regulatory frameworks and legislation in public transport transparencies 2003 eu-funded urban...

REGULATORY FRAMEWORKS AND LEGISLATION IN PUBLIC TRANSPORTREGULATORY FRAMEWORKS AND LEGISLATION IN PUBLIC TRANSPORT

Transparencies 2003

EU-funded Urban Transport Research Project Results

www.eu-portal.net

TRANSPORT TEACHING MATERIAL

REGULATORY FRAMEWORKS AND LEGISLATION IN PUBLIC TRANSPORT

MODULE 1 DEFINITIONINTRODUCTION TO LEARNING MATERIALS

KT Regulatory framework of public transport contains:

• legal and

• organisational aspects

Transparency, efficiency and quality are the keys for a friendly and efficient PT.

• The co-existence of authorities and operators, the necessary allocation of responsibilities sharing of risks as well as co-ordinated ”pull” and ”push” measures are other crucial issues


The following EU-objects served as key sources for this KT:

SOURCES

• ISOTOPE (improved structure and organisation for transport operations of passengers in Europe)

• MARETOPE (managing and assessing regulatory evolution in local public transport operations in Europe)

• QUATTRO (quality approach in tendering urban public transport operations)


Short description of the national differences in the following parts of Europe.

The following categories of financing can be distinguished:

Capital cities regions are often approached in a different manner than rest of the country.

NATIONAL DIFFERENCES

• UK

• Western Europe

• Central Europe


MODULE 2

Structure of presentation

• Definition

• Sources

• Right of initiative

• Levels of planning and control in PT

• Contractual relationships between actors

• Quality assurance in PT

• Financing and subsiding

• Differences and Examples


RIGHT OF INITIATIVE• competition on the road (UK) market initiative

• competition off the road (very common throughout the EU) authority initiative

Source: MARETOPE

Organisational forms

Public system

Conces-sion

Authorisa-tion

Open entry

Authority initiative

Delegated management

Public management

Dominated by public companies)

Dominated by private companies)

Note!Tendering of the realization is possible in all models!

Market initiative


RIGHT OF INITIATIVE

The market initiative regimes have as common characteristic that commercially viable services are meant to appear out of autonomous market processes.

Authority initiative regimes have as common characteristic that services can only result from a conscious action by the authority. As such no services can appear as result of simple market forces as no legal provision makes such autonomous entry possible.


Public system

Conces-sion

Authorisa-tion

Open entry



Publicmanagement


Dominated by privatecompanies)

Note!Tendering of the realization is possible in allmodels!

Market initiative


Public system

Conces-sion

Authorisa-tion

Open entry



Publicmanagement


Dominated by privatecompanies)

Note!Tendering of the realization is possible in allmodels!

Market initiative


.

It is important to state that few real-world examples will fully correspond to any of these theoretical organisational forms. Normally it is a blurry blend of several forms

Source: MARETOPE



Pu

blic m

anag

em

ent

...

Cen

tral plan

nin

g &

ou

t-so

urcin

g

...

Dele

gate

d m

anag

emen

t

...

Co

ncessio

n

Perp

etual exc

lusive au

tho

risation

... Tem

po

rary exclus

ive au

tho

risation

...

Tem

po

rary no

n-e

xlusive au

tho

risatio

n

...

Op

en en

try

Market initiative


MODULE 3

Source: MARETOPE



Co

ncessio

n

...

Deleg

ated m

anag

emen

t

...

Cen

tral plan

nin

g &

ou

t-so

urcin

g

...

Pu

blic m

anag

emen

t

Co

ncessio

n

...

Deleg

ated m

anag

emen

t

...

Cen

tral plan

nin

g &

ou

t-so

urcin

g

...

Pu

blic m

anag

emen

t

Op

en en

try

...

Tem

po

rary no

n-exlu

sive au

tho

risation

...

Tem

po

rary exclusive

auth

orisatio

n

...

Perp

etual exclu

sive au

tho

risation

Op

en en

try

...

Tem

po

rary no

n-exlu

sive au

tho

risation

...

Tem

po

rary exclusive

auth

orisatio

n

...

