orwa, and J. Klopp. 2015. “The Digital Matatu Project: using cell Phones to create an Open source Data for Nairobi’s semi-Formal Bus system.”

Journal of Transport Geography 49 (December): 39–51.

4

Minimum Requirements to Consider for a Public-Private Partnership

Understanding the common elements of urban bus reforms that have successfully structured public-private partnerships (PPPs) is critical. A careful review of these critical elements will help planners to identify whether their specific conditions match those required to enable such a delivery model. The key elements of a PPP may be grouped into three categories:

• Technical elements. The project must be aligned with its primary objective— that is, improving the welfare of potential users of public transportation. To that end, the technical structure of the project must respond to contextual conditions, including trends in demand and existing services. A reform that does not improve service (by, among other things, reducing the generalized cost of travel, GCT) not only will fail to achieve the core objective of improving mobility but also will suffer from low demand, leading to low operating revenue and financial sustainability problems. This situation is especially true in a context of growing motorization and competition from new alternatives to public transportation. The scope and nature of proposed technical solutions are key to understanding whether a PPP is the best delivery model. • Institutional and regulatory elements. To succeed, any PPP needs an enabling environment, which means a sound legal framework that provides legal certainty. In addition, the authority responsible for managing the PPP must have the capacity to monitor the contracts and fulfill all the responsibilities assigned to it under the PPP structure. • Fiscal capacity. Subsidizing public transportation is a necessity in most city systems with a certain level of formalization. However, the amount of these subsidies is considerably lower than the resources allocated to general transportation infrastructure that, in effect, subsidize the use of private vehicles.

Very few bus rapid transit (BRT) trunk corridors have positive net operating revenues; among feeder services, positive operating revenue is even more rare. As bus systems—whether conventional or BRT or operated by the public or the private sector—expand to include less profitable routes, a subsidy is almost inevitable,1 assuming that the public sector provides the infrastructure. Therefore, the public sector must have enough fiscal capacity to provide infrastructure and subsidize operations.