n/e/r/a - DTTAS Department of Transport, Tourism And · PDF fileMODELS FOR THE PROVISION, REGULATION AND INTEGRATION OF PUBLIC TRANSPORT SERVICES A Final Report for the Public Transport

MODELS FOR THE PROVISION,REGULATION AND INTEGRATION

OF PUBLIC TRANSPORTSERVICES

A Final Report for the PublicTransport Partnership Forum

Prepared by NERAand TIS.PT

July 2001London

Project Team

NERAJohn DodgsonEmma Kelso

Jan Peter van der VeerNicola Tully

TIS.PTProfessor José Viegas

Rosário MacárioManolo de la Fuente

n/e/r/aNational Economic Research AssociatesEconomic Consultants

15 Stratford PlaceLondon W1N 9AFTel: (+44) 20 7659 8500Fax: (+44) 20 7659 8501

Web: http://www.nera.comAn MMC Company

Av. 5 de OutubroNo 75 – 71050 Lisbon, PortugalTel: (+351) 21 359 30 20Fax: (+351) 21 359 30 21

Web: www.tis.pt

TABLE OF CONTENTS

EXECUTIVE SUMMARY i

1. INTRODUCTION 11.1. The Scope of this Report 11.2. A Note on Currencies 2

2. CRITERIA FOR EVALUATION 32.1. Introduction 32.2. Economic Criteria 42.3. Service Quality Criteria 62.4. Integration Criteria 72.5. Social Cohesion 82.6. Dealing with Change 82.7. Economic Growth 92.8. Environmental Criteria 10

3. IRELAND’S CURRENT SITUATION 113.1. Dublin 113.2. Other Irish Cities 19

4. CITY STUDY: ADELAIDE 284.1. Key Facts 284.2. City Description 284.3. Institutional/Regulatory Framework 294.4. Performance against Criteria for Evaluation 314.5. Summary of Performance Against Criteria 464.6. Adelaide “Scorecard” 48

5. CITY STUDY: COPENHAGEN 495.1. Key Facts 495.2. City Description 495.3. Institutional/Regulatory Framework 505.4. Performance Against Criteria for Evaluation 545.5. Summary of Performance Against Criteria 685.6. Copenhagen “Scorecard” 70

6. CITY STUDY: ÉVORA 716.1. Key Facts 716.2. City Description 716.3. Institutional/Regulatory Framework 726.4. Performance Against Criteria for Evaluation 736.5. Summary of Performance Against Criteria 83

6.6. Évora “Scorecard” 84

7. CITY STUDY: LYON 857.1. Key Facts 857.2. City Description 857.3. Institutional/Regulatory Framework 867.4. Performance against Criteria for Evaluation 897.5. Summary of Performance Against Criteria 1007.6. Lyon “Scorecard” 102

8. CITY STUDY: MANCHESTER 1038.1. Key Facts 1038.2. City Description 1038.3. Institutional/Regulatory Framework 1058.4. Performance Against Criteria for Evaluation 1138.5. Summary of Performance Against Criteria 1288.6. Manchester “Scorecard” 129

9. CITY STUDY: PRESTON 1309.1. Key Facts 1309.2. City Description 1309.3. Institutional/Regulatory Framework 1319.4. Performance against Criteria for Evaluation 1359.5. Summary of Performance Against Criteria 1469.6. Preston “Scorecard” 147

10. CITY STUDY: THE HAGUE 14910.1. Key Facts 14910.2. City Description 14910.3. Institutional/Regulatory Framework 15010.4. Performance against Criteria for Evaluation 15710.5. Summary of Performance Against Criteria 16810.6. The Hague “Scorecard” 170

11. CITY STUDY: TORONTO 17111.1. Key Facts 17111.2. General Description 17111.3. Institutional/Regulatory Framework 17311.4. Performance against Criteria for Evaluation 17911.5. Summary of Performance Against Criteria 19911.6. Toronto “Scorecard” 200

12. CITY STUDY: ZURICH 20112.1. Key Facts 20112.2. City Description 201

12.3. Institutional/Regulatory Framework 20212.4. Performance Against Criteria for Evaluation 20512.5. Summary of Performance Against Criteria 21512.6. Zurich “Scorecard” 216

13. STRENGTHS AND WEAKNESSES OF THE MODELS 21713.1. Adelaide 21713.2. Copenhagen 21813.3. Évora 21813.4. Lyon 21913.5. Manchester 22013.6. Preston 22013.7. The Hague 22113.8. Toronto 22213.9. Zurich 223

14. CONCLUSIONS 22414.1. Introduction 22414.2. Responsibility for Public Transport Services 22514.3. Provision of Bus Services 22814.4. Provision of Rail-Based Modes (Light Rail and Heavy Rail) 23714.5. Achieving Transition 238

APPENDIX A. SOURCES AND INTERVIEWS 241A.1. Dublin 242A.2. Regional Irish Cities 244A.3. Adelaide 245A.4. Copenhagen 246A.5. Évora 247A.6. Lyon 248A.7. Manchester 249A.8. Preston 250A.9. The Hague 251A.10. Toronto 252A.11. Zurich 255A.12. Conclusions 257

REF: Anne Mace/2/17-7-01/F:\ANNE.MACE\MSOFFICE\WINWORD\NERA 2001\FINAL REPORT_170701.DOC

LIST OF TABLES

Table 3.1 Transport Modal Splits in Dublin (%) 12Table 3.2 Dublin Bus Patronage 1987-2000 13Table 3.3 Development of Bus Fares in Dublin, 1986 to 2000 14Table 3.4 Bus Kilometres in Dublin, 1995-2000 14Table 3.5 DART Service Patronage 15Table 3.6 Bus Revenue in Dublin, 1997-2000 15Table 3.7 Bus Costs and Revenues per Vehicle Kilometre and Passenger Journey in Dublin, 1995-2000 15Table 3.8 DART Costs and Revenues per Train km and per Passenger Journey 1995-1999 16Table 3.9 Bus Éireann Provincial City Passenger Journeys 21Table 3.10 Weekly Bus Use in Galway 21Table 3.11 Patronage on Cork – Cobh Suburban Rail Line 22Table 3.12 Method of Travel to Work Used by Cork City Residents, 1991 22Table 3.13 Bus Éireann Fare Levels in Regional Irish Cities 22Table 3.14 Bus Éireann Provincial City Bus Kilometres 23Table 3.15 Bus Éireann Provincial City Finances 24Table 3.16 Cost per Vehicle Kilometre and Passenger Journey in Bus Éireann Provincial Cities 24Table 3.17 Services Departing on Bus Éireann Service 5W from Galway Eyre Square to Rahoon on Weekdays from 08:00 to

12:00 27Table 4.1 Modal Splits for Journeys to Work in the City of Adelaide 1986 to 1996 32Table 4.2 Patronage Figures 1988/9 – 1998/9 (millions) 33Table 4.3 Metro Adelaide Public Transport Fares (as of 1st July 2001). 34Table 4.4 Adelaide Performance Against Criteria 47Table 4.5 Adelaide Summary “Scorecard” 48Table 5.1 General Data Copenhagen 49Table 5.2 The Members of the HUR 51Table 5.3 Principal Bus Operators in Copenhagen, May 2001 53Table 5.4 Bus Passenger Traffic in Copenhagen, 1990 to 2000 55Table 5.5 Ticket Prices in Copenhagen 1997-2002 56Table 5.6 Bus Production Data in Copenhagen, 1990-2000 58Table 5.7 HUR/HT Revenue and Costs, 1998, 1999 58Table 5.8 Operator’s Scores on Concessions 62Table 5.9 Copenhagen Performance Against Criteria 69Table 5.10 Copenhagen Summary “Scorecard” 70Table 6.1 Modal Split in 1999 and 2000 73Table 6.2 Information About the Buses Used in Évora 75Table 6.3 Costs of the System 76Table 6.4 Income 76Table 6.5 Total Personnel Costs (€) 81Table 6.6 Évora Performance Against Criteria 83Table 6.7 Évora Summary “Scorecard” 84Table 7.1 Public and Private Transport Modal Split, 1986 and 1995 89Table 7.2 Public Transport Patronage in Lyon, 1998-1999 90Table 7.3 Prices of Key Tickets 91Table 7.4 Operational Details of Lyon Bus System 92Table 7.5 Operational Details of Lyon Metro System 92Table 7.6 Revenue and Costs of Lyon Public Transport System 93Table 7.7 Lyon Farebox Revenue, 1996-1999 93Table 7.8 Prices for Interurban Monthly Tickets 97Table 7.9 Lyon Performance Against Criteria 101Table 7.10 Lyon Summary “Scorecard” 102Table 8.1 Annualised Bus Vehicle Kilometres of 20 Largest Operators 107Table 8.2 Greater Manchester Bus Patronage 1986-2000 114Table 8.3 Metrolink Patronage 1993-1998 114Table 8.4 Development of Bus Fares in Greater Manchester, 1986-1998 115Table 8.5 Bus Kilometres in Greater Manchester, 1986-1998 116Table 8.6 Bus Revenue and Support in Greater Manchester, 1986-1997 117Table 8.7 Operating Costs and Vehicle Kilometres of the Two Largest Bus Operators 117Table 8.8 Costs per Vehicle Kilometre and Passenger Journey in English Metropolitan Areas (excluding London) 118

Table 8.9 Performance Data for Rail Services into Greater Manchester 119Table 8.10 Examples of Travelcard Prices in Greater Manchester 121Table 8.11 Earnings and Hours per Week Worked by Industry 126Table 8.12 Manchester Performance Against Criteria 128Table 8.13 Manchester Summary “Scorecard” 129Table 9.1 Modal Splits in Preston and Lancashire (Travel to Work), 1991 135Table 9.2 Indicative Preston Bus Fares 136Table 9.3 Preston Bus Rambler Tickets 136Table 9.4 Satisfaction with Bus Services in Preston 140Table 9.5 Preston Performance Against Criteria 147Table 9.6 Preston Summary “Scorecard” 148Table 10.1 Haaglanden Modal Split, 1998 157Table 10.2 HTM Tram Patronage 1992-2000 157Table 10.3 HTM Bus Patronage 1992-2000 158Table 10.4 Current Fare Levels in National Fare System 159Table 10.5 Tram and Bus Kilometres and Staff Numbers in The Hague, 1992-2000 160Table 10.6 Paying Travellers on HTM 160Table 10.7 HTM Financial Details 1998-1999 161Table 10.8 Customer Satisfaction among HTM Passengers 163Table 10.9 The Hague Performance Against Criteria 169Table 10.10 The Hague Summary “Scorecard” 170Table 11.1 Modal Splits for Toronto : 1996 180Table 11.2 Modal Splits on Specific Screen Lines during the Morning Peak 180Table 11.3 TTC Total Passenger Journeys (millions) 181Table 11.4 TTC fares (from 3rd June 200) 182Table 11.5 TTC Adult Single Fare 1990 to 2000 182Table 11.6 Sample GO Transit Fares (March 2001) 183Table 11.7 Kilometres Operated 1990 to 1999 (millions) 184Table 11.8 TTC’s Revenue-Cost Ratio 185Table 11.9 TTC Operating and Capital Subsidies (millions, 2001 prices) 186Table 11.10 TTC Acceptable Maximum Hour Average Vehicle Loads 190Table 11.11 TTC Employment and Wages 196Table 11.12 Toronto Performance Against Criteria 199Table 11.13 Toronto Summary “Scorecard” 200Table 12.1 Bus and Rail Patronage in Zurich on an Average Day (000) 205Table 12.2 Public Transport Patronage in the City of Zurich 206Table 12.3 Summary of Key ZVV Fares 206Table 12.4 VBZ Route Network in the City of Zurich 207Table 12.5 Public Transport Services in Canton of Zurich (1999/00) 207Table 12.6 ZVV Revenues and Costs, 1991/92-1999/00 (€, millions) 208Table 12.7 Zurich Performance Against Criteria 215Table 12.8 Zurich Summary “Scorecard” 216

LIST OF FIGURES

Figure 2.1 Criteria for Evaluation 4Figure 5.1 The Current HUR Organisation 51Figure 5.2 Fare Levels 56Figure 5.3 Per cent of Low Floor Buses in Copenhagen 60Figure 5.4 Passenger Rating of Bus Service Quality 62Figure 6.1 Map of Public Transport Routes in Évora 78Figure 7.1 Links between the City, the Département, SYTRAL and SLTC 86Figure 10.1 Changes in Funding and Governance Arrangements 151Figure 11.1 TTC Service Area 173Figure 11.2 GO Transit’s Service Area 174Figure 12.1 ZVV Organisation Scheme 204

Executive Summary

i

EXECUTIVE SUMMARY

The Scope of the Study and the Structure of the Report

Proposals to reform public transport in Ireland have been published in the Government’sConsultation Paper A New Institutional and Regulatory Framework for Public Transport.This report has been prepared by NERA (National Economic Research Associates) andTIS.PT to inform the Public Transport Partnership Forum of the alternative ways in whichpublic transport services are organised in different selected cities around the world. The aimof this exercise was to assist the Forum in making a formal statement of its views in responseto the Consultation Paper.

The report identifies the relevant criteria by which transport services in a city should bejudged. The project team also selected, in co-operation with the Forum, a set of key cities fordetailed study. The set, which consists of Adelaide (Australia), Copenhagen (Denmark),Evora (Portugal), Lyon (France), Manchester (England), Preston (England), The Hague(Netherlands), Toronto (Canada) and Zurich (Switzerland), was chosen to be representativeof the wide range of approaches to public transport that have been used in recent years.

The project team undertook detailed investigations of each of these cities, and the results ofthese are set out in individual city chapters, with discussion organised around the criteriafor evaluation. For each city we summarise the advantages and disadvantages of theapproach used in a series of scorecards, while we also summarise key aspects of each city’sperformance in regard to the criteria.

The report then draws our conclusions about the lessons from experience in the selectedcities for the way in which urban public transport services might be reformed in Ireland.

Criteria for Urban Transport Services

Chapter 2 of the report sets out the evaluation criteria agreed with the Forum for use in thisstudy. These criteria for evaluation were then used to assess the strengths and weaknessesof the different urban transport models considered.

The criteria (though not necessarily in order of importance) are:

• Economic criteria, consisting of efficient use of the transport system, efficientoperation of the public transport system, and value for money, including level ofsubsidy in terms of cost recovery;

• Service quality criteria, including average speed, frequency, reliability andovercrowding;

• Integration criteria, including physical integration, integration of tariffs, integratedprovision of information, and integration with land use planning;

Executive Summary

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• Social cohesion, including accessibility and affordability of services to the elderly,those with disabilities, and those on low incomes;

• Ability to deal with change, including both change in response to external factors likechanging demand, and change due to internal reforms;

• Contribution to economic growth, both in regard to assistance in the general workingof the city’s labour market, and in regard to the specific issue of provision of goodlinks to the local airport;

• Environmental criteria, including deliberate use of public transport policy to achieveenvironmental ends.

Urban Public Transport in Ireland

In the Dublin conurbation, an area suffering from serious traffic congestion, the two mainproviders of public transport services are Bus Átha Cliath and Iarnród Éireann (the latterprimarily though not exclusively through the DART electrified services). In addition,commuter bus services from the outer Dublin areas are provided by Bus Éireann, the thirdof the three CIE companies, and by some private operators. The Office of the Director ofTraffic of Dublin Corporation is responsible for traffic management in the DublinCorporation area. The Dublin Transportation Office is responsible for public transportplanning and strategy in Dublin.

Bus Átha Cliath operates a network of about 150 bus routes with a fleet of some 1020 buses,and is protected from competition from other operators by the regulatory system. Much ofthe fleet has been renewed in the last few years, and Quality Bus Corridors have improvedservice quality on a number of Dublin’s radial corridors. Journey numbers grew in the firstpart of the 1990s, but have remained relatively stable since. Fares have generally fallen ininflation-adjusted terms.

Traffic on the DART suburban rail network has been rising in recent years, and costs perpassenger carried have been falling. Other heavy rail commuter services operated byIarnród Éireann have been developed, though passenger figures have not been available.

The public transport services in the Irish provincial cities are, with the exception of theCork-Cobh rail service, entirely bus-based. Most services are operated by Bus Éireann,though there are some privately-operated services in Galway and Waterford. Localgovernment involvement with the provision of public transport services is limited,compared with that in similar-sized cities in other countries.

Executive Summary

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Experience in the Selected Cities

Adelaide

The public transport system in Adelaide consists of a bus network, a guided busway (the O-Bahn), a commuter rail network, and a single-route tramway. The Passenger TransportBoard has overall responsibility for public transport, setting fares and minimum servicestandards, and providing integrated information. Competitive tendering has been used inthe bus sector, with area-based contracts using gross cost contracts with output incentives.However, the current contracts with the public rail and tram operator have been negotiatedrather than having been subject to a competitive process.

Adelaide scores well on service reliability, and the low fares encourage public transport useby the socially excluded, while there are also good facilities for the mobility-impaired. Theswitch to competitive tendering has slowed – but not reversed - the decline in publictransport use, but the use of area-based tenders (in comparison with the route-based tendersthat are more common elsewhere) did not lead to as much innovation in the provision ofnew services as had been hoped. Industrial relations are bad, and the transition tocompetitive contracts was poorly managed in its early stages.

Copenhagen

Public transport in Copenhagen consists of bus and heavy rail. There is a central authority,HUR, with overall responsibility for public transport, including fare levels, routes,timetables, service quality and provision of information. There is competitive tendering ofbus services using gross cost contracts, and with operator remuneration linked to servicequality levels as measured in customer surveys. Three bus operators control over 90 percent of the market.

Copenhagen is often cited as a good example of the approach to use in the competitiveprovision of services. There is an integrated system with a common fares structure andcommon branding of services. In addition, the transition to the present tendering systemwas phased over a number of years, with protection of staff working conditions in the eventof concession transfer. However, the gross cost contract system does not provide incentivesfor operators to expand output of services.

Évora

Évora is a small historic town in Portugal. The central public transport planning andmanagement body consists of the local municipality, the public transport operator and theparking-meter company. There is a bus-based system, with a single private operatorproviding services under a long-tem concession agreement. Parking meter revenue is usedto subsidise public transport. There is good service reliability, though frequency is onlymoderate.

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Lyon

The public transport network in Lyon consists of bus, metro and tram, as well as some heavyrail services provided by SNCF. A major feature of the Lyon system is that public transportservices are provided by a single operator under a six year management contract. A centralpublic transport agency, SYTRAL, is responsible for public transport planning, includingservice levels and fares. STRAL also owns the infrastructure and the public transportvehicles, and it retains the revenue risk.

The existence of a single transport planner, and a single operator, aid network integration.The fact that the transport authority retains ownership of the vehicles reduces entry barriers,but the fact that it is only possible to compete for provision of all services at once means thatsmaller organisations cannot contribute in the competitive process so the number of bidseach round is low. Cost recovery is low, and industrial relations appear to be poor.

Manchester

Public transport services in Manchester consist of buses, the Metrolink light rail system, andheavy rail services. Bus services are deregulated, and the private operators can set their ownfares and decide on their service levels. The central authority, the Greater ManchesterPassenger Transport Executive, decides on gaps in the commercial bus service that need tobe filled by competitive tendering. The contracts are mainly awarded on a net cost basis.The Metrolink system is owned by the public sector, but built and operated by the privatesector, though there are arrangements for the operating contract to be re-let. Rail servicesare provided by private train operating companies operating under contract withgovernment subsidy.

Manchester provides an example of extensive involvement of the private sector in publictransport provision. The system scores well on economic criteria, with a high level of costefficiency and high cost recovery. Provision of information is good despite the multi-operator system. The light rail system has been a big success, providing a high qualitysystem and attracting people out of their cars. The funding and concessioning solutionsadopted for Metrolink have been innovative.

However, public transport fare levels are relatively high, there is poor tariff integrationcompared with comparable cities in other countries and a lack of physical integrationbetween services. Transition to the deregulated environment in bus services was painful:there was considerable instability in services, and bus staff earnings fell. The service qualityof heavy rail services fell after rail privatisation and tendering, in particular because of anover-ambitious franchise bid by the main company providing local rail services in theGreater Manchester area.

Executive Summary

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Preston

Preston is a medium-sized city with an all-bus network. As in Manchester, bus services arederegulated, and gaps in the commercial network are filled by competitive tendering, with amixture of gross and net cost contracts. There are three bus operators in the city: asubsidiary of one of the main private bus operators in Britain, Stagecoach; a formermunicipal operator now employee-owned, and a long-standing private operator. TheCounty Council has overall responsibility for public transport services, fundingconcessionary fares, tendering out non-commercial services and providing someinformation, but its public transport planning responsibilities are limited.

Frequency levels and network coverage are good, as are cost efficiency and cost recovery.The system is also very flexible because of the freedom that operators have to choose routesand timetables. Staff at the main operator own the company themselves and enjoy goodworking conditions. Following deregulation in 1986 there was initial instability as a result ofa major “bus war”, but competition has now disappeared, and operators tend to stick totheir own areas. Neither tariff nor information integration are good, and operators will notalways include information about other companies’ services in their timetables. As inManchester, fare levels are relatively high.

The Hague

Public transport services in The Hague are provided by tram and bus services, and by localrail services operated by NS (Dutch railways). A regional body, Haaglanden, is responsiblefor public transport including the setting of service standards, while fares are set under auniform National Fare System. Competitive tendering is being introduced, thoughgradually, and with the first concession awarded to the existing operator.

The Hague benefits from a good integrated ticketing system with relatively low fares whichwill be preserved despite the planned changes in the public transport market. Thesechanges will take gradually, and there will be employment guarantees to tram and bus staff.The low fares are reflected by low cost recovery. While industrial relations in the bus andtram operations are good, those on the railways are poor. There is a shortage of appropriateskills in the public transport authority. The different modes are not presented as anintegrated public transport network.

Toronto

Toronto is a large North American city, with low population density, especially in theextensive outer suburban areas, and high car ownership. However, it is a city with a strongcommitment to public transport. There is a publicly-owned system controlled at thecity/municipal level. In the city itself, the Toronto Transit Commission is responsible forplanning and operation of the tram system, buses and the subway and light rail systems.Longer distance commuter rail and bus services are provided by GO, with rail services

Executive Summary

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operated over the tracks of the national rail system. There are also individual bus operatorsin each of the outer municipal areas.

There is good integration of fares and information provision, and cost recovery is good.There is a strong public transport culture. The GO operation provides good lessons forcontracting out aspects of the provision of rail commuter services to the private sector.Training and employee benefits systems are good, and there are clear and comprehensiveprocedures to ensure transparency and accountability in the provision of public transportservices. There are also good facilities for the mobility impaired. However, there have beenproblems. Current funding arrangements are inadequate, especially in regard to futureinvestment. There is relatively poor service provision in the outer Greater Toronto Area,especially for non-radial journeys. The flat fare system that is common in North Americadiscourages short journeys.

Zurich

Zurich is a city noted for its emphasis on public transport, with a high modal share forpublic transport on journeys to and from the city centre. The backbone of the publictransport system is the conventional tram system, supplemented by buses and byconventional heavy rail services provided by the national operator. Bus and tram servicesare provided by a single operator, and there is very little tendering of services. The ZurichPublic Transport Authority is responsible for co-ordination, funding and setting fares.

Consequently Zurich has a well-integrated public transport system with high quality andreliability. There has been a consistent emphasis on the importance of public transport overthe years, and so public transport is given priority, and this has been reflected in its highmarket share. Industrial relations are good. But incentives for cost efficiency are weakenedbecause of the lack of competition for the provision of services.

Lessons for Ireland

We do not believe that there is a single “city model” that is most appropriate, but thatIreland should adopt the strengths, and avoid the weaknesses, that our case study citieshave revealed. Solutions for individual cities will also depend in part on the mix of modesthat presently provide public transport services in a particular city. The role that publictransport is able to play in the provision of good quality services in a city’s transportnetwork will also depend on attitudes to the private car, and the way in which car use iscontrolled, for example by use of parking restrictions and/or charges, and the way in whichthe car is required to yield priority to public transport vehicles.

A clear lesson for larger cities is the need to have a strong transport planning agencyresponsible for all aspects of public transport services in each city. Most public transportauthorities have achieved integrated networks, tariff integration and an overall co-ordination of the development of the system. We therefore support the proposals to createsuch an authority for Dublin. The authority will need to be able to establish minimum

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service levels and quality standards, and it will need to be responsible for co-ordination ofclear information for passengers. It will organise any process of competitive tendering orfranchising. Given our recommendations for the bus market, we also believe that it shouldbe responsible for the level and structure of fares. One issue to be considered will be that ofwhether it should also take over responsibility for ownership of the bus fleet. There willcertainly be a need to establish its sources and level of funding. Care will be needed toensure that it can draw on the appropriate range and level of planning skills.

In regard to provision of bus services in Dublin, we believe that it would not be appropriateto adopt deregulation of services on the British model. This results in too much instability ofservices, and can increase congestion if a number of companies provide services. While thefully integrated publicly-operated systems in Toronto and Zurich have much to commendthem, we do not believe they create enough pressure for internal efficiency (while they mayalso not be compatible with future European legislation). In any event, forms of competitivetendering have been shown to work well in practice, and have been widely adopted.

We therefore support introduction of some form of competitive tendering for bus services inDublin, with suitable safeguards for employees and for the transitional process. We believethat a form of route-based tendering would be more appropriate than area-based tendering,and we suggest that groups of routes should be offered for tender, but with packagesdesigned so that smaller firms do have the opportunity to compete. We also recommendthat, at least initially, gross cost contracts are used to reduce risk to entrants.

In the Irish provincial cities we see merit in a system of management contracts for their busservices. One reason is the shortage of transport planning experience at local governmentlevel. Successful tenderers could then have opportunities to develop the bus systems inthese cities, though the contracts would need to specify minimum service levels andmaximum fare levels. However, experience in Preston has shown that permitting fullderegulation would be a practicable alternative option for these cities, especially if fareswere capped, while competitive tendering of routes would also be a possible option.

The approach to be adopted for commuter rail services in Dublin will in part be dependenton ultimate decisions about restructuring of Iarnród Éireann, but we see merit in the Dublinpublic transport authority taking an increasing role in regard to the services provided,including the setting of fare levels and their integration with those it sets for bus and lightrail services. It might also provide the mechanism by which public funds are channelled tothe rail infrastructure and train service operators. As a first step we recommend setting up amore separate organisation within IE responsible for operation of DART, and possibly otherDublin suburban rail services.

Finally, one of the most important lessons from our case studies is the importance ofmanaging the transitional process, both for the consumer (in terms of fares, service qualityand service integration) and for staff (of both existing and new transport operators, and ofplanning/regulatory agencies). We consider it useful to adopt a gradual approach to

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change, to ensure that operators, staff and customers have adequate time to adjust to thenew arrangements. This will also allow time for appropriate legislation.

In regard to passengers it will be important to ensure that there are not major revisions toservices (unless these can be clearly justified by shifts in demand) and that service levelsthen remain stable. It will be particularly important to ensure that service quality standardsdo not fall, and that operators have incentives to improve service standards. Changes infares and service levels that are planned should be clearly explained to passengers inadvance.

In order to minimise negative impacts on staff, we recommend careful consideration begiven to setting up schemes to allow redeployment of staff, while still retaining incentives toemploy staff productively and for staff to act efficiently. Consideration might also be givento ensuring that pay levels or benefits do not suffer in the transition. It will also beimportant to ensure that new bodies set up with planning, co-ordinating or regulatoryresponsibilities are staffed with adequately trained and experienced staff.

Introduction

1

1. INTRODUCTION

1.1. The Scope of this Report

Proposals to reform public transport services in Ireland have been published in theGovernment’s consultation paper, A New Institutional and Regulatory Framework forPublic Transport.

NERA and TIS were appointed as independent consultants to carry out a comparativeevaluation of the various approaches to the provision, regulation and integration of publictransport services in major urban areas. The aim of these is to assist the Public TransportPartnership Forum in making a formal statement of its views in response to the consultationpaper.

This Report sets out criteria which we will use to evaluate different public transport systemsin the different cities that have been selected for comparison. The criteria, which havealready been discussed with the Public Transport Partnership Forum, are detailed inChapter 2.

Chapter 3 of the report provides a relatively brief review of the provision of urban transportservices in Ireland, first in Dublin, and then in the four provincial cities of Cork, Galway,Limerick and Waterford.

Chapters 4 to 12 consider each of the nine cities selected for detailed evaluation. The ninecities, selected in discussion with the Forum, are:

• Adelaide, Australia;

• Copenhagen, Denmark;

• Évora, Portugal;

• Lyon, France;

• Manchester, England;

• Preston, England;

• The Hague, Netherlands;

• Toronto, Canada; and

• Zurich, Switzerland.

At the end of each of these chapters we summarise the main positive and negative featuresof each city’s performance on a “scorecard”. Results from the “scorecards” are then

Introduction

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summarised in Chapter 13, where we review the advantages and disadvantages of each ofthe individual city models.

In Chapter 14 we provide our conclusions and recommendations in regard to the situation inIreland.

Appendix A provides details of the information sources we have consulted in undertakingthis work, including the face-to-face interviews we held as part of our interview programme.

1.2. A Note on Currencies

Throughout this document, financial figures are given in euros, converted from the localcurrency using current exchange rates. We have only shown financial figures in the localcurrency where they refer to fares and are useful in illustrating the extent to which fares arerounded to the nearest convenient sum in order to increase traveller convenience and toreduce the need for giving change.

Where meaningful, we have converted financial figures provided for a time series (eg wagesor operating costs over time) into 2001 prices (ie, adjusted for inflation) in order to help thereader make comparisons over different years.

Criteria for Evaluation

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2. CRITERIA FOR EVALUATION

2.1. Introduction

As part of the study, we identified and agreed with the Forum a range of transportation,social, economic and other relevant criteria for evaluation, which we have used to evaluatethe strengths and weaknesses of each of the urban transport models that we consider in therest of this report.

Before discussing the criteria in detail, it is worth making some general observations. Firstof all, we note that the cities we are analysing all have their own particular characteristics.As a result, the indicators below may be different for various cities just because ofdifferences in traffic density, geographical circumstances and so on. It can be difficult tocompare the indicators as such between cities and use these comparisons as a basis fordrawing conclusions on, for example, the effectiveness of the public transport system. Weare therefore cautious when making such comparisons and only make them where we feelthey are justified. We mainly use these indicators to analyse changes over time, for examplechanges after a major change in the organisational structure of the public transport system ina city. Even then, it is necessary to carefully examine other factors that may also havecontributed to any changes.

For the same reasons, it is necessary to be very careful when evaluating any of the indicatorsin isolation. For example, when a local transport authority decides to franchise its urban busroutes and requires bidders to improve the quality of its services, provide better informationand so on, it may well be that the cost per passenger mile will increase. Obviously, in suchcases, examining the cost indicator only will give an entirely wrong view of the effectivenessof the new policy.

Copies of the data we have compiled are being provided to the Steering Committee, so thatit will be possible for the Forum to carry out further analysis of indicators of their own,should they wish to do so.

In general, of course, it is necessary to consider the quality of the data available within eachof the cities being studied. For this type of investigation comprehensive data are needed onpublic transport provision and use, car and other road vehicle traffic levels, traffic speeds bytime of day, and financial results for public transport operators. While this chapter sets outthe criteria for evaluation we will use, we acknowledge that in some cases data availabilityis a constraint.

The criteria we use are presented in Figure 2.1 below. In the remainder of the presentchapter, each of these criteria will be discussed in greater detail. We note that social,economic, environmental and other criteria all have an important role when evaluatingpublic transport systems, and that the order in which criteria are discussed in this report inno way reflects relative importance.


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Figure 2.1Criteria for Evaluation

Efficient use of the transport systemEfficient use of the transport system

Efficient operation of the public transport systemEfficient operation of the public transport system

Value for money, including subsidy levelValue for money, including subsidy level

Economic criteriaEconomic criteria

Integration criteriaIntegration criteria

Physical integrationPhysical integration

Tariff integrationTariff integration

Information IntegrationInformation Integration

Integration with land useIntegration with land use

Service quality criteriaService quality criteria

Social cohesionSocial cohesion

Dealing with ChangeDealing with Change

Responding to external changesResponding to external changes

Responding to internal changesResponding to internal changes

Economic growthEconomic growth

Public transport and labour marketsPublic transport and labour markets

Access to airportsAccess to airports

Environmental criteriaEnvironmental criteria

Efficient use of the transport systemEfficient use of the transport system

Efficient operation of the public transport systemEfficient operation of the public transport system

Value for money, including subsidy levelValue for money, including subsidy level

Economic criteriaEconomic criteria

Integration criteriaIntegration criteria

Physical integrationPhysical integration

Tariff integrationTariff integration

Information IntegrationInformation integration

Integration with land useIntegration with land use

Service quality criteriaService quality criteria

Social cohesionSocial cohesion

Dealing with ChangeDealing with change

Responding to external changesResponding to external changes

Responding to internal changesResponding to internal changes

Economic growthEconomic growth

Public transport and labour marketsPublic transport and labour markets

Access to airportsAccess to airports

Environmental criteriaEnvironmental criteria

2.2. Economic Criteria

2.2.1. Efficient use of the transport system

A transport system is efficient when all users have to pay for the costs, including externalcosts, that they impose on the system and on other users. In more technical terms, economicefficiency is achieved when all prices are set equal to marginal social costs, where thesemarginal social costs include external costs such as air pollution costs, noise costs andcongestion costs imposed on other road users. This is the known as the “first best”optimum. To achieve the first best optimum in a city it would be necessary that road userswould pay a congestion charge when traffic levels exceed free-flow conditions. In practice,such road pricing is often difficult to introduce, not least for political reasons, so that theprices that road users pay will be below the costs they impose. In this case the “second-best”optimum involves setting prices for public transport services below their marginal socialcosts, as long as there is some substitution between the two modes.


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Consequently, congestion is likely to occur.1 A key indicator for the occurrence ofcongestion in a city is the average traffic speed that is achieved, during peak hours but alsooutside these hours. However, changes in traffic speeds can be caused by a wide varietyof factors. Some of these factors relate to the public transport system and we willstudy these. One key indicator here is the modal split, the shares of people usingprivate cars on the one hand and of those using public transport, walking and cyclingon the other hand. Modal split figures need to be examined both in the centre of thecity and in the city as a whole. Public transport patronage figures, especially changesin them, will be relevant as well, and so too will be public transport fare levels. Whenanalysing the latter, we distinguish between various categories of fares, for examplefull fares, concessionary fares and so on, and compare changes in them against changesin the retail price index. We adjust fare levels data between cities into Euros usingcurrent exchange rates. We also consider the impact of any changes in the structure offares.

We also look at how demand and traffic management in the best practice cities areorganised and examine what the effects of these policies are. Examples of such policiesinclude traffic calming measures, access restrictions, on-street and off-street parkingcontrols and charges, workplace parking levies and electronic road pricing.

2.2.2. Efficient operation of the public transport system

This category examines whether the public transport system is operated at a minimumreasonable cost.

As noted above, comparisons of cost levels are not always easy. Differences in factorsoutside the control of the operator, such as congestion levels, can cause cost levels to behigher even if the operator manages the factors that are within its control in the best possibleway. We therefore avoid analysing unit cost levels in isolation.

There are a number of “performance indicators” that can be used to measure operatorefficiency. We consider the use of appropriate indicators based on standard measures ofpublic transport operator performance based on public transport statistics such as numbersof passengers carried, passenger miles, bus or train miles, staff numbers and costs, totalcosts, and resources used.

Other criteria that we evaluate to assess the operational efficiency of the public transportsystem, and if possible analyse in a similar way as described above, include:

• total number of hours that each employee works per week;

• proportion of hours worked spent driving; and

1 Even with road pricing there would be some congestion, since the optimal level of congestion may not be zero.


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• overhead costs as a percentage of total costs.

2.2.3. Value for money criteria, including subsidy level

Most public transport systems in the developed world receive subsidy payments from localor national governments. Although it is desirable to subsidise public transport to a certainextent, there are always many alternative uses for the funds involved. Public transportsystems should therefore be organised such that the subsidy costs do not exceed efficientlevels and we will include the amount of subsidy (as a percentage of total costs) as a keycriterion in our evaluation. If possible, we distinguish between various subsidy categories,such as subsidy payments to cover concessionary fares, subsidy payments to coveroperational deficits, subsidy payments for specific capital investment projects and so on, aswell as examining how subsidies are broken down between modes We have also looked forhidden forms of subsidy, such as fuel tax rebates for bus operators, or provision of land andbuildings by local authorities at zero cost.

When considering overall value for money to both the consumer and the taxpayer (ie viasubsidy), we also examine arrangements in place for ensuring accountability andtransparency in the treatment of public transport operator finances and their operations as awhole. Another area for consideration is the opportunities and incentives given to operatorsto maximise revenue from sources other than subsidy and farebox, for example theexploitation of other commercial opportunities such as advertising.

2.3. Service Quality Criteria

A passenger making an urban transport trip incurs two types of costs: the fare payable andthe time spent while travelling. The concept of quality in urban public transport is veryimportant, as this influences both the amount of time spent travelling and the valuation of it(the time cost will be lower if the journey is made in a pleasant environment). Key qualitycriteria we examine are:

• average speed of the public transport modes (which will influence journey times);

• overcrowding levels;

• quality of timetable information;

• accessibility of the public transport system (e.g. average distance that people have towalk to the nearest bus stop and access facilities for the mobility impaired); and

• average age of vehicles.

Key service level criteria we examine are:

• frequency levels (which are a major determinant of average waiting times);


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• reliability (percentage of vehicle trips on time, percentage of vehicle trips cancelled);

• number of route miles operated and geographical coverage;

We also consider how service levels and quality requirements for public transport operatorsare enforced, and the nature of penalties levied for infringement.