Perp

etual exclu

sive au

tho

risation

Market initiative


LEVELS OF PLANNING AND CONTROL IN PT

Source: MARETOPE

Level

General description

Decision

General goals: transport policymarket shareprofitability

General description of the services: area

target groupsintermodality

Detailed service characteristicsfaresimage

additional services

vehiclesroutes

timetable

Salesselling activities

information to the public…

Productioninfrastructure managementvehicle rostering and maint.

personnel rostering and mngt.

Strategic What do we want to achieve?

Long term (5 year)

Tactical Which services can help to achieve these aims?

Medium term (1-2 year)

Operational

Short term (1-6 months)

How to produce these services?

„Software

„Hardware“


EXAMPLE: TENDERING OF THE DESIGN AND REALISATION (CONCESSIONING)

The freedom of operators is limited by the minimum standards defined by the concessioning agency which organises the tendering of all services, area-wise, according to the instructions of the transport authority.

Source: MARETOPE

In many cases decisions pertaining to one topic, such as fares or routes, will not be attributed totally to soley one actor.

Transport Authority

Politicalcouncil

TransportDepartment

Tenderingorganisation

Independant Organisation

“The People” Transporters

Private companies

Strategic

Tactical

Operational

Actor

Transp. Pol.

((discussion)Social pol.

Relation

Mobil. Std.Accessib. Std.

(Min.std.)

((discussion)

Translation

TimetableVehicle type

Routes

(Min.std.)((Min.std.)

(Min. std .)(Mid. std .)

(Min.std.) Fares

Sale

Person. Mngt.Vehicle Mngt.

Information

Com

petitive tendering

Democratical control

Contract with tenderung organisation

InstructionsHierarchical control

Transport Authority

Politicalcouncil

TransportDepartment

Tenderingorganisation



Private companies

Strategic

Tactical

Operational

Actor

Transp. Pol.


Relation


(Min.std.)

((discussion)

Translation


Routes



(Min.std.) Fares

Sale


Information

Com

petitive tendering





Source: MARETOPE

Transport Authority

Politicalcouncil

TransportDepartment

Tendering organisation



Private companies

Strategic

Tactical

Operational

Actor

Transp. Pol.


Relation


(Min.std.)

((discussion)

Translation


Routes



(Min.std.) Fares

Sale


Information

Com

petitive tendering





Contracts in the public transport world usually divide between production cost risks and revenue risks. Risks can be shared in various ways implying many intermediate forms of contracts are thinkable as can be seen in the shaded boxes.

MODULE 4: CONTRACTUAL RELATIONSHIP BETWEEN ACTORS

Source: MARETOPE

Production risk borne by

Authority Operator

Operator

AuthorityR

even

ue ri

sk b

orne

by

ManagementContract

(M)

Gross CostContract

(GC)

Net CostContract

(NC)

M withProductivityincentives

M withproductivity and

revenue incentives

M withRevenueincentives

GC with Shared

production risk

GC withRevenueincentives

NC withshared revenue and

production risk

NC withShared

revenue risk

NC withShared

production risk

GC withrev. incentives andshared prod. risk


Authority Operator


Authority Operator

Operator

AuthorityR

even

ue ri

sk b

orne

by

Operator

AuthorityR

even

ue ri

sk b

orne

by

ManagementContract

(M)

Gross CostContract

(GC)

Net CostContract

(NC)

M withProductivityincentives

M withproductivity and

revenue incentives

M withRevenueincentives

GC with Shared

production risk

GC withRevenueincentives


production risk

NC withShared

revenue risk

NC withShared

production risk

GC withrev. incentives andshared prod. risk


Source: MARETOPE


Authority Operator

Operator

Authority

Rev

enue

risk

bor

ne b

y

Management Contract

(M)

Gross Cost Contract

(GC)

Net Cost Contract

(NC)

M with Productivity incentives

M with productivity and

revenue incentives

M with Revenue incentives

GC with Shared

production risk

GC with Revenue incentives


production risk

NC with Shared

revenue risk

NC withShared

production risk

GC with rev. incentives and shared prod. risk


CONFLICT TYPES

There are internal (industrial relations) and external (between an authority and an operator) and will vary in their magnitude of importance.