2.4. Integration Criteria

When a public transport trip involves using multiple vehicles or multiple modes, the qualityof the trip will also be heavily influenced by the extent to which the public transport systemis integrated. A distinction can be made between four different types of integration:

• physical integration: are different bus stops located close enough to each other tofacilitate easy interchange? Are the main train station and the main bus stationadjacent to each other? Are there facilities for park and ride at, for example, railcommuter stations, or dedicated park and ride bus services? Are interchangesbetween different rail modes, such as heavy rail and LRT located close to oneanother? Who is responsible for integration in multi-operator systems?

• tariff integration: do bus tickets allow for through journeys on other buses, even ifthe other bus is operated by a different firm? Are through rail-bus tickets availableand are multi-operator travelcards available? How are season tickets made availableacross different modes and different operators? What arrangements are in place foragreeing revenue sharing between operators? How are disputes between operatorsresolved?

• information integration: do different operators or the local authority publish jointtimetables? Are maps available at public transport stops, and in the public transportvehicles, of all routes operated by all operators?

• integration with land use: how far is transport planning integrated with land useplanning? Are decisions to permit new developments linked to provision of publictransport facilities? Do decisions to approve new facilities (such as new out-of-townshopping facilities) take account of potential increases in private car trips andjourney lengths?

We examine all four categories, by a combination of qualitative and quantitative analysiswhere appropriate. We also analyse how arrangements for integration are co-ordinated andenforced in multi-operator systems, including issues such as the authority responsible forintegration requirements, regulation and monitoring, and the imposition of penalties forfailure to comply.


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2.5. Social Cohesion

A further criterion is the impact of transport policy, and especially changes as a result ofstructural and/or institutional changes, on social cohesion. In particular, how doestransport policy impact on less well-off members of society, including the elderly, thosewith disabilities (particularly those which restrict movement), the young, and those on lowincomes? Of particular concern with generally-rising incomes and car ownership is theimpact on those who do not have direct or indirect (via family members or friends) access toa private car. Does the public transport system provide these important groups, and theareas in which they live, with good quality and affordable alternative transport facilities toenable them to access educational facilities, the labour market, shopping centres, healthfacilities, places of entertainment, and family and friends in a way that does not increaserelative deprivation? Is geographical coverage of the public transport system reasonablycomprehensive? Are there adequate service levels at off-peak times, in evenings, and atweekends? How do changes in fare levels impact on those groups with lower disposableincome? Are there concessionary fare schemes that ameliorate the impact of general fareincreases?

A further aspect of social cohesion is that of whether changes are widely-accepted, that is ofwhether there is widespread political approval, and/or whether key minority groups feeldisadvantaged and aggrieved by changes.

2.6. Dealing with Change

This brings us to the more general issue of dealing with change. An important evaluationcriterion will also be how a public transport system can cope with change. It is useful tomake a distinction here between two types of change:

• Responding to external changes. This category includes the ability of a publictransport organisation model to adjust to changing demand patterns (for example, aslocations of employment and residence change), innovative technologies (forexample smart-card ticketing technology) or new government policies.

• Responding to internal changes. This refers to the ability of a public transportsystem to respond to structural changes to the model itself. Examples of questionsthat we address include:

- Have the changes been politically controversial? What has been the attitudetowards the change of the various stakeholders involved?

- Did the transition process go smoothly? How was change managed? Did aco-ordinating body for implementation exist, and have a clearimplementation strategy and timetable? How was the co-ordinating bodyconstituted? Has it been possible to complete the process within the originaltimetable?


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- Has it been possible to resolve issues relating to staff levels in a way that wassatisfactory to all stakeholders? Has staff real income been affected? Has jobsecurity and job satisfaction changed2? Did industrial disputes occur? Whathas been the impact of the transitory period on staff turnover? How easy is itto recruit good staff given local labour market conditions? In particular,when considering the impacts of the transition process on the labour force inthe public transport sector, we will examine criteria such as basic pay, andother payments, hours of work, and other conditions of employment such asannual leave entitlements, training, pensions and where appropriate, otherbenefits such as medical schemes, again focussing particularly on changes inthese criteria as a result of the public transport policy initiatives (consideringthe wider economic context within which these changes occur – eg generalemployment legislation, business cycles, etc.).

- Did the changes cause major shocks or instability to the timetable and theservices offered, including fares and fare structures? What has been theimpact of any such problems on public transport patronage?

2.7. Economic Growth

A further criterion is the impact of the public transport system on economic prosperity andgrowth. Here we highlight two aspects, labour market impacts, and links for air travellers.

2.7.1. Public transport and local labour markets

The availability and quality of the public transport system plays a key role in assisting thefuture economic growth of a city. An important issue here is the extent to which publictransport systems enable local employers to draw on as wide a pool as possible of labourmarket skills, as well as allowing employees easy access to areas of employment. This maybe particularly relevant for city centre employers and those working in these areas, but willalso be important for places of employment located sin suburban centres, and for factoriesand other larger scale industrial employers. Success in these matters will be closely relatedto the network coverage of routes and to the integration between different routes andmodes.

Public transport also plays an important role in helping to reduce overall congestion levels,which can act as a constraint on the economic growth of a city due to the restrictions that itplaces on mobility, both for employers, employees, and those conducting business withinthe city. The ease with which people, goods, and services can flow within, into and out ofthe city will have an impact on the decisions of businesses as to where they locate. A good

2 As it can be often be difficult to measure job satisfaction in a quantitative way, we will make clear the basis onwhich we conduct analysis of these issues, for example by examining patterns of industrial unrest, staff surveys, orinterviews with unions and employers.


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transport system that helps to minimise congestion will help encourage businesses to locatein or near the city, thus helping economic growth.

2.7.2. Access to airports

Another issue of concern to business will be ease of access for passengers on internationaland domestic air routes. For those cities large enough to support a local or regional airport,how good are public transport links to the city centre? Is there a regular bus service, and arejourney times and frequencies satisfactory? Alternatively, is there some form of fixed link,light rail or heavy rail, that provides a faster better quality direct link between airport andcity centre? How well are proposals to improve the link being handled?

2.8. Environmental Criteria

A final consideration is environmental criteria. Public transport is generally regarded asbeing more environmentally-friendly than the private car. How are environmentalconsiderations taken into account in transport planning and regulation? Are there specificenvironmental standards that must be met?

More specifically, are changes in modal split deliberately used as a policy instrument toreduce the environmental costs of private car use? How are the environmental impacts ofbuses reduced: are there any policies in place to control vehicle emissions from buses, or toencourage use of more environmentally-friendly fuels by public transport vehicles? Howare noise costs from buses and rail vehicles controlled? Where systems such as road pricingare in operation, are hypothecated taxes used to ensure that revenues are channelled intoother environmental initiatives? Are any subsidies provided for environmental aspects ofpublic transport, and if so of what size and form?

Ireland’s Current Situation

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3. IRELAND’S CURRENT SITUATION

3.1. Dublin

3.1.1. City description

3.1.1.1. Geographical and economic features

Dublin is the capital of Ireland. There are some 1.5 million inhabitants in the total GreaterDublin metropolitan area (GDA). The Greater Dublin area comprises Dublin CountyBorough and the counties of Dun Laoghaire-Rathdown, Fingal, Kildare, Meath, SouthDublin and Wicklow.

Dublin is currently experiencing strong economic and population growth, with thepopulation of the GDA expected to reach 1.75 million by 2016. This growth is beingaccompanied by a strong increase in car ownership, expected to rise from 342 per 1,000 ofthe population in 1999 to 480 per 1,000 of the population in 2016. Congestion is now asignificant problem, especially during the morning and afternoon peaks.

3.1.1.2. Political context/governance arrangements

There is currently no central responsibility for transport services in Dublin.

The main public transport operators within metropolitan Dublin are Bus Átha Cliath(Dublin Bus) and Iarnród Eirann (Irish Rail), which are both part of the state-ownedtransport group Córas Iompair Éireann (CIE). Commuter services by bus from the outerregions of the Greater Dublin Area are provided by the sister company Bus Éireann, whichalso operates the intercity services into Dublin. Iarnród Éireann also runs commuter andintercity train services.

The Office of the Director of Traffic of Dublin Corporation is responsible for trafficmanagement in the Dublin Corporation area. There are five divisions: Traffic Control andManagement Division, which is responsible for traffic control, traffic signals, road markings,traffic calming and roadworks control; Parking Control and Enforcement; EnvironmentalTraffic Planning section, whose responsibilities include Quality Bus Partnerships; Noise andAir Quality; and Road Safety.

The Dublin Transportation Office is responsible for public transport planning/strategy inDublin. It co-ordinates inputs from the other transport bodies in the GDA (the localauthorities, the Department of Public Enterprise, the Department of the Environment, towhich it is formally accountable, the operators, the Gardai and the National RoadsAuthority).


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3.1.2. Public transport in Dublin

Data from the DTO model from 1991 and 1997 show changes in mode split between 1991and 1997. Table 3.1 shows mode split in terms of morning peak journeys, and off-peakjourneys, in these two years.

Table 3.1Transport Modal Splits in Dublin (%)

AM Peak 1991 AM Peak 1997 Off Peak 1991 Off Peak 1997Car 64 72 72 76Bus 26 19 25 19Rail 10 9 3 5

Total 100 100 100 100

Source: DTO

Car is the predominant mode, increasing its share of morning peak journeys between 1991and 1997 from 64 per cent to 72 per cent, and increasing its share of off-peak journeys from72 per cent to 76 per cent. Bus accounted for around 25 per cent of morning peak and offpeak trips in 1991, falling to 19 per cent of both types of trip in 1997. Rail mode share ofmorning peak trips fell slightly from 10 per cent in 1991 to nine per cent in 1997, but rail’sshare of off-peak trips rose from three per cent to five per cent.

Both the total number of morning peak trips and off-peak trips in Dublin rose by around 45per cent between 1991 and 1997. Average traffic speeds in the morning peak fell by 23 percent, from 18 km/hr in 1991 to 14 km/hr in 1997. The DTO has estimated that on certainkey routes to the city centre, journey times rose by an average of 62 per cent between 1991and 1997.

Until the light rail system (LUAS) currently under construction is completed, there are twopublic transport modes in Dublin: bus and heavy rail.

The main public transport system in metropolitan Dublin is the extensive bus networkoperated mainly by Dublin Bus over an unduplicated route network of 930 kms, providing54 million bus kilometres each year, on about 150 different routes. The bus market isregulated under the 1932 Road Traffic Act. In November 2000 private bus operators wereinvited to submit applications for annual licences in the Greater Dublin area, though theprimary objective of new licences would be that they expanded the public transport networkrather than competed for market share on existing routes served by licensed or exemptedoperators.

Commuter services into the centre of Dublin are mainly provided by Bus Éireann, althoughthere are also some smaller private operators. Bus Éireann operates commuter services outtowards Drogheda in the North, Maynooth and Kildare in the West, and Wicklow andArklow in the South.


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Heavy rail services in Greater Dublin are provided by Iarnród Éireann. The main service isthe electrified DART system running now from Malahide in the north to Greystones in thesouth, with a branch to a terminus at Howth. The DART system covers 51 kms of route,with 29 stations. In the centre DART serves stations at Connolly, Pearce and Tara St.

In addition to DART, diesel-operated services are provided from Heuston terminus toKildare (the Arrow commuter service) on the main Cork line, from Connolly to Maynoothon the Sligo line, and beyond the electrified DART network to Drogheda/Dundalk in theNorth and Arklow in the South.

3.1.3. Performance against criteria for evaluation

3.1.3.1. Economic criteria: transport system use

Details on bus patronage on Dublin Bus services from 1987 to 2000 are presented in Table 3.2below.

Table 3.2Dublin Bus Patronage 1987-2000

Calendaryear

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Passengerjourneysper year(millions )

160 164 161 167 173 176 171 178 185 186 188 192 193 186

Index(1986=100)

100 102 101 105 108 110 107 111 116 116 118 120 121 116

Source: Dublin Bus

Table 3.2 shows that the number of bus journeys on Dublin Bus services grew quite stronglyoverall from 1987 to 1995 (apart from 1993 when there was a strike by maintenance staff),grew again in the late 1990s, but have fallen off a little in 2000, back to 1995 levels.Information is not available on average trip length, so passenger kilometres cannot becalculated. Unfortunately patronage figures and similar statistics for Bus Éireann commuterservices only are not available.

When evaluating the trends in bus patronage, it is important to take trends in real fare levelsinto account. In Table 3.3, data on adult single cash fares are given.


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Table 3.3Development of Bus Fares in Dublin, 1986 to 2000

1986 1988 1990 1992 1994 1996 1998 2000

Adult single fare 1-3 stages €, current prices 0.57 0.57 0.63 0.70 0.70 0.70 0.70 0.76

Adult single fare 8-13 stages €, current prices 0.89 0.95 1.08 1.20 1.27 1.27 1.27 1.33

Adult single fare 1-3 stages €, Jan 2001 prices 0.83 0.78 0.81 0.86 0.81 0.79 0.76 0.77

Adult single fare 8-13 stages, €, Jan 2001 prices 1.29 1.30 1.38 1.48 1.48 1.44 1.38 1.35

Source: Dublin Bus Website

The table shows that following steady increases in adult fares throughout the late 1980s andearly 1990s, fares were frozen from 1994 (in fact most fares were frozen from 1991), leadingto a fall in real prices. Indeed, for the period as a whole, the fare for a 1-3 stage ride hasfallen in real terms from 1986 to 2000, and the fare for a 8 to 13 stage ride has only increasedslightly.

3.1.3.2. Economic criteria: transport system operation

Table 3.4 shows that bus kilometres run by Dublin Bus between 1995 and 2000 have beenrising relatively slowly.

Table 3.4Bus Kilometres in Dublin, 1995-2000

1995 1996 1997 1998 1999

Total bus kilometres (millions ) 50.8 51.5 52.5 52.6 52.9

Index (1986=100) 100 101 103 103 104

Source: Dublin Bus

An important development is that of the provision of Quality Bus Corridors (QBC). Theseprovide dedicated road space, good quality vehicles and a frequent service. The QBCnetwork is a radial one, with four corridors currently open (Lucan, Malahide, Stillorgan andFinglas) and a further six proposed and seeking approval.

As regards output of Dublin suburban rail services operated, there has been only a verysmall increase in DART total train kms from 1.96 million in 1995 to 1.97 million in 2000.Total passenger kms and passenger journeys have however risen steadily from 1995 to 1999as Table 3.5 shows, although a small drop-off is observed in 2000.


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Table 3.5DART Service Patronage

1995 1996 1997 1998 1999 2000Passenger journeys (m) 16.7 17.3 18.2 19.8 20.0 19.6Passenger kms (m) 177.4 169.1 185.3 213.9 223.9 216.4Average length of trip (kms) 10.6 9.8 10.2 10.8 11.2 11.0

Source: Iarnród Éireann

Unfortunately, similar statistics for other rail commuter services operating in the GDA andbeyond are not available at this level of aggregation.

3.1.3.3. Economic Criteria: value for money and accountability

Table 3.6 below provides data on bus revenue in Dublin between 1997 and 2000.

Table 3.6Bus Revenue in Dublin, 1997-2000

1997 1998 1999 2000

Total farebox revenue €m, current prices) 124.0 129.1 128.2 135.7Index (1997=100) 100 104 104 109Total farebox revenue (€m, January 2001 prices) 138.6 140.8 137.6 137.8Index (1997=100) 100 102 99 99

Source: Dublin Bus

While revenue rose in monetary terms over this four year period, it fell in real terms afteradjusting for inflation.

Data on the costs of providing bus services in Dublin are shown in Table 3.7.

Table 3.7Bus Costs and Revenues per Vehicle Kilometre and Passenger Journey in

Dublin, 1995-2000

Calendar year 1995 1996 1997 1998 1999 2000

Costs per vehicle kilometre (€, includingdepreciation, Jan 2001 prices)

3.17 3.22 2.89 2.96 3.06 n.a.

Cost per passenger journey (€, includingdepreciation, Jan 2001 prices)

0.87 0.89 0.81 0.81 0.84 n.a.

Farebox revenue per vehicle kilometre (€,Jan 2001 prices)

n.a. n.a. 2.62 2.67 2.60 2.56

Farebox revenue per passenger journey (€,Jan 2001 prices)

n.a. n.a. 0.73 0.73 0.71 0.75

Source: Dublin Bus


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Table 3.7 shows that the costs per vehicle kilometre and per passenger journey fell in realterms between 1996 and 1999. Farebox revenues per vehicle kilometre and per passengerjourney both remained relatively stable during this period.

Dublin Bus earned farebox revenue of €136,059,000 in 1999, and incurred operating costsincluding depreciation of€149,019,533, a farebox revenue/cost ratio of 0.91.

The company received a state grant through its holding company CIE in accordance withEU Regulation 1107/70 governing State aid to transport undertakings of €16,775,733. In1998 the State grant to Dublin Bus had been €11,267,000.

Average staff wage/salary was €25,579 in 1998, and €26,751 in 1999, an increase beforeadjusting for inflation of 4.6 per cent. The average number of employees rose from 2,901 in1998 to 3,004 in 1999.3

Table 3.8 shows revenue and costs on DART services. It shows that real costs per train kmand per passenger journey have fallen from 1995 to 1999 quite considerably. Revenue pertrain km increased in real terms during the same period, with revenue per passengerjourney remaining broadly constant. Cost data were not available for other suburban railservices at this level of aggregation.

Table 3.8DART Costs and Revenues per Train km and per Passenger Journey 1995-1999

1995 1996 1997 1998 1999Total costs/train km (2001 €) 20.0 18.9 19.6 17.6 17.5Total cost/pax journey (2001 €) 2.4 2.2 2.2 1.8 1.8Total revenue/train km (2001 €) 9.8 10.4 10.5 11.3 11.4Total revenue/pax journey (2001 €) 1.1 1.2 1.1 1.1 1.1

3.1.3.4. Service quality criteria

The average age of Dublin buses has fallen significantly over the past five years, fromaround 8.3 years to 4.3 years (excluding mini/midibuses). This has been the result of asignificant expansion in the number of new buses.

Dublin Bus operates a Passenger Charter with targets for example on cleanliness, staffcourtesy, and reliability. However the charter is voluntary and there are no penalties toDublin Bus for failing to meet its targets. Iarnród Éireann and Bus Éireann operatepassenger charters on a similar basis.

3 Information in these paragraphs from Bus Átha Cliath Annual Report and Financial Statements 1999, p.13.


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The DTO report that Dublin Buses are frequently unable to run to timetable as a result ofcongestion.

3.1.3.5. Physical integration

The main bus terminals and rail stations are located separately in the centre of Dublin, andinvolve several minutes walk for passengers wishing to transfer. Some bus services,provide links between the rail stations and the central bus station, including the airportbuses and DART feeder buses. Links between the different modes of public transport dohowever leave some room for improvement. Bicycles are not permitted on DART trains,and there are wide restrictions on when they are permitted on other services.

3.1.3.6. Tariff integration

Tariff integration within Dublin is relatively good within modes, but less so between modes.Dublin Bus operates a distance-based fare structure, based on the number of stages riddenwith prepaid travel cards useable on all routes. The same system is in operation on allDublin Buses, except for express buses, night buses, Airlink buses and services in outersuburban areas. Different fares are charged for bus and rail services. It is possible to buyprepaid tickets which are valid on both bus, DART, and other suburban rail services, but it isnot possible to buy integrated tickets for cash fares at the time of travel, except on DARTfeeder bus routes. There is no ticket integration between Bus Éireann and Dublin Bus orIarnród Éireann.

Passengers are able to buy tickets at stations on the vehicle (exact fare only on buses) andfrom a variety of other outlets such as newsagents and shopping centres.

3.1.3.7. Information integration

Information on public transport services in Dublin is provided by the operators themselves.Timetable and route information is provided at bus/train stations and at bus stops, and onthe internet or by telephone.

Real time passenger information is due to be introduced on QBC routes from Summer 2001and is already in place on much of the DART network.

3.1.3.8. Integration with land use

Local authorities are required to consult with the DTO on all planning applications anddevelopment plans. The DTO has no formal powers to approve or decline an application,but they can make recommendations. If planning applications go to appeal, the DTO isoften asked to provide advice. Again, although it has no formal powers appeals have in thepast been successful via this route. These links are strengthened by the fact that the sevenlocal authorities servicing the Dublin area all have representatives on the DTO board.


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It is envisaged that the DTO will continue to have a role in strategic land use planning underthe new Dublin transport authority.

3.1.3.9. Social cohesion

There are a number of features of the Dublin Public Transport fares system which aid socialcohesion. Concessionary cash fares are offered to children (around half fare), to students of16 to 18 years for two-way fares only (no discount on cash single fares). For pre-paid tickets,discounts are available to both children and students, and in the form of family tickets. IrishRail (including DART) and Bus Éireann also offer concessionary fares for children andstudents. Free travel is available for senior citizens over the age of 66 in possession of a validpass.

Accessibility for the mobility impaired is mixed. Around 25 per cent of Dublin Buses arelow floor buses. Routes are gradually being converted to be accessible to the mobilityimpaired (about 20 are now fully accessible), and all buses purchased from 2000 onwardsare to be fully accessible (low floor plus kneeling suspension). The main rail stationsprovide lift access to platforms where needed, and portable ramp access to trains, but thisfacility is not offered at all stations. Most but not all trains are able to accommodatewheelchairs. Some of Bus Éireann’s fleet are wheelchair accessible, but such services are notcomprehensive.

3.1.3.10. Economic growth: airport links

Bus services are provided to Dublin Airport by Dublin Bus and by the private firm Aircoach.Dublin Bus runs two services, departing every 10 to 30 minutes depending on the time ofday/week. There is no light or heavy rail link to the airport currently, although a light raillink is planned.

3.1.3.11. Economic growth: environmental criteria

Dublin public transport operators are not subject to any formal environmental targets.However Dublin Bus has undertaken to ensure that all new buses will be low-emissionbuses.


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3.2. Other Irish Cities

3.2.1. Introduction

In this section we briefly discuss the current situation in the regional Irish cities. To this end,we have visited Cork and Galway and held discussions there with relevant officials of localauthorities, Iarnród Éireann and Bus Éireann. Furthermore, we have requested data on thecity services from Bus Éireann. Although the company has responded, it has only provideda limited amount of non-commercially sensitive information. As a result, we are unable toprovide an in-depth analysis of the situation in the regional cities.

3.2.2. Institutional and regulatory framework

Public transport in the regional Irish cities is mainly provided by Bus Éireann, who alsooperate the rural and long distance bus services. It should be noted that a large number ofprivate operators also provide long distance bus services from the various cities in Ireland.However, there is private competition in Waterford and to a lesser extent in Galway. InCork, there is a suburban heavy rail line from Cork to Cobh that is operated by IarnródÉireann. Systems are almost entirely bus-based (there is some heavy rail in Cork). Weconsider this to be appropriate given their size.

Bus Éireann is part of the umbrella company CIE, which in turn is regulated and funded bythe Department of Public Enterprise. The Minister approves the maximum single fare –service levels are a matter for the company, as are promotional or return fares. Underdirection issued by the Minister in January 2001, Bus Éireann is required to notify theDepartment of proposals for service alterations or new services, subject to a four-weeknotice period. Matters such as temporary diversions because of road work etc are notrequired to be notified. However, Bus Éireann officials have indicated that approval isrequired for a two-minute timetable change or for a (non-temporary) diversion.

At the moment, Bus Éireann is funded using yearly lump-sum budgets, although there is atendency to move into longer-term public service contracts.

Private operators can compete by applying for a licence. The licensing system for passengerlicences does not generally accommodate head to head competition between privateoperators or between private operators and Bus Éireann. The licences specify the route to beserved, the frequencies and the times of operation. The Department reviews licenceapplications in the light of existing services and whether a case has been made by a privateoperator that services currently being provided by Bus Éireann or another private operatorare inadequate. Many licences are issued for the same routes services by Bus Éireann,however the general policy is to licence services where there is an hour or more gap betweenexisting services in the case of regional or interurban services and a 20 minute or more gapin urban areas. The private operator competing with Bus Éireann on the Salthill – CityCentre corridor in Galway was granted a licence as a different route was proposed from the


20

existing Bus Éireann services. The Department affords equal treatment to Bus Éireann andto private operators, which implies that whether or not DPE approves Bus Éireannproposals for service changes also partly depends on whether the proposed services wouldcompete with existing private services.

The responsibility for public transport is centralised without formal involvement of therelevant local councils. In Galway, the only local involvement comes from individualcouncillors who occasionally make specific requests to Bus Éireann regarding bus services intheir area. Otherwise, Bus Éireann have only a limited interaction with Galway Corporationand almost none with Galway County Council, although both bodies do have to giveplanning permission for the construction of bus shelters. Bus Éireann officials in Galwayhave indicated that they would be keen to have more interaction with the Corporation andthe County Council.

In Cork, however, Cork Corporation and Cork County Council are more actively involved inthe public transport services in the city, though it is the Department that makes the ultimatedecisions. A problem in Cork and Galway is the fact that the Corporation is responsible fora quite narrowly defined area, which may exclude some suburbs, whereas the CountyCouncil is responsible for a much larger area, mainly rural in nature. This means that theCounty Council has a rural focus and is not really equipped to deal with problems of a moreurban nature that occur in the areas immediately surrounding the Corporation areas. InWaterford and Limerick, similar issues can occur, compounded by the fact that these citiesare surrounded by two counties as opposed to just one. It has been suggested that theCounty Councils should have urban departments as well to avoid boundary problemsoccurring.

There are a number of other bodies that constrain the freedom of action of Bus Éireann in theregional Irish cities. One of these is the National Roads Authority, which has views onwhether to allow bus stops along national roads and often constrains what Bus Éireann cando. Another is the Gardai, who are also involved in determining the locations of bus stops.

3.2.3. Performance against Criteria for Evaluation

Economic criteria: transport system use

Table 3.9 contains details of bus patronage in the four provincial cities. For 2000, figures areavailable per city, whereas only totals are available for 1998 and 1999. It can be seen thatfrom 1999 to 2000, total patronage in terms of passenger journeys has grown by about 4 percent.


21

Table 3.9Bus Éireann Provincial City Passenger Journeys

City 2000(millions)

1999(millions)

1998(millions)

Cork 10.98

Limerick 4.00

Galway 3.85

Waterford 0.64

Total 19.47 18.73 18.90

Index (1998=100) 103 99 100

Sources: Data provided by Bus Éireann (2000 figures); Bus Éireann Annual Report and Financial Statements1999 (1998 and 1999 totals)

Some more details on the situation in Galway are available from the Galway Transportationand Planning Study, carried out in 1999. The bus patronage figures contained in this studyare presented in Table 3.10.

Table 3.10Weekly Bus Use in Galway

January Summer October

Number of bus trips 2512 2796 2512

Number of passengers 48220 79578 50229

Passengers per trip 19 20 28.5

Source: Galway Corporation and Galway County Council (1999) Galway Transportation and PlanningStudy.

The study mentions that total patronage in Galway was (in 1998/99) around 3.2 millionpassengers per year. This would mean one single trip per week per person resident in theCity (53 trips per year), and the report suggests that this is a very low figure bearing in mindtourist visitors. Bus Éireann officials in Galway have however indicated that patronage hasgrown by about 20 per cent over the last two years as a result of service improvements (seebelow). They also mentioned however that costs have increased by more than that.

In Cork, data are available on the development of patronage on the suburban rail linebetween Cork and Cobh, which show that the number of passengers on the line is growingstrongly. Table 3.11 contains the patronage figures for this line.


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Table 3.11Patronage on Cork – Cobh Suburban Rail Line

Year 1993 1994 1995 1996 1997 1998

Number of passengers 284 265 309 399 439 474

Index (1993=100) 100 93 109 140 155 167

Source: Report of Joint Committee of Public Enterprise and Transport

Table 3.12 contains the most recent available modal split for travel to work by Cork CityResidents.

Table 3.12Method of Travel to Work Used by Cork City Residents, 1991

Mode Percentage

Car driver 29.6

Car passenger 8.3

Bus 10.9

Rail 0.3

Pedal cycle 7.5

Motor cycle 1.6

On foot 28.9

Other/unspecified 12.9

Total 100

Source: Cork City Development Plan 1998

Information on key adult fare levels in the regional Irish cities is provided in Table 3.13.

Table 3.13Bus Éireann Fare Levels in Regional Irish Cities

Cork Limerick Galway Waterford

Adult single fare IR£0.75/€0.95 IR£0.75/€0.95 IR£0.75/€0.95 IR£0.75/€0.95

Adult weekly city ticket IR£9.00/€11.42 IR£9.00/€11.42 IR£9.00/€11.42 4

Adult monthly city ticket IR£34.00/€43.15 IR£30.00/€38.08 IR£31.00/€39.34 IR£32.00/€40.61

Source: Bus Éireann

In all cities, there is a €0.95 (75p) flat fare level. If a journey involves two or more bus trips, anew fare is payable for each separate leg. In addition, weekly and monthly tickets areavailable that are valid on all city buses. There are however no day tickets allowing

4 The Bus Éireann official at the Waterford travel centre advised that weekly tickets are not available in Waterford.


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unlimited bus use. The private operator in Galway competing on the City Centre to Salthillcorridor charges fares that, according to Bus Éireann, are around 20 per cent below the BusÉireann fares.

The fact that the adult single fare is the same in all cities is remarkable. Although the sameis true in for example the Netherlands, the reason there is that all fares in the Netherlandsare part of the nationwide integrated fare system, which currently prevents tariffdifferentiation between cities. This however does not apply to the Irish situation.

Economic criteria: transport system operation

Table 3.14 contains details on the number of bus kilometres run by Bus Éireann in the fourprovincial cities. For 2000, figures are available per city, whereas only totals are available for1998 and 1999. It can be seen that from 1998 to 2000, the total number of bus kilometres runby Bus Éireann in the four cities has grown by about 5 per cent. In addition to the routesoperated by Bus Éireann, one route in Waterford and two in Galway are provided by privateoperators.

Table 3.14Bus Éireann Provincial City Bus Kilometres

City 2000(millions)

1999(millions)

1998(millions)

Cork (16 routes) 3.734

Limerick (10 routes) 1.202

Galway (9 routes) 0.927

Waterford (4 routes) 0.275

Total 6.144 5.927 5.856

Index (1998=100) 105 101 100

Sources: Data provided by Bus Éireann (2000 figures); Bus Éireann Annual Report and Financial Statements1999 (1998 and 1999 totals)

Economic criteria: value for money

In the Bus Éireann annual reports, the financial figures are split out between the city servicesand the other services that are provided by Bus Éireann. The 1998 and 1999 details for thecity services are contained in Table 3.15, after converting them to January 2001 prices.


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Table 3.15Bus Éireann Provincial City Finances5

1999€000

1998€000

Revenue 15.901 16.138Maintenance 4.105 3.906Other operating costs 14.971 13.660Operating depreciation 2.349 2.710Total expenditure before interest 21.425 20.276Operating deficit before interest (5.524) (4.138)

Source: Bus Éireann Annual Report and Financial Statements 1999

Table 3.15 shows that from 1998 to 1999, revenue has fallen by about 1.5 per cent in realterms. Total expenditure however has risen by about 5 per cent and as a result, theoperating deficit has increased by 33 per cent in real terms. The percentage of totalexpenditure (before interest) covered by revenue has decreased from 80 per cent in 1998 to74 per cent in 1999.

On the basis of the information contained in Table 3.9, Table 3.14 and Table 3.15, some basicstatistics on the financial performance of Bus Éireann have been calculated. It should beemphasised that these are crude statistics only. Care should be taken when interpretingthem and especially when comparing them with similar statistics for other cities, as thesimple ratios do not take any differences in operating environment between cities intoaccount. Nevertheless, the figures given in Table 3.16 provide some useful insights.

Table 3.16Cost per Vehicle Kilometre and Passenger Journey in Bus Éireann Provincial Cities

1999€000

1998€000

Total operating costs (million €; including depreciation, January2001 prices)

21.425 20.276

Total vehicle kilometres operated (millions) 5.927 5.856

Total passenger journeys (millions) 18.73 18.90

Cost per vehicle kilometre (€, January 2001 prices) 3.61 3.46

Cost per passenger journey (€, January 2001 prices) 1.14 1.07

Source: calculated from Bus Éireann Annual Report and Financial Statements 1999

5 The figures have been obtained by converting the values in the Bus Éireann Annual Report to January 2001 pricesand subsequently into Euros.


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Service quality criteria

As part of the National Development Plan, money has been made available to Bus Éireannfor a large fleet replacement and expansion programme. As a result, the average age of thevehicle fleet is now low, many buses are fitted with low floors (100 per cent in Limerick andGalway, 69 per cent in Cork and 45 per cent in Waterford) and the increased fleet hasallowed substantial frequency increases. For example, in Cork, services have increased by26 per cent in 2000, compared to 1999. In Galway, the increase over this period was, at 43per cent, even higher.

A general problem affecting service quality in both Cork and Galway is traffic congestionand, importantly, the lack of bus priority measures. This adversely affects both journeytimes and bus punctuality. The lack of local authority involvement in the provision of busservices in their area may partly explain the fact that bus priority measures have so far notbeen a great priority for the local councils. We do however note that bus priority measuresare now on the agenda, partly as a result of the National Development Plan.

No data are available on punctuality and reliability of Bus Éireann’s city operations. TheBus Éireann Customer Charter aims are to operate 98 per cent of all scheduled services, andto operate no scheduled service ahead of its timetable. The punctuality target in theCustomer Charter refers to Expressway services only, i.e. there is no punctuality target forurban services.

The Galway Transportation and Planning study concludes the following on the quality ofthe Galway public transport system:

“The present network consists of too many routes, unattractive timetables (many not onrecognisable or memorable frequencies), a high flat fare (though reasonable Season Ticketprices), unattractive and poorly presented vehicles, little or no information at stops, militantstaff attitudes and a ‘take it or leave it’ overall image. Unsurprisingly, most residents andvisitors choose to leave it: bus use at one single trip per resident per week is negligible – it is asystem of last resort rather than first choice” 6

It is clear that since the publication of this report in September 1999, the situation hasimproved, mainly as a result of the new vehicles that have come in and the associatedfrequency improvements. However, frequency levels in the regional Irish cities can still notbe regarded as very high, especially compared to a city like Preston in the United Kingdom(see Chapter 9). In Preston, a city with 130,000 inhabitants, many routes operate at 10-minute frequencies, with some routes operated by minibuses even being served at 5 or 6-minute headways. The relative lack of routes served by minibuses with their associatedhigh frequencies is probably one of the main weaknesses of the public transport system inthe regional Irish cities. We do however note that the Bus Éireann development plans for

6 Galway Corporation and Galway County Council (1999) Galway Transportation and Planning Study, p 6-6.


26

the next few years will involve the purchase of a substantial number of minibuses for theregional city operations.

Physical integration

In all four regional cities, there is a central bus station that is served by all or almost all buslines, enabling easy interchange between lines. In Galway, Limerick and Waterford, the busstation is adjacent or very close to the railway station.7 In Cork, however, the bus andrailway stations are some way apart. The bus station has an excellent location in the citycentre, but the railway station is somewhat further out. Although there is a bus routeserving the station, services on it are limited due to difficult traffic conditions and anadverse road layout. The service does however meet most of the trains arriving from theCobh suburban line.

Furthermore, there is a Park & Ride scheme in Cork, which is run by Cork Corporation andwhich is claimed to be the only P&R scheme in Ireland so far. Although the scheme is lossmaking and situated on a temporary site, it is considered successful.

Tariff integration

Fares are reasonably well integrated as far as weekly and monthly tickets are concerned.These are valid on all Bus Éireann services, but not on any private services operating in thearea. In Cork, monthly tickets are available that allow travel on just the city buses, on cityand suburban buses or on all buses plus the Cobh rail services. The requirement in Corkthat monthly tickets can only be valid for a calendar month is however not very customer-friendly, as applies to a lesser extent to weekly tickets only being able to commence on aSunday.

However, there is no integration as far as single cash fares are concerned. If a journeyinvolves changing from one Bus Éireann city bus to another, a single fare is payable for eachleg of the journey. The flat fare system has the additional disadvantage that it discouragesshort journeys, for example within the city centre.

Information integration

The quality of the information provision in the two cities Cork and Galway that have beenexamined is variable. In Galway, there is a timetable booklet that contains all Bus Éireanncity services. Also, most of the bus stops contain clear timetable information. A mapshowing all bus lines does not exist.

7 In Galway there is no real bus station but all buses stop at Eyre Square which is opposite the railway station. A busstation is planned directly adjacent to the railway station.


27

In Cork, on the other hand, there are severe shortcomings in the provision of information.The leaflets that are available by line are of a poor quality and difficult to understand for theinexperienced user. The same is true for the timetable information at bus stops, where it isoften not clear whether any times shown refer to the bus stop in question or to the startingpoint of the service. Furthermore, no map exists of the Cork public transport system.

A general problem is also that the schedules of services can be hard to memorise, as there isnot always a fixed pattern of services even on frequent services where this would not seemtoo difficult to realise. The timetable in Table 3.17 below provides an example of a routewhere this occurs.

Table 3.17Services Departing on Bus Éireann Service 5W from Galway Eyre Square to Rahoon

on Weekdays from 08:00 to 12:00

0800 0815 0830 0845 0905 0920 0935 0950 1010 1025 1040 1055 1115 1130 1145 1200

Integration with land use

Finally, the integration between land use and transport policies in Ireland appears to bedeveloping in the right direction, at least in the two cities Cork and Galway that have beenexamined. In both cities, integrated land use/transportation studies have been carried out.In the case of Cork, it is intended to situate the majority of future development along therailway lines. However, nothing has actually been done yet in Cork and Galway.

City Study: Adelaide

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4. CITY STUDY: ADELAIDE

4.1. Key Facts

• System consists of bus, O-Bahn (guided busway), heavy rail, and tram services.

• Bus sector: competitive tendering using gross-cost contracts with outputincentives. Multiple, area-based contracts.

• Rail/tram sector: current contracts negotiated with incumbent rather thancompetitive.

• Central authority (Passenger Transport Board - PTB) has overall responsibility forpublic transport, recommends fare levels, sets minimum quality of service levels,and provides integrated service information.

• PTB provides buses to the operators.

4.2. City Description

4.2.1. Geographical & economic features

Adelaide is the capital of South Australia and is situated on the coast at the mouth of theTorrens River. The metropolitan population totals 1.05 million, and the urban area covers1,925 square kilometres.

Adelaide has traditionally been an industrialised city with factories producing automobilecomponents, machinery, textiles, and chemicals. The area also contains two petroleumrefineries. However, recent years have seen some decline in industrial activity and a shifttowards the service sector. Adelaide is the chief port for South Australia, and the harbour islocated some seven miles outside the city centre. The population density of the city is low(at 550 per square km) and the city is separated from the suburbs by extensive areas ofparklands.

The bulk of the City’s employment is situated in the outer suburbs (South, North and Westof Adelaide), but employment in the city centre has been declining in recent years (by about4 per cent from 1987 to 1992, and a further 4 per cent from 1992 to 1997). Population growthin South Australia is also slow, at 0.5 per cent per annum, less that half that of the nationalrate.

Congestion in metropolitan Adelaide is considered to be relatively mild compared to thatexperienced in many capital cities, with congestion occurring for only relatively short


29

periods during the morning and afternoon peaks, and even then, not considered to beexcessive.8 The city has a total of 18 inlet roads serving the “Square Mile” of the City.

4.2.2. Political context/governance arrangements

Metropolitan Adelaide falls under three main levels of government: the Federal Governmentof Australia, the State Government of South Australia, and several metropolitangovernments. Transport policy is the primary responsibility of the South Australia stategovernment Department of Transport, Planning and the Arts, which regulates passengertransport services through its Passenger Transport Board (PTB).

4.3. Institutional/Regulatory Framework

4.3.1. Current transportation services and the market access regime

Within Adelaide, public transport is provided by on street buses, O-Bahn buses (the highspeed, guided busway), heavy rail and tram.

The Adelaide bus network is divided into six geographical areas plus the free servicesoperated in the CBD, each of which has been contracted through competitive tendering.Contracts are awarded in the form of concessions (initially for a period of five years, butextendable to ten if eg service levels are met and there is agreement on price) based ontendered service and price. There are currently four bus operators: Serco, AustralianTransport Enterprises (ATE), Torrens Transit and Transitplus (which is a joint venturebetween ATE and TransAdelaide, the publicly owned corporation). The bus servicecontracts set minimum standards for routes, timetables and vehicle types (supplied by PTB)but beyond this, operators have some freedom to develop services within their area.

Operation of the rail network and the tram network, is also contracted. There is a separatecontract for the rail and tram network, which has been awarded to the incumbent operator,TransAdelaide by negotiation rather than by open competitive tender (despite a generallywidespread view that there are opportunities for savings to be made here). TransAdelaidecurrently remains a state-owned entity.

Transport SA (part of the Department of Transport, Planning and the Arts) retainsownership of all bus infrastructure (buses, depots) and leases them to the operators.

Area franchising was preferred over route franchising both for historical reasons (the citywas previously divided up into eleven areas) to encourage innovation in route development.This policy was relatively unsuccessful during the first contracting phase, when contractpayments were linked very closely to patronage levels, potentially due to risk averse

8 City of Adelaide Economic Profile 1999 – City of Adelaide and City of Adelaide Traffic Management Study – Murray FYoung & Associates.


30

behaviour by operators, as route changes typically result in a drop in patronage over theshort term. However, more recently, route changes are now starting to be proposed, whichmay be due to the reduction in the size of the patronage-based component of the contractorfees.

For 20 years prior to the introduction of competitive tendering, the public transport networkwas operated by the State Transit Authority. This period had seen falling patronage levels,increasing subsidy levels, and cuts in services. Competitive tendering was introduced withthe intention to reverse these trends.

Structure of contract payments

Bus operators’ contracts were awarded as a result of a competitive tender process. Theactual contract payments are commercially confidential, however, the general structure ofthe contract amounts are as follows:

There is an incentive type payment/penalty for operators for patronage above, and now,after the first year, below, an agreed base line level. The actual amount per passenger variesbetween operators. This is justified as some operators’ routes are much longer than othersand as such have a lower opportunity for patronage volume and higher costs per passenger.Those with longer routes receive a higher payment per passenger, those with shorter routeshave a lower payment. These payments lie somewhere within the region of €0.40 and €0.62per passenger . As patronage has increased this year for the first time in a number of yearsthese payments have proved to be greater than originally expected.9

The larger part of each operators contract payments is on the basis of a fixed fee forproviding the service, which is likely to be broadly related to operating costs.

In earlier tender rounds the patronage component of the contracts represented a largepercentage (approx. 50 per cent) of their total payments. In this most recent round, thepatronage component has been scaled back owing to risk averse behaviour of the operatorsin terms of route innovation and as such the fixed component now represents a much moresignificant chunk of their total payments.

Price indices are used to adjust components of the contract payments on a monthly basis,largely to adjust for volatility in fuel prices.

Contract amounts can also be adjusted in the event of route changes, according to the bidroute km rates. At the time of tendering all operators had to bid a ‘route km’ rate for newservices or adjustments to existing services and this is used by the PTB when adjustingroutes. The initiative for a change to routes can come from either the PTB or the operator.

9 PTB acknowledges that the increase in fuel prices has contributed to patronage increases along with serviceimprovements and marketing initiatives.


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4.3.2. Responsibility for planning, regulation and funding

All sectors of Adelaide public transport are regulated by the Passenger Transport Board(PTB), which is a division of the Department for Transport, Urban Planning and the Arts.The PTB was set up under the 1994 Passenger Transport Act. The objectives of the PTB areto promote innovation in the delivery of passenger transport services and reduce the cost ofoperating Adelaide’s public transport system. Among other things, the PTB is required tocreate and maintain an integrated network of services; to promote efficient and effectiveservices; to review services and fares; to establish and maintain various passenger transportinfrastructure and facilities; and to provide information about services to the public. ThePTB does not operate any services itself. The PTB is theoretically the only body that isresponsible for setting fares but in practice always needs political consent to any changes.The PTB is also responsible for local public transport in the rest of South Australia.

The contracts between the PTB and the operators are gross cost contracts with outputincentives, in which the PTB retains all revenue. The operators have considerable freedomto set service levels themselves, subject to minimum standards, and are paid an outputsubsidy for every passenger carried. The operators retain the production risk, whereas therevenue risk is shared between the operators and the PTB. The minimum standards aregenerally those previously maintained by the state operator and are relatively tight.Contracts are let for five years, with a five-year extension option dependent on satisfactoryperformance and agreement on price.

4.4. Performance against Criteria for Evaluation

4.4.1. Economic criteria: transport system use

4.4.1.1. Modal Splits

Table 4.1 provides information on the splits between alternative transport modes forjourneys to work in the City of Adelaide in 1986, 1991 and 1996. Examining trips to work isparticularly useful because they tend (generally) to coincide with the peak. During thisperiod, total journeys to work in the City increased by 6.8 per cent from 71,396 million to76,238 million, although the total numbers of people entering the City has fallen in recentyears.


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Table 4.1Modal Splits for Journeys to Work in the City of Adelaide 1986 to 1996

1986 (%) 1991 (%) 1996 (%)Train 7 5 4Bus 24 20 18Car driver 47 52 57Car passenger 11 10 10Bicycle 2 2 2Walk 2 2 2Two or more modes 3 2 2Other* 5 6 5Total 100 100 100

Source: City of Adelaide Economic Profile 1999, taken from ABS Census of Population and Housing* Eg tram, motorbike, taxi.

As Table 4.1 shows, car journeys, particularly car journeys with only one occupant,dominate trips to work in Adelaide. Private car trips as a whole currently account for 67 percent of journeys, while public transport’s share totals 22 per cent. In terms of public transit,the bus dominates as the most used transport mode. If all journeys rather than just journeysto work are considered, the domination of the private car is even greater. For example, in1986, only 8 per cent of trips in the Adelaide metropolitan area were made by public transit.Since then, it has probably fallen further and could be as low as 5 per cent.

One important picture emerging from Table 4.1 is that while a modal share of 22 per cent isreasonable by international standards, especially in a relatively low density area, the modalshare of public transit has fallen quite significantly in the ten year period shown (from 31 percent to 22 per cent). Cycling and walking have not changed as a proportion of total journeysto work. All of the increase has been in car use, and all of this is in car drivers rather than carpassengers. While it would be more instructive if more recent data could be examined itwould appear that Adelaide’s transport system has been relatively unsuccessful as a wholein attracting people to public transport for commuting, and also unsuccessful in retainingthe modal splits of the early 1990s. When competitive tendering was introduced, one of themotivations was fears that the then centralised control over bus services had led to areduction in ridership. While it is difficult to judge what the counterfactual would havebeen, it would appear that the current model has not been successful in reversing this trend.However, it should be noted that the rate of fall in transport’s modal share in the secondperiod shown is tangibly lower than that in the first period, suggesting that the rate ofdecline has at least been slowed.

4.4.1.2. Patronage

In terms of overall patronage figures, just over 41 million trips were made on AdelaideMetro public transport services in 2000 (as measured by total Metroticket sales). Table 4.2


33

shows patronage figures since 1998/9 in terms of both boarding and total passengerjourneys.

Table 4.2Patronage Figures 1988/9 – 1998/9 (millions)

1988/9 1989/90 1990/1 1991/2 1992/3 1993/4 1994/5 1995/6 1996/7 1997/8 1998/9Boardings 72.36 73.06 77.60 71.95 66.17 65.43 62.46 60.92 60.14 59.34 56.24Journeys 53.93 54.22 56.86 52.81 49.09 48.65 46.37 45.63 44.87 44.10 41.61

Source: PTB Annual Report 1998/99

As the data above show, patronage of Adelaide public transport has been falling steadilysince 1990/91. While the rate of decline slowed markedly from 1995/6 to 1997/8, ie, in theperiod immediately following the introduction of contracting, the most recent year’s figuresagain show a fairly substantial fall. While these falls mirror the decline in public transportmodal splits discussed above, it should be borne in mind that they also reflect a period ofsignificant recession for the City in the early/mid ‘90s, and the fact that the total number ofjourneys made into the City is also falling. Figures from PTB show that the fall hashappened on both bus/tram and train services, and across both regular and concession faregroups (but with a significantly larger drop in the former). However, in 1998/99, PTBestimated that by the end of 1999/00 the annual percentage decline in public transportpatronage will have halved since the introduction of contracting in 1995. The PTB alsoreports that patronage for the most recent year (2000/01) has increased slightly, reversingthe previous trend. In 2000/01 there was a 3.1 per cent increase in boardings (4.6 per centtrain, 2.6 per cent tram, and 2.7 per cent bus). Total boardings were 57 million for this year(of which 17.5 per cent were train, 3.5 per cent tram, and 79 per cent bus).

4.4.1.3. Fares

All operators within Metro Adelaide are required to charge the same fares. The MetroAdelaide area covers almost all of metropolitan Adelaide, apart from a few small pockets inthe far North and South of the area.10 The same fare policy applies across all modes. Ticketsare valid on all modes and also for transfers between modes. Table 4.3 provides a summaryof the main fares available (as of 1st July 2001). Fares will be increased in August 2001.

10 This is more due to accident than design, due to shifts in the metropolitan boundaries, and the fact that ticketinghas not kept pace with these shifts.


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Table 4.3Metro Adelaide Public Transport Fares (as of 1st July 2001).

Adult single Adult singleoff-peak

Adult 10 tripticket

Daytrip

ticket

Student/concession

single

Student/concession

10 trip ticket

Childsingle

Child10trip

2section

Zone 2section

Zone 2section

Zone - - - - -

€ 0.99 1.79 0.68 1.05 6.49 12.05 3.46 0.86 5.99 0.74 4.02Aus $ 1.60 2.90 1.10 1.70 10.50 19.50 5.60 1.40 9.70 1.20 6.50

As Table 4.3 shows, the Adelaide fares system is a combination of a flat fare and a distance-based system. For short trips of approximately three kms or under, a “2 section” ticket is thecheapest ticket available. For journeys above three kms, passengers can purchase a Zoneticket, which acts as a flat fare ticket, allowing the user to travel anywhere on the network,including free transfers on to other services and modes, within two hours of the initialboarding time.

Concessionary fares with significant discounts are offered for concession holders (seniorcitizens, other pensioners and the unemployed) and tertiary students, and even lower faresare offered for primary and secondary students. Children under five travel free. Discountsare also available for those travelling off-peak (after 9.01am and before 3pm Monday toFriday) – in addition to the information shown in Table 4.3, off peak fares are also availablefor concession holders, tertiary students and primary and secondary school students,covering the whole network for €0.49 (80 AUS cents). Discounts are also available for thosebuying 10 trip tickets. No monthly or annual tickets are offered.

Public transport operators are reimbursed for the cost of concessionary fares as eachpassenger is counted as one full passenger in the calculation of the operator’s payments tothe PTB.

Fare levels are decided by the South Australian Government as part of the annual budgetreview, with the PTB making recommendations. Fares were frozen for all Metroticket typesfrom 1998 to July 1st 2000, partially with the aim of encouraging greater public transport use.This amounted to a small decrease in the real fare, as inflation was 1.3 per cent in Adelaidefrom 1998/99 to 1999/00. Prior to that, the adult single fare (2 section or zonal) wasincreased by €0.06 (10 AUS cents) in July 1998. Single concession fares were held constant,and concession multitrip fares rose by €0.12 (20 AUS cents).

4.4.1.4. Demand and traffic management

There are few forms of demand and traffic management schemes in use in Adelaide. Thereis no use of multiple occupant car pool lanes, and there is almost no use of bus lanes.Adelaide uses fixed median strips and one operator, Torrens Transit, has been lobbying for


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the introduction of variable median strips that would allow for bus lanes. At present thereare no plans for such a change.

A southern O’Bahn has been considered but it is not going to be implemented owing to cost.Alternative options are now being considered, in particular a bus priority lane, althoughthere have been some complaints of a lack of consultation by PTB and Transport SouthAustralia on this issue.

The City of Adelaide makes relatively extensive use of controlled on-street parking,including ticket and meter parking, time limit parking, designated loading zones and permitparking. Total controlled on-street car parking spaces have increased from 9,250 in 1992 to15,075 in 1998.

The City of Adelaide Traffic Management Strategy report by Murray F Young & Associates(1997) reports the Adelaide road system to be generally good, with little congestion, and agood level of road infrastructure (traffic signals, road marking etc.).

4.4.1.5. Traffic speeds

Information on average traffic speeds in Adelaide shows significant variation, from up to 60or 80kph at non-congested times and places (ie, the speed limit) and even higher on the O-Bahn, to an average of 25kph on Torrens Transit’s contract areas. The average travel time inmetropolitan Adelaide has been slowly but steadily increasing in recent years. Average allday travel times have increased by three per cent from 1996/7 to 1999/00, while the averagemorning peak times have seen the largest increase of nine per cent during the same period.

4.4.2. Economic criteria: transport system operation

The operators in Adelaide metro together currently operate 50 million vehicle kilometres peryear. There are 1,150 kms of bus routes (153 routes in total). The tramline is 10.8 kms long,and the six train lines total 120 kms.

4.4.3. Economic criteria: value for money and accountability

4.4.3.1. Costs and revenues

PTB reports that total farebox receipts made up 19 per cent of operating revenue fortransport operators as a whole. This figure is low by international standards. However,there is a hierarchy by mode in terms of cost recovery from passengers. The O’Bahn is themost efficient in terms of ticket revenue keeping pace with operating and capital costs, withthe trains being the least efficient. Buses are the next most efficient after the O’Bahn,followed by trams.

Unfortunately, detailed cost and employment data are not available for the individualtransport operators, for reasons of confidentiality.


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4.4.3.2. Funding/subsidy arrangements

The PTB coordinates all of the public transport in South Australia and subsidises the publictransport system through government appropriations. Payments to Metropolitan servicecontractors were €131.5 million in 1999-2000. These payments have been growing slowlyover the last few years (€128.0 million in 1998-1999 and €123.7 million in 1997/98 in a periodof close to zero inflation). This amount includes cash flows from PTB to the operators andtransfers from PTB to Transport SA for the payment of the leases of capital assets for busoperators (eg, buses, depots), ie, there is an explicit cash subsidy to operators for providingthe service and there is a subsidy in the form of all capital assets to bus operators.TransAdelaide owns its rolling stock but bus operators lease almost all assets from PTB.Serco leases a few buses from a third party and Torrens Transit is constructing two furtherdepots for its use, otherwise the bus operators lease all their capital assets fromGovernment.11

The PTB is primarily funded from Parliamentary appropriations, however it also receives allmoney from metropolitan ticket sales, advertising revenue from buses, and a payment tocover concession ticket subsidies from other government departments which fundconcession travel. Subsidies apply to the train, tram and bus services. 12 PTB’s revenues arereported as:

• 66 per cent appropriation from government;

• 19 per cent ticket sales;

• 11 per cent concession ticket subsidies; and

• 4 per cent other (including advertising revenue).

Concessionary fares are funded by the state government. As far as operators are concernedthere is no distinction between a concession fare and a full fare passenger in terms of thepatronage component of their contract payments from PTB. Each passenger counts as onefull passenger in terms of calculating the operators’ payments. The PTB collects all fareboxrevenue and for Adelaide metropolitan passengers they recover an estimate of the ‘gap’between full fare revenue from concession holders and actual farebox revenue from the twoother government departments who fund concession travel.13 There are therefore noincentives on operators to promote either concessionary ridership or full adult ridership.Should PTB fail to accurately predict the level/proportion of concessionary travel in any oneyear, it risks over/under recovery of revenues from the state government.

11 Transport SA owns all the bus capital assets and leases them to the operators contracted to PTB to provide busservices. Bus operators are obliged to use Transport SA infrastructure. PTB pays the lease costs.

12 http://www.audit.sa.gov.au/99-00/b2/passenger.htm

13 For ‘country’ passengers the PTB accurately recovers the concession ticket gap as they claim actual amounts fromthe relevant government departments.


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Transport SA retains ownership of all bus infrastructure (buses, depots) and leases them tothe bus operators with PTB paying Transport SA the lease cost. In earlier contract roundsTransport SA leased the assets to the operators, the operators paid Transport SA andreceived funding for the assets from the PTB. This financial flow has been shortened by PTBpaying Transport SA directly. There are no financial flows for infrastructure to or from theoperators. Operators bid for operating costs only and a required level of infrastructureresources.

4.4.3.3. Commercial revenues other than farebox

The PTB holds all rights to advertising on the buses and therefore earns all advertisingrelated revenues. The PTB contracts this function out to another firm to manage.

Bus operators’ only other apparent avenue for revenue generation is chartering. ATE doesoperate a charter service but as it is using buses leased from Transport SA, ATE paysTransport SA a km charge for all charter business of €0.22 per km. ATE’s view is thisrenders them uncompetitive with most commercial bus charter operators and so theiropportunities in this area are limited. They can only make charters for short tripscommercially viable. Torrens Transit does not operate a charter service and views it as adistraction from their core business.

4.4.3.4. Arrangements for accountability and transparency

The PTB is subject to usual South Australian government reporting requirements thatprovide aggregated details of financial statements as part of the annual report for theDepartment of Transport, Urban Planning and the Arts. There is internal governmentreporting and the Auditor-General audits the PTB annually. The Department of Treasuryand Finance can investigate the PTB at any time although this has not occurred as yet.

The amount of information made public in South Australia is relatively limited. TheMinister does announce ‘Defective Service Amounts’ (DSA) and operators relativeperformance is reported. The total level of public transport subsidy is reported in the annualreport and government budget papers are on the web.

4.4.4. Service quality criteria

4.4.4.1. Frequency

As would be expected, service frequency varies between routes and modes. On trains andtrams, frequency varies from approximately every fifteen minutes at peak times to everyhour during off-peak times (especially evenings and weekends). On the O-Bahn, servicesrun every one to three minutes during weekday peak periods, every five minutes forweekday off-peak periods, every 12 to 15 minutes on weekends and public holidays, andevery 12 minutes at night. For bus services, Adelaide Metro operates nine Go Zones, where


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passengers have only to wait a maximum of 5 to 15 minutes (the maximum is specified foreach route) on weekdays, and a maximum of 30 minutes at weekends and at night.

On Friday and Saturday nights, there is a night bus service (NightMoves) which runs on fiveroutes between midnight and 4am, and stops at city centre locations and taxi stops.

4.4.4.2. Reliability

Service punctuality is reported by operators to be good, with over 99 per cent of buses andtrams arriving on time, and 98 per cent of trains. However, given that a vehicle is recordedon time when it arrives less than 10 minutes late, it is less clear whether the public alsoperceives service punctuality as good. Only 0.5 per cent of bus and tram services arereported to be cancelled, and less than two per cent of train services.

One of the factors that may have contributed to such good reliability levels are the DefectiveService Amounts (DSAs). Bus, train and tram operators can be charged DSAs for failing tokeep to on-time running. In the first phase, operators are charged €185 for instances ofrunning early by more than two minutes and €124 for running late by more than 10 minutes.If a vehicle fails to run then there is a €309 charge. In the second phase DSAs of the sameamounts will be charged for any running early and for running more than five minutes late.Late running is logged by the companies themselves, with drivers calling-in when they arerunning late. The PTB carries out quarterly spot checks on reported lateness levels.

On-time running is one of the factors that also features in the quarterly benchmarking of allpublic transport operators. Operators are required to obtain a certain percentage score inthese benchmarking exercises, otherwise their contracts may be terminated. Scores will alsohave an impact on whether or not an operator is likely to secure a five-year renewal to theircontract at the end of the first five-year term. Other factors that feature in the quarterlybenchmarking analysis include amenity levels (such as cleanliness and staff courtesy),customer satisfaction, customer perceptions of safety and a mechanical inspection ofvehicles.

4.4.4.3. Accessibility

Adelaide’s record on accessibility appears to be somewhat mixed. Services are largelyarranged on a radial pattern out of the city centre, including the tramway, which runsroughly East-West from the City Centre towards the coast, and the O-Bahn, which runsNorth East out of the City Centre. Provision in the city centre is fairly good, but is lesscomprehensive outside this area. While the North-East to South West corridor appears to bewell served, the North West, and Southern areas, and areas East of the City Centre are lesswell catered for. We note that in their 1997 City of Adelaide Traffic Management Strategyreport, Murray F Young & Associates reported a high concentration of public transport inonly a few streets.


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However, the average distance to bus stop in Adelaide Metro is reported as 400 metres. Fortrain services, it varies from 400 metres to 1km. Only five per cent of passengers arereported to need to make a transfer between services to complete a journey. (Note that weunderstand this figure to be for those already using public transport.)

Particular initiatives to improve accessibility for the mobility impaired and socially-disadvantaged groups are discussed in the section on social cohesion. However, initiativesworthy of note are the wheelchair-accessible AdelaideFree buses which operate on tworoutes within the City of Adelaide, the South Australian Transport Subsidy Scheme (SATSS)providing subsidised taxi services for the physically disabled, and the special services thatare laid on in times of high demand (for example for football matches).

Other service quality initiatives

PTB themselves have a service charter, which covers their dealings with customers, staff,suppliers and government. Pledges are set out in descriptive terms rather than in terms ofspecific standards.

There is some overcrowding on services, with the ratio of passengers to seats recorded at 47per cent for buses, 42 per cent for trams, and 49 per cent for trains (potentially implyingsignificantly higher ratios in peak times). The average age of rolling stock is 13.2 years forbuses, 15 years for rail cars, and 71 years for tram cars. There are plans to rate vehicles onlevels of passenger amenity and to apply a DSA of €124 where given standards are notenforced. However, the standard has yet to be set.

If an operator observes overcrowding then they should contact the PTB to discuss options oflarger buses/more carriages for that service or more buses/trains on the route. Busoperators have indicated that should they actually do this then the PTB will advise themthere are no more buses to be provided and that to meet the overcrowding they shouldtransfer buses from another route.

The PTB recently commissioned Market Equity to undertake a passenger satisfaction surveyacross the metropolitan Adelaide public transport system. The survey reported that 82 percent of passengers were satisfied or very satisfied with their overall trip, with similar resultsfor each of the modes (85 per cent for tram, 83 per cent for bus, and 80 per cent for train).

4.4.5. Integration criteria

The PTB controls all of the public transport in Adelaide and is responsible for ensuringservices are integrated. PTB owns all of the ticketing infrastructure, collects all fareboxrevenue, organises information sources, and prints timetables.


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Within the city centre, physical integration appears to be reasonable, with all the majortransport modes converging on the same central area. For example the O-Bahn links directlyinto the main bus-stop area. The main railway station (Adelaide Station), the central busstation, and the main tram station are all located within a few of blocks of one another, butpassengers changing modes do have to make a (relatively short) walk between them. Thebus service from the airport also links into this central area and stops at the main bus station,the tram station and Adelaide Train Station. The tram and rail services connect with one-another at a number of interchanges along their routes.

The Rail, Bus and Tram Workers Union (RBTU) believes that the public transport system isless integrated as a result of the privatisation. RBTU report that there is less scope forflexibility in terms of buses meeting trains etc. Formerly, there was a central controller whowould co-ordinate late running buses, trains etc. Today, RBTU report that drivers of oneoperator can not talk to another other than via their own central offices and as such ithappens less. PTB reports that wherever possible services will be delayed to enablepassengers to meet connecting services.

Where PTB determines that a new route ought to be provided then they can direct theoperator to do so. If this is an additional service then the contract payments will be adjustedaccording to the contractor’s bid route km rate. Given PTB’s fixed budget then it is morelikely that any change in routes to meet changes in demand will be achieved through thetransfer of one service from one route to another. That is, resources are more likely to bereallocated rather than increased. The Government recently allocated some of the savingsachieved from the competitive tendering of the metropolitan bus services to increaseservices on the trains and buses.

Adelaide has 65 formal park & ride facilities located at railway stations, tram stops, O-Bahninterchanges and key locations on the road network. The park and ride facilities are locatedadjacent to fixed track facilities (rail, O-Bahn and tram) or at transit link stops, whichprovide a fast limited stop service to the city, to take advantage of the faster travel times.The park and ride facilities provide 4,650 car park spaces and are served by public transportservices with frequency that varies between a service every 30 minutes to a service every 10minutes in the peak.

There are bicycle locks at some train stations and major bus hub points.


Tariff integration within the Adelaide Metro area is very good in that there is a single fareschedule for all operators in Adelaide Metro, and Metrotickets are valid on all operators’services. This integration is further enhanced by the fact that with a Zone ticket (eithersingle trip or multi trip), passengers can transfer between services – either of the same modeor between modes within two hours of the initial boarding.


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Ticket purchasing facilities are also good. Tickets can be bought on board busses, tramsand trains, at staffed railway stations, operator depots, and from a range of other vendors,including newsagents, post offices, some schools and university campuses, some snack bars,cafes and delis.


Information integration is generally good within Adelaide Metro. All ticket retailers havepublic transport “InfoBars” – free standing display units which contain leaflets on servicefares, routes, timetables and other information. In addition, a number of other outletsthroughout the city have InfoBars (for example local information centres). This informationis also available via the internet and via telephone. Information points at bus stops are alsocurrently being introduced.

There are no real-time information arrangements in operation within Adelaide. Thepossibility of introducing such a service has been discussed, but these ideas are still in theirearly stages.


Responsibility for integration of public transport policy with land use policy lies withTransport South Australia and Planning South Australia, which along with PTB aredivisions of the Department of Transport, Urban Planning and the Arts. PTB has indicatedthat co-ordination between these three bodies has improved following their amalgamationinto one department four years ago, but operators have suggested that co-ordination is stillquite limited.

4.4.6. Social cohesion

Adelaide public transport generally appears to cater well for socially disadvantaged groups.

4.4.6.1. Concessionary fares

The section on fares in section 4.4 provides details of the features of the Adelaide faresstructure that are potentially helpful to those on low incomes or with limited mobility.Concessionary fares are offered to children, students, senior citizens, other pensioners andthe unemployed, and children under five travel free. The price of a concessionary fare is lessthan half that of the normal adult fare, and the child fare (for primary and secondarystudents) is even lower. During off peak periods concession holders and tertiary studentscan travel anywhere within Adelaide Metro for €0.49 (80 cents). The ten trip and day triptickets offer reasonable savings of up to 30 per cent on single fares for those using the systemregularly. The “2 section” ticket allows people using public transport for relatively shortjourneys to benefit from a lower charge. However, we note that the 2 section ticket is onlyavailable for those paying the full adult fare.


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The relative popularity of the reduced rate fares is reflected in the fact that concessionaryfare journeys accounted for 64 per cent of total journeys on Metro Adelaide public transportin 1998/99. Multitrip tickets also accounted for over half of total tickets sold.

4.4.6.2. Access for the mobility impaired

General accessibility issues are discussed in Section 4.4.4. AdelaideFree buses are free busesthat run on two routes (the Central Loop and the Beeline). They include facilities for thosewith pushchairs, and are low floor buses. They are also equipped with a ramp forwheelchair access. The AdelaideFree service currently records two million passengerjourneys per year and the annual costs are around €1.8 million.

For those physically unable to use regular public transport services, the South AustralianTransport Subsidy Scheme (SATSS) provides subsidised taxi travel. Taxis in the scheme arewheelchair accessible. The SATSS scheme provides vouchers to those with permanentmobility disabilities that can be used to reduce their taxi fares on the first €18.50 ($30) of thefare by 75 per cent for those who are wheelchair-bound, and by 50 per cent for those withother permanent mobility disabilities. Further subsidies are also available to wheelchairusers in the form of the Journey to Work Scheme, which also offers 75 per cent discounts ontaxi fares to and from work, and the Tertiary Education Assistance Scheme which offers 100per cent subsidies on taxi journeys made for study purposes. The total value of subsidyvouchers in 1998/99 was around €3.6 million.

All main public transport interchanges and stations and some shopping centres areequipped with information units which provide information on timetables and routes forthe disabled including Braille and push button recorded information.

The PTB and the State Government Office of the Ageing also support a community-ledinitiative, the Community Passenger Network which acts as a co-ordinator for existingcommunity transport schemes. In 1998/9, there were a total of 34,176 passenger journeys onthe Community Passenger Network, up on 25,494 in 1997/8.

4.4.7. Dealing with change: responding to external changes

There is a strategic planning division within the PTB to co-ordinate services with changes indemand patterns. New technology such as real time information is being considered by thePTB, and all technology is the responsibility of PTB (eg, ticket equipment, real timeinformation) or Transport SA (buses, depots, gas refuelling facilities etc). There is littleopportunity for the operators to spearhead such changes other than route adjustments.


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4.4.8. Dealing with change: responding to internal changes

4.4.8.1. Staffing issues

The privatisation of public transport in 1994 brought about significant internal change forthe public transport operators. The re-organisation of the incumbent publicly ownedoperator (TransAdelaide) led to a significant cut in the number of jobs, both of head officestaff (about 25 per cent were lost) and of drivers.

TransAdelaide was provided with a government grant to allow it to make relativelygenerous redundancy packages. In the last round of tendering TransAdelaide staff wereoffered either “separation” from TransAdelaide (ie termination of employment) with asubstantial one-off payment from TransAdelaide, and the option to then seek employmentwith the new operators on that company’s pay and conditions, or redeployment to eitherother departments of TransAdelaide, or other parts of the public sector. Fromapproximately 1600 TransAdelaide staff, there are around 280 who stayed in the publicsector and approximately 200 who have not been successfully re-deployed. The RBTUestimates around 600 took the redeployment option.

In the earlier tendering rounds, drivers received separation payouts but only if they did notaccept similar work for the following three years. This prevented the private operators fromhiring them and dissuaded many from accepting retrenchment. Therefore in the earlyrounds many opted for redeployment within the public sector and operators largely did nothire former TransAdelaide staff. However, in the latest round, drivers were offered aseparation package regardless of their employment position after leaving and the otheroperators hired close to 100 per cent of the ex-TransAdelaide staff. It is thought that thesechanges arose due to a combination of both political pressure and practical necessity.

The changes did meet with industrial disquiet. There was some industrial action whencontracts were lost, and there were reports of sabotage of buses, bus routes and waymarkers. In the latest contracting round, security was stepped up to help discourage anyrepeat of the sabotage witnessed in the initial round and no sabotage has been reported.

A further problem that arose in the first contracting phase was that while all operators wererequired to have a full staff signed up for work by the new contracts start date, as it turnedout most of the drivers were interviewing with all the operators and accepting jobs with allof the operators, so there was some uncertainty about exactly how many drivers wereactually going to turn up for work on the first day of business.

The changes also led to a significant shift in unionisation arrangements with the Rail, Busand Tram Workers Union (RBTU) losing all of their bus driver members since privatisation.


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14 Driver salaries are reported to have fallen under the private operators, according to theRBTU in the order of €93 to €105 per week. The RBTU also reports that the private operatorsare rostering less effectively in terms of driver comfort, with many drivers unable to returnto the depot for lunch breaks etc. These reports have however not been substantiated by thecurrent operators.

The RBTU conduct staff attitude surveys for TransAdelaide staff and reportedly there is ahigh level of dissatisfaction. This lies particularly with the management who wereperceived to have ‘lost’ the contracts through poor tendering. Remaining employees arereported to enjoy little job security as they expect the train operations to be competitivelytendered in the not too distant future.

While the PTB reports no significant industrial dispute or staffing issues arising from thefranchising of bus operations currently, there was some unrest with TransAdelaide staffprior to the latest changeover, with staff going on an unofficial strike for up to three weeks.Since then there has been one court case between the Rail, Bus and Tram Workers Union(RBTU) and Torrens Transit with respect to pay and conditions. Otherwise industrialrelations currently appear to be comparatively harmonious, although one operator hassuggested that all sides were perhaps still finding their place within the new contracts.

Changes to how staffing issues have been handled are not the only improvements that havebeen made between the initial contracting rounds and the latest ones. For example, whenthe initial contract areas were set, there were eleven contract areas, with four additional tramand rail contracts. There was also a requirement that no single area could exceed 100 buses.This led to the break-up of a number of previously through-services into separate services,thus reducing overall service quality. The total number of tenderers was alsodisappointingly low, and in the second tendering round the program had to be put on hold.Following these problems, a number of changes were made, with the total number of busareas being reduced to seven, and the upper limit of 100 buses being removed.

It would seem that Adelaide has learned some of the lessons emerging from the firstcontracting rounds, and has since made improvements (including the new separationpackages for drivers) which have made the last contracting round more successful.

4.4.9. Economic growth

4.4.9.1. Public transport and labour markets

Congestion is not considered to be very severe in Adelaide, and so does not currentlyimpose a constraint on the growth of the economy. There do not appear to be any specific

14 Since the move to private operators the RBTU has lost membership as they can only represent public transportworkers. The Transport Workers Union (TWU) now represent drivers for the private bus operators. The TWUalso chose to not meet with me.


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initiatives in place to link the growth of public transport with the growth of the economy.However, Adelaide Metro does produce publicity material (in the form of leaflets availablefor example at ticket outlets/stations and over the web) that emphasise the savings thatcommuters can make by opting for public transport instead of the car.

4.4.9.2. Access to airports

A privately-run shuttle bus service connects the airport with the city centre, including themain bus, rail and tram stations. It has a scheduled timetable to meet flights and you cancall to make arrangements to meet it. Transit Regency pays no concession or licence feesand receives no subsidy from the PTB. It does not have an exclusive right to the route.However, no other public transport operator has been given the option of that route andaccording to Torrens Transit it is not one of PTB’s objectives. The shuttle service is perceivedto offer an adequate service, and it is thought unlikely that any other airport link will beestablished in the foreseeable future. Fares for this service are significantly higher thanstandard fares, at €4.08 ($6.60) for a single trip from the airport to the city centre (€6.80 for areturn ticket, and €1.36 for a single child fare).

4.4.10. Environmental criteria

There is a move towards the use of compressed natural gas-powered (CNG) busses in a bidto reduce emissions. The Federal Government has provided subsidies to the SouthAustralian Government for CNG buses. At July 2001, 20 per cent of buses are fuelled byCNG and this is due to rise to 28 per cent by May 2002.

Bus contractors with gas facilities receive CNG buses when older buses are retired andreplaced with new buses.15 However, at least two operators, Southlink and Transitplus haveno gas facilities and only receive diesel buses. Serco and Torrens Transit operate gas buses.The O’Bahn has no gas facilities so Serco only operates diesel buses on the O’Bahn. Thereappear to be some planning failures however. For example, the PTB wanted gas buses onthe O’Bahn but without any gas facilities. Torrens Transit’s fleet has been undergoing majorreplacement at present, and so their number of gas buses has increased significantlyhowever, gas pump facilities have not been increased to match. Thus Torrens Transit nowhas approximately 80 gas buses with the capacity to refuel only 50. There is over a yearwaiting time for the supply of new gas facilities so Torrens Transit is now trying to sourcetemporary pump facilities to rent in the meantime. Transport SA owns all (or almost all) ofthe fleet, depots and infrastructure such as gas facilities and is responsible for fleetreplacement policy etc.

The decision to freeze fare levels from 1998 to 2000 to try and increase ridership on Adelaidepublic transport was partially motivated by a desire to reduce emissions. There have been anumber of publicity campaigns to try and encourage public transport use, which have

15 All new buses are also now wheelchair accessible.


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included stressing the environmental benefits. Other campaigns have included directcomparisons of the cost of commuting by car with the cost of commuting by publictransport, illustrating how much money can be saved by the latter for different commutingdistances.

4.5. Summary of Performance Against Criteria

Table 4.4 below summarises what we consider to be the most significant positive andnegative aspects of the Adelaide system under each of the criteria for evaluation.


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Table 4.4Adelaide Performance Against Criteria

Positive Negative

Economic criteria

• Rate of decline in modalsplits/patronage slowing sincecompetitive tendering introduced.

• Short journeys are not penalised bythe fare system. Off peak useencouraged.

Economic criteria

• Low cost recovery

• Low and falling modal splits, fallingpatronage.