Contracts should include provision for remedy covering all the risks that may be foreseen at the outset. Flexibility is one important part to guarantee a sustainable service which can cope with future challenges.

Source: ISOTOPE

FinanceResponsabilities

CONFLICTTYPES

Objectives to Reach

Fare Policy Perfomance Other


The figure presents possible combinations of public or private ownership with public or private management indicating different types of contracts between government and state-owned enterprises, private managers of state assets and private monopoly, respectively.

Ownership

Public Private

Private

Public

Managem

ent

Public management(wb: Performance contract)

Private concession(wb: Regulatory contract)

Delegated management(wb: Management contract)

OWNERSHIP VERSUS USAGE

Source: MARETOPE


Private

Public

Man

agem

ent

Public management(wb: Performance contract)

Private concession(wb: Regulatory contract)

Delegated management(wb: Management contract)

Ownership

Public Private

Source: MARETOPE


In the context of tendering, decision making at the tactical level can be organised.

FIXED VERSUS FLEXIBLE PLANNING

• prior to the contracting out and operators have no tactical powers (London, Copenhagen)

• (prior to the contracting out and operators have some tactical powers (Helsingborg, Sundsvall)

• during the contracting out (Netherlands, France) simultaneously with the contracting out of the operational level

• during the contracting out not simultaneously with the contractingout of the operational level


These various forms are ordered in into four main options for the place of the tactical (T) decisions.

FIXED VERSUS FLEXIBLE PLANNING

Source: MARETOPE

T Determined prior to

contracting/tendering

T Determined During

contracting/tendering

T Fixed Duringcontract

T Changes During contract

Contracting/tendering of:

The Development and the realisation with redevelopment incentives.


the realisation with redevelopment incentives.


The Development and the realisation


the realisation


Quality loop

The quality loop is based on four distinctive benchmarks:

Analysing differences between these four benchmarks (see figure 11) help decision-makers to improve their service.

MODULE 5 QUALITY ASSURANCE

Source: MARETOPE (on the basis of QUATTRO),

Provider Customer

Word-of-mouth

Personal needs

Past experience

Competitive alternatives

PerceivedExpectationof quality

Gap 1Gap 2

Gap 3

Gap 5Gap 4Statedquality

Realisedquality

Expectedquality

Perceivedquality

Plannedquality

Gap 6

Provider Customer

Word-of-mouth

Personal needs

Past experience


PerceivedExpectationof quality

Gap 1Gap 2

Gap 3

Gap 5Gap 5Gap 4Statedquality

Realisedquality

Expectedquality

Perceivedquality

Plannedquality

Gap 6


Source: MARETOPE (on the basis of QUATTRO)

Provider Customer

Word-of-mouth

Personal needs

Past experience


Gap 1Gap 2

Gap 3

Gap 5Gap 4

Realised quality

Expectedquality

Perceived quality

Planned quality

Gap 6

MODULE 5

Quality loopPerceived

Expectationof quality

Stated quality


The contract should specify:

CONTRACT DESIGN

• objectives of continuous improvement

• tools and responsibilities, including measurement and/or monitoring programs

• consequences of the measures, including financial incentivesand/or penalties

• control of these results

• recourse procedure in the case of non application of the contract


CONTRACT DESIGN

• Transport (including access/exit by users)

• Connections (inside UPT/with other modes)

• Information to customers (static/real time)

• Fares and sales system

• Environmental impact (in a broad sense)

This specification of services should stimulate operators and authorities to cover all operational/tactical fields of interest by the continuous improvement system:


MODUL 6 INTEGRATIONThe contract should specify:

• Logical integration

• Physical integration

• Traffic integration

Continuous improvement

By ”continuous improvement” of urban public transport, we consider the need for continuous adjustment of the service design and of the organisation in charge of providing the service, in order to maintain or increase its value. Innovation in service and management is generated by continuous improvement systems.


FINANCING AND SUBSIDING

Pricing and financing in Urban Transport are closely related concepts since the level of prices determines the self-financing capacity, and consequently the need for subsidies.

The following categories of financing can be distinguished:

• Transport users contributions

• Contributions from public sources and public companies

• Contributions from other beneficiaries

• Private sources

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