Service quality

• Clear performance regime withmonetary penalties will help ensuregood service quality.

• Frequency quite good, reliability verygood.

Service quality

Integration criteria

• Very well integrated fare system.

• Established park and ride system.

• Good information provision.


• Physical integration may havesuffered since contracting introduced.

Social cohesion

• Good facilities for mobility impairedwith subsidised taxi service.

• Good concessionary fares (levels andavailability).

Social cohesion

Dealing with change

• New severance contracts haveincreased the number of staff beingredeployed to the new operators

Dealing with change

• Badly managed transition tocompetitive contracts in early stages

• Employee wages have fallen

Economic growth Economic growth

Environmental criteria

• Programme to replace fleet withCNG fuelled buses well underway.

• Public transport advertising includesemphasis on environmental benefits.



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4.6. Adelaide “Scorecard”

To complete this chapter we present a summary “scorecard” summarising the mainadvantages and disadvantages of the Adelaide system.

Table 4.5Adelaide Summary “Scorecard”

Adelaide

Advantages Disadvantages

• Low fares encourage publictransport use by socially excluded

• Good facilities for mobility impaired

• New contracts were intended toencourage innovation in provisionof services

• Good service reliability

• Very low cost recovery

• History of bad industrial relations

• Badly managed transition tocompetitive contracts in early stages,including staff redeployment

• Poor incentives to increase patronagewith new contracts

• Falling ridership and modal splits(although rate of decline slowing)

City Study: Copenhagen

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5. CITY STUDY: COPENHAGEN

5.1. Key Facts

• Services consist of: bus, heavy rail.

• Competitive tendering of bus services using gross cost contracts, with operatorremuneration linked to service quality levels as measured by consumer surveys.

• Central authority (HUR) with overall responsibility for public transport, includingfare levels, routes, timetables, service quality regime and information provision.



Copenhagen is the capital of Denmark, situated in the east of the country on the island ofZealand (Sjaelland). The metropolitan area has a population of 1.7 million inhabitants,which is one third of the entire population of Denmark. The city of Copenhagen itself hasaround 500,000 inhabitants.

Table 5.1General Data Copenhagen

Authority Inhabitants1st January 2000

Area square kilometres

City of Copenhagen 496,000 90City of Frederiksberg 90,000 10Copenhagen County 613,000 530Frederiksborg County 365,000 1350Roskilde County 232,000 890Greater Copenhagen Area Total: 1,796,000 2,870

Source: HUR

The population has increased from 1,711,000 in 1990 to 1,739,000 in 1995 to 1,796,000 in theyear 2000.

Copenhagen faces the Sont, the sea separating Denmark from the southern tip of Sweden,placing it opposite to the Swedish urban area of Malmö. Recently, a fixed rail and road linkhas been opened that eliminated the need to cross the Sont by ferry. The structure of theurbanised area of the Capital region is organised along six radial regional railway corridors.This is based upon the so-called “Finger Plan” developed in 1948. According to this plan thedensely urbanised area of Copenhagen forms the palm of the hand, while the suburbanareas form the five fingers. Recreational areas separate the fingers.


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Overall responsibility for public transport rests with the Greater Copenhagen Authority.Further details of the regulatory structure are given below in Section 5.3.1.



Public transport in Copenhagen consists of bus and heavy rail. Copenhagen Transport (HT)was established in 1974 as a consolidation of twelve mainly publicly owned transportcompanies. Copenhagen Transport became the joint public transport authority and theoperator at the same time. From 1980, 80 per cent of the operation in the area was carried outby Copenhagen Transport whereas the remaining 20 per cent was produced by smallindividual private operators on a gross-cost contractual basis.

A fundamental feature of the Copenhagen model was – and still is – that the right ofinitiative remained with HT, the public transport authority. Operators are allowed tosuggest new routes and time tables, but the public transport authority takes the finaldecision. All contracts are gross-cost contracts.

For HT and its politicians, it is absolutely crucial that the customer perceive public transportin Copenhagen as one integrated company and not as a fragmented number of individualoperators. Therefore all buses today have the same identity. The operators believe thisstandard setting by HT/HUR is too strict, leaving no entrepreneurial freedom for theoperators.

Current organisation

The current organisation of HUR dates from July 2000 when HT ceased to exist as anindependent company. On 1st July 2000 Copenhagen transport was incorporated into thenewly created Greater Copenhagen Authority – much along the lines of the Greater LondonAuthority. Like HT more than 25 years ago, HUR was established by law. HUR consists ofthe planning, the transport, and the service divisions (Figure 5.1). Many of the presentchallenges are solved in co-operation between the different departments. A ”Project-productdevelopment council” and a ”Quality council” connect the departments in a matrixorganisation.

The eleven members of the HUR council come from the two city councils and three counties– among them, the five mayors (Table 5.2). A political committee, the Transport Committee,supervises the public transport management in HUR.


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Figure 5.1The Current HUR Organisation

Planning Division(Regional Planning, Traffic Planning,

Analysis and Statistics, Planning Coordination

Travel Card Project

Marketing and Information Dept. Revenue and Data Analysis Dept.

IT and Development Dept. Construction Dept.

Schedule and Analysis Dept. HT Customer Center Dept.

Contract and Quality Dept.

Transport Division Service Division(Press and Information, Internal Services, Finances,

HR Administration and Development, Legal)

General Management

)

Planning Division(Regional Planning, Traffic Planning,

Analysis and Statistics, Planning Coordination

Travel Card Project

Marketing and Information Dept. Revenue and Data Analysis Dept.

IT and Development Dept. Construction Dept.

Schedule and Analysis Dept. HT Customer Center Dept.

Contract and Quality Dept.

Transport Division Service Division(Press and Information, Internal Services, Finances,

HR Administration and Development, Legal)

General Management

)

The authority is responsible for regional planning, comprehensive transportation planning,business development policies, the interregional co-operation with South Sweden due to thenewly opened bridge between Copenhagen and Malmö and for some cultural institutions aswell. HUR has followed the recommendations of the ISOTOPE16 study about the threelevels of organisation (see paragraph 5.3.2).

Table 5.2The Members of the HUR

Authority Members in Greater Copenhagen AuthorityCity of Copenhagen 3City of Frederiksberg 1Copenhagen County 3Frederiksborg County 2Roskilde County 2Greater Copenhagen Area Total: 11

Source: HUR

From 2001, HUR takes over six small local railways, one in Southern and five in NorthernZealand. The national railway companies, DSB (Danish State Railways), S-tog andBanestyrelsen will still own the central railway system and the suburban S-trains. From2002, the Ørestad Development Corporation (Ørestadsselskabet) will run the first metro line- a company owned by the State and the two cities.

16 ISOTOPE was a research study conducted as part of the EC Transport RTD programme. The report described andcompared the organisational and legal structures used in urban public transport in European countries. It analysedthe pros and cons of these alternative structures and considered how organisational structures might be improved.Summary details can be found at http://europa.eu.int/comm/transport/extra/res-isotope.html


52

HUR is the fare-determining authority of the region, and the board makes decisionssubsequent to a hearing of other involved parties. All revenue collected by the three publictransport authorities of the region (DSB, the local railways and HUR) is re-allocated tooperators according to a ”revenue distribution model”. The Metro will be fully integrated inthis system. We discuss fare arrangements in more detail in the economic criteria section.

Tendering for bus concessions

The public transport lines in Copenhagen are subject to tendering. Concessions can beallocated to public as well as to private operators. The contractual relationship betweenHUR and its operators is a so-called gross-cost contract with quality incentives. The first 45per cent of operations were allocated in the period 1990-1995 and the second 55 per cent inthe period of 1995 to 2002. The non-tendered lines are operated by the Bus Division – later“BusDanmark A/S” in 1995, and from 1999 “Arriva Danmark A/S”. The non-tendered linesare operated on regular standard contracts like any tendered contract.

The Copenhagen-model describes how HUR has increased the quality of service to thepassengers and reduced costs without resorting to full privatisation or deregulation. It isbased on two key principles:

1. HUR continues its role as a public transport authority by determining routes,timetables and fares. It routinely conducts passenger surveys and handlesinformation and complaints, sets the service standard and determines bus design.Bus operations are tendered according to routes in packages of six-year contracts toall bus operators complying with the European Union tendering rules. Operators areallowed to liaise and give a common bid on a maximum of three packages at onetime. Packages are made rather small to ensure that small operators have equalaccessibility to the market. Approximately once a year a tendering round is madecontaining several packages of routes.

2. HUR has set up a number of objectives for the tendering process. A primaryobjective is to choose the best and cheapest bid. In the tender strategy set by HUR, itis specified that tenders must be attractive for large as well as for small operators.Bids are calculated according to various stipulations stated by HUR (for instance thestate of the rolling stock, organisation, previous performance, and price). If anoperator has new buses, he may set a higher price and still win the tender.

Except for Arhus and Odense most of the bus transport market in Copenhagen has beentendered out. This resulted in a drastic fall in the number of operators in Denmark fromabout 200 to just 40. A handful of these 40 control 80 per cent of the Danish market. Thesituation in Copenhagen is presented in Table 5.3 which shows market shares of thedifferent bus operators.


53

Table 5.3Principal Bus Operators in Copenhagen, May 2001

Operators Market share* (%)Arriva Danmark A/S 45.4City-Trafik A/S 15.7Connex Transport Danmark A/S 31.3De Hvide Busser 2.1Fjordbus A/S 2.4Partner Bus A/S 1.7Østtrafik a/s 0.4

* Telebus and service buses have a total market share of 1 per cent.

Source: HUR

The operators are paid on a monthly basis, according to a price-index formula. Thetendering system does not allow operators to compete on working conditions. Therefore,bids have to be based on average salary costs for the purpose of bid ranking. The truecontractual prices are then adjusted for the personnel that have actually been taken over.

During the entire contract period, the contractor is required to provide terms in respect ofpay and pensions according to one of the three labour agreements. These are between: theUnion of Public Employees and the Association of Country Councils in Denmark, the Semi-skilled workers Union and the Association of Country Councils in Denmark, between theFederation of Bus Owners and the Semi-skilled workers Union and finally in accordancewith the “National agreement for scheduled bus services” and related “supplementaryagreement”.

At the beginning of 2001, one of the main operators, Combus A/S has been taken over byArriva. Its concessions for Copenhagen however are taken over by Connex. Combus had a19.8 per cent market share in Copenhagen.


Regarding the organisational framework, Copenhagen follows the MARETOPE17-conceptwhich disaggregate into three levels of organisation:

17 MARETOPE is an ongoing European-wide project, and a follow-up on the ISOTOPE project. MARETOPE willprovide details of the current legal, organisational and financial frameworks of local public transport systems, andthe processes and impacts of changes in these systems, based on specific case studies.


54

• Strategic level, represented by the management of the city of Copenhagen and otherlocal authorities in the greater Copenhagen area. Strategic management is involvedin the formulation of general aims, areas, target groups and general service as well asthe determination in broad terms of the means that can be used to attain these, or inshort supply an answer to the question: what do we want to achieve?

• Tactical level, represented in Copenhagen by HUR. This makes decisions onacquiring means that can help reach the aims, and on how to use these means mostefficiently. For public transport this means that the tactical level is concerned withfares, routes, timetables and service type.

• Operational level, represented by the operators. The operators make sure that theorders are carried out and that this happens in an efficient way. It is about answeringthe question: how do we produce the product? For public transport operators thismeans vehicle rostering, drivers rostering, personnel management, maintenance,purchase of consumables, fleet renewal management.

Routes are tendered on gross-cost contracts to seven operators – some of them still rathersmall local bus companies. The large international firms are however slowly taking over themarket. HUR decides about the schedules and level of fares and sets standards for quality,service, and the design of the buses. HUR receives all fare revenue from the passengers,subsidies from the five public owners and pays the operators for their operations regardlessof the number of customers using the individual route. This model has been chosen toensure that a public transport authority that offers what is sensible for citizens from a socialpoint of view determines available bus services. HUR is responsible for route planning, butthis is carried out in detail in co-operation with the operators. The operator is responsible forthe operation of the buses.

Copenhagen culture of co-ordination

There is not really a constitutional arrangement, but generally recognised common practiceis to talk with the stakeholders when something new happens or a relatively big changeoccurs, for example before deciding on building a new terminal/hub. The stakeholders are:railway operator, metro operator, local authorities, road authorities, HUR. Theseorganisations meet up in regular steering groups with rotating chairmen and meetingplaces.

5.4. Performance Against Criteria for Evaluation


5.4.1.1. Modal splits

In 1992 the market share of public transport was 20 per cent. The aim of HUR is to increasethis towards 24 per cent in 2010. Part of the public transport will then be provided by the


55

new metro system, to be opened in 2002. The number of bus journeys in the same periodmust increase by 15 per cent. In 1998 HUR had already measured an increase of 7 per cent.

5.4.1.2. Patronage

Table 5.4 shows bus passenger traffic in Copenhagen between 1990 and 2000. The numberof passenger journeys fluctuated between 238 and 256 million and the amount of passengerkilometres between 937 and 1058 million. The average trip length seems to be stable for thelast six years between 4.11 and 4.13 kilometres.

Table 5.4Bus Passenger Traffic in Copenhagen, 1990 to 2000

1990 1992 1994 1996 1998 2000Passenger trips per year (millions) 238 238 244 256 256 244Passenger kilometres per year (millions) 1012 1018 937 1051 1058 1007Average trip length (km) 4.52 4.28 3.84 4.11 4.13 4.13

Source: HUR

5.4.1.3. Fares

The fare depends on the distance travelled according to the zone system introduced in 1978and is independent of the public transport mode used. The basic idea of the system is thatthe customer should not be bothered by the fact that a number of authorities work ”behindthe curtain” to provide public transport for the actual service provision as well as forticketing and fares. In 1978, a common fare system was put in place to make it possible forpassengers to interchange freely between bus and train. The Copenhagen region wasdivided into 95 different zones. The passenger pays for each zone he or she travels through.

Tickets can be purchased from ticket offices at the stations, vending machines at stations orfrom bus drivers. The tickets are stamped with time, date and departure zone. Thepassenger pays for the number of zones needed. The minimum fare covers two zones, andthe maximum fare covers seven zones and over. 10-Clip cards are available for journeyswithin two, three, four, five, six or all zones.

One clip entitles the passenger to travel within the number of zones printed on the face ofthe card. Several simultaneous clips extend the period of travel and increase the number ofzones the passenger can travel in. The passenger can clip for a maximum of seven zonesenabling the passenger to travel in all zones for a period of two hours. Discount clip cardsfor two, three or more zones are available from more than 900 outlets all over the GreaterCopenhagen Area. Travelling on a monthly pass, the passenger is allowed to travel incertain zones - or the whole area. Monthly passes are available from 200 of the card-outlets.


56

Development of fare levels

Figure 5.2 below shows the development of fares up to 1999. Fare rises kept pace withgeneral inflation until 1997. In that year Parliament decided to finance a reduction of thefares in local and regional public transport in Denmark. As a consequence, the fare level wasreduced by approximately 9 per cent.

Figure 5.2Fare Levels

80

90

100

110

120

130

140

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997.1 1997.2 1998 1999

Index

Inflation Fares Real fares

Source: HUR

A broad outline with some important tickets and prices is presented in Table 5.5. Thisshows the development of prices from 1997 to 2002. Special discounts are available forchildren, youngsters under 18, pensioners, pre-pensioners and students.

Children pay only pay 50 per cent of the normal fare for tickets bought in the bus and 24hour tickets and even less for the 10 clips and the monthly card. Details are provided inTable [5.6] below.

Table 5.5Ticket Prices in Copenhagen 1997-2002

19-01-97 /27-09-97

28-09-97 /16-01-99

17-01-99 /15-01-00

16-01-00 /20-01-01

21-01-01 /20-01-02

Minimumprice (2

zones, in €)

Maximumprice (all

zones, in €)

Minimum(2 zones, in

€)

Maximumprice (all

zones, in €)

Minimum(2 zones, in

€)

Maximumprice (all

zones, in €)

Minimum(2 zones, in

€)

Maximumprice (all

zones, in €)

Minimum(2 zones, in

€)

Maximumprice (all

zones, in €)

24-hour ticket 9.42 9.42 9.42 9.42 10.0910-clip cardadults

10.09 32.30 9.42 30.96 10.09 32.30 10.77 34.32 11.44 36.34

Monthlypersonal passadults

32.97 96.90 28.94 87.48 29.61 91.52 30.28 99.60 31.63 106.33

Source: HUR


57

Table 5.6Ticket Prices in Copenhagen for special groups in 2001

children youngstersunder 18

pensioners pre-pensioners students

Minimumprice (2

zones, in €)

Maximumprice (all

zones, in €)

Minimum(2 zones, in

€)

Maximumprice (all

zones, in €)

Minimum(2 zones, in

€)

Maximumprice (all

zones, in €)

Minimum(2 zones, in

€)

Maximumprice (all

zones, in €)

Minimum(2 zones, in

€)

Maximumprice (all

zones, in €)24-hour ticket 5.05 10.09 10.09 10.09 10.0910-clip cardadults

5.38(2 zones)

7.40(3 zones)

11.44(2 zones)

36.34(all zones)

11.44(2 zones)

36.34(all zones)

11.44(2 zones)

36.34(all zones)

11.44(2 zones)

36.34(all zones)

Monthlypersonal passadults

16.15 53.16 16.15 53.16 27.59 (3zones per 3

months)

36.34 (allzones per 3

months)

11.04 37.28 31.63 66.08

Source: HUR

New development on fares: introduction of a smartcard

While fares in Copenhagen are now based on a zone system, in 2004 a smartcard system is tobe introduced. This will change the system towards paying for the distance travelled insteadof zones travelled.


Some demand and traffic management initiatives have been undertaken, with theintroduction of priority for buses at some junctions and the setting up of some bus lanes.However, these initiatives have so far been relatively inadequate, and traffic speeds have notincreased as a result of them. Further initiatives are therefore planned.

5.4.1.5. Average traffic speed

The average speed of the buses in central parts of Copenhagen is well below 10mph while inthe outer districts of Copenhagen the situation is slowly getting worse. In 1997 the averagespeed was above 20 kms/hr, but by 1999 it had fallen slightly below 20 kms/hr. Thesituation in Copenhagen county is improving, from 28 kms/hr in 1997 to 30 kms/hr in 1999.


In Copenhagen, 1,048 buses were operational in the year 2000 on about 270 routes. There are10,000 bus stops. The total production of bus hours is more than four million. Table 5.6shows that the amount of vehicle kms per year is slowly decreasing as well as the number ofoperators, while the number of vehicles is slowly increasing.


58

Table 5.6Bus Production Data in Copenhagen, 1990-2000

1990 1992 1994 1996 1998 2000Vehicles kms per year (millions ofkm)

94 93 94 92 89 88

Number of vehicles - - - 1007 1014 1048Number of operators 12 12 8 9 7 7

Source: HUR

5.4.3. Economic Criteria: value for money and accountability


Table 5.7 below provides details of HUR costs and revenues. From this table, the ratio offarebox revenues to costs for 1999 can be calculated at 0.74 for farebox revenues to operatingcosts, and 0.55 for farebox revenues to total costs.

Table 5.7HUR/HT Revenue and Costs, 1998, 1999

1998 1999Costs: € million € million- Operation exclusively 201 206- PTA costs 24 26- Other (pensions,handicap services, etc.)

48 47

Total costs 273 279

Revenue:- Ticket sales for HUR 148 153- Subsidies

* from the 5 counties* from the State, EU

119118

1

121121

0- Other (rental of property,service bus transport, etc.)

3 4

Total Revenue 270 278

Source: HUR

Competition has led to declining tender prices for bus operations. From the first tenderinground in 1990 to the seventh round in 1998, the costs per bus hour had fallen by 24 per cent.At the same time, patronage has increased. In the period 1993-97, the number of annualpassengers boarding increased more than 8 per cent. However, patronage decreased slightlyin 1999. HUR believes that the lowest bus costs per hour have been reached with operatorsoperating almost without profits. Probably as a result of that during the latest rounds, thehourly costs have risen.


59

5.4.3.2. Funding/Subsidy Arrangements

HUR receives a subsidy from the owners (the counties), with a subsidy rate of about 44 percent. See the cost and revenue data below for more quantitative data. A large part is to paythe pensioners, former employees from when they were still part of the local government.HUR also gets compensation for the 9 per cent lower fare rates as from 1997 and for thelower fares for early-retired travellers and students.

Investments in the buses are made by the operators while HUR undertakes investments inIT, marketing, information, overall finances, bus-stops and terminals. Certain investmentsare made in co-operation with DSB, whilst others are made with various local and regionalauthorities. HUR does not receive income from specific earmarked taxes.


In 1999, HUR’s income other than from subsidies and farebox amounted to €4 million, andincluded property rental incomes.

5.4.3.4. Arrangement for accountability and transparency

HUR publishes annual report and accounts. In addition, HUR is required by law to providefurther information to any interested party on request, subject to confidentiality and publicsafety limitations.


5.4.4.1. Frequency

Services in the centre have generally good frequencies, with a service every ten minutes orless on the main route into the city centre from 7am to 6pm, and a slightly less frequentservice in the evenings (up to midnight) and early mornings (from 5am). For those servicesthat are mainly commuter services, frequencies fall from around every ten minutes in thepeak and during the day to around every twenty minutes in the evenings. Some servicesonly operate at peak hours.


The services are not very reliable. Some solutions are already in place, like preferentialtreatment at intersections and a few miles of bus lanes. These measures however do notincrease the average speed enough. Therefore a “city network” like in Stockholm is currentlyunder development. This means concentrating the majority of the network in a relativelylimited number of streets.


60

The advantages are a more efficient use of bus lanes and a good use of preferential treatmentof buses at intersections. At the same time on-line information will be provided to thepassengers. Services can also become cheaper because of increasing average bus speed.

HUR checks the percentages of completed journeys and overcrowding as well. Thepercentage of completed journeys varies between 99.80 and 99.87 between 1996 and 1999. In2000, this figure was further increased to 99.91 per cent.


Most of the buses today are low floor buses suitable for elderly and disabled people andprams. Special services for the disabled are also operated with almost 400,000 journeys ayear in specially equipped buses. By next tendering session in June 2001 all busses will beequipped for the mobility impaired. Figure 5.3 shows the proportion of low floor buses inthe fleet.

Figure 5.3Per cent of Low Floor Buses in Copenhagen

Source: HUR

Geographical coverage is generally good, with 96 per cent of the population living within600 metres of a bus stop, and 82 per cent of the population living within 300 metres of a busstop.


61

5.4.4.4. Other service quality initiatives

A unique feature of the Copenhagen-model is that it was the first in the world to usecustomer surveys as the basis for an incentive programme for bus operators. Each year,HUR asks more than 20,000 randomly selected passengers to rate bus service on the basis ofseveral criteria. The operator’s quality level is assessed on 11 different points, 9 of which arebased solely on the passengers’ perception of quality. The quality surveys form the basis ofa ranking of operators every three months, according to which a quality bonus will bepaid. The passengers assess the quality of services, indicating how satisfied they are with thequality of each point mentioned below - on the journey they are presently on - and howimportant each point is to the passenger. It is possible to reset an individual measuringpoint if external factors, such as street works, are beyond the operator’s control.

The results of the surveys feed into the incentive system or ”carrot and stick-model”. In theninth tendering round it is stated that operators that do not live up to the previously setquality standards are fined up to 1.5 per cent of the contract sum by HUR. Conversely,operators who meet or exceed standards are awarded a bonus of 1.5 per cent per bus hour.Each operator can obtain a maximum of 5 per cent extra. All information about bidding,operating costs and quality ratings is freely available to the public and to the media.

The operator must meet all the quality standards in the contract in order to obtain the bonus.If the survey shows that an operator is below the minimum objective on one or severalpoints, a penalty in the payment will be made in proportion to the level of non-performanceand the importance of the measuring point to the passengers. In addition, the operator mustdraw up an action plan showing how quality will be enhanced.

HUR is entitled to check the operator’s performance under the contract through inspectionof the buses while in operation. HUR may make a set-off in the payment of 30-400 Euro peroccurrence in some situations, for instance:

• Early departure from terminus;

• Missing tickets;

• Failure to replace defective ticketing equipment;

• Operation of another bus type than the agreed one;

• Delayed departure from terminus by more than two minutes;

• Incorrect signposts;

• Missing information folders; and

• Failure to meet the cleaning standards.


62

Table 5.8Operator’s Scores on Concessions

ContractorContractor A, Concession A 79.4 81.9 82.2 79.0 76.7 69.0 80.9 83.5Contractor A, Concession B 79.6 78.5 78.3 78.4 72.7 69.0 78.5 84.1Contractor B, Concession C 82.5 84.9 87.8 77.4 75.5 71.1 79.1 81.2Contractor B, Concession D 82.8 84.3 85.2 81.1 76.2 67.9 80.0 82.7Contractor B, Concession E 80.6 84.5 84.9 80.3 75.9 74.1 81.4 85.3Contractor C, Concession F 86.5 86.3 87.5 79.4 77.3 75.6 83.5 85.1Contractor D, Concession G 82.6 83.8 84.2 76.1 70.4 71.3 84.3 82.3Contractor E, Concession H 82.9 82.7 83.8 79.9 76.5 75.0 81.2 85.9Contractor G, Concession I 82.6 82.6 84.8 78.8 72.5 67.0 75.5 81.9

Contract level 83.3 83.3 83.3 79.0 76.0 71.0 80.0 83.3Minimum level 81.3 81.3 81.3 77.0 74.0 69.0 78.0 81.3HT, average 82.0 83.2 84.1 79.1 75.0 71.2 80.5 83.7

Outsideclearing

Insidecleaning Ventilation

Outsidecleaning

NoisePunctuality Driving Driver’sbehaviour

Other instruments to measure and improve customer satisfaction are improving the image,introducing a customers panel, a customer care programme and integration of thisprogramme with the customer centre. A travelplanner and extensive website (www.ht.dk)have also been introduced.

From the introduction of quality incentives in the contracts, customers have estimated thequality level to increase steadily. However, in 1999 there was a fall in the passengers’ratings of quality in the buses, shown in Figure 5.4. HUR believes this stems from variousreasons, for instance, bus operators having market shares that are too big. To overcome thisproblem, HUR has implemented certain measures. In order to not only focus on the size ofthe financial bid, HUR has started including previous performance in the choice of operatorfrom the ninth tendering round from 2000 onwards, as well as quality of the bus equipment,and the organisation of the operators.

Figure 5.4Passenger Rating of Bus Service Quality

800

805

810

815

820

825

830

835

1.Quarter

1995

3.Quarter

1995

1.Quarter

1996

3.Quarter

1996

1.Quarter

1997

3.Quarter

1997

1.Quarter

1998

3.Quarter

1998

1.Quarter

1999

3.Quarter

1999

Source: HUR


63

The incentive system based on consumer satisfaction helps to compensate for one of thedisadvantages of the gross contract system that is currently being operated. Although thereare plans to introduce net contracts for some time now, currently no such contract or pilot isbeing implemented. In gross contracts revenue and production risk are both theresponsibility of HUR. This means operators are less interested in the customer andcustomers’ satisfaction. Therefore a quality incentive system is in operation.

If part of the agreed journeys are cancelled, HUR may effectuate a set-off in the paymentaccording to a rising rate. If the operator fails to acquire a certain piece of equipment, to useenvironmental-friendly fuel or meet cleaning standards, HUR is entitled to reduce thepayment to the operator. The fine also depends on the type of contract in force between theoperator and HUR. If the operator is in material breach of contract, HUR may cancel thecontract, or part of the contract. If the operator continues to neglect his contractual dutiesdespite written notification, or if the operation provides less than 75 per cent of scheduledservices, HUR is entitled to cancel the contract as well.

HUR also checks the operators for on-time departures from the terminus and the degree ofservice, measured on basis of the operator’s own report. More than 6,000 journeys arechecked during a year, and each bus is checked 4-5 times yearly. Drivers are checked onceor twice per year. HUR then calculates an index that serves two main purposes: a qualityrating of the bus system in general, but more importantly, an evaluation of the individualbus operators. Surveys in 1998 showed that 87 per cent of the passengers were satisfied withthe bus service, and only 2 per cent were directly dissatisfied.

The average age of vehicles in Copenhagen is 5.7 years.



HUR has the financial responsibility for the provision of public transport in Copenhagen.They therefore have the responsibility of planning the bus routes, connecting all local andregional bus services in one system connecting towns to the city. HUR has to co-operatewith the national DSB, the national state railway, for the rail connections and the transportto and from Sweden over the new Oresund bridge. The train-bus connections in the citycentre are well organised. The four train stations in the city centre: Hovedbanegarden,Vesterport, Norreport and Osterport are connected with the number 11, 10, 16 and 6 buslines respectively.


In 1978, a common fare system was put in place to make it possible for passengers tointerchange freely between bus and train. The area was divided into the 95 zone system thatis still in existence. Further details of the fares system are given above in the fares section.


64

In 1997 joint ticketing was implemented in Denmark on a national scale. Since 1997 inprinciple all public transport tickets are valid across the bus and train modes. Although jointticketing has some major advantages for the user, good information has to be madeavailable.


HUR is responsible for proving information to the public. Besides the information onplatforms and a map with all the bus and train lines for the Copenhagen region, they alsoprovide brochures about new developments such as the new smart card. HUR has a websitein Danish only with an introduction about the organisation, downloadable documents andnews flashes to inform customer about new developments. An e-mail address forinformation and a telephone number are added as well.

The website from HT (www.ht.dk), the predecessor of HUR, is far more extensive with allthe bus lines, a bus travel planner, information about ticket and pass prices, helpdesktelephone number, information by using wap-services and an e-mail service specifically forcomplaints. There is also a tourist section in which the tourist can find information abouttrain and bus in English, French and German and a customer service telephone number.Information is also available for the handicapped wanting to use public transport.

Although managed by different operators, all buses in Copenhagen have the sameappearance, logo and colour in order not to confuse the user.

Currently HUR is testing real time information on buses and bus platforms, though this isregarded as very expensive.


HUR has a major responsibility for integration, and both public transport and land useplanning are now the responsibility of HUR.

Greater Copenhagen has about 92 train stations in the area. They all have facilities to parkcars. There are less than 10 “official” park and ride stations, all situated in the suburbsaround Copenhagen.



Some special groups are recognised by HUR enabling them to use the public transport for alower price. These groups are: children, youngsters, pensioners, pre-pensioners andstudents. Details of the discounts given are reported in the fares section on this chapter. In1997 the parliament decided to finance a reduction of the fares in local and regional public


65

transport in Denmark. As a consequence the fare level was reduced by approximately 9 percent.


The accessibility section in the section on service quality provides details of low floor bususe. Special services for the disabled are also in existence with almost 400,000 journeys ayear in specially equipped buses. By next tendering session in June 2001 all busses will beequipped for the mobility impaired.

5.4.7. Dealing with change: internal and external change

5.4.7.1. Dealing with transition

During the early 1980s, Copenhagen Transport faced increasing problems. The level ofquality as well as patronage decreased, strong unions initiated strikes, and fares increaseddespite falling fuel prices. The reasons were weak political and company management. Atthe same time, private operators began claiming that they were able to operate routescheaper than those of Copenhagen Transport. In this spirit, Parliament - under theleadership of the liberal-conservative government then in power - considered privatisingCopenhagen Transport. This would reduce costs, but it remained obvious that regional andurban public transport still needed to be managed and co-ordinated centrally. Customerswere to benefit from one, seamless system, and not from a patchwork of several overlappingones. The solution was to allow Copenhagen Transport to remain as the central planner andmanager of bus operations in the Greater Copenhagen Area, but without operating busesitself.

In 1990, the Copenhagen Transport Act 1990 was passed in Parliament stating that at least 45per cent of all operations were to be subject to tender within the next five years. Publiccompanies and Copenhagen Transport were not permitted to make bids. In the same yearCopenhagen Transport was divided into two separate divisions: an administrative divisioncalled HT and a division that was in charge of operations, the so-called ”Busdivisionen”. HTgot a business-oriented board – consisting of 5 persons, one from each of the countiesinstead of the 37 members the Greater Copenhagen Council had. Responsibilities for trainservices were given back to the state, the Ministry of Transport. The key word to continueintegration between buses and trains became “co-operation” – only in case of any disputeconcerning fares, HT would have the final word as the fare deciding authority.

Authorities were 100 per cent in charge of all subsidisation and financing, HT received itssubsidies from the counties whereas DSB (national railway operator) received its subsidiesfrom the state. The local railways received most subsidies from the state but also a minorpart from HT and the local authorities. Terminals and constructions were normally financedjointly between HT and the local authorities. All revenue went to HT, which reallocated themoney to DSB according to passenger counts, and to the operators according to the numberof bus hours performed and the level of quality.


66

Results came quickly. Operational costs decreased by 20 per cent in the period from 1990-1994. The bus fleet was renewed and quality improved. At the same time, a new businessstrategy - ”Vision 2005” - was established. Patronage increased and the financial situation ofCopenhagen Transport was improved remarkably.

In 1995, a revised Copenhagen Transport Act was passed. All bus operations were to betendered by 2002 and public operators were permitted to bid on routes on the same groundsas private operators. Busdivisionen became an independent limited company, although itwas still owned by the five public owners of Copenhagen Transport. Simultaneously, itchanged its name to ”BusDanmark A/S”. Since then a clear allocation of responsibilities hasbeen put in place. Since 1995, BusDanmark A/S has won several tenders. In 1999,BusDanmark A/S was sold to the British operating company Arriva, leaving Combus(formerly the Danish State Railways Bus Company) as the sole publicly owned operator.

The aims from the reforms starting in 1990 were to decrease costs, increase the level ofquality and at the same time attract more passengers. Tendering is seen as a means to reachthese goals, not as a goal on its own. Furthermore it was very important that the personnelwas not victimised by lower wages. The EEC regulative on mandatory company take-overof personnel secured all drivers. This meant that HT did not enter a period of work conflictsand strikes as one could have feared. What helped in this respect is that HT employed itslast civil servant as a bus driver in 1974. In 1974, when HT was established, the unions andthe management worked together on levelling the wage level of the drivers in private sectorand the public sector. In 1990 when tendering began this meant that there was hardly anywage gap between the public and the private sector.


As all operators in Copenhagen are private companies, data on staff issues are not readilyavailable.

However, an interesting decision was taken in 1990 with the Copenhagen Transport Act.Although the bus lines were going to be tendered out in Copenhagen, as stated in the act, itwas very important that the personnel was not victimised by lower wages. The EECregulative on mandatory company take-over of personnel secured all drivers. This meantthat HT did not enter a period of work conflicts and strikes as one could have feared. In1974, when HT was established, the unions and the management worked together onlevelling the wage level of the drivers in private sector and the public sector. In 1990 whentendering began this meant that there was hardly any wage gap between the public and theprivate sector.

Bus drivers and their training are the operator’s responsibilities. There are currently about4,000 drivers. Due to EU regulation on company take-overs, and due to Danish legislationon company acquisitions, a new operator must offer the present driver a job at an equalwage level and with equal working conditions when the company is taken over by anothercompany.


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During the last few years HUR has focussed more strongly on driver satisfaction. The toolsused are the introduction of certification of the drivers, improving the work conditions aswell as introducing a drivers’ panel.

Further details of the protection offered to staff during the contracting process are describedin the section on tendering for bus concessions in Section 5.3.1.

Unions

There are two unions involved in the public transport system in Copenhagen. One is theUnion for public and civil service and the other one for the private sector called the SID. TheUnion for public and civil service is involved because of formerly state owned transportcompanies now integrated in privately owned companies. Until now it is not perfectly clearwhich of the two has the mandate and which of the two has to organise the communicationwith the operators. For the suburbs it is SID, for the city of Copenhagen it is mixed. Thebiggest two public transport companies have a mixed membership.

The tendering documents, including the position of employees during and after transitionand acquisition / mergers periods has not been established in co-operation with the unionsbut is based on national legal constraints and requirements.

Employees from the operators can only go on strike when this is legally allowed. Whenthere are strikes during the period a collective agreement (like the period an operator has thelicence to run public transport lines) then this is considered as a violation of that agreement.Because of the agreement the partners who have signed the agreement have an obligation ofpeace. Strikes are only allowed during the process of renewing the collective agreement.There however exist “wild cat strikes”, spontaneous occurrences by some or moreemployees. The union has to disapprove of these strikes. The employees will usually befined the number of hours they have been on strike.

Conflicts are solved, according to procedures established in labour laws that are over 100years old. Conflicts should first be negotiated on a local level. If this does not work theconflict can be negotiated on a regional level. If an agreement has not been reached there isthe possibility to go to the labour court or to voluntary arbitration. The arbitration is usuallydone by a judge of the supreme court. No appeal is possible after the verdict of the labourcourt or the voluntary arbitration. The labour court usually takes a year to come to its finaldecision. In the case of arbitration it is one or two months. Voluntary arbitration is oftenused for interpretation of collective agreements, while the labour court is often used forwhen there is a breach or violation of an agreement. The verdict is usually a fine.Comparative models for solving labour conflicts are used all over Scandinavia.

SID considers the training of the drivers as adequate. The training is run by the governmentand does not only include learning how to drive a bus, but also about conflict managementand about psychology. In the initial stage of the tendering, the operators bid so low thatthey tried to cut costs and save time where possible, having to do with timetables, breaks,


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uniforms in short benefits that are custom but not mentioned in the contract. The labourconditions are now slowly improving.



The authorities in the Copenhagen area are keen to encourage the increased use of publictransport as a way of minimising congestion and the limitations that this puts on economicgrowth. HUR have been set a target to increase the model share of public transport to 24%by 2010.


Currently there is a bus service as well as a train running from the Copenhagen city centre tothe airport. The train service has just one stop between the centre and the airport. From theairport to the city centre takes about 12 minutes by train, with a train running every tenminutes. Bus and train tickets have the same price due to ticket integration. The price of thetickets varies between €1.48 and €2.42 (11 and 18 Crowns). It has not yet been decidedwhether the metro system will be extended towards the airport as well. If this occurs thenthe tickets will have the same price as the bus and train tickets.


HUR has stated various objectives to be fulfilled in the coming decade. These are means tofulfil VISION 2005. One of the objectives is an environmental objective; of sustainabledevelopment in the transport sector, with fewer car drivers, and more public transportusers. Emission of local damaging substances must be halved by 2002; emission ofgreenhouse gasses must be stabilised at the 1996-level. Green accounts reports are nowpublished every year. To reach the objective the owners of HUR – the counties and the twocities – have accepted higher fare prices for improved environment measures.


Table 5.9 below summarises what we consider to be the most significant positive andnegative aspects of the Copenhagen system under each of the criteria for evaluation.


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Table 5.9Copenhagen Performance Against Criteria

Positive Negative

Economic criteria

• Fairly good cost recovery

Economic criteria

Service quality

• Pioneering use of customer surveysas part of the quality of serviceincentive programme. Servicequality incentives especially useful ina gross cost contract system such asthis.

Service quality

• Reliability could be improved.

• No output incentives in the gross costcontracts.


• Strong central authority helps ensureservice integration.

• Relatively good informationprovision and good ticketingintegration.


Social cohesion

• High proportion of low floor buses,plus special services for the disabled.

Social cohesion

Dealing with change

• Gradual approach to transition to aconcession system.

• Explicit provision for staff workingconditions in the event of concessiontransfer. The fact that bidders cannotcompete on working conditions is aninteresting feature.

Dealing with change

Economic growth

• Good access to airport.

Economic growth


• Specific environmental objectives.



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5.6. Copenhagen “Scorecard”

To complete this chapter we present a summary “scorecard” summarising the mainadvantages and disadvantages of the Copenhagen system.

Table 5.10Copenhagen Summary “Scorecard”

Copenhagen


• Integrated system with commonfares structure and common servicebranding

• Phased transition to concessionsystem

• Performance regime based oncustomer satisfaction surveys

• The gross cost contract system fails toinclude any output incentives.

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6. CITY STUDY: ÉVORA

6.1. Key Facts

• Bus-based system with a single operator contract.

• Private operator on a long-term concession contract.

• Central public transport planning and management body comprised of the localmunicipality, the public transport operator and the parking-meter company.

• Parking meter revenues used to subsidise public transport.


6.2.1. Geographical and economic features

Évora, the capital of the Alentejo Region, is an historical city located in the Southeast ofPortugal. The historical centre of Évora has kept its old design characteristics, dated frommedieval times, with very narrow streets and a wall surrounding it. About 75 per cent ofthe streets have a width of less than 5 metres, while 46 per cent of the streets do not exceed awidth of 3.5 metres. The traffic flow between the centre and the periphery is made throughthe old medieval “gates”.

The county of Évora has a population of around 55,000 of which 87 per cent is located in thecity (inside and outside the walls). The residents in the historical centre area represent 17 percent of the county’s population. The level of motorisation in the city is higher than thenational average and indeed one of the highest rates in Portugal.

The employment in the service sector is mainly concentrated in the historical centre andrepresents about 60 per cent of the total employment. The city centre is also the location formany key facilities including the University and main hospital.

In 1986 the city was classified by UNESCO as World Patrimony, which caused a significantincrease in tourists visiting the region and the city centre.


Political initiatives at the National, Regional and Municipal levels all impact ontransportation policy in Évora, although local initiatives have the most direct impacts.

The National Program of social and economic development (PNDES), sets out goals for theAlentejo region in terms of its developments, which have been translated into a Regional

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Plan for the region (PROALENTEJO). The first and most relevant objective relates toovercoming the economic, demographic and social depression that had characterised theregion during the last decades. Among the different goals established the following onesassumes special relevance in this context:

• promote competitiveness and quality of Alentejo;

• create conditions to fix population in the region;

• take advantages of the endogenous potential of the region;

• promote the entrepreneurial role of the stakeholders in the development of newprojects;

• promote the competitiveness of the economic sector; and

• establish a network of cities at regional context, based on a hierarchy of functions.



Public Transport in Évora is bus-based. The municipality of Évora has responsibility fortransport at the strategic level. The municipality also manages the tariff system includingboth the type of and level of fares.

A body known as SITEE is in charge of planning and managing the urban transport system.SITEE brings together the Municipality of Évora, the Bus operator Belos Transportes and theprivate parking meter company (Resopre). SITEE is 51 per cent owned by the Municipality,44 per cent by Belos and 5 per cent by Resopre.

The aim of this partnership is to promote the conditions for sustainable mobility, byrestraining the access of private cars to the city centre, and promoting the use of publictransport. The second reason that stimulated the conception of the SITEE project is to coverthe financial deficit of the public transport system. By integrating public and privatetransport management in one entity (SITEE), public transport can now be cross-financedwith the revenues coming from the parking meters.

There were some major constraints that caused delays in establishing SITEE:

• The national legal and regulatory environment for urban public transport in Portugalis far from clear. Therefore the municipalities, sometimes even without having adedicated public transport department, often perform Strategic and Tacticalfunctions of the system.

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• The “Basic Law on Terrestrial Transports” (Law 10/90) is not totally implemented.This prevents the existence of more than one municipal concession in each city, evenif more than one network exists. This situation required that an agreement was madebetween the municipality and the actual operator in Évora.

• The legislation that regulates the local power was only reviewed recently, enablingthe establishment of municipal companies with private capital.

One of the main successes of SITEE is the acceptance of the programme. This is due toseveral public discussions with citizens and other stakeholders in which the different aspectsof the programme were explained as well as the implementation of an informationprogramme during the period of public discussion. An important aspect increasing itsacceptance was the immediate improvements of public transport introduced simultaneouslywith the restrictions to car use.

A second success factor was the participation of the bus operator Belos Transportes whoprovided all the (commercially sensitive) information of its operation and financial details.This information is necessary for the municipality to estimate the revenue needed fromparking metres to cover the deficits of the public transport system, and for linking financialcosts and benefits to the transport plan. The advantage for Belos will be a new integratedsystem to solve the financial deficit of the urban public transport operation.




The table below presents the modal split in 1999 and 2000, which gives an idea of the impactof the recent changes (Table 6.1).

Table 6.1Modal Split in 1999 and 2000

Mode 1999 share (%) 2000 share (%)Bus 5 8Taxi & other individual / collective modes (e.g. employer) 16 16Private car 75 70BicycleWalk

4 6

Total 100 100

Source: Évora

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6.4.1.2. Patronage

The average public transport user makes 2.2 trips per day, or 803 per year. The total amountof passenger kilometres is 9,279 per week. The amount of passenger kilometres over the lastfew years is slowly decreasing.

6.4.1.3. Fares

A single cash ticket costs €0.90 (180 Escudos). When bought in advance it costs €0.36 (73Escudos). A monthly pass costs €14 (2,810 Escudos). There is only one place where thesepasses can be obtained. A concessionary fare monthly pass is available for the followingthree groups of people, all paying €7.48 (1,500 Escudos) for the pass:

• the youth pass, for people under 26 years old;

• the school pass. For all people attending school and higher education; and

• the pensioners’ pass, for people aged 65 and older.

Tickets can be bought in advance at three locations, one of them being open on Saturdaysand Sundays.

Until the year 2000 two zones existed. Now there is only one zone.


The demand management and traffic management will be improved soon with theintroduction of a new radio system, which permits real time demand management. Morecomplex systems are currently too expensive given the size of the public transport system inÉvora.

A new traffic plan was implemented inside the city in order to make access to the city centredifficult and therefore to reduce the amount of traffic. This has been done by reorganisingthe road network in order to eliminate the traffic just passing through the city centre,reorganising the ring roads around the city centre, introducing more one way streets,reorganising crossings, introducing bus priority lanes and implementing new rules forloading and unloading of vehicles.


There is no information available on traffic speeds in Évora.


The total amount of line kilometres is 384 (one way). Running these lines takes in total 19.4hours. The longest line is 19.6 kilometres, the shortest only 7.9 kilometres. In total the city

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has 16 lines providing 82 services per week, running in total 9,485 kilometres. The averagespeed is 19.8 kilometres. The fastest service runs 29 kilometres per hour, the slowest almost14 kilometres per hour. See Table 6.2 for more information about the buses in Évora.

Table 6.2Information About the Buses Used in Évora

Buses Maximum number of passengersType Amount Number of seats Passengers

standingTotal

passengersMercedes (1) 2 43 18 61Mercedes (2) 7 43 13 56Volvo 3 29 21 50Renault 3 22 25 47

Source: SITEE

SITEE consists of the following employees:

• Management 3

• Financial department 2

• Bus drivers 20 (public transport)

• Inspector 1 (public transport)

• Inspector 7 (parking)

• Management and administration 2 (parking)

All the SITEE services are outsourced. This means that from the 35 people as stated aboveonly one is really working for SITEE. The rest are hired from e.g. the public transportoperator and the parking operations company. The manager works 35 hours per week, aswell as the seven people for the parking services. The bus drivers and the bus inspectorwork 40 hours per week. The other two people that are part of the management are onlyworking and paid for a monthly management meeting. Of the 40 hours per week the busdrivers are paid, they drive about 25 per cent of the time.



Table 6.3 and Table 6.4 show income and costs are for the 2nd, 3rd and 4th trimester of 2000.This because SITEE has just been established. From these tables, it can be calculated thatrevenues from the farebox cover 57% of total public transport costs, or 69% of publictransport operating costs.

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Table 6.3Costs of the System

CostsCosts for representatives and administration

€Administration: 1,015Representative Belos 381Representative municipality of Évora 381Representative Resopre 254

Public transport costsEmployees Belos 256,656Maintenance by Belos 121,491Belos other costs 14,676Depreciation costs 68,143Other costs 19,017

Costs for parkingMaintenance 16,178Police 70,603Depreciation costs 58,089Other costs 12,315TOTAL 1,117,151

Source: SITEE

The forecast costs were €441,944 compared with an outturn of €479,983.

Table 6.4Income

IncomeTicket sales

EuroTickets sold by the driver 59,002Tickets bought in advance 130,678Passes 83,558

Income from parking feesResidential passes 29,950Reserved parking spaces 15,623Parking spaces available to the public 330,458

OtherOther income 12,655TOTAL 661,923

Source: SITEE

The income for tickets and passes has been less than predicted. The total income for ticketsand passes was €273,237, while the forecast was €322,429. The income from parking spaceswas also less than forecast at €458,531, the main reason being insufficient ticket control.

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6.4.3.2. Funding and subsidy arrangements

The level of subsidy depends on factors that vary during and over the years. The incomefrom parking fees depends on the amount of available parking spaces and public works thattemporarily decrease the number of parking places. In 2000 this subsidy was €14,970. Thesubsidy for public transport depends on the introduction of new lines and the introductionof more reduced fares was €34,930. Part of the subsidy will be used to improve the quality ofthe buses as well as improving the supply of parking spaces.

6.4.3.3. Commercial revenues other than the farebox

In the year 2001 a deal has been made with an advertising management company regardingthe advertising on buses and the reverse of tickets. It is estimated that with this extra incomethe deficit of SITEE will be diminished by 25 per cent.


The annual accounts and the accounting scheme of the firm are according to the nationalrules and guidelines.


6.4.4.1. Frequency

Services typically operate two or three times an hour at peak times, but services are lessfrequent on the off peak and at weekends, when some services do not run.


The number of cancelled bus rides is insignificant, at less than one service per week, out of822 services per week. The rule is that a service cannot be cancelled if there is not analternative available within 20 minutes of that service.

The number of services with a delay of more than 15 minutes is also insignificant. About 80per cent of the services arrive within 0 to 5 minutes of the planned time.


Accessibility has recently been improved with the introduction of small environmentalfriendly high quality buses, readjustment of timetables and routes and increase of frequency.New routes are implemented linking neighbourhoods to the centre and to main socialinstitutions, like schools, the hospital and the university. Research showed that 23 per centof the users of the new bus lines started to use public transport after the introduction of theSITEE-project.

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The average distance of the bus stops is 150 to 200 metres in the urban part of themunicipality and 150 to 400 metres in the more rural area.

Figure 6.1 shows the map of the Évora bus system. This maps illustrates that all theindividual “suburbs” of the city are served.

Figure 6.1Map of Public Transport Routes in Évora

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6.4.4.4. Other service quality issues

For trips from near the city centre to the city centre less than 100 per cent of the seats aregenerally occupied. Outside the rush hour this is the same for other vehicles. In the rushhour loading is between 132 per cent and 172 per cent, depending on the type of bus and thedestination.

The bus lines run through the whole of the urban area and the more densely populatedareas in the less urbanised parts. The average age of the SITEE vehicles is about 13.5 years.

The last customer research projects are from before SITEE started. A new project, inaccordance with the plan of activities, will however start soon. In accordance with the lawSITEE must listen to the complaints and suggestions of the users, and it runs a complaintsbook.

The contract imposes penalties when specific service quality criteria cannot be met.



To restrain the access of private cars to the city centre and promote the use of publictransport some complementary measures have been developed covering different aspects,such as the creation of several free parking areas, outside the city walls but near the mainentrances of the city, and installing parking metres in the city centre. There are 1,350parking spaces in the historical centre with parking metres and 1,300 parking spacesreserved for inhabitants.

Extra attention is paid to the connection between the free parking areas and public transport,good pedestrian access to the centre and surveillance of the parked cars. Inside the walls allthe streets have paid parking. The network of parking metres is computerised to identifythe free parking spaces still available, different zones have different tariffs, parking forresidents is free and businesses inside the city walls have price discounts. Integrating publicand private transport management in SITEE enables the cross-subsidisation of publictransport with the revenues from the parking system.


Since there is only one public transport mode and one zone tariff integration is complete.There are plans to make it possible to pay for car parking with a card that can also be usedfor public transport.

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SITEE is responsible for providing information about the public transport. The timetablesare available on all the main bus stops. The timetables are also available at points of sale.

A maps is available with the printed bus lines, line numbers and destinations (see Figure6.1).

There are two websites for SITEE. The most extensive one is http://www.cm-evora.pt/sitee.Here more in depth information can be obtained about the company itself, a map,timetables, tickets and the parking system as well. The other website of SITEE(http://www.evora.net/sitee/horarios.htm) also contains the public transport information.


SITEE integrates both public transport and use of public (parking) space. All the car parksare near a main bus stop, while at the same time new or changed bus routes will always takeinto consideration the car parking situation.

There are a number of free parking areas very near the entrances of the old city of Évora.The old city of Évora has very limited parking facilities, which have to be paid for and it isdifficult to drive through because of the width of the street and the circulation plan.



There are special youth, school and pensioners passes. Instead of €14, they pay €7.48 for amonthly pass.


There is no real provision for the mobility impaired on Évora public transport, with none ofthe current vehicle fleet adapted for eg wheelchair access.


The prices of all the tariffs can be adjusted in accordance with the consumer price index withan extra of 1 per cent.

A study into the introduction of new technologies for tickets and for the management oftraffic and public transport demand is currently underway.

Every month there is a meeting between SITEE and the owners of SITEE to co-operate andco-ordinate the individual and joined actions. SITEE sends three monthly reports to inform

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the municipality of Évora about the progress and meeting the requirements for theconcession.



Since SITEE was started no strikes have taken place. In the years before that strikes werealso very uncommon, in fact the last strike was five to six years ago. Before that, hardly anyincidents occurred.

There are two unions representing the labour force in Évora. One is the Union for theSouthern Road Transport. One person is dealing with the transport in whole region of theAlentejo. Since Belos is part of a bigger transport operator, called Setubalense, operating inthe Alentejo, the Union only negotiates with the main office in Azeitão and not with Belos inÉvora. The Union has never spoken with SITEE. The same is the case with the secondUnion, the Union of Local Public Administration Workers. They cover the country perregion and are therefore also oriented towards the Alentejo as a whole.

The costs for personnel are presented in Table 6.5.

Table 6.5Total Personnel Costs (€)

Annualincome

Representation costs

Other Holidaysand Xmas

Overtime Travelcosts

Socialsecurity

Management18 31,544 3,394 4,344 5,257 - variable 3,494Inspector - - 1,147 - - - -Financialdepartment

- - 2,339 - - - -

Bus driver 171,882 - - 20,135 74,960 - 47,813Inspector (bus) 6,041 - - 1,432 9,998 - 2,960Administration services(bus)

26,688 - - 3,235 12,744 - 7,616

Inspector(parkingservices)

46,759 - 576 1,113 1,567 - 4,787

Managementandadministration(parkingservices)

13,360 - 192 1,113 - - 1,447

TOTAL € 296,274 3,394 8,598 32,285 99,269 variable 68,117

Source: SITEE

18 Only a part of the wages is paid by SITEE

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Next to the base payment, the (future) employees will receive an extra 10 per cent. Overtimepay is set in accordance with that for all public officers. As the basic income for bus driversis low (about €475 per month), they are often working extra hours to increase their income.Unions are sometimes worried about this.

The amount of holidays per person varies from 22 (drivers, bus inspector), 23 (people hiredfrom municipality) to 26 days (manager).

The inspectors have about 70 hours of training per year. The manager has 15 hours trainingper year. When the bus drivers start to work they get 32 hours of theory lessons, 80 hours ofdriving lessons and 50 hours of practise with the inspector and an experienced bus driver.Next to these initial hours there are refreshment courses when new cars, ticketing systemsand traffic control systems are being introduced.

Employee evaluation forms are not used as yet. There are however regular meetings withthe union.



The way in which Évora has sought to integrate car parking and public transport initiativesreflects the importance of trying to ensure good access to the city centre for business,employees and others. This is especially important in Évora given the historic nature of thecity layout.


Not applicable.


The municipality of Évora and Belos were already busy introducing alternative energy(biodiesel) in some of the urban buses before the start of SITEE. It was the costs oftransporting this fuel to Évora that made Belos and Évora decide to stop this programme.Currently one of the activities of SITEE is to make contact with suppliers of hybrid vehicles(electricity and diesel).

There are some ideas to implement a special pass with reduced costs to everybody parkingnear public transport terminals which permits transport between the city centre and theterminal. Another idea is to supply free public transport to the city centre for cars carryingfour or five people.

The national government has two different environmental subsidies for the implementationof projects and plans for the reduction of pollution by using alternative energy and the

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introduction of technologies that permit the increase of public transport users. SITEE willsoon present a project that will make use of both the subsidies.


Table 6.6below summarises what we consider to be the most significant positive andnegative aspects of the Évora system under each of the criteria for evaluation.

Table 6.6Évora Performance Against Criteria

Positive Negative

Economic criteria

• Link between parking revenues andpublic transport subsidies is aninteresting feature.

Economic criteria

• Low modal splits.

• Reasonably good cost recovery, butcould be higher with better ticketchecks.

Service quality

• Good reliability, although frequencyis only moderate.

Service quality


• Good ticketing integration.

• Explicit links between parking areasand bus routes, including some freeparking outside the city centre.

• Experience of the local operator isused directly in the planning agency


Social cohesion Social cohesion

• Very poor provision for themobility impaired

Dealing with change

• Transition has taken place smoothly.

Dealing with change

• Bus drivers have to work overtime tocompensate low basic pay levels

Economic growth

• Explicit linking of parking and publictransport initiatives to try and reducecongestion.

Economic growth

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Positive Negative

Environmental criteria Environmental criteria

• Initiative to introduce biodiesel fuelproved too costly.

6.6. Évora “Scorecard”

To complete this chapter we present a summary “scorecard” summarising the mainadvantages and disadvantages of the Évora system.

Table 6.7Évora Summary “Scorecard”

Évora


• Public transport planning andmanagement body includes the localoperator

• Car parking funds used to help fund publictransport, making SITEE less dependent ongovernmental loans and subsidies, whilelimiting car use in the city centre at thesame time

• Good service reliability combined withcheap public transport

• High acceptance of SITEE because ofpublic discussions, immediate visibleimprovement in public transport andrestricted use of car in old city centre

• Complete and simple tariff integration

• Revenues lower than expected due tolack of ticket checks

• Very poor access for mobility impaired


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7. CITY STUDY: LYON

7.1. Key Facts

• Public transport system consists of bus, metro, tram, and heavy rail.

• Central public agency responsible for public transport provision, including servicelevels and fares, and ownership of the infrastructure and public transport vehicles.

• Single operator, management contract with some freedom on service planningwithin the authority’s constraints. Authority retains revenue risk.



The Lyon conurbation is geographically a flat alluvial plain in its eastern part, separatedfrom the hills located to the west and the north by the two rivers Rhône and Saône. Thissituation leads to a rather divided territory: the Rhône valley upstream of Lyon, the easternplain, the plateau of Caluire prolonged by the Bresse area of the Département de l'Ain,(between Rhône and Saône), the western hills and the right bank of the Rhône to the south ofthe city. The whole urban region includes the city of Saint Etienne and has a population ofaround 2.5 million. About 80 per cent of them live in Greater Lyon.

The regional council Département du Rhône covers twice the area of the urban councilcommittee Communauté Urbaine but includes only 30 per cent of the population. Comparedto the urban council, the regional council is more concerned with the development of itshilly or mountainous western areas (Beaujolais, Monts de Tarare). Therefore, the townplanning of the conurbation is sometimes hampered by conflicting wishes of the regionaland urban councils.

Major economic activities in the Lyon conurbation include chemical, petrochemical andmetallurgical industries as well as universities, research laboratories, commercial activities,paramedical businesses and engineering companies.


The town planning agency of the Lyon urban council (Agence d'Urbanisme de la CommunautéUrbaine de Lyon) is in charge of all town-planning studies related to Greater Lyon and to theLyon urban region. It is not an executive body but it has a recognised expertise. In general,its advice is taken into account for transport and regional policy matters as well. It also hasan arbitration function.

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The town planning agency has produced the Lyon 2010 developments and the town-planning scheme (Schéma Directeur d'Aménagement de la Région Lyonnaise), which weresubmitted to the elected bodies and are a basis for the land use documents (Pland'Occupation des Sols or P.O.S). These documents regulate all aspects related to land use,parking facilities, road, railway, and public transport infrastructures. They includecompulsory measures (number of parking places per dwelling or per 1,000 square meters ofoffice buildings for example), as well as intended infrastructure developments.

SYTRAL is the transport planner. The area of responsibility of SYTRAL is equal to the areaof the urban council committee. The 20 members of the board of SYTRAL are elected. Tenare from the urban council committee and 10 from the regional council. Every three yearshalf of the board is replaced, with the members being elected for six years. More than 99 percent of the public transport in Lyon is operated by Société Lyonnaise de Transport en Commun(SLTC), belonging to the KEOLIS group. Figure 7.1 shows a schematic presentation of theorganisational framework.

Figure 7.1Links between the City, the Département, SYTRAL and SLTC

Urb

anco

mm

uni

ties

(55

citi

es)

10el

ecte

dp

eopl

e Departem

entR

hône(19

districts)

10elected

people

SYTRAL

SLTC >99% of the market

Agence d'Urbanisme de la CommunautéUrbaine de Lyon



The core of the Lyon public transport system is formed by four metro-lines. In addition, anew tramline opened on January 1st, 2001. Buses and trolley buses operate the remainder ofthe public transport network. There are also a number of funiculars.

Public transport in Lyon is regulated through management contracts. Every six years, theregional transport authority organises a tendering procedure for the management of theexisting public transport network. SYTRAL, the public transport authority, retains the

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ownership of infrastructure and vehicles and retains both the revenue risk as well as a partof the production cost risk. SYTRAL is responsible for demand and traffic management,meaning among other things planning of the lines, frequency levels, pricing and ticketing aswell as introduction of new bus and tram line. The urban communities can however makeproposals for introduction or changes of lines and the operator can assist them in studyingproposed bus lines. It is however the SYTRAL management that ultimately decides aboutintroduction of changes of lines.

The operator is paid a fee of around €205 million according to the mileage actually run. Thismeans that mileage lost is not paid for, e.g. in the case of strikes. Lost mileage as a result ofstrikes has already cost the operator €3 million in 2001.

For both passenger and freight transport operators in France, a certificate called capacité detransport is required. It is not a real degree, but the candidate needs to invest some time inlegal transport matters, technical and managerial ones. Alternatively, being an executive inthe transport industry entitles a person to be appointed as head of a company on the basis ofexperience, without having to pass the exam.

Because of the importance of personal contacts in France, as well as because of the minimumsize requested by the transport authority to be accepted as a competitor, competition is infact limited to the small group of large transport operators in France (Via Transport,Transdev, CGEA-CGFTE, Verney and Cariane). Moreover, foreign companies appear veryinfrequently in the tendering process.

Bus, trolleybus, metro and two funicular services are currently operated by Société Lyonnaisede Transport en Commun (SLTC). SLTC belongs to the KEOLIS group, a public transportholding with more than 25,000 employees operating in 80 cities and 50 regions in the EU.SLTC won the tender in 1999 and will operate until 2004. In 1999 the only two competitorswere Arriva and Transdev, although SLTC expects fiercer competition in 2004. SLTCreceives a payment per public transport kilometre operated.

The second operator in Lyon is OPTIBUS, a non-profit society which deals with thetransport of the disabled and has less than 1 per cent of the total market. Out of the totalcosts, two thirds are covered by SYTRAL and the rest by passenger payments.

The degree of competition in the Lyon system appears to be limited. In spite of the fact thatthe contracts are tendered every six years and the fact that the investment required byoperators is very limited, the entry barriers still seem high. Managing the whole of anetwork the size of Lyon is a complicated task and it appears that an incumbent operatorwould develop major advantages, which is reflected by the limited number of competitorstendering for the contract.

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SYTRAL, the planner, mainly has the duty to cover the area of urban public transport. Itacts also as an adviser to the regional council Département du Rhône. It is also responsible forthe specification of heavy rail transport within the boundaries of the regional council, withthe exception of tariffs. The regulatory powers may be described as follows:

• The specifications for the level and quality of the public transport service are fixed atevery call for tender (every six years since 1985). They are modified when needed, asprovided for in the contract, against an amendment to the fee charged to SYTRAL.Broadly speaking the fee is modified according to the extra man-hours and vehicle-kilometres that the operator needs. Any extra vehicles will be brought into thesystem by SYTRAL, which remains in charge of investment.

• The decisions related to major investment projects are taken by the board ofSYTRAL, within the framework of a medium/long term investment plan derivedfrom the public transport strategy, or alternatively from an urban transportation plan(plan de déplacements urbains).

Fare levels are set by SYTRAL. The fare is a flat fare, based on the constitutional(interpretation of) citizens' rights, which implies equal treatment for all, irrespective of thevariations of the cost of public service according to the place where they live or work.

SYTRAL can also contract out studies, for example on planning, to the urban town planningagency or to any consultant relevant to its responsibilities.

The operator in turn is required to:

• determine the actual timetables; adjustments are regularly made by commonunderstanding between SYTRAL and the operator, although they have to besubmitted to the vote of SYTRAL's board;

• use its right of initiative, act as a consultant and make use of its market knowledge atboth local (Lyon area) and national level (it has operations in more than 80conurbations); and

• propose any improvements to the service and to supply its expertise to SYTRAL.

The main operator undertakes some subcontracting, as regional coach operators and taxioperators are involved in running a small number of services. From January 1st, 1997, theregional coach transport routes are integrated into the SYTRAL system. Since then,incoming coaches are allowed to pick up passengers enter at specific stops, thereby offeringexpress services for journeys within the urban area.

The case of Lyon is the largest contract at fixed cost in France (exceeding €180 million peryear). The formula was initiated in 1986. The initiator was the operator who felt

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competition approaching its territory under the former scheme of contract against amanagement fee, which was less than one per cent of turnover. As the financial risk to theoperator under the new structure is higher, fewer competitors now try to enter the Lyon(management contract) market.

The authority was also in favour of the new structure. The operator would now bear alarger part of the production cost risk and therefore have a larger incentive to reduce itscosts. Under the previous scheme of contract against a management fee, the production riskrested with the authority.




The modal split over all the modes in Lyon is presented in Table 7.1. This table shows thatthe market share of taxis and private cars has increased by about 5 per cent-points in theperiod from 1986 to 1995, mainly at the expense of walking. The decline of the market shareof public transport has been relatively limited.

Table 7.1Public and Private Transport Modal Split, 1986 and 1995

Mode 1986 1995BusTram/light railMetro/undergroundHeavy rail 14.5 13.5Taxi & private car 48.0 53.0Bicycle 2.0 1.5Walk 34.5 31.5Other 1.0 0.5Total 100.0 100.0

7.4.1.2. Patronage

On a typical day in 1999, around 1,173,000 trips were made by public transport. This wasdivided over the various modes as follows:

• 474,300 for buses;

• 231,000 for metro line A;

• 230,700 for metro line D;

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• 110,100 for metro line B;

• 81,000 for trolley-buses;

• 29,700 for metro line C; and

• 16,200 for the funiculars.

It can be seen that almost half of these trips were made by metro, although buses account fora significant number of journeys as well.

In 1999, the total number of passenger kilometres was:

• 2.55 million for trolley buses;

• 38.9 million for buses;

• 13.2 million for the metro system; and

• 0.93 million for private buses.

The total amount of passenger journeys in 1999 was 256 millions. A trip involving a changeusing for example the bus and the metro is counted twice in this figure. Without countingthe individual legs of journeys, the total number of passengers in 1999 was 159 million. Thelarge difference between the two figures implies that many passengers use more than onepublic transport line to and from the city.

The 1998 and 1999 patronage figures are contained in Table 7.2. This shows that between1998 and 1999, public transport patronage increased slightly. In 2000, however, the use ofpublic transport increased by about 5 per cent.

Table 7.2Public Transport Patronage in Lyon, 1998-1999

Passengers journey-legs

1998 1999 1998 1999Total (in millions) 157 159 253 256Total per inhabitant 135 136 218 219

Source: SLTC

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7.4.1.3. Fares

The key tickets are presented in Table 7.3.

Table 7.3Prices of Key Tickets

Price € (FF) DescriptionTicket unité 1.30 (8.50) Single ticket within the urban

area, time limit is one hourCarnet of 10 tickets 10.45 (68.50) A booklet of 10 single ticketsDay ticket 3.74 (24.50) Day ticket on name within the

area greater Lyon urban areaMonthly pass - adult 43.16 (283.00) Provides access to the entire

greater Lyon urban areaMonthly pass – student (under 28) 30.64 (201.00) Provides access to the entire

greater Lyon urban areaMonthly pass – child (under 13) 18.45 (121.00) Provides access to the entire

greater Lyon urban areaMonthly pass – senior (over 65) 30.64 (201.00) Provides access to the entire

greater Lyon urban area

Source: SLTC

In addition, senior citizens aged over 65 who also receive state low income benefits areentitled to a “free” pass (in exchange for a €5.03 administration charge).


The town planning agency of the Lyon urban council is responsible for town planningscheme proposals, including roads and parking facilities. SYTRAL is responsible for publictransport demand management, including the planning of routes and frequencies.


The average traffic speed in the centre of Lyon is about 13 km/h. It is 17 km/h for the mainlines and 20 km/hr for the lines out of the centre. For the metro it is 24 to 25 km/h for lineA/B, 17 km/h for line C and about 29 km/h for D. The new tramway has a plannedaverage speed of 19 to 20 km/h.


In Lyon there are 1002 buses: 24 minibuses, 778 standard buses, 113 long buses, and 87trolley buses. There are 32 metro vehicles for metro lines A and B, with three carriages each,five vehicles for line C (two carriages each) and 36 vehicles for line D (two carriages each).Lines A and B have more carriages as they serve the major business areas and the two maintrain stations. The total amount of route kilometres is 1,300 for regular buses and 1,110 forschool buses. Summaries of transport operation details in Lyon are provided in Table 7.4and Table 7.5.

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Table 7.4Operational Details of Lyon Bus System

Number of bus lines Line kilometres Number of vehiclesBus 123 1300 819Mini bus 6 20 24Trolley 7 43 73School bus 111 1110 87

Source: SYTRAL

Table 7.5Operational Details of Lyon Metro System

Number of stations Line kilometres Number of carriages

Metro line A 13 8,2

Metro line B 6 3,7

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Metro line C 5 2,4 10

Metro line D 15 12,9 72

Funiculars 5 1,2 6

Source: SYTRAL

Some 55.5 million public transport kilometres are provided per year. The bus takes thebiggest slice with 38.9 million kilometres.

SYTRAL owns the buildings and buses and is currently buying about 55 buses per year.



Table 7.6 contains the revenues and costs of the public transport system in Lyon. It showsthat the proportion of costs covered by farebox revenue is low and that there are significantdeficits.

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Table 7.6Revenue and Costs of Lyon Public Transport System

Amount (€)Fare income 100.5Subsidies 120.4Versement (see below) 100.5Other sources 11.4Total revenue 332.8

Operating costs 205.3Equipment costs 242.7SYTRAL administration 4.4Total operating costs 452.4

Table 7.7Lyon Farebox Revenue, 1996-1999

Fare income (million €)1996 90.91997 94.81998 95.61999 96.1

Source: SLTC


The “Versement Transport” is a specific tax imposed by law to subsidise the improvementand development of public transport in France. The Versement Transport comprises apercentage of the salaries paid by all the companies with more than nine employees. Forlarge cities like Lyon, there are two maximum rates: 1 per cent and 1.75 per cent. The 1.75per cent rate applies to cities where public transport has exclusive right of way such as atram network or a metro network.19 For the Paris region, the maximum rate is 2.20%. TheLyon the tax level is 1.62 per cent. Most of the income (1.5 per cent) goes to SYTRAL.

The “Versement Transport” had its origins in a report of the National Assembly in 1973 (theValleix report), which stated that a good transport policy is a major element of urbandevelopment. Today, the Versement Transport has two main objectives:

• giving local authorities a financing capacity for improving their public transportnetworks, without resorting to state subvention or additional loans; and

19 Information retrieved on the world wide web, 28/06/2001: http://www.ils.nrw.de/netz/leda/pdf/dv3-an01.pdf

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• enabling local authorities to reduce their operating deficits, by transferring financingfrom their general budgets to this tax on salaries.

It is thought that the Versement Transport does not have a significant effect on labour costs,nor on company location. It also has a very limited taxation impact (less than 1 per cent ofthe overall French tax burden).

This tax levy on companies is a very powerful tool for financing and developing publictransport in France. The Versement Transport has been introduced in more than 85 per centof urban areas with more than 20,000 inhabitants. Almost 40 per cent of the costs of publictransport in France are financed by this measure.

The income for the subsidies is raised by a local income tax, of which 50 per cent is levied bythe urban council committee and 50 per cent by the regional authority. The fare income isgradually increasing, as can be seen in Table 7.7. About 50 per cent of it comes from ticketsales and the other 50 per cent from travel cards.


The income from advertising goes to SYTRAL. This is about € 4.5 million per year foradvertising on buses and metros. For the tram there is a special contract, with all the moneyobtained from advertising being earmarked for cleaning the tram. The same kind of contractis in operation for bus stops where income from advertising is also sufficient to clean thestops.


Accountability is enhanced by the fact that SYTRAL’s board is made up of elected membersfrom the urban council committee and the regional council. There are regular elections, withhalf the board being replaced every three years.

The public transport operators produce annual reports, which are available to the public.


7.4.4.1. Frequency

The service frequencies are as follows:

• for metros during peak hours: a service every three minutes, with a service intervalof less than two minutes on line D during peak hours;

• for buses during peak hours: every three or four minutes for the most importantlines, six to eight minutes for the main lines and about 10 to 15 minutes for secondarylines; and

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• during off-peak hours: every 5 to 10 minutes for metro and 6 to 30 or 60 minutes forbuses.


The objective in the contract with the operator is to have more than 70 per cent of buses perline arriving on time. A vehicle is on time if it arrives between one minute before thescheduled time and three minutes after the scheduled time. No more than eight lines areallowed to score below this level. Performance will soon be measured with the use of aGlobal Positioning System, with which the first buses will be equipped in the summer of2001.

Other provisions regarding service quality in the contract include a requirement that for buslines, no more than three lines are allowed a percentage of cancelled trips in excess of 1 percent. For the metro system, the requirement is that 99 per cent of planned metro kilometresmust be delivered.


Accessibility in terms of geographical coverage is generally considered to be good, with arelatively dense network of rail, metro, tram and bus lines.

The average distance to bus stops is 300 metres and 500 to 600 metres to metro stations. Theaverage number of passenger interchanges per trip (inter- or intra-modal) is 1.62 and theaverage age of the buses is around eight years.


The quality of the performance of the operators is monitored by SYTRAL and evaluatedaccording to the following ten quality dimensions:

• cleanliness;

• punctuality;

• information to the passengers;

• fraud control;

• production;

• availability of equipment;

• behaviour;

• security; and

• environmental care.

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The performance regarding these dimensions is checked by SLTC staff, who are speciallyemployed for this purpose. Last year, the operator failed to meet the objectives forinformation to the passengers and for fraud control. If the agreed targets are not met,penalties become payable by the operator. The main penalties are as follows:

• for punctuality, cleanliness and information, the penalties are € 46,000 per three-month period. The dimension of cleanliness was introduced last year;

• failing to meet the fraud control target is penalised by a € 137,000 per three-monthperiod;

• in 2001 the criteria of behaviour and security were introduced. Both have smallpenalties of €7,600 if the agreed standards are not reached. The security measurerelates to performance indicators like the amount of visible staff after 20.00 hours;

• environmental care also has a minor penalty of about €7,600. It is being measured bye.g. bus noise and switching off bus engines where possible.

The public transport system in Lyon is currently introducing a quality system according tothe AFNOR norm developed in France. The main aspect of this norm is that it only looks atthe level of quality for the customers and is outcome oriented, as opposed to the ISO normsthat focus mainly on procedures.

SLTC is currently working on a customer charter, which clearly interlinks with the five mostimportant features according to their customers: welcoming; driving; punctuality;information; and cleanliness. Price and frequency will not be taken into consideration,because these are determined by the public transport authority SYTRAL.



The physical integration of the Lyon public transport system can be considered as good as itcontains an extensive network of rail, metro, tram and bus lines. The Lyon public transportsystem operates about twice as much vehicle kilometres as the systems in Lille andMarseille, even though the cities are of similar size.

The Lyon centre has two main train stations: Perrache and Part-Dieu. Both are wellconnected to the rest of the city with metro, tram and bus lines. Perrache has connectionswith eight local bus lines, two tramlines, 10 regional bus lines and metro line A. There isalso a bus connection to the airport. Part-Dieu is linked to Metro B, a tramline and 13 buslines. A direct connection to the Eurexpo fair is also available, as well as a bus connection tothe airport.

There are also a number of Park&Ride schemes in the area, for which SYTRAL isresponsible. There are about 3,000 parking spaces in the area. The sites that are linked to

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the metro system are much more successful than the ones that are linked to the tram system.The reason might be that the tramlines are also easy to travel by car.


Tariff integration is generally good. Tickets bought within the Lyon area can be used forbus, tram and metro.

The Lyon urban transport system extends to 55 cities around Lyon. This means that co-ordination with other operators is not very important. There are however contracts withprivate bus companies and with SNCF for travelcards. For these cards the Rhône area isdivided in seven zones. Price integration with the other six zones is available on trains andinterurban buses. There is so far no integrated rail-urban transport single ticket but mainlymultimodal season tickets according to the national railway fare system. This nationalsystem is rather rigid. Outside Greater Lyon there is another system with only privateoperators. The Department of Rhône only deals with them in relation to fare levels.

The prices for co-ordinated TCL – interurban bus tickets and TCL – Train (SNCF) arecontained in Table 7.8.

Table 7.8Prices for Interurban Monthly Tickets

TCL – interurban bus (in €) TCL – Train (SNCF) in €1 zone 50.312 zones 41.16 56.413 zones 48.78 71.654 zones 56.41 86.905 zones 65.55 91.476 zones - 96.047 zones - 100.62

Source: SLTC


It is the operator that is responsible for providing the information, with SYTRAL checking ifthe provision of information is in accordance with the agreed standards. As there is onlyone operator, the level of information integration in Greater Lyon can be considered as good.

Currently, a real time information programme is being installed in the buses, containing 500stops. In buses fitted with the system, the name of the next stop will appear during thejourneys. The system will later be extended to include 3,500 stops. The idea is to implementthis for the tramway stops as well.

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Recently, the urban council committee has produced a transport plan named “Le plan desdéplacement urbains de l’agglomération Lyonnaise” in which public transport has an importantrole. One of the main pillars is the way to try and make the public transport compete withprivate transport (car). This is conceptualised on several spatial levels.

Six territorial levels are distinguished (1 to 6) for the different scales for which trips takeplace. Levels 5 and 6 relate to Intercontinental, Europe, Euro-region and regional trips.Public transport can compete with planes and cars by using TGVs and other major trainlines as far as regions and possibly euro regions. For transport within the “bassin de vie”, anarea slightly extending beyond the Greater Lyon area, public transport can compete withprivate transport by providing metro and tramway lines. In the “secteur”, for example thecentre of Lyon, there should be a distribution network between centres of work, leisure,services etc. For urban centres, which consist of several districts the main source ofcompetition is providing inter-district links. Within a district public transport should beprovided by minibuses.

This plan will be used for the extension of the public transport services in Lyon. The sixlevels show for example that the metro and tram networks should be extended in order to becompetitive on level 4. In the lower levels 1, 2 and 3, public transport is competitive with 22to 25 per cent of passengers using public transport. For the periphery, this is much lower,which means that the developments should be taken place on this scale. On level 4, a realnetwork should be developed integrating metro, train and tramlines providing transport tokey areas.

The aim of the plan is to reverse the decline in market share of the public transport system.The plan has been produced with all the relevant partners in the area: regional and urban(public) transport organisations as well as sectoral governmental organisations, SYTRAL,SNCF (French national railways) and RFF (rail infrastructure manager).



Details of concessionary fares are given in Section 7.4.1.


Around 30 per cent of the buses are equipped for the mobility-impaired. There is also aspecial dial-a-ride service for the disabled, operated by Optibus. Optibus is funded bySYTRAL and receives an annual subsidy of around € 1.2 million. The section on fares abovegives details of the discounts available for children, students, senior citizens and families.

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7.4.7. Dealing with change: external changes

During the last 10 years, no fundamental changes to the Lyon public transport system haveoccurred.

A successful change was the introduction of a special reduction card for students and aspecial two-hour ticket. The two-hour tickets give the users an extra hour to travel in thecity. The student ticket resulted in a considerable increase of the use of public transport bystudents. Both the two-hour ticket and the student ticket resulted in increased revenue forSYTRAL.

7.4.8. Dealing with change: internal changes

The most significant changes within SLTC have been the internal decentralisation,introduction of quality management and training and the extensions of the public transport,like the metro lines and the introduction of the tram.


SLTC is part of KEOLIS, a holding company that employs some 25,000 people. Only a fewhundred have KEOLIS-contracts. The rest, including most SLTC staff, have local contractsand working conditions. In Lyon there are only 20 people with a KEOLIS contract.

There are about 3,842 staff employed by SLTC, of which about 60 per cent are drivers andother operators, 5 per cent administration, 11 per cent technical, 15 per cent for site ganglabour, 2 per cent for management and 7 per cent for labour. Nearly 10 per cent of the staffare women with around 6 per cent of the drivers being female. The total staff costs are aboutFRF 900 million FRF (€ 137 million), which implies an average cost per member of staff ofaround € 36,000. The employees work 35 hours per week and have 25 holidays per year.The pension scheme is a state system and is the same all over France.

Bus drivers who are hired and have driving licence D get a 15 day training programmewhen they start. They are offered a fixed contract for 152 hours per month. If they only havedriving licence B and are over 26, the training is extended by one month to obtain license Dand they are offered a gross salary of €1,494.14 per month plus an extra thirteenth month.People who start as bus driver not in the possession of driving license D can get a fixedcontract after passing the exam and will receive the following salary: €722.46 from month 1to month 4, €925.98 from month 5 to month 12 and €1,094.58 from month 13 to month 18.

On a national level in France there are five unions recognised by the national government tonegotiate with public authority and private companies and sectors. Next to these five, “free”unions also exist. There are three unions in Lyon with which the local public transportorganisations negotiate: CGT, FO and FGTECFDT. For issues of major importance the threeunions often work together.

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There is a national collective agreement for urban transport. However, each union, on acompany, local, regional or national level, can decide on its own what it is going to doregarding the operator in Lyon. Unions do not have to notify in advance that they are goingon strike.

Strikes occur every year, although some years are better than others. It is difficult to explainwhy there are more strikes in Lyon than for example in Évora, Zurich and Copenhagen,where hardly any strikes takes place. The last big strike in Lyon was in 1999. It lasted forfive days and was related to the introduction of the 35-hour workweek. Before 1999, peopleused to work 40 hours per week and staff went on strike for compensation measures. So farin the year 2001 there was a one day strike in January, three days in March, one day in Apriland two days in May.

SLTC has a quality charter for the staff, which is not public. They aim to achieve an 80 percent overall satisfaction score.



No details to report.


There is an airport, Lyon Satolas, which is served from the city centre by buses and taxis.The service is provided by the county of Rhône and does not fall under the responsibility ofSYTRAL. The frequency is about three buses per hour. The buses that depart from the twomulti-modal stations in the centre of Lyon are however not easy to find, especially forpeople without a knowledge of the French language. The bus fare from the airport to thecity centre is €7.49 (FF49), €13.46 for a return ticket, or €8.46 for a single ticket which is alsovalid on Lyon metro. A single child fare is €3.82.




Table 7.9 below summarises what we consider to be the most significant positive andnegative aspects of the Lyon system under each of the criteria for evaluation.

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Table 7.9Lyon Performance Against Criteria

Positive Negative

Economic criteria

• The national versement system is aninteresting feature.

Economic criteria

• No output incentives in the gross costcontract.

• Poor cost recovery.

• Modal share fairly low and decliningslightly.

Service quality

• Accessibility is good.

• Service quality monitoringprogramme. Customer chartercurrently under development.

Service quality


• Strong central planning agency helpsservice integration.

• Good physical, information and tariffintegration.

• Park and ride schemes


Social cohesion

• A range of concessionary faresavaialable.

Social cohesion

• Flat rate fare system maydiscriminate against those needing tomake short journeys.

Dealing with change

• Authority ownership of busesreduces barriers to entry.

Dealing with change

• Single contract for the whole areaprevents smaller companies forbidding, potentially restrictingcompetition.


Environmental criteria Environmental criteria

• No specific initiatives.

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7.6. Lyon “Scorecard”

To complete this chapter we present a summary “scorecard” summarising the mainadvantages and disadvantages of the Lyon system.

Table 7.10Lyon Summary “Scorecard”

Lyon


• Powerful transport planner

• Ownership of vehicles by transportplanner facilitates investment andreduces barriers to entry

• Having a single operator for the bus,tram and metro network facilitatesintegration

• Versement Transport

• The gross cost contract used doesnot give the operator an incentive toincrease revenue

• Tendering the whole network atonce increases entry barriers, withtypically only two or three bidsreceived per tendering round

• Poor labour relations with veryfrequent strikes


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8. CITY STUDY: MANCHESTER20

8.1. Key Facts

• Bus, light rail and heavy rail-based system.

• Central public transport authority (GMPTE) with overall responsibility includinginformation provision.

• Deregulated bus system with mainly net-cost contracts. Operators have freedomto set fares. Private heavy rail operator on a franchise contract.

• Light rail system built and operated by private firms, but GMPTE retainsownership. Operators set fares, but GMPTE sets service levels.



The city of Manchester is situated in the North West of England, just west of the Pennines.The city itself has around 500,000 inhabitants, but there are some 2.5 million inhabitants inthe total Greater Manchester metropolitan area. Its growth had originally been driven bythe Industrial Revolution, but by the 20th century, the city was facing increasing industrialproblems associated with the decline of the textile trades as a result of foreign competitionand technological obsolescence. Manchester remains an industrial city, although the servicesector has become much more important in the last few decades.

In Greater Manchester, around 70.4 per cent of people of working age were in employmentin 1998/99, compared with an average of 73.5 per cent for the United Kingdom.21 The ILOunemployment rate was 6.2 per cent in this period, almost equal to the UK average.22 Theaverage gross weekly full-time earnings in Greater Manchester were € 675 per week as atApril 1999, about 5 per cent below the UK average.23 The earnings figure however comparesfavourably with the other metropolitan counties in the United Kingdom.

The figures for Manchester itself are considerably worse those for the Greater Manchesterarea. For example, in February 2000, around 20 per cent of the Manchester population aged

20 All prices mentioned in this chapter have been converted into January 2001 prices and then into euros. Anexchange rate of €1 = £0.62 has been used.

21 Source of this and the other statistics in this section: Office for National Statistics (2000) Regional Trends. Data referto the period March 1998 to February 1999.

22 The ILO unemployment rate is the unemployment rate as a percentage of the economically active.

23 In January 2001 prices, the figure is £435 (€700)


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over 16 received income support, as opposed to 12 per cent for Greater Manchester. The 20per cent figure is among the highest in the entire country.


Greater Manchester is governed by ten Metropolitan District Councils, one of them beingManchester City Council which is responsible for Manchester itself. The body that isresponsible for public transport in the area is the Greater Manchester Passenger TransportAuthority (GMPTA), which is made up of 33 Councillors from each of the District Councilsin Greater Manchester. GMPTA assesses the public transport needs of the county andmakes policy decisions about the provision of public transport in the area, mainly focusingon those services and facilities that are not provided by the market. GMPTA is funded bylocal taxation, raised by the District Councils but with financial contributions from CentralGovernment, and passes these funds on to its executive body, the Greater ManchesterPassenger Transport Executive (GMPTE). GMPTE is one of seven Passenger TransportExecutives (PTEs) in the United Kingdom.

The main duties of GMPTE are the following:

• GMPTE subsidises bus services that are not provided commercially by bus operators;

• GMPTE provides timetable information ;

• GMPTE subsidises concessionary fares;

• GMPTE is, with the Strategic Rail Authority, responsible for local rail services inGreater Manchester; and

• GMPTE owns the Metrolink light rail system and manages its development.

Other bodies at a national level are involved in public transport in Greater Manchester aswell. As indicated above, the Strategic Rail Authority is jointly responsible with GMPTE forthe provision of local rail services in the area. The Department of the Environment,Transport and the Regions (DETR) provides funding and is responsible for the policyframework.24

24 Following the recent General Elections in the United Kingdom, this department has been renamed to Department ofTransport, Local Government and the Regions (DTLR).


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8.3.1.1. Public transport in Manchester

Greater Manchester has three important public transport modes: heavy rail, light rail andbus. Of these, bus is by far the most important mode, with approximately 90 per cent oflocal public transport journeys made by bus, with heavy rail and Metrolink each accountingfor approximately 5 per cent. In terms of passenger kilometres, buses account for around 75per cent of the total passenger kilometres travelled by local public transport, with around 15per cent by rail and 10 per cent by Metrolink.

There is a very extensive bus network in Greater Manchester with several hundreds ofroutes. The bus market is deregulated and there are currently around 26 privately ownedfirms active in the bus market. The market is however dominated by the two largest firms,First Manchester and Stagecoach Manchester, both part of large UK bus groups.Subsidiaries of these two groups operate almost 80 per cent of the total of vehicle miles inManchester. Many of the other firms only operate a limited service on one or two routes.

The heavy rail network is also extensive with around ten railway lines running intoManchester city centre. The network comprises 228 route kilometres with 98 stations. Thereare two main stations in the centre: Piccadilly in the south and Victoria in the north. Manyservices terminate at one of these stations, but there are some through services via eitherPiccadilly or Victoria (but none serving both). The suburban network is mainly operated byFirst North Western under a seven year franchise.

The light rail network is marketed under the name Metrolink, the first line of which openedin 1992. The light rail plans were drawn up in the 1980s in relation to a heavy rail schemethat was carried out at the time and involved the construction of two new chord lines thatenabled more trains to reach the main Piccadilly station. This left a number of lines withlocal traffic only, which required both increasing subsidy and considerable capitalexpenditure to renew life expired equipment. Eventually, this resulted in a proposal for asix-line Metrolink network. Due to funding constraints, the network was to be constructedin phases.

The first phase involved the conversion of two existing railway lines, one from Bury in thenorth and the other from Altrincham in the south. The line from Altrincham used toterminate at Piccadilly station in the southeast of the city centre, whereas the link from Buryran into Victoria, situated in the north of the centre. Therefore, a new on-street section wasconstructed through the city centre, linking the two former railway lines and with a spur toPiccadilly. The line proved very successful and a second line, consisting of a 9.5 kmextension into Eccles, opened in July 2000. This section is different from the other parts ofthe network in that it has not been constructed by converting an existing railway line.Instead, a new line has been built, partially running on the streets and partially on its own


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right-of-way. The contract for the Eccles extension was won by Altram, which took over theoperation of the existing routes.

8.3.1.2. Market access regime

As the framework is rather different for each of the three modes, we consider each of themodes in turn.

Bus

History

The 1985 Transport Act radically altered the bus market in the United Kingdom with fullderegulation occurring outside London and Northern Ireland. The main elements of the Actwere:25

• Removal of control of entry to and exit from the local bus market, subject to a 42-daynotice period.

• Compulsory competitive tendering for loss-making services, provided there is noundue interference with the viability of commercial services.

• Changes in ownership and control of the bus companies; the state-owned NationalBus Company was privatised as 70 different area companies, whereas the municipaloperators were put at arms length from the authority. Many of the latter companieswere sold at a later stage.

• Limiting the local authority powers and duties to, among other things,supplementing commercial services, operating a concessionary fares scheme,running bus stations and promoting voluntary travelcards.

• Introduction of general competition law to the bus market.

• Subsidy cuts, especially in the metropolitan areas.

In Greater Manchester, the PTE ran some 96 per cent of the vehicle mileage in the area priorto deregulation, with the remainder mainly provided by National Bus Companysubsidiaries. After deregulation, no serious competition emerged until early 1987, whenManchester Minibuses entered the south Manchester market, quickly expanding untileventually a fleet of 230 vehicles was operated. Greater Manchester Buses Ltd, the newoperating company owned by the PTE but at arm’s length from it, reacted by introducing itsown minibus services in south Manchester. Manchester Minibuses did not compete on pricebut followed Greater Manchester Buses distance-related scale. Other operators entered as

25 See Mackie, P and Preston, J (1996) The Local Bus Market: A Case Study of Regulatory Change. Avebury (Aldershot,Hants).


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well and by July 1988, over 20 per cent of the bus kilometres run in the area was operated byprivate companies. Competition was very intense with over 70 companies competing forbusiness at one point.

However, in September 1988, a consolidation process started that would eventually seemuch on-the-road competition disappear. In that month, Manchester Minibuses was sold toRibble, which was in turn bought by Stagecoach in mid-1989. In 1994, Greater ManchesterBuses was split up into a northern and a southern part, and both parts were privatised viaan employee buy-out. In 1996, these companies were bought by FirstGroup and StagecoachHoldings respectively, who went on to buy out many smaller operators. In an attempt tosegment the market, Stagecoach launched its Magic Bus brand in 1996, offering low fares ona number of routes using older double decker buses in a distinct blue livery, while retaininghigher priced services using modern single deckers. This move was successful in bothattracting passengers and in further reducing competition.

Current situation

At present, the two main operators account for some 78 per cent of the total vehiclekilometres run. FirstGroup and Stagecoach operate about 83 per cent of commercial vehiclekilometres and about 55 per cent of tendered kilometres. Of the total vehicle kilometres runby all operators, around 85 per cent is operated commercially. An overview is provided inTable 8.1. It should be noted that the totals are higher then the sum of the entries in theTables as only the 20 largest operators are included.

Table 8.1Annualised Bus Vehicle Kilometres of 20 Largest Operators

Operator Kilometres (000s)

Commercial Subsidised Total

First Manchester,Pennine & Rochdale

49547 7826 57373

Stagecoach Manchester& Ribble

34069 3450 37519

Arriva Manchester &North West

5294 2365 7659

Rossendale Transport 1846 1311 3157

Blue Bus 2043 423 2466

Others 8267 4510 12777

Source: GMPTE

Operators are free to register and deregister commercial services, subject to a 42-day noticeperiod. Everyone can register services, although under the 1981 Public Passenger VehiclesAct, certain criteria regarding financial standing and vehicle safety must be met. The TrafficCommissioners are responsible for applying entry standards for the bus industry and thenmaking sure that these standards are maintained. Penalties under the 1981 Act for failing to


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adhere to the vehicle safety standards or to the financial standing requirements includerevocation or suspension of the licence, a reduction in vehicles authorised on the licence, theimposition of other conditions on the licence and the issuing of formal warnings.

Once a timetable is registered, it must be adhered to, although deviations of up to 5 minutesaround the published times are allowed. Under the 1985 Transport Act26, failure to run theservices punctually can result in a fine or in a temporary withdrawal of the right to registerservices. Imposition of the latter penalty can have serious consequences and, in their riskassessments, the large UK bus groups consider the sanction to be one of the most significantrisks they face. The fine that can be imposed is 20 per cent of the operator’s fuel duty rebateover the three months prior to the data of imposing the fine. It should be noted that thisrefers to operators and not to services, and that the Act does not provide for lower fines. Asa result, the fine is often disproportionate, especially in the case of large operators, and thepenalty is therefore rarely used. The Government has therefore proposed changes to the Actto allow the imposition of lower fines.27

The tendered services fall under the responsibility of GMPTE. GMPTE apply accessibilitycriteria to determine which services should be put out to tender (see Section 8.4.6).However, as a guideline figure, services are not worthwhile if they require more than €3.22support per passenger. If a tender replaces a deregistered service, the tendered service maynot fully replace the previous level of service. Occasionally, it is possible to divert anotheroperator’s service, thereby avoiding the need for a tender. Sometimes, commercial operatorsdevise their route networks so as to make it difficult to devise feasible tender packages.

To evaluate whether it is worthwhile to put a service out to tender, GMPTE may useemergency contracts for a couple of months. To this end, it is possible to use de minimiscontracts, which are small contracts that do not need to be put out to tender. A de minimiscontract must not involve expenditure of more than €19,300 per annum on a particularroute, and not more than €112,900 per annum for any operator.

For scheduled services, minimum subsidy (net cost) contracts are used in most cases. Thisgives the bus operators an incentive to increase revenue and it makes it easier for GMPTE tobudget for services as it does not have to bear the revenue risk. However, about four to fiveyears ago, it became difficult to find bidders for some school contracts and hence some ofthose contracts have since been switched to minimum cost (gross cost) agreements.Contracts for school services often do not involve a timetable; instead the operator justmakes a specified number of buses available during specified hours. The lack of a timetablemakes the estimation of revenue difficult and consequently, gross cost contracts are often thepreferred option for such tenders.

26 See Sections 26 and 111.

27 See chapter 10 of DETR (1999) From Workhorse to Thoroughbred: A Better Role for Bus Travel.


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Contracts for scheduled services are put out by route. GMPTE specifies a timetable and thetype of vehicle that must be used. The vehicle specification includes an age limit and aminimum number of seats. It also provides an estimate of the annual mileage involved andan estimate of the annual number of passenger trips. Operators are free to submit non-compliant bids or single bids for a group of tenders, but should for comparability purposesalso submit a compliant bid.

There is no fares regulation on tendered services. This means that, when daytimecommercial services and evening tendered services are operated by different companies,there may well be differences between the fares charged during daytime and those chargedduring evenings.28 In such cases, the situation also often occurs that single operatortravelcards, e.g. Stagecoach’s Megarider ticket, are only valid during daytime on a particularroute and not on the evening services. One of the reasons for not controlling fares is that iffares were controlled, it would be GMPTE that would be blamed for any increases.

GMPTE continuously monitors the quality of the tendered services and will terminatecontracts that are not adhered to. In that case, the operator is liable for any losses thatGMPTE incurs if the replacement tender is more expensive than the contract that is beingterminated. However, the operator may also choose to switch to running the servicecommercially if the resulting losses are less than the fine that would be payable to GMPTE.

Increasingly, the contractual option to terminate agreements in cases of non-performance isbeing supplemented by a system of financial penalties. Penalties already exist for non-operated mileage as a result of cancellations. This involves disproportionate deductionsfrom the tender price, i.e. it is not just the payment for the lost mileage that is being withheldbut there is also a penalty element. Penalty provisions also exist for lateness.

Tender costs have been rising sharply in recent years, with annualised percentage increaseswell into double figures. The main reason is significant increases in operator costs, mainlyrelated to increased fuel and insurance charges. However, reduced patronage, a reducedcompetitiveness of the bus market and staff shortages are of influence as well. On a smallscale, operators are also deregistering their commercial services in the hope of winning theresulting tender. However, the proportion of vehicle kilometres run commercially has beenrelatively stable over the last decade at around 85 per cent.

Future developments

In its policy document From Workhorse to Thoroughbred: A Better Role for Bus Travel (DETR,1999), the Government has set out its policy in regard to the bus market for the next fewyears. The main aim of the measures announced in the document is to improve the qualityof bus services. It is believed that only by improving the quality of bus services can the

28 It is estimated that between 25 and 50 per cent of evening contracts are awarded to other operators than the oneoperating the daytime service.


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decline in bus use in the United Kingdom be reversed and will the bus become a realisticalternative to the private car.

A key element in the proposals is the idea of Quality Partnerships. These are voluntaryagreements between local authorities and operators, whereby operators provide new, highquality vehicles in return for the authority investing in infrastructure like bus prioritymeasures, new shelters or more radical options like guided busways. The idea is not a newidea, but the document proposes a statutory backing for them. This would allow authoritiesto set quality standards for Quality Partnership facilities they provide, with powers toexclude buses that did not meet the standards. The Government also proposes the option ofQuality Contracts for areas where Quality Partnerships might not work. For those areas,this would effectively mean the deregulated system being replaced by a franchised system.However, authorities would have to go through a lengthy application process for QualityContracts and ultimately need Ministerial Approval. The authorities would need todemonstrate that the benefits of Quality Contracts in terms of modal shift could not be metby other means, and that any extra costs involved would be offset by other benefits.

Partly as a result of the threat of moving to Quality Contracts, the operators have so far beenkeen to sign up to the voluntary partnerships. In Greater Manchester, there are actually twotypes of Quality Partnership Agreement: a countywide agreement involving all operatorsand all other parties concerned, and specific agreements for individual corridors. Thecountywide agreement includes the following main provisions:

• the introduction of intermodal one-day travelcards;

• a passenger information programme, including a commitment to confine bus servicechanges to 12 dates per year, with a further commitment to reduce this numberfurther to three or four a year. The notice period for changes to the commercialnetwork will increase from 6 to 9 weeks. Similarly, GMPTE will give operators morenotice of tender invitations; and

• a commitment to the programme of Quality Bus Corridors.

There are however concerns as to whether the section of the countywide agreement dealingwith ticketing is consistent with Chapter I of the 1998 Competition Act. This will bediscussed in more detail in Section 8.4.5.2 on tariff integration.

Heavy rail

Prior to 1994, local transport services in the Greater Manchester area were operated byBritish Rail (BR) under contract to GMPTE. Effectively, GMPTE paid BR the marginal cost ofproviding these local services. Funding was provided by central government to theMetropolitan District Councils, who in turn funded GMPTE.


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In April 1994, however, the railway industry in Great Britain was restructured on the basisof the 1993 Railways Act. The industry was split up into an infrastructure manager(Railtrack), three rolling stock leasing companies, 25 passenger train operating companiesand a variety of other companies. From then on, the train operating companies paid accesscharges to Railtrack for the use of the infrastructure and leasing charges to the rolling stockcompanies for the use of the trains. Both Railtrack and the rolling stock companies wererequired to earn a commercial rate of return on their assets, in order to facilitate their laterprivatisation. This requirement meant however that the operating companies’ costsincreased significantly, so that the subsidy that would be required to allow them to operateprofitably did too. These subsidies would be paid to the operators by the Office ofPassenger Rail Franchising (OPRAF)29, which would in return specify minimum servicelevels, quality standards and regulate a number of fares.

The operators were sold through a competitive bidding process for their franchises. In thecase of Greater Manchester, the local franchise Regional Railways North West was awardedto North Western Trains, later sold on to FirstGroup and renamed First North Western.Another franchise with some services running into Manchester was sold to the Liverpoolbus operator MTL. This franchise is now owned by Arriva.

It was regarded as desirable that the PTEs would continue to be a party in the specificationof local rail services in their area. However, the new structure of the railway industry nolonger allowed them to buy services on a marginal cost basis, which meant that the cost ofproviding the services to the PTE would increase considerably. Three transitional yearsfollowed, in which the gap between the existing costs and the costs under the new regimewere met by government grants to the Metropolitan District Councils or, in 1996/97, to theoperators by means of a Revenue Support Grant. In that year, GMPTE was not involved atall in the provision of local rail services in Greater Manchester. From 1997/98 onwards,DETR pays a Metropolitan Railway Passenger Services Grant directly to the PTEs. Thisgrant allows the PTEs to continue to specify service levels and fares in their area and to payfor it. To this end, they are now co-signatories to the franchise agreements with the relevantoperators. In the case of GMPTE, this concerns the agreements with First North Westernand, to a lesser extent, Arriva Northern.

An important question for the PTEs to address was whether or not to take the revenue riskon the services they had specified. Assuming the revenue risk would allow the PTE to takethe commercial decisions, effectively using the operator as an agent. Five of the seven PTEshave taken this approach. GMPTE however was one of two PTEs not to bear the revenuerisk. The revenue risk would be great because a lot of revenue of the main operator of localrail services, First North Western, is related to the revenue of the mainline operator VirginTrains. This would mean that there would be uncertainty about a significant part of thePTE’s budget. In addition, the PTE did not wish to get involved in revenue protection. It

29 This body has now been absorbed into the Strategic Rail Authority (SRA).


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should be noted that in the future, the Strategic Rail Authority wants all operators to takethe revenue risk on their suburban services.

However, GMPTE did decide to exercise as much control over fare levels as possible. Tothis end, most fares were included in a basket of regulated fares that, on average, are notcurrently allowed to increase by more than the inflation level minus one per cent. The faresin the basket include season tickets, standard singles, standard returns and day returns. Thecontracts with the operator also contain other incentives, such as for punctuality andreliability. In addition, all the PTEs operate the Service Quality Incentive Regime, whichinvolves inspections by the PTEs of specific attributes of station and on-train service, withrewards for improvements and penalties for failures to meet agreed standards.

Light rail

Although successive governments agreed to provide funding for the construction of thevarious phases of the Metrolink network, all did so on condition that private sector fundswere brought in as well. Consequently, the various links are built and operated by theprivate sector, with GMPTE retaining ownership of the system.

The first line between Bury and Altrincham was built by the GMLL consortium, whichincluded GEC, Amey and Mowlem. In spite of the government’s desire to attract privatefunding, in the end the consortium paid only about €8 million of the construction costs ofthe project, on a total of around €242 million. The consortium, that would also beresponsible for operating the line, would not receive any operating subsidy and apparentlyexpected to lose out if it offered to contribute more to the capital costs of the project. In theevent, however, the link proved very successful and by 1997 the system was generating anoperating surplus of around €6.5 million per year.

The original contract allowed the PTE to re-let the Metrolink contract (although the existingconcessionaire did have to be compensated) and the contract to build and operate the Ecclesextension (as well as run the rest of the system) was awarded to Altram, a consortium ofAnsaldo, Laing, 3i Venture Capital and Serco. As the winning consortium would also takeover the profitable existing line, this time the private sector was prepared to fund asignificant part of the capital costs of the extension in order to get access to these profits.The extension, which opened in July 2000, cost around € 258 million, of which €173 millionwas funded by Altram and the remainder by GMPTA, the European Regional DevelopmentFund and the Department of the Environment Capital Challenge.

The current contract with Altram, which again can be re-let, runs to 2014. It specifiesminimum service levels, but the operator is free to set fares. There is a set of penalty clausesfor failure to operate the service. The operator has to request permission for the timetable,but agreement cannot be reasonably withheld. One issue with the present structure is thefact that the concessionaire borrows from banks, which tightly control what can be donewith the money. As a result, little money is available for advertising the system.Improvements, for example on stations, will only be made if it is built into the contract.


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Some trams are currently being extended with a middle section, but it is GMPTE that has topay for this.

In March 2000, a €403 million funding package was made available by the nationalgovernment for the further extension of Metrolink. Three or four lines will be added to thenetwork, one (a short link to a busy shopping centre) on condition that it can be whollyfunded by the private sector. There will a single contract for the extensions, and the winningconsortium will also take over the operation of the existing network. Again, the previouscontract allowed this provided the existing operator would be compensated. The newcontract is likely to be for 25 years and GMPTE is considering including some form of farescontrol in it. Because of the success of the existing lines, services are often overcrowded andGMPTE is worried that the new operator will take advantage of this by raising peak fares toration capacity. The decision as to who to let the new contract to will be based on trade-offsbetween criteria, not just on the lowest level of public funds required.




The Greater Manchester Local Transport Plan indicates that in 1991, car accounted for 60 percent of all trips (up from 45 per cent in 1976). Bus use accounted from 21 per cent of all tripsin 1976 and decreased to 14 per cent in 1991. It also indicates, without giving exact numbers,that the share of walking and cycling fell as well between 1976 and 1991, but that the shareof rail remained fairly constant, although small in absolute terms. No more recent modalsplit data are available and while the Plan recognises that the data are in need of updating, itis thought that the trends exhibited above are still relevant.

It is also indicated that in 1997, public transport accounted for 52 per cent of all trips into theregional centre made by car or public transport. The target is to reduce this to 44 per cent by2005/6.

8.4.1.2. Patronage

Details on bus patronage in Greater Manchester from 1986 to 2000 are presented in Table 8.2below.


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Table 8.2Greater Manchester Bus Patronage 1986-2000

Year ending 31 March 1986 1992 1994 1996 1998 2000

Passenger journeys per year (millions ) 355 269 249 236 227 217

Index (1986=100) 100 76 70 66 64 61

Passenger kilometres per year (millions) 1474 1226 1138 1081 1041 994

Index (1986=100) 100 83 77 73 71 67

Average trip length (kilometres) 4.15 4.56 4.57 4.58 4.59 4.58

Source: Greater Manchester Local Transport Plan

Table 8.2 shows that the number of bus journeys in the six years after deregulation declinedby about 25 per cent. The average trip length increased, however, and the decrease inpassenger kilometres is therefore lower than the decrease in passenger journeys over thisperiod. From 1992 onwards, the average trip length stayed constant. Both passengerjourneys and passenger kilometres declined by a further 20 per cent in the six years to 2000.

The bus patronage figures may have been influenced by Metrolink, although the lattermainly replaced two existing railway lines. Table 8.3 contains patronage figures forMetrolink from 1993 onwards.30 In addition, it should be noted that the two railway linesthat were replaced by Metrolink carried around 7.5 million passengers per year.

Table 8.3Metrolink Patronage 1993-199831

1993 1995 1996 1997 1998

Passenger journeys per year (millions ) 7.64 12.38 12.71 13.63 13.82

Index (1993=100) 100 162 166 178 181

Passenger kilometres per year (millions) 67.7 109.7 112.6 120.7 122.4

Index (1993=100) 100 162 166 178 181

Source: GMPTE (1999)

Table 8.3 shows that, after a slow start, Metrolink patronage grew spectacularly in the periodbetween 1993 and 1995. The slow start has probably been caused by the fact that the twolines were closed for about a year while they were converted; it has taken some time to winback lost patronage. After 1995, patronage continued to grow at an average annual rate ofaround 3.75 per cent.

30 Phase I of Metrolink opened in 1992.

31 The average trip length on the basis of the figures in the table is 5.51 miles for all the years given. Whereas thismay be true in practice, it may also be the case that the average trip length has simply been assumed constantwhen calculating the passenger miles figures. These therefore need to be interpreted with care.


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Although some details on heavy rail patronage in Greater Manchester are available, theseare distorted by the opening of Metrolink and by the fact that in 1996/97, GMPTE was notinvolved in the provision of local rail services in its area. These figures are not thereforereported here. The figures suggest that patronage fell by around 10 per cent between 1993and 1996, and countrywide trends suggest that they will have been growing strongly sincethen.

8.4.1.3. Fares

When evaluating the bus patronage figure, it is important to take the development of farelevels into account. In Table 8.4, data on selected fares are given. The data in the Table referto single adult cash fares only.

Table 8.4Development of Bus Fares in Greater Manchester, 1986-1998

1986 1992 1994 1996 1998Cost of bus travel: 2.4 km cash fare(€, January 2001 prices)

0.65 1.03 1.06 1.10 1.24

Index (1986=100) 100 158 163 169 191Cost of bus travel: 15 km cash fare(€, January 2001 prices)

2.02 2.66 2.63 2.68 2.95

Index (1986=100) 100 132 130 133 146Cost of bus travel: concessionary fare(€, January 2001 prices)

0.29 0.47 0.58 0.58 0.58

Index (1986=100) 100 162 200 200 200


As a result of the growth in availability of discounted fares, especially through travelcard-type tickets, these figures significantly overstate the actual increases in average fares paid.GMPTE estimates that, after allowing for discounts, average adult fares are nowapproximately 25 per cent below the adult single fare.

Nevertheless, Table 8.4 shows that all single cash fares have risen significantly in real termsand some have almost doubled. It is interesting to note that longer distance passengers havenot been facing fare increases to the same extent as passengers making shorter trips.


Table 8.5 contains data on the amount of bus kilometres run in Greater Manchester from1986 to 1998.


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Table 8.5Bus Kilometres in Greater Manchester, 1986-1998

1986 1992 1994 1996 1998

Total bus kilometres (millions ) 116.0 133.0 146.3 137.6 132.6

Index (1986=100) 100 115 126 119 114

Annualised subsidised bus kilometres(millions)32

11.633 20.3 16.3 18.2 17.9

Index (1986=100) 100 175 140 157 154

Percentage of bus kilometres run commercially 8934 85 89 87 86


Table 8.5 shows that in the years following deregulation, the number of bus kilometres runin Greater Manchester increased significantly, with the level in 1994 around 25 per centhigher than in 1986. After 1994, the level of bus kilometres run declined somewhat.However, the number of bus kilometres remains around 10 per cent higher than pre-deregulation. The proportion of kilometres run commercially does not show a clear trendand GMPTE officials have indicated that it may be characterised as a circular pattern,influenced by market forces. In the last few years, it has been on the decrease as a result oflarge operators deregistering commercial services.

Reliable data on local train kilometres are unavailable due to the impact of Metrolink andthe impact of organisational and institutional changes. It is clear, however, that thestructural changes in the railway industry have not had a similar impact on kilometrefigures as the changes in the bus industry had. The minimum service level specifications forthe operators were based on the 1994 timetable. Although some successful operators haveexpanded services beyond this minimum level, this is unlikely to be the case for First NorthWestern, which has been financially troubled due to an overly ambitious franchise bid. It islikely that rail services in Greater Manchester will have been fairly constant in the yearssince 1994.


Table 8.6 below provides data on the development of on-bus revenue, bus concessionarysupport and total bus support in Greater Manchester from 1986 to 1997.

32 The figures have been annualised from the April data for the relevant year.

33 Figure refers to 1987 as opposed to 1986.

34 This has been calculated using the annualised subsidised kilometre figure given and a total number of bus miles in1987 of 64.9.


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Table 8.6Bus Revenue and Support in Greater Manchester, 1986-1997

1986 1992 1994 1996 1997

Total on-bus revenue (€m, January 2001 prices) 230.3 204.0 205.2 193.0 179.8

Index (1986=100) 100 89 89 84 78

Total GMPTE concessionary support (€m;January 2001 prices)

65.8 72.4 57.6 59.2 58.7

Index (1986=100) 100 110 88 90 89

Total GMPTE subsidy (€m; excl. concessionarysupport; January 2001 prices)

100.5 66.0 44.7 48.2 47.6

Index (1986=100) 100 83 44 48 47

Percentage of revenue from farebox (includingconcessionary support as farebox revenue)

75 81 85 84 83

Percentage of revenue from farebox (includingconcessionary support as subsidy)

58 60 67 64 63


It can be seen that in the period to 1994, the total of GMPTE subsidy payments to the busindustry (excluding concessionary fares support) decreased by about 55 per cent, slightlyincreasing again afterwards. In combination with the reduction of on-bus revenue duringthis period, the farebox revenue as a proportion of total revenue increased from 75 to 85 percent during this period.

Data on the costs of providing bus services in Greater Manchester are available as both FirstManchester and Stagecoach Manchester publish annual reports. In combination with detailson bus miles published by GMPTE, some basis statistics can be calculated. These arecontained in Table 8.7. Only 1998 data are presented, as this is the only year for which bothfinancial figures and kilometre figures are available. As with all similar ratios, these need tobe interpreted with great care.

Table 8.7Operating Costs and Vehicle Kilometres of the Two Largest Bus Operators

Year ending 31 March 1998 First Manchester Stagecoach Manchester

Total operating costs(€000; including depreciation, January 2001 prices)

95,600 73,43235

Total vehicle kilometres operated (000) 48983 36003

Cost per vehicle kilometre (€, January 2001 prices) 1.95 2.05

Source: First Manchester, Stagecoach Manchester annual reports; GMPTE

35 This figure refers to the year ending 30 April 1998.


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More instructive than the above are aggregate data on the development of bus operatingcosts for local bus services in metropolitan areas. These are presented in Table 8.8.

Table 8.8Costs per Vehicle Kilometre and Passenger Journey in English Metropolitan Areas

(excluding London)

Year ending 31 March 1986 1992 1994 1996 1998 2000

Costs per vehicle kilometre (€; includingdepreciation; January 2001 prices)

3.21 1.97 1.73 1.66 1.53 1.52

Cost per passenger journey (€; includingdepreciation, January 2001 prices)

0.90 0.87 0.89 0.87 0.84 0.84

Source: DETR (2000)

Table 8.8 shows that the costs per vehicle kilometre have fallen dramatically in real terms inthe six years after deregulation and continued to fall afterwards. However, the cost perpassenger journey have only fallen by, in total, around 7 per cent in the 14 years afterderegulation. Furthermore, a comparison of Table 8.7 and Table 8.8 shows that theoperating costs per vehicle kilometre of the two largest Manchester operators are somewhatabove the average for English metropolitan areas (excluding London). This may be due tosituations specific to Manchester, to the fact that the largest operators may have higher coststhan smaller operators, to measurement differences or to other factors.

For Metrolink, cost and revenue data are not available due to data confidentiality problems.Limited data on rail revenue and support are available until 1996, but again distorted by theimpact of Metrolink and especially by the structural changes to the rail industry since 1994.Even if data were available, it would not be possible to analyse them within the scope of thepresent study due to the current complexity of the industry and the multitude of paymentsbetween the various players. We regret that we are unable to provide further insights here.


8.4.4.1. Frequency

Due to the deregulated nature of the Greater Manchester bus market, frequency levels varyconsiderably. Frequency levels on individual services are rather low with only a limitednumber of services having more than six buses an hour. However, as most routes are oftenserved by a substantial number of (sometimes competing) services, frequency levels on mostcorridors are very high. In addition, the commercial network is dense. However, duringevenings and Sundays, when many services are subsidised, the level of service on thenetwork is considerably lower. Most individual services operate at 30 or 60-minute intervalsduring these times, although they again combine to result in higher frequencies along busycorridors.


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The high commercial frequency levels are partly due to entry deterrence strategies of theincumbent operators. By running as many buses per hour as possible, they avoid leaving“gaps” in which a competitor could profitably enter. The same applies to the number ofroutes.


Unfortunately, GMPTE do not publish details on service quality on the Greater Manchesterpublic transport system. Data are however available from the Strategic Rail Authority onthe punctuality and reliability of local rail services into Greater Manchester. Punctuality isdefined as percentage of trains arriving within five minutes of scheduled time. Reliability isdefined as percentage of scheduled trains actually running.

Table 8.9Performance Data for Rail Services into Greater Manchester

Line group Year ending Punctuality Reliability

Manchester North Dec 1997 93.9 98.9

Dec 1998 85.8 97.2

Jan 2000 89.6 99.0

Manchester South Dec 1997 94.6 98.6

Dec 1998 90.8 98.2

Jan 2000 91.7 99.1

Source: Strategic Rail Authority Performance Bulletins

Table 8.9 shows that from 1997 to 1998, performance declined significantly as First NorthWestern was hit by the rapidly declining subsidy profiles and had to implement consequentcost cutting measures. In fact, in the three-month period from April 1998 to June 1998,performance on the Manchester North lines dropped as low as 90.6 for reliability (i.e. almost10 per cent of trains cancelled) and 70.8 for punctuality (i.e. almost 30 per cent of trainsrunning more than five minutes late). This was subsequently deemed a breach of FirstNorth Western’s franchise agreement and a compensation package for passengers has beennegotiated. Since then, performance has improved again.


When evaluating whether or not a service should be put out to tender, GMPTE try toprovide as many people as possible with a reasonable bus service at a reasonable walkingdistance. Specifically, GMPTE try to maximise the number of people living within:

daytime either within 250 metres of a bus stop with a service every 30 minutesor within 400 metres of a bus stop with a service every 15 minutes

evening/ either within 250 metres of a bus stop with a service every 60 minutesSundays or within 400 metres of a bus stop with a service every 15 minutes


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There are however budgetary constraints that limit the number of people that can be servedby bus services. In principle, no more than €3.25 per passenger is paid in subsidy to busservices. Services sometimes have to be withdrawn altogether, especially during evenings,when there is violence against staff. This is often related to farebox theft. On weekdaysduring daytime, 92 per cent of the population have access to public transport in terms of theabove criteria. During evenings and weekends, the figure tends to be between 80 and 85 percent.


Since 2000, performance figures have been calculated by the SRA using a new methodology,focusing more on passengers’ experience. The resulting figures are not comparable with theones presented in Table 8.9. Performance in the last months of 2000 and in 2001 has beenadversely affected by the implications of the crash near Hatfield. This crash was found tohave been caused by so-called “gauge corner cracking” of rails, which resulted in theimposition of severe speed limits across Railtrack’s network.



With the construction of the first phases of Metrolink, the degree of physical integration inthe areas concerned has improved substantially. Some excellent interchanges have beenbuilt and Metrolink of course enables many new through journeys to be made.

The integration between bus and rail is more problematic. Neither the Victoria nor thePiccadilly rail stations have a bus station and for most connecting bus services, a walk isrequired. This is also true for a lot of interchanges between bus services in Manchester citycentre as there is no central bus station (though there are some smaller interchanges servedby a limited number of routes).

The biggest problem with physical integration in Greater Manchester is caused by the waythe deregulated bus market works. There is no central planning of routes and the result isan extremely complicated route network. Although the network is now much more stablethan it used to be, it is still very difficult to understand and, for the inexperienced, to use. Inaddition, a deregulated bus market implies that it is not possible to have a bus line “feed”into, for example, a railway line if it would be profitable for the bus operator to operate athrough service to the city centre itself. Such a situation is not necessarily detrimental, it forexample enhances competition and increases the range of journey opportunities available tothe general public, but it is not an ideal situation from the viewpoint of physical integration.Metrolink for example did experience some initial competition on one of its corridors.

Overall, we would adopt a mixed view as to the level of physical integration of publictransport services in Greater Manchester. It is very good in some areas, especially whereMetrolink is involved, but rather poor especially in relation to the bus network.


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In Greater Manchester, there is a different degree of tariff integration according to whethersingle tickets or multi-journey travelcards are concerned. We will discuss these in turn andthen pay attention to the 1998 Competition Act and its implications for tariff integration.

Generally speaking, there is no tariff integration for single and return tickets. In the majorityof cases, customers buy single fares from the operators they travel with. Some operatorsoffer return tickets, but these cannot generally be used for a return trip by another operator.When a journey involves changing between vehicles or between modes, generally separatetickets are required for each leg of the journey.

There are however a few exceptions, notably:

• passengers with a train ticket to Manchester city centre from any train station inGreater Manchester can travel free on Metrolink trams in the city centre; and

• passengers arriving in Manchester travelling by Virgin Trains can by a bus add-onticket for €1.60 (GB£1).

The picture regarding travelcards is more mixed. A variety of travelcards is available thatallow unlimited travel on almost all public transport services in Greater Manchester,marketed under the brand System 1.36 However, the large operators also have their owntravelcards, valid on their services only. An overview of the price levels and the differencesbetween general and operator-specific travelcards is provided in Table 8.10.

Table 8.10Examples of Travelcard Prices in Greater Manchester

First Manchester StagecoachManchester

System 1

Day ticket bus €4.03 (GB£2.50) €4.03 (GB£2.50) €4.84 (GB£3.00)

Concessionary - €1.77 (GB£1.10) € 2.02 (GB£1.25)

Weekly ticket bus entire area :€14.52(GB£9.00)

inner city: €10.48(GB£6.50)

€11.29 (GB£7.00) €20.97 (GB£13.00)

Concessionary €6.61 (GB£4.10) €6.45 (GB£4.00) under 16s: €7.82(GB£4.85)

Monthly ticket bus €55 (GB£34) - €73 (GB£45)

Source: First Manchester, Stagecoach Manchester, GMPTE

36 As it is not currently possible to force operators to participate, there are a limited number of small operators thatdo not accept these countywide travelcards.


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In evaluating Table 8.10, it is worth keeping in mind that the large operators do not actuallycompete on the prices of their travelcards, as their operating areas are quite distinct. Thereason why operators find it profitable to introduce their own travelcards is that they keepthe entire revenue from them. By contrast, they would only get a “slice” of the revenue ofmulti-operator passes.

As bus services in Greater Manchester operate in a deregulated market, general competitionlaw is applicable to them. As a result, integrated ticketing becomes more difficult to achieveas they often involve agreements between operators. Under Chapter I of the 1998Competition Act, some types of agreements between operators are illegal.

The Act prohibits agreements between companies that result in an appreciable prevention,restriction or distortion of competition in the United Kingdom. In terms of public transportticketing schemes, examples of schemes that generally would fall within the prohibitioninclude agreements that:37

• raise barriers to entry and keep out new competitors, for example throughexclusivity provisions;

• dampen competition by carving-up routes between participants;

• eliminate individual single and return tickets, the fares for which were set at thediscretion of individual operators; or

• fix fares for tickets sold under the schemes or facilitate this.

However, the UK Office of Fair Trading has recognised that certain other integrated publictransport ticketing schemes that do not include the elements mentioned above should bepermissible because of the benefits they bring. As it would be too expensive to issue a ruling(costing €21,000) to that extent for each individual scheme, a Block Exemption for suchschemes has been proposed. For schemes to qualify under the Block Exemption, certaincriteria must however be met. One of these is a requirement that revenue obtained frommulti-operator travelcards must be allocated on the basis of passenger miles (as opposed torevenue foregone). Many in the industry fear that the administration costs of allocatingrevenue on this basis will in many cases exceed the entire benefit of the schemes.

Overall, we would regard the degree of tariff integration in Manchester as poor. Whilstthere are multi-operator travelcards and new one-day tickets, the lack of integration as far assingle and return tickets is concerned compares very poorly with our other comparatorcities. The implications of the 1998 Competition Act suggest that improvements will be verydifficult to realise.

37 Office of Fair Trading (2001) Public Transport Ticketing Scheme Block Exemption – Formal Consultation Draft.


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The responsibility for the provision of information on public transport in Manchester lieswith GMPTE. This applies to all modes and GMPTE are consequently able to pursue anintegrated information policy. The countywide Quality Partnership Agreement has led tofurther improvements. For example, the timetable sections of both the First Manchester andStagecoach Manchester websites now refer to the GMPTE Journey Planner website.

GMPTE produce several network maps. The map containing all services in GreaterManchester is difficult to read due to the enormous number of services presented on it, butthere is a useful additional map showing frequent services only. All modes on this map arepresented in a similar way with only colours distinguishing between them. In addition, aseries of clear leaflets are produced by GMPTE with details on the timetables of the variousservices. Importantly, these leaflets also include route maps and details on connectionpoints. For train services, informative leaflets are available showing all trains betweenimportant city pairs, with in addition maps, details on possible connections with other trainsand other modes and platform information.

GMPTE, in conjunction with System 1, also operate a phone information service (at localrates) with details on all public transport services in Greater Manchester. Unfortunately, thenumber used is different from the number used for the national public transport enquiryservice which GMPTE also advertise, possibly because the latter is a national rate number.Information is also available via the Internet and Teletext.

Overall, we would regard the current level of information integration within the GreaterManchester area as very good. Having the responsibility for the provision of informationwithin one body is clearly a beneficiary factor.


Traditionally, the integration of transport with land use in many UK cities has not been verygood due to the development of out-of-town shopping centres and greenfield housingestates, which are difficult for high-density public transport to access.

In recent years, however, the policy emphasis has been changing. The draft RegionalPlanning Guidance acknowledges that the integration of land use and transport planning isa key aspect of solving the region’s transport problems. It also recognises however that landuse change is a long-term process and that management of transport demand created by theexisting land use pattern must be addressed.

Consequently, the Greater Manchester Strategic Planning Framework concentrates onreducing decentralisation and on using the planning process to enhance public transport,cycling and walking infrastructure. It also introduces the concept of a sustainableneighbourhood, in which an appropriate mix of residential and employment trips can be


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blended within a locality to encourage shorter trips that can be made on foot or by cycle.The Greater Manchester Local Transport Plan is based on the Strategic Planning Framework.

In summary, Greater Manchester is suffering today from a lack of integration between landuse and transport in the past. Present policies however show a much higher level oftransport/land use integration.



Although GMPTE do not have a specific policy aimed at improving social cohesion in theGreater Manchester metropolitan area, there are nevertheless a number of schemes in placethat are worth mentioning here.

The first and most important one is the concessionary fares scheme. There is a flat fare ofcurrently €0.65 (GB£0.40) for below 16s and over 60s, as well as for disabled people. Thisused to be a very simple scheme, but things have now become more complicated with thenationwide introduction of a compulsory half-fare concessionary scheme for senior citizens.For shorter journeys, this would mean that the concessionary fare would have to be below€0.65. For longer journeys, on the other hand, the concessionary fare would increasesignificantly if the nationwide scheme were adopted. A compromise has now been reachedwhere travellers can pay either €0.65 or half the fare, whichever is the lowest.

GMPTE reimburses operators for the concessionary fares using a formula that takes intoaccount the fact that concessionary fares generate additional demand. As a result, operatorsdo not receive the full difference between the concessionary and ordinary fares but only apart of that. A price elasticity38 of –0.3 is used as a basis for the calculations.

8.4.6.2. Accessibility for the mobility impaired

Access for the mobility impaired has improved significantly in recent years as a result of agrant scheme for low-floor buses. The scheme broadly paid operators the extra capital costsof low-floor buses compared to conventional buses. As a result, Greater Manchester nowhas one of the largest fleets of low-floor buses in the United Kingdom. The scheme has nowbeen discontinued as the cost difference between low-floor and traditional buses has largelydisappeared.

The Metrolink system is fully accessible. The accessibility for the mobility impaired on theheavy rail system is varies. It is possible to get journey assistance subject to a 24-hour noticeperiod, but only a number of stations are fully accessible.

38 A price elasticity indicates how much the level of demand changes in response to a small price changes. A priceelasticity of –0.3 implies that if prices increased by 1 per cent, demand would decrease by 0.3 per cent.


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The current bus market in Greater Manchester, as far as the commercial services areconcerned, is highly flexible and can easily adapt to changes in demand, serve new routesand so on, subject to a 42-day notice period. In fact, it could be argued that the system is tooflexible as the frequent timetable changes are confusing for the passengers, which is why thenumber of annual timetable changes is now being limited under the countywide Quality BusPartnership agreement (see Section 8.3.1.2 above).

However, the flexibility is considerably lower as far as the tendered bus services, Metrolinkand the heavy rail services are concerned. In all these cases, GMPTE issues detailedspecifications as to service levels. Operators of tendered bus services and the operator ofMetrolink hardly have any freedom to make adjustments; rail operators only to a limitedextent. For these modes, responding to changes in demand is often only possible byrenegotiating the contract or by waiting until the contract has expired.



Both the bus and rail industry in Greater Manchester have seen radical structural change. Inboth cases, this was followed by a turbulent transition periods with adverse impacts onservice quality. In the bus market, the problems were caused by heavy competition. Theseproblems may have been inherent to the radical deregulation model that was opted for. Inthe railway industry, on the other hand, the problems were caused by the operator havingput in an overly ambitious franchise bid, to find itself running into serious financialdifficulties when faced with the rapidly declining subsidy profile. These problems couldhave been avoided. It could be argued that the bus industry has settled down now, but therailways probably have not.

We do not think that the UK authorities have paid sufficient attention to ensuring a smoothtransition between regimes and have failed to note the possible adverse long-termconsequences in terms of patronage of a turbulent transition period. As already suggestedabove, in the case of the bus industry, the problems could probably only have been avoidedby choosing an entirely different restructuring model. In the railway industry, more carefulthought and, in particular, more gradual change should have resulted in much lessproblems.39

39 Notwithstanding the above, it should be noted that the problems that occurred with rail services in GreaterManchester are more severe than what happened elsewhere. While problems with service punctuality andreliability have occurred across the UK rail industry, there have been few cases as severe as the Manchester localservices.


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A discussion with a representative from the main union in the Manchester public transportsystem has taken place, although on a confidential basis. Membership of unions amongdrivers in Greater Manchester is very high; the number of drivers that are non-unionmembers is negligible. The relationship of the unions with the main operators inManchester varies and is better with some operators than with others. At First Manchester,a series of 14 one-day strikes occurred in late 2000 over pay conditions, with unions mainlyobjecting to the fact that new drivers are paid less than existing drivers. Generally speaking,industrial relations at head-office level of the main UK bus operators are better than at locallevel. It is however at local level that wage negotiations take place.

As all operators in Greater Manchester are private companies, data on staff issues are notreadily available. Although one operator has supplied some data, these are of a confidentialnature and cannot be published.

It is however interesting to examine the overall picture that emerges from the UK NewEarnings Survey. This is done in Table 8.11.

Table 8.11Earnings and Hours per Week Worked by Industry

198640 1991 1994 1996 1998 2000

Earnings € per week (January 2001 prices)

Male UK bus and coach drivers 524 459 459 453 462 466

Male UK train drivers and assistants 667 727 774 865 832

Male UK rail inspectors, supervisors & guards 613 644 618 696 696

All UK occupations 522 595 623 636 652 667

Total hours works per employee per week

Male UK bus and coach drivers 48.5 47.2 47.8 48.3 48.5 47.2

Male UK train drivers and assistants 43.6 43.8 44.3 42.2 40.7

Male UK rail inspectors, supervisors & guards 48.4 47.2 47.3 45.4 42.7

All UK occupations 40.4 40.0 40.1 40.2 40.2 39.7

Earnings € per hour (January 2001 prices)

Male UK bus and coach drivers 10.82 9.72 9.60 9.36 9.52 9.88

Male UK train drivers and assistants 15.30 16.60 17.49 20.49 20.44

Male UK rail inspectors, supervisors & guards 12.65 13.64 13.08 15.35 16.29

All UK occupations 12.91 14.76 15.54 15.82 16.24 16.79

Source: New Earnings Survey

40 No 1986 data available for rail staff due to changes to occupational classifications that were made in 1991.


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Table 8.11 contains a number of interesting insights. First of all the position of bus andcoach drivers. In the first few years after the deregulation in 1986, their income in real termsfell by around 12 per cent. Since then, it has remained more or less constant, althoughincomes elsewhere in the economy have been continuously increasing. The number ofhours worked by bus and coach drivers has been more or less constant at around 48 perweek, significantly above the UK average which has remained stable at around 40 hours perweek. As a result, the average earnings per hour of a bus driver are now 41 per cent lowerthan the UK average, compared to 16 per cent lower in 1992.

The opposite however is true for railway staff. The average weekly earnings have gone upand the number of hours worked has gone down, both especially in the years immediatelyfollowing privatisation. As a result, the average earnings per hour in real terms for bothdrivers and guards are now around 30 per cent higher than in 1991. Drivers, who wereearning about an average hourly wage in 1991, now earn significantly more, whereas guardshave caught up and now earn about average hourly wages.

It is not easy to find an explanation for the somewhat surprising result with regard torailway staff. Staff shortages and a booming labour market may have been of influence.



No specific initiatives to report.


Manchester Airport is an important international airport with a catchment area broadlyequal to the north of England. The airport is served by buses, and a heavy rail link into theairport opened in 1993. The heavy rail link is operated by First North Western under theseven year franchise agreement that covers most Manchester local services. There are aboutfour fast services per hour and some slower ones. A standard open return from ManchesterPiccadilly to Manchester Airport is priced at €9.33 (GB£5.60), a standard day return costs€8.00 (GB£4.80). For a journey by bus, the adult single fare from the city centre toManchester Airport is €3.83 (GB£2.30). Furthermore, one of the proposed new Metrolinkcorridors will run into the airport. As a result, a new multimodal interchange has beenproposed at the airport.


The Greater Manchester local transport plan aims to reduce the environmental impact of theGreater Manchester transport system in terms of air quality, noise and climate change.However, no specific targets for these indicators have been set. Rather, targets have beenformulated in terms of the use of transport modes and the modal splits. Some key targetsare:


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• the market share of public transport in terms on trips into Manchester city centre toimprove from 52 per cent in 1997 to 56 in 2005/6.

• cycle flows to be doubled between 2002 and 2012; and

• walk journeys back to 1990 levels by 2012.


Table 8.12 below summarises what we consider to be the most significant positive andnegative aspects of the Manchester system under each of the criteria for evaluation.

Table 8.12Manchester Performance Against Criteria

Positive Negative

Economic criteria

• Tram system design, constructionand operation generally consideredsuccessful.

• Both cost recovery and cost efficiencyare good.

Economic criteria

• Relatively high fares

Service quality

• New Quality PartnershipAgreements an attempt to improveservice quality.

• Deregulated market results in highfrequencies and a dense networkduring daytime

Service quality

• Timetable changes are frequent


• Information integration good despitea deregulated system, largely due tothe central planning authority.

• Specific targets to improve frequencyand accessibility


• Poor tariff integration.

• Poor physical integration, althoughMetrolink tram system has improvedthis.

Social cohesion

• Centrally-operated concessionaryfares subsidy scheme.

Social cohesion

Dealing with change Dealing with change

• Transition poorly handled with a lotof instability discouraging ridership.

• Staff wages have suffered sincederegulation.


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Positive Negative

• Poorly-managed rail franchising ledto an over-optimistic bid, andsubsequently falling service quality.

Economic growth

• Good links to the Airport. Servicesare available which do not chargepremium fares.

Economic growth


• Environmental criteria form a part ofthe Greater Manchester TransportPlan, and targets have been set interms of modal splits.


8.6. Manchester “Scorecard”

To complete this chapter we present a summary “scorecard” summarising the mainadvantages and disadvantages of the Manchester system.

Table 8.13Manchester Summary “Scorecard”

Manchester


• High level of cost efficiency and high costrecovery

• Metrolink high quality and successful,innovative funding and concessioningarrangements, good environmentalintegration

• Very good central information provisiondespite multi-operator system


• Instability in the bus network afterderegulation

• Lack of physical integration betweenservices

• Poor tariff integration compared withcities in other countries

• Bus staff earnings suffered

• Quality of rail services suffered afterprivatisation due to an over-ambitiousfranchise bid

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9. CITY STUDY: PRESTON

9.1. Key Facts

• Deregulated, bus-based system. Combination of gross-cost and net-cost contracts.

• County council has overall responsibility, including administration of theconcessionary fares system, tendering-out non-commercial services and someinformation provision, but few planning responsibilities.



Preston is a medium sized city in the Northwest of England with around 130,000inhabitants. It is predicted that by 2006, the population will have increased to 148,000. Thecity, which used to have a strong cotton textile industry, now has other industries inengineering and in vehicle and aircraft manufacturing. It also has a growing service sector.This includes the main offices of Lancashire County Council, and the University of CentralLancashire.

As at February 2000, around 13 per cent of the Preston population were income supportbeneficiaries. This compares with 10 per cent for the county of Lancashire and also 10 percent for the United Kingdom as a whole. The ILO unemployment rate in Lancashire Countywas 4.3 per cent in 1998/99, compared with 6.5 per cent for the North West of England and6.3 per cent for the United Kingdom.41 No recent unemployment figure for Preston itself isavailable, but the income support figure suggests that it will be higher than the Lancashireunemployment figure.


Although the public transport market in Preston is deregulated, there is still an involvementof local and national government in the public transport system. Lancashire County Councilis responsible for public transport in the entire Lancashire region, including Preston.Preston also has a Borough Council, with however only minor transport responsibilities likeparking policy. The national government is also involved in various ways, mainly throughthe Department of the Environment, Transport and the Regions (DETR). Examples of DETRinvolvement include the specification of a mandatory concessionary fares scheme and byintroducing and funding Local Transport Plans.

41 The ILO unemployment rate is the unemployment rate as a percentage of the economically active.

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9.3. Institutional/Regulatory Framework42


9.3.1.1. Public transport in Preston

Public transport in Preston is entirely bus based. There is a railway station, which is almostentirely used for trips to outside the Preston urban area. The majority of public transporttrips in Preston are made to and from the city centre, with around 60 per cent of journeysoriginating or terminating at the bus station.

There are three main commercial bus operators, each operating fairly distinct geographicalareas:

• Preston Bus, the former municipal operator, now employee-owned, broadly servingthe north of the city;

• Stagecoach Northwest, part of one of the three largest UK bus companies, serving thesouthwest and the southeast of the city; and

• John Fishwick & Sons, an independent, family-owned operator, over 90 years old,broadly serving the south.

In addition, there is a number of smaller companies operating tendered services.

9.3.1.2. The market access regime

Bus deregulation in the United Kingdom

The 1985 Transport Act radically altered the bus market in the United Kingdom with fullderegulation occurring outside London and Northern Ireland. The main elements of the Actwere:43

• Removal of control of entry to and exit from the local bus market, subject to a 42-daynotice period.

• Compulsory competitive tendering for loss-making services, provided there is noundue interference with the viability of commercial services.

• Changes in ownership and control of the bus companies; the state-owned NationalBus Company was privatised as 70 different area companies, whereas the municipal

42 A number of issues have already been discussed in Chapter 8 on Manchester. For ease of reading, some of the keypoints are repeated here, although in some cases the reader is referred to the Manchester chapter for more details.

43 See Mackie, P and Preston, J (1996) The Local Bus Market: A Case Study of Regulatory Change. Avebury (Aldershot,Hants).

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operators were put at arms length from the authority. Many of the latter companieswere sold at a later stage.

• Limiting the local authority powers and duties to, among other things,supplementing commercial services, operating a concessionary fares scheme,running bus stations and promoting voluntary travelcards.

• Introduction of general competition law to the bus market.

• Subsidy cuts, especially in the metropolitan areas.

Full deregulation occurred on October 26, 1986.

History of bus competition in Preston44

In Preston, the municipal operator Preston Borough Transport registered some 95 per cent ofits services commercially after deregulation. It had been characterised as a high-cost, high-fares operator with high patronage levels. In April 1987, less than six months afterderegulation took place, a new entrant begun operations in the Preston area, trading underthe name Zippy. Zippy entered with some 80 minibuses and operated innovative routeswith high frequencies (including hail and ride services), had new and clean vehicles,friendly staff and did not operate an exact fares policy. However, it matched theincumbent’s fares, so that competition took place on frequency and quality but not on price.Indeed, when Preston Borough Transport introduced a significant fares increase inNovember 1987 (over 3 per cent in real terms), the new fares were immediately matched byZippy.

The municipal operator responded to the new entrant by purchasing a fleet of minibuses aswell, with the first minibuses being introduced two weeks after the first Zippy minibusservice. In July 1987, it also restructured its network and increased service levels on its mostprofitable routes. As a result, the total stage bus mileage in the Preston Borough areaincreased by around 130 per cent, i.e. more than doubled, over a period of three months.45

However, Zippy found itself unable to sustain its services. In September 1987, the companyreduced its network and increasingly focused on competing with Ribble, a former NationalBus Company operating south of Preston. Ribble, itself successfully privatised through amanagement buy-out, responded by buying out Zippy itself. As a result, in March 1988,Zippy’s network was again restructured with only 31 vehicles left in operation (as opposedto the original 80).

44 This section on the nature of competition in the Preston bus market draws heavily on Mackie, P and Preston, J.(1988) “Competition in the urban bus market: a case study”. Proceedings PTRC Summer Annual Meeting, Seminar C:Public Transport Planning and Operations, pp 157-170.

45 The increase in seat mileage was much lower as many routes were now operated by minibuses.

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A number of reasons have been suggested for Zippy losing the battle. The main reasonappears to be that the bus market in Preston was not highly contestable. Some of the factorsthat contributed to this were:

• access to bus stations (Zippy could not be prevented from using the central busstation, but it was alleged they received the less favourably located stands. In anycase, many people in Preston had developed a habit of using certain stands in the busstation);

• different financial structures (the municipal operator had not been privatised andhence a relatively low return on capital might be acceptable);

• difficulties in retaining staff with many going to the incumbent;

• local knowledge and experience of the incumbent; and

• the ability of the incumbent to react quickly, for example by deploying a minibusfleet only two weeks after the entrant had started its operations.

Current situation

In contrast to the initial frequent changes after deregulation, the bus market in Preston isnow much more stable. Preston Bus, as the former municipal operator is now called,continues to operate in its traditional area. It operates virtually all its services commercially,including evening and Sunday services, implying the continued existence of cross-subsidybetween services. The company had been privatised in 1993 by means of an employee buy-out and is now the only employee-owned bus operator in the United Kingdom. Althoughthe company is profitable, the returns that are achieved are not particularly high. It istherefore becoming more difficult to find sufficient employees interested in the scheme:many choose not to participate.

Ribble had been sold out to Stagecoach in 1989 and this company has now merged two of itsbusinesses in the Northwest of England into Stagecoach Northwest. This company operatesa number of its services commercially at all times, but registers some other services onlyduring daytime Mondays to Saturdays. The third commercial operator, John Fishwick &Sons, continues to operate in its established area to the South of Preston, where it has beenactive for over 90 years. It too operates virtually all services commercially. In recent years,it has been facing competition on its main corridor from another company, Blue Bus.Fishwick responded to this entrant by registering a “frequent service” on its main corridor,which implies a service at least every ten minutes without the need to register the exacttimetable details. This allowed Fishwick to run a flexible timetable, including theduplication of Blue Bus’s services. Recently, Blue Bus has decreased its service from four toone buses per hour, which indicates that Fishwick has effectively won the battle

Services that are not run commercially are put out to tender by Lancashire County Council.However, for this to happen, two criteria must be met. The first criterion is that the revenue

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earned by the service should cover at least 20 per cent of its gross costs. The second criterionis that the subsidy per passenger should not exceed €3.25. It is also tried to meet certainminimum service levels, although this is more an issue in rural areas outside Preston. InPreston itself, the minimum service levels are in almost all cases achieved by the commercialservices. Consequently, with just one exception, there are no routes in Preston that areentirely tendered (i.e. tendered services not just during evenings and Sundays but also at allother times).

The invitations to tender specify the timetable, the type of vehicle to be used and the seatingcapacity. The authority also specifies fare tables, unlike GMPTE in Manchester, andprovides the operators with a revenue estimate. Operators are allowed to submit non-compliant bids or block bids, but are also required to submit a compliant tender.

Typically, five or six bids per contract are received. This number is fairly stable for schoolservices but is currently on the increase for scheduled services. The agreed price is indexedeach year according to a transport price index. Most contracts run for four or five years. Inrecent years, prices for renewed contracts have been rising fairly rapidly.

A mixture of minimum cost (gross subsidy) and minimum subsidy (net subsidy) contracts isused. Almost all school contracts are operated on a minimum cost basis. For the scheduledservices, it is the operator’s choice whether to bid on a minimum cost basis, a minimumsubsidy basis, or on both. If the council can choose, it will normally award the contract on aminimum cost basis in cases where the revenue estimate provided by the operator isrelatively certain, whereas a minimum subsidy contract may be used when the estimatedrevenue by the bidder is higher than the authority had thought. Out of 41 contracts inPreston, 38 contracts are currently on a minimum cost basis. The majority of these arecontracts for school services.

Lancashire County Council monitors the tendered services and can terminate the contractswithout giving notice if they are not adhered to, or can issue formal warnings. Operatorscan also terminate agreements but are subject to a 12-week notice period. If services arecancelled, the subsidy payable is reduced at twice the average rate, i.e. an operator thatcancels services not only does not get paid for them but also incurs a penalty. The Councilalso checks the vehicles that are used, in conjunction with the Vehicle Inspectorate. Out of350 checks that carried out last year, 20 led to a prohibition.

Like in Greater Manchester, a Countywide Quality Bus Partnership is being negotiated inLancashire between the County Council and the main operators. The main aims of theagreement are similar to the Manchester agreement (see section 8.3.1.2 of the Manchesterchapter for details).

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Unfortunately, the most recent modal split figures from the Preston area date from the 1991Census (the 2001 Census is currently being analysed). For travel to work in Preston and inthe whole of the Lancashire county, these are the figures presented in Table 9.1. The localauthority has indicated that in recent years, bus use has not fallen, although this does notnecessarily apply to the bus market share.

Table 9.1Modal Splits in Preston and Lancashire (Travel to Work), 1991

Mode Preston (%) Lancashire (%)Rail 0.6 0.9Bus 14.5 8.3Car 59.5 65.4Cycle 3.0 2.7Foot 14.9 13.8Other/Work at home 7.6 8.9Total 100 100

Source: Lancashire Local Transport Plan 2001/02 – 2005/06

9.4.1.2. Patronage

The total number of public transport trips in the Preston area is in the order of 20 million peryear. This implies about three trips per resident per week. Due to confidentialityconstraints, it is not possible to give the exact figure or to disaggregate the figure byoperator. Details on the number of passenger kilometres are unknown as not all operatorsrecord these figures.

9.4.1.3. Fares

The operators in Preston operate a fare system based on stages. Table 9.2 contains indicativedetails on fares that are currently charged by Preston Bus.

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Table 9.2Indicative Preston Bus Fares

Length of journey Indicative fare (€) Approximate fare perkilometre (€; based on mid-

point of range)

Up to 0.8 km 0.48 1.20

0.8 to 1.6 km 0.81 0.68

1.6 to 2.4 km 1.13 0.57

2.4 to 4.0 km 1.34 0.42

4.0 to 5.6 km 1.48 0.31

5.6 to 6.4 km 1.53 0.26

Source: Preston Bus

In addition, the operators operate daily, weekly and monthly tickets. A daily ticket valid onall Preston Bus services (not on other operators) costs €4.03 (£2.50). Preston Bus also offerslonger-term Rambler tickets at the following prices:

Table 9.3Preston Bus Rambler Tickets

7 Day Monthly Quarterly

Adult €12.10 (GB£7.50) €43.15 (GB£26.75) €119.35 (GB£74.00)

Child €7.60 (GB£4.70) €26.51 (GB£16.50) €73.80 (GB£45.75)

Student €10.90 (GB£6.75) €37.10 (GB£23.00) n/a

Source: Preston Bus

Stagecoach North West offers, in addition to single cash fares, a weekly ticket priced at€15.30 (GB£9.50). Fishwick operates single cash fares only, which following includes singleas well as day return tickets.


There are no demand management schemes in Preston. On-street parking is currently free,although proposals are being developed to introduce charges in areas covered by limitedwaiting near the town centre.

There are also little traffic management schemes, although a number of Quality BusCorridors (see section 9.4.4) are being developed that include bus priority measures. Again,there are proposals for traffic management, which will include selected part-time roadclosures for vehicles, initially during off-peak periods, in order to improve conditions forpedestrians and buses. These proposals have not yet been implemented.

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The operators achieve average speeds in the order of 20 km/hr, depending on whether theymainly operate in urban or in sub-urban areas.


The total number of buses operated by the commercial operators in the Preston area is in theorder of 300, although a number of these run on interurban routes from Preston. Thesebuses operate around 15 million kilometres per year.

Data on the total number of route kilometres have been provided but unfortunately not on aconsistent basis (apparently there are differences in whether multiple lines along a route arecounted separately or not). These are not therefore reported here.



Data on costs and revenues have been provided by the main commercial operators but, forreasons of commercial confidentiality, cannot be reported here.

The average cost per vehicle kilometre in the Preston area, weighted by the number ofvehicle kilometres operated, is in the order of €1.60 (GB£1). It should be noted that this is avery rough approximation, which is useful for indicative purposes only. It should also benoted that there are major cost differences between operators.


Commercial services in Preston do not receive direct subsidy payments, although they enjoya fuel duty rebate and are reimbursed for the costs of carrying concessionary passengers.Fuel duty rebate is paid at a national level, whereas Lancashire County Council isresponsible for the cost of accepting concessionary fares.

Tendered services also enjoy a fuel duty rebate and concessionary fares reimbursements. Inaddition, for these services a general operating subsidy is payable. These subsidies are paidby Lancashire County Council, which is also responsible for specifying the tenderedservices.


All commercial operators in Preston earn a significant proportion of their revenue from non-bus related sources. Fishwick, for example, operates a large private hire and coach holidaybusiness. The exact figures involved cannot be reported here. However, the deregulatedenvironment provides very powerful incentives for maximising other commercial revenues.

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For commercial services in Preston, there is no accountability and no transparency. PrestonBus published annual accounts but takes advantage of exemptions in the Companies Act.As a result, it for example does not declare its turnover. Stagecoach North West publishesaccounts for the North West as a whole, without making disaggregations. Of course, it canbe argued that there is no need for accountability and transparency for services that do notinvolve public money.

Accountability for the subsidised services is primarily achieved through the tenderingprocess: competitive pressures should ensure that subsidies are not higher than necessary.Once a tender has been awarded, the agreed subsidy becomes payable without the operatorshaving to justify the actual costs they incur.


9.4.4.1. Frequency

Frequency levels in Preston are generally good; many routes operate at 10 or 12 minutefrequencies and there are a number of routes operated by minibuses that enjoy 5 or 6 minutefrequencies. Thinner routes have lower frequencies but routes in the urban area without atleast a 30-minute frequency level are rare. Evening and Sunday frequencies are also verygood: a significant number of routes are served by three of four buses per hour during thesetimes, with hourly services on most of the thinner routes.

The high frequency levels are partly due to entry deterrence strategies of the incumbentoperators. By running as many buses per hour as possible, they avoid leaving “gaps” inwhich a competitor could profitably enter. This competitive threat usually causescommercially operators to run more services than they would do in the absence of potentialcompetition, and this is certainly the case in Preston.


Both Preston Bus and Fishwick aim to provide a high quality service in terms of reliability,with Fishwick indicating that services are never allowed to be cancelled. The number offailures at Stagecoach is not very high either, although it increased significantly during2000/2001. The punctuality of all the operators is however adversely affected by heavytraffic congestion in Preston. In fact, the fuel consumption per kilometre of buses in Prestonis almost as high as of buses in London. At Stagecoach, where the target is to have 95 percent of buses arrive within five minutes of their scheduled arrival time, problems withpunctuality became so severe a few years ago that the company was penalised under the1985 Transport Act (see section 8.2.2.2 of the Manchester chapter).

One of the main aims of the countywide Quality Bus Partnership programme will be torelieve these congestion problems. In Preston, the first Quality Corridor (marketed under

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the name “SuperRoute”) is already in operation and more are to follow. The improvementsmainly involve bus priority measures, new vehicles and improved bus stops. The QualityCorridors are certainly an improvement compared to the previous standards. In the contextof our other comparator cities, though, they would probably have to be regarded as“average”. There are however examples of more radical Quality Bus Partnerships in theUnited Kingdom that involve bus lanes or even guided busways.


Not only do the routes in Preston enjoy high frequencies, there is also a very large number ofroutes in the first place. With just one exception, Lancashire County Council does not needto subsidise daytime services to areas that would not otherwise be served. Like the highfrequencies, the dense network is partly caused by the nature of competition in the busmarket. If the operator would run a network as to maximise their profits, there might wellbe gaps in the network in which competitors could develop new services. Consequently, thethreat of entry not only causes the incumbent operator to run high frequencies but also torun dense networks, at least to a larger extent than it would have done in the absence of acompetitive threat.


The quality of the buses used is variable. The average age of the Preston Bus fleet is around9.5 years. Of the 117 vehicles, 18 double deckers have low floors, which are mainly usedfor the Superbus routes (see below). Stagecoach does not operate any low-floor buses at all,while Fishwick only has a few.

A final useful insight into the quality of the Preston public transport system has beenprovided by Lancashire County Council. As part of the Best Value Programme for localauthorities, the Council has measured the satisfaction among users of public transport andpublic transport information. Some key results are presented in Table 9.4.

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Table 9.4Satisfaction with Bus Services in Preston

Item Satisfaction score46

(%)

The frequency of the bus service 80

The provision of bus stops 82

The state of the bus stops 63

The timeliness of the service 70

The bus routes 72

The cost of bus service 34

The local bus service overall 74

The amount of information 71

The clarity of the information 66

The accuracy of the information 65

The provision of public transport information overall 62

Source: Lancashire County Council

The satisfaction levels in Table 9.4 can be regarded as very high, especially as far as theactual bus services are concerned. However, the provision of information is also generallyrated highly. It should be noted that on all items regarding the service and the informationprovision, Preston scored significantly higher than any other area in Lancashire with typicalsatisfaction scores elsewhere around 50 per cent. The only remarkable exception is thesatisfaction with the level of fares charged. Not only does this item score low in absoluteterms with only around one third of respondents being satisfied, Preston also hardly ratesany better on this item than the Lancashire average.



Most journeys in Preston are made without making changes between buses; in fact, around60 per cent of journeys originate and terminate at the bus station. The bus station ismanaged by the local authority and used by all operators. This means that those travellersthat do need to change can do so conveniently at the bus station.

For rail passengers arriving into Preston, the picture is rather different. The bus and railstations are situated at opposite ends of the city centre and the rail station is not served byany buses, although a number of routes run nearby.

46 “Satisfied” is defined as the percentage of respondents being “very satisfied” or “fairly satisfied” with the item inquestion. The percentages are of all users that expressed a view, which includes both public transport users andnon-public transport users. Data for those that have used the service or seen the information are available as well,but only for the county as a whole.

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A new initiative though is the Preston Shuttle Service, operated and funded jointly by VirginTrains and Stagecoach Northwest. The service, which is free to rail passengers and costsonly 20 pence for others, runs every 20 minutes between the railway station, the town centreand the bus station. The service started in February this year, initially on a trial basis forthree months. However, the link does not appear to be very successful and it is not clearwhether it will continue to operate.

There is also a highly successful P&R scheme in operation in Preston. There are about 400parking places, which are used by a mixture of commuters and shoppers, and the park isvery full for most of the time. Preston Bus runs a dedicated commercial minibus servicebetween the site and the city centre with a service every 6 minutes between 8am and 6pm.The fare (single or return) for the 1.5 km journey is €1.60 (GB£1) before 9.45 am and €1(GB£0.60) afterwards. The parking fee is €1.60 (GB£1) before 9.45 am, with free parkingafterwards.


Although individual operators offer integrated tickets for travel across their own networks,there is no tariff integration between operators in Preston at the moment. There are nothrough single and return tickets and there are no multi-operator travelcards. The onlyexception is the €1.60 (GB£1) add-on bus ticket that is available to Virgin Trains customersand is valid on all operators in Preston. However, this scheme is hardly used by customerswith only a few add-on tickets sold each month.

Although the County Council is keen to introduce a countywide multi-operator travelcardscheme, the operators have so far been unwilling to participate in such a scheme. It shouldbe kept in mind that the Preston operators operate in fairly distinct areas and that some 60per cent of trips originate or terminate at the bus station. With few people having to changebetween bus services, let alone operators, there is probably less need for integrated ticketingin Preston than in some other areas.

The extent to which joint ticketing schemes are consistent with competition law isanother potential difficulty in establishing such schemes. Full details are provided inSection 8.4.5.2 of the Manchester case study. A key problem is for schemes to beexempted from the Act under the proposed Block Exemption,47 certain criteria must be met.One of these is a requirement that revenue obtained from multi-operator travelcards must beallocated on the basis of passenger kilometres (as opposed to revenue foregone). Many inthe industry fear that the administration costs of allocating revenue on this basis will inmany cases exceed the entire benefit of the schemes.

47 Office of Fair Trading (2001) Public Transport Ticketing Scheme Block Exemption – Formal consultation draft.

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In Preston, timetables are produced both by Lancashire County Council and by thecommercial operators. The Council timetables include all services on a particular route; theoperator timetables usually do not include any services operated by competitors. Asignificant number of routes are however operated by one operator only and in such cases,two identical timetables will exist, one published by the operator and one by the Council.This especially applies to Preston Bus routes and the Council and Preston Bus have nowagreed to publish a series of joint timetables.

The operators have varying policies as to whether to include services not operated bythemselves in their timetables. Directly competing services will not normally be included.For example, the Fishwick Sunday timetable for route 109 only includes its own commercialtwo-hourly service, whereas in fact an hourly service exists with alternate commercialservices operated by Fishwick and Stagecoach.

The picture is more mixed as far as including tendered evening and Sunday services areconcerned that are operated by another operator. For example, Fishwick’s timetablesuggests that the last route 117 service on weekdays departs at 16.30 from Preston BusStation, whereas there is in fact an 18.30 departure operated on behalf of Lancashire CountyCouncil by a third party. On the other hand, Stagecoach does include in its timetable leafletsthe evening and Sunday services on its routes to Blackpool that are operated by BlackpoolTransport on behalf of the Council.

The Council also produces a network map, with details of all services, information on thebus station and details of the town centre stops. Also, the Council pioneered theintroduction of a national telephone information number by linking its network of CountyInformation Centres. The service, operated under contract by Stagecoach, is accessible atnational call rates and provides information on all public transport modes in the county.Furthermore, the County has a strategy to increase the proportion of bus stops withtimetable displays from 28 per cent at present to 100 per cent by March 2009. Real-timeinformation will also be introduced at key interchange points.

In spite of these important initiatives, the level of information integration in Preston cannotcurrently be regarded as good. The main problems include the complexity of the underlyingnetwork and the poor numbering system. As a result, any information, no matter how wellpresented, will be inherently difficult to understand. In addition, changes to the timetableare frequent, although Preston Bus have tried to limit the number of structural changes.Although the Council aims to create an integrated, easy to understand network, this is inpractice not easy to realise.


As already indicated in the Manchester chapter, the integration of transport with land use inmany UK cities has traditionally not been very good due to the development of out-of-town

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shopping centres and greenfield housing estates. These are often difficult for high-densitypublic transport to access.

In recent years, however, the policy emphasis has been changing. The draft RegionalPlanning Guidance for the North West acknowledges that the integration of land use andtransport planning is a key aspect of solving the region’s transport problems. It alsorecognises however that land use change is a long-term process and that management oftransport demand created by the existing land use pattern must be addressed.

Consequently, the North West regional transport strategy has been developed as an integralpart of the review of Regional Planning Guidance, and the Lancashire Local Transport Planis consistent with the regional transport strategy. In turn, the Local Plan that has beendeveloped for the Preston Area is consistent with the Lancashire Local Transport Plan. Itshould be noted though that in Preston, the city centre has remained the focal point ofactivity. In fact, this has led to severe congestion around the town centre for much of theday.

In summary, we conclude that the integration between land use and transport policies isnow good, unlike in the past. Past land use developments in Preston have however beenrelatively favourable to the public transport network.



Apart from tendering unprofitable routes for social reasons (see Section 9.3.1.2), the mainother policy to improve social cohesion is the Lancashire concessionary fare scheme.

The scheme applies to single cash fares only and offers half fare travel for men aged 65 yearsor over and women aged 60 years or over. However, the reductions are only available topeople in possession of a pass which must be issued in Lancashire or West Yorkshire. Theimplication is that only “local” pensioners are eligible for concessionary fares. Persons aged70 years or over can get free travel in the Preston area, provided they are Preston residents.

The operators are reimbursed by Lancashire county council for accepting the concessionaryfares, but not for the full amount. Account is taken of the fact that concessionary faresgenerate additional demand. As a result, operators do not receive the full differencebetween the concessionary and ordinary fares but only a part of that. When an elderlyperson makes a half-fare trip that would otherwise cost €1, the person will pay a fare of 50ctand the authority will pay another 35ct to the operator. When the same trip would be madefree of charge by someone aged over 70, the authority would pay around 70ct to theoperator. Of the total budget for the concessionary fare scheme, over 80 per cent is spent onthe free-fare part of the scheme.

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General access issues are discussed in Section 9.4.4. As noted there, 18 double deckers of the117 vehicles operated by Preston Bus have low floors, which are mainly used for theSuperbus routes. Stagecoach does not operate any low-floor buses at all, while Fishwickonly has a few.


As the Preston public transport system is entirely bus-based, deregulated and almostentirely run commercially, it is probably the most flexible system in terms of responding toexternal changes of all cities in our study. Operators set fares and service levels and are freeto make adjustments subject to a 42-day notice period. For the tendered services, mainlysome evening and Sunday services in the Stagecoach area, flexibility is less due tocontractual arrangements specifying services. However, the proportion of tendered servicesin Preston is very low. We would therefore rate the flexibility of the Preston publictransport system in terms of responding to external changes as excellent.



The biggest internal change that the Preston public transport system has seen was of coursethe 1986 deregulation. As described in Section 9.3.1.2, this led to a period with heavycompetition in Preston and major instability. By contrast, the present situation isremarkably stable.

In the Manchester chapter, we have suggested that the initial problems could probably onlyhave been avoided by choosing an entirely different restructuring model. However, thePreston market is illustrative in that the deregulated market does settle down after the initialinstable phase.


The wage levels paid by the operators in Preston vary considerably across operators. Thewages paid by Stagecoach are low, even below the UK average for bus and coach drivers of€9.80.48 The two other commercial operators pay a lot more and have wages significantlyabove the UK average. However, bus drivers in Preston work long weeks with the averagebeing at or well above the average UK levels. Working weeks of 55 hours are by no meansan exception, although it should be added that drivers in Preston are often very happy withsuch working weeks and the income they earn as a result. In Section 8.3.6.1 of the

48 Source of the UK average figure: Office for National Statistics (2000) New Earnings Survey. Although the Prestonoperators have supplied details on the wage levels they pay to their drivers, they have done so on a confidentialbasis. The figures cannot therefore be published here.

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Manchester chapter, a table is included which contains details on the average earnings ofbus drivers in the United Kingdom, as well as details on earnings elsewhere in the economy.

The differences in pay levels are reflected in the staff turnover figures, which are very lowfor Preston Bus and Fishwick, and rather high for Stagecoach. Stagecoach also experienced aserious industrial dispute in the summer of 2000 when a series of 15 one-day strikesoccurred.

An interesting feature of the Preston public transport system in terms of labour marketissues is the fact that Preston Bus is employee-owned. When the company was bought fromthe council in 1993, an explicit aim was to preserve staff employment conditions and it wasfelt that the best way to achieve this was to allow the employees to buy a stake in thecompany. All permanent staff were given the option to buy a package of 1000 shares at€1.60 each (requiring an investment of almost €2,000 at January 2001 prices) on a take it orleave it basis, i.e. no other packages were available. Management were offered the samepackage as the other staff, i.e. directors owned the same amount of shares as drivers. A bankprovided personal loans if required, whereas Preston Bus provided loans to those that hadinsufficient credit ratings. Around 90 per cent of those eligible did actually buy the package.The investment so far would have been worthwhile: the €2,000 initial investment wouldnow be worth almost €16,000, both at January 2001 prices.

The scheme however is now less popular then it used to be; the number of shareholders isdown from 290 to 160 and a trust owns more than 30 per cent of shares at the moment. Newmembers tend to be less interested as the share price does not rise very rapidly any more:the returns on the stock market are often higher. A second factor is the fact that in 1993,many staff bought shares, as they believed that the scheme would protect their position,both in terms of employment conditions and pensions. A new member of staff howeverdoes not yet have a position and is therefore less interested in protecting its pension bybuying shares. It is not believed that the share ownership has improved staff attitudes,although staff attitudes were already relatively good.

Generally speaking, the relationship of the unions with Preston Bus is reasonable. Problemsdo however occur from time to time, currently over a recent schedule change and also ingeneral over the lack of proper grievance procedures. In 1996, there were three one-hourstrikes in 1996 over wage levels. No strikes have however occurred since then. AtStagecoach North West, industrial relations are more difficult, however. In the summer of2000, a series of 15 one-day strikes occurred, mainly related to the fact that new drivers earnsubstantially less than existing drivers.

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Not applicable for Preston.


The Lancashire Local Transport Plan contains several measures to induce a modal shift fromprivate to public transport, mainly aimed at relieving congestion but also explicitly atreducing local air pollution, noise problems and greenhouse gas emissions. As far as publictransport is concerned, the main initiative is the countywide Quality Bus Partnerships toimprove the quality of bus services. In Preston, it is indicated that air pollution is a problem,although a final assessment still has to be made.

In terms of the environmental damage caused directly by public transport, the countywideQuality Bus Partnership has resulted in a commitment by the operators to increase thenumber of buses meeting either Euro Standards or operating with green fuels or catalysts.Discussions with participating operators are due to be completed by Summer 2001.


Table 9.5 below summarises what we consider to be the most significant positive andnegative aspects of the Preston system under each of the criteria for evaluation.

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Table 9.5Preston Performance Against Criteria

Positive Negative

Economic criteria

• High cost recovery

Economic criteria


• Competition tends to disappear withoperators limiting themselves to theirestablished routes

Service quality

• Frequency and network coverage arevery good.

• Good reliability

Service quality

• Some service instability in the periodimmediately following deregulation.


• New initiatives to improveintegration with land use planning.


• Physical integration could beimproved.

• Poor tariff integration.

• Relatively poor informationintegration, although this isimproving.

Social cohesion

• Fairly good concessionary faressystem.

Social cohesion

Dealing with change

• Staff continue to enjoy good workingconditions at Preston Bus andFishwick

Dealing with change

• Deregulation led to “bus wars” andinstability in services for some time.

• Staff working conditions atStagecoach deteriorated



• Specific plans to increase publictransport modal shifts in order toreduce pollution levels.


9.6. Preston “Scorecard”

To complete this chapter we present a summary “scorecard” summarising the mainadvantages and disadvantages of the Preston system.

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Table 9.6Preston Summary “Scorecard”

Preston



• Very high bus frequencies and networkcoverage – a good quality bus-basedpublic transport system

• Flexible system due to operator freedomto determine service levels and timetables

• Staff at the main operator own thecompany themselves and enjoy goodworking conditions


• Initial instability following a major “buswar”

• Competition tends to disappear andoperators stick to their own territory

• Poor tariff integration

• Information integration is not verygood, especially with operatorspublishing their own timetableswithout always including competingservices

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10. CITY STUDY: THE HAGUE49

10.1. Key Facts

• Tram, bus and heavy-rail based system.

• Competitive tendering being introduced. Gradual process with first concessionawarded to incumbent.

• Regional body responsible for public transport including setting service levels.

• Fares set under uniform National Fare System.



The Hague is the third largest Dutch city with a population of around 450,000. It is theadministrative capital, though Amsterdam is the official capital. The Hague is the home ofboth court and government and therefore a city dominated by civil servants. The city issituated in the west of the country along the coast. It is relatively prosperous with less socialproblems than in most of the other large Dutch cities.


There are three layers of government involved in public transport in The Hague. The CityCouncil (gemeente Den Haag) owns the municipal operator HTM. The City Council alsohas a major vote in the next layer of government, the regional body “StadsgewestHaaglanden”. This body can be regarded as a Greater The Hague government and will bereferred to as “Haaglanden” in the remainder of this section. In the Haaglanden authority,The Hague City Council and 12 smaller councils in the surrounding area work together onissues that go beyond the boundaries of the City of The Hague. Among other things,Haaglanden is responsible for public transport in the area. The third layer of government isthe national one, mainly the Ministry of Transport, Public Works and Water Management.50

This Ministry is currently responsible for the provision of rail transport in Haaglanden andis responsible for setting fares, although Haaglanden may charge lower fares if they so wish.The issues in the respective responsibilities of local and national government bodies forpublic transport in Haaglanden are discussed in more detail in Sections 10.3.1.2 and 0.

49 All prices mentioned in this chapter have been converted into January 2001 prices and then into euros using theofficial conversion rate of €1 = NLG 2.20371

50 Hereafter referred to as Ministry of Transport.


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10.3.1.1. Public transport in The Hague

The public transport network in Haaglanden consists of a mix of tram, bus and heavy railservices. The Hague urban area is well covered by a network of (traditional) tramlines,running on the street or on separate rights-of-way. The tramlines are supplemented by buslines. Heavy rail is important in the interurban transport network. There are frequent localservices on the main lines that are also served by Intercity services. In addition, there aretwo dedicated suburban rail lines, one of them constructed in the 1980s. There is oneinterurban tramline, with other places without rail connections served by buses. Of thethree modes, tram is the most important one with an indicative market share in theHaaglanden public transport market of around 60 per cent. This is followed by bus andheavy rail, with the share of heavy rail estimated as being less than 10 per cent.51

There are currently three operators involved in the provision of public transport in theHaaglanden area. The municipal operator HTM is responsible for the operation of the tramnetwork and the urban bus services. Interurban bus services are operated by Connexxion,the successor company to the former national operator of interurban bus services VSN. NS,the national heavy rail operator, is responsible for local services on both the main lines andthe dedicated suburban lines.

All operators are public limited companies, with all equity owned by the City of The Hague(HTM) and the national government (NS and Connexxion).

10.3.1.2. The market access regime

Tram/bus

Traditionally, public transport in the Netherlands was provided by operators owned bynational or local governments. In The Hague, HTM was given the exclusive rights for theoperation of the tram and urban bus network, with similar rights given to Connexxion forthe interurban bus services. No other operators were allowed to enter the market.

The operators were subsidised by the national government. The Ministry of Transportallocated a subsidy to the operators on the basis of annual budget rounds. It was alsoresponsible for setting fare levels. There is an integrated ticketing system in theNetherlands, the “National Fare System”. This system allows customers to use one ticket forall tram, bus and underground services in the Netherlands. The fare increases within this

51 These figures are estimated on a very rough basis and are only intended to give the reader an idea of the relativeimportance of each of the three modes.


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system were determined annually by Parliament and were often politically contentious. Thepublic transport operators were responsible for determining service levels and planning theservices. Their proposals however had to be approved by the relevant local or regionalgovernment.

With the 2000 Passenger Transport Act (Wet Personenvervoer 2000), the traditional situationhas changed. One of the objectives of the Act was to introduce a clearer governancestructure for public transport in the Netherlands, in particular by transferringresponsibilities and funding powers from national to regional government bodies. Anotherpolicy aim was to introduce competition for the market of public transport provision.

The changes are illustrated in Figure 10.1. One of the main changes is the fact that operatorsare now funded through regional government instead of through the national Ministry ofTransport. At the same time, the initiative for determining and planning public transportservice levels has shifted from the operators to the regional government bodies. As a result,regional governments are now able to both specify service levels and to provide subsidy forthem.

Figure 10.1Changes in Funding and Governance Arrangements

NationalGovernment

NationalGovernment OperatorOperator

Local/RegionalGovernment


OldSituation

NewSituation

NationalGovernment




Funds

Approvestimetable

Funds andsets servicelevels

Funds

NationalGovernment




OldSituation

NewSituation

NationalGovernment




Funds

Approvestimetable

Funds andsets servicelevels

Funds


152

The subsidy payments to the operators are no longer determined annually, but agreed uponin advance for a number of years. To this end, all regional governments are required toenter into concession agreements with the operators in their area by January 1st, 2002 at thelatest. The existing operator is given exclusive negotiating rights for the first concession,which may last for a maximum of six years. After expiry of the first concession period, theregional governments are required to put the concessions out to tender. Concession periodsmay be for a maximum of six years, although longer periods may be allowed in certaincircumstances. These include concessions that involve large investments in rolling stock,where no leasing market can be realised for the vehicles and where the local authority is notable to own the rolling stock itself.

The Act specifies that 35 per cent of Dutch interurban public transport services (excludingtrains) must be subject to competitive tender by January 1st, 2003, rising to 100 per cent byJanuary 1st, 2006. For urban transport, the dates are January 1st, 2006 and January 1st, 2007respectively. However, the articles relating to urban transport will only come in force in2005, depending on the results of an evaluation of the initial results of the Act in 2004.

As shown in Figure 10.1, the regional governments are being funded by the nationalgovernment, which now pays a similar amount of money to the regional bodies as it used topay directly to the operators. It is the intention that long-term subsidy agreements will beagreed between the national government and the regional bodies in order to give themfunding stability. For example, in the case of Haaglanden, a 10-year contract has beenproposed but not yet agreed on.

The subsidy from national to regional government is revenue based: for each € of revenueearned in the regional government’s area, the national government pays around €1.48 to theregional authority. The authorities are free to use the same subsidy system in theiragreements with the operators or to use a different method. They are also free to spend themoney as they wish, as long as it is spent on public transport.

The revenue-based subsidy from the national government gives regional governments anincentive to focus on services that generate demand and thereby revenue. There arehowever two main disadvantages to the system, which therefore is currently under review.The first disadvantage is the impact of the system when patronage and revenue are falling.In such cases, subsidy from the national government will fall too. This could induce avicious circle of patronage falls leading to subsidy cuts, leading to service cuts that in turnlead to even lower patronage.

The second disadvantage is the potential cost of increased risks. Public transportexpenditure often takes up a large part of the total budget of a regional government. If forsome reason the regional government ends up paying more subsidy to the operators than itreceives from the national government, the consequences for the authority budget could beserious. In practice, therefore, regional governments usually use the same subsidy formulain their contracts with operators as in their agreement with the national government.


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Consequently, operators too are subsidised on the basis of revenue earned and this meansthat the operators bear an amplified revenue risk.52 There are concerns that in the future,private operators bidding for tenders will charge heavy risk premiums for bearing thisamplified revenue risk.

A further problem with the revenue based subsidy approach is the limited freedom ofregional governments to set fare levels for services in their area. In theory, regionalauthorities have this freedom, but in practice their actions are very much constrained by thecontinued requirement to accept the integrated National Fare System on all public transportservices.53 Fare levels for this system will still be set by the government. In the Netherlands,there is a high degree of tariff integration in public transport (see Section 10.4.5.2) and it isnot regarded as acceptable if this integration would be lost as a result of institutional andregulatory reforms in the public transport sector.

In practice, this requirement means that regional governments can only introduce new faresthat are lower than the National Fare System. As the price elasticity for public transport inthe Netherlands tends to be low, lower fares do not generate much additional demand andoften result in lower overall revenue and consequently less subsidy from the nationalgovernment. For most regional governments, lower fares are not therefore an attractiveoption. It is hoped that the planned nationwide introduction of a smart-card ticketingscheme between 2003 and 2006 will allow more price differentiation while preserving tariffintegration.

In Haaglanden, a six-year concession has now been agreed with the interurban operatorConnexxion. This contract includes a quality incentive regime: the annual subsidy can beincreased or cut by one per cent if quality levels are above or below the standards agreed. Itis intended that Connexxion’s urban services will be put out to tender in 2003. Haaglandenis also in the process of agreeing a concession with the urban operator HTM, with it beinglikely that a six-year concession will be agreed for HTM’s tram network. HTM’s busnetwork however will probably be split up into four parts, all to be tendered in 2002/2003.The four parts will not be areas, which would make the operation of through servicesdifficult, but rather groups of lines. Routes, service levels and fares will all be specifiedtightly with little freedom for the operators. It looks likely that net cost contracts will beused for this and all other public transport tenders in the Netherlands.

A final remark on the regulatory framework for trams and buses in Haaglanden is that,although the urban operator HTM is being put more at arm’s length from the council, it stillneeds to justify even the smallest expenditures to the Haaglanden regional authority. As wewill also see below, the authorities in the Haaglanden area do not as yet tend to be preparedto give operators much commercial and operational freedom. However, the city of TheHague does intend to sell up 49 per cent of HTM shares in order to provide the company

52 Effectively, the revenue risk that operators face increases by a factor of around 2.5.

53 This excludes most trains and certain long distance coaches (“Interliners”).


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with capital for expansions. One condition however will be that HTM will continue to existas an independent entity. For that reason, it is more likely that an investment company willbe sought as shareholder than another public transport operator.

Heavy rail

Introduction

Until a few years ago, all heavy rail services in the Netherlands were operated by thenational rail operator NS. The operator was subsidised by the Ministry of Transport on anannual lump-sum basis. Although its service levels and timetable required formal approvalby the Minister, in practice the Ministry did not interfere with the timetabling process,leaving considerable freedom to the operator. Fares however were set by Parliament in anoften politically contentious process. NS was responsible for both infrastructure andoperation.

From 1995, under influence of EU directives 91/440/EG and its continuations 95/18/EGand 95/19/EG, this situation changed. Infrastructure and operations were separated andthe new business unit NS Passengers was given more freedom from governmentinterference. For example, subject to some relatively loose restrictions, it no longer requiredgovernment approval to set fares and service levels. In later years, policy developed furtherand from 1998, a distinction has been made between the main network and the contractsector. Each of these will be discussed in turn.

Main rail network

The main network contains those lines that NS is able to operate without subsidy (excludinginfrastructure costs). Both Intercity and local services on these lines are included and thisimplies a degree of cross-subsidy from Intercity to local services. These lines will continueto be operated by NS under a 10-year exclusive concession, which is currently beingdiscussed in Parliament. No operating subsidy will be payable for those lines and NS isincreasingly required to cover its marginal infrastructure costs.

The proposed contract for the main network defines a number of main performances thatNS must comply with. The most important of these are:

• a peak hour growth target: by 2005, NS must have increased its peak hour traffic(measured as the number of people going through the barriers heading for the 12main Dutch cities) by almost 23 per cent, compared to the 2000 level. There is abonus if the target is exceeded, but no specific penalty if the penalty is not met. IfNS’s performance falls substantially below the agreed norm in any year, discussionswill follow on what measures can be taken to achieve the target in future years;


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• a punctuality target: by 2005, 92 per cent of trains should arrive within 3 minutes ofthe scheduled time. NS has to pay a penalty of €4.5 million for each one per cent thatpunctuality falls below the norm, up to a maximum of around €11.5 million per year.

• NS shall compensate all passengers that are delayed. Half the fare shall be refundedif the delay is between 30 and 60 minutes, with a full refund for greater delays. Onlyin special cases shall force majeure be cited.

• NS shall comply with minimum levels of provision relating to first/last train timesand service levels. The requirements are based on the 2000/2001 timetable but leaveconsiderable freedom to NS to make service cuts if required, especially in the case ofsmaller stations during off-peak hours.

• NS shall not increase a basket of key fares by more than the consumer price indexplus 2 per cent.

The peak hour growth and punctuality targets are averages and consequently do not applyto each of the individual local services running into The Hague, but only to the average of allservices run by NS on the main network. The minimum service level, the price cap and thedelay compensation do however apply to the individual services and stations in theHaaglanden area.

It should be noted however that the proposed contract is controversial and that the outcomeof the parliamentary debate is uncertain.

At some point in the future, the local rail services on the main network too may bedecentralised and put out to tender, like the lines in the contract sector (see below). An issuehere is the extent to which it is desirable to have a frequent local service and a frequentIntercity service, operated by different companies, share the same railway track. Somepeople in the Netherlands argue that such a situation should be avoided and that localservices on the main network should only be decentralised if dedicated tracks are available,e.g. on a four-track railway line.

Contract sector

The contract sector includes those lines that NS cannot operate profitably. This includes anumber of rural lines, which are currently in the process of being franchised. It also includesa number of lines of a more urban nature, including the two dedicated suburban lines in theHaaglanden region.

For the moment, these lines continue to be operated by NS. There is a framework contractthat covers all the lines (around 30). The main provisions in this contract are the following:

• There is a minimum level of seat kilometres to be provided, initially equal to theamount in the 1997/98 timetable. However, each year, this minimum is decreased


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by 3 per cent, i.e. services may to an extent be rationalised. It is however not allowedto rationalise services by reducing frequency levels or by closing stations, i.e., theonly way in which services could be reduced is by running shorter trains. Theminimum applies to the total of the 30 lines, not to each line individually.

• An annual subsidy is payable to NS. This subsidy is indexed annually by averaginga wage index and a price index. The subsidy is proportionally reduced if less seatkilometres have been provided than the minimum, but with no additional finepayable.

The intention is to transfer the responsibility for the contract sector lines to the regionalgovernments as soon as possible, followed by putting the lines out to tender. In the case ofsome rural lines, this has already happened. However, the decentralisation of the urbannetworks is politically contentious. It is likely that firstly, there will be an experiment in theAmsterdam area to examine the implications of the decentralisation of urban networks,which will include the urban services on the main network. Decentralisation would involvelimiting the staff concerned to the urban network in question: a highly controversial issue(see Section 10.4.9).

NS have suggested that the contract sector lines are unprofitable even when taking thesubsidy payments into account. The (confidential) financial data supplied for the twocontract lines in the Haaglanden region do indeed suggest that the gap between thebudgeted income and the budgeted costs exceeds the subsidy payable to NS. Consequently,NS have suggested that if local authorities will be receiving the same budget for the contractlines as NS currently receives, unpleasant surprises and service cuts may result when the“real” deficits of the unprofitable lines become clear. However, the most recent tender forthree rural lines in the north of the country resulted in the winning company Noordnedsignificantly undercutting the subsidy level that NS previously received.54 This suggeststhat either the losses claimed by NS are artificial or that there is scope for efficiencyimprovements on the lines in question. It should also be noted that Noordned soon facedsignificant difficulties in maintaining service quality.

The future for the two dedicated suburban lines in the Haaglanden area will very much beshaped by the Randstadrail proposal. Currently, many passengers using the lines transfer atThe Hague Central Station to a tram or bus line. Also, the lines are not in too good acondition and the most important of them is actually loosing patronage. It has thereforebeen proposed to convert the lines to light rail operation and to construct a link betweenthem and the tram network in The Hague. The change would in some ways be similar toManchester Metrolink, although the Randstadrail proposal involves using the existing tramnetwork. Originally, NS, HTM, Connexxion and the Rotterdam urban operator wereinvolved in a PPP proposal for the conversion. This however failed as the regionalgovernment wanted to transfer risk to the operators but was not prepared to grant them a

54 Noordned is a joint venture of NS and Arriva.


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sufficient degree of freedom. The current plan is to keep the infrastructure in the hands ofthe government and to agree on a concession for the operation of the new system. Here, too,the existing operators will have exclusive negotiating rights for the first concession period,with the concession being tendered afterwards.




Table 10.1 contains the modal split in the Haaglanden area as measured in 1998 andcompares this with the national average.

Table 10.1Haaglanden Modal Split, 1998

All purposes,Haaglanden (%)

All purposes,Netherlands (%)

To/from work,Haaglanden (%)

To/from work,Netherlands (%)

Car (driver) 27 32 36 48

Car (passenger) 18 17 5 7

Public transport 8 5 17 10

Cycle 25 27 32 29

Walk 20 18 5 4

Other 2 2 5 3

Total 100 100 100 100

Source: Stadsgewest Haaglanden

10.4.1.2. Patronage

Table 10.2 and Table 10.3 below contain details of tram and bus patronage of the mainoperator HTM.

Table 10.2HTM Tram Patronage 1992-2000

1992 1994 1996 1998 2000

Passengers journeys per year (millions) 78.4 77.7 74.8 81.3 80.7

Index (1992=100) 100 99 95 104 103


Index (1992=100) 100 104 103 112 121

Average trip length (kilometres) 3.02 3.16 3.27 3.27 3.57

Source: HTM


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Table 10.3HTM Bus Patronage 1992-2000

1992 1994 1996 1998 2000

Passengers journeys per year (millions) 44.1 42.3 37.3 38.0 37.0

Index (1992=100) 100 96 85 86 84


Index (1992=100) 100 92 82 84 83

Average trip length (kilometres) 3.61 3.45 3.49 3.50 3.58

Source: HTM

It can be seen in the two Tables that, over the last eight years tram use has been fairlyconstant in terms of passenger number, but increasing in terms of passenger kilometres dueto a rising average trip length. Bus use has declined by over 15 per cent both in terms ofpassenger journeys and passenger kilometres. It is interesting to note that the average triplength used to be greater for buses than for trams and that this is no longer the case.

NS have supplied patronage data for the stations in the Haaglanden area, but these areconfidential and cannot be published. The figures suggest that in the period from 1996 to1999, train travel into The Hague has increased by around 5 per cent. However, traffic onthe most important of the two suburban lines in the contract sector has fallen sharply overthis period.

For future years, there is an annual growth target for all public transport in the Haaglandenarea of 3 per cent per year until 2005, and 5 per cent in the years afterwards.

10.4.1.3. Fares

The current fare levels that apply on public transport throughout the Haaglanden area arepresented in Table 10.4. These fares are integrated fares from the national fare system. Forthe purpose of the system, the whole country is divided in zones, each some 4.5 km inlength. In The Hague, there is a city centre zone and a number of zones adjacent to it. Mostjourneys in The Hague involve crossing either one or two zones, the fares for which arepresented in the Table. The fares are the same regardless of the mode that is used, althoughmost rail trips will involve crossing more than two zones. The majority of people use pre-paid multiride tickets, although in-vehicle tickets are available as well at a higher fare.


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Table 10.4Current Fare Levels in National Fare System

pre-paid (€) in-vehicle (€)

1 zone single 0.76 1.36

2-zone single 1.13 2.04

One-day travelcard (valid in the entire city) 5.45 5.45

1-zone monthly 28.16 n/a

2-zone monthly 47.80 n/a

Source: HTM

Fare increases are decided by the national government. Since 1994, these have been equal toor slightly above the rate of inflation. In the three years prior to 1994, however, fares wereincreased by 6 per cent per annum (with inflation running at around 3 percent) in order toreduce public spending on the transport system.


The local authorities are responsibility for local roads and parking policies (i.e. not theregional authority Haaglanden). There are a number of demand and traffic management,including part-time closures of selected city centre streets (using flexible barriers) and theintroduction of parking charges in virtually the whole of the city of The Hague. Localresidents can buy parking permits for the streets around their house that vary in price from€3.11 to €6.19 (city centre) per month.


The average speed that is achieved by HTM’s buses was 19.9 km/h in 2000, up from 19.6km/h a year earlier. As far as trams were concerned, the change was significant with anincrease from 18.5 km/h in 1999 to 19.5 km/h in 2000. It is thought that there is scope toincrease the average bus speed to 21 km/h and the speed for trams to 22 km/h.


Table 10.5 contains details on the number of bus and tram seat kilometres, the length of thebus and tram networks and on staff numbers. All data refer to the main operator HTM.


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Table 10.5Tram and Bus Kilometres and Staff Numbers in The Hague, 1992-2000

1992 1994 1996 1998 1999 2000

Total seat kilometres (tram) 1021 1085 1090 1110 1196 n/a

Index (1992=100) 100 106 107 109 117 n/a

Total seat kilometres (bus) 509 499 508 538 535 n/a

Index (1992=100) 100 98 100 106 105 n/a

Total number of staff 2041 1893 1823 1980 2067 2132

Source: HTM

The number of tram seat kilometres has been increasing during the last eight years, broadlyin line with the increases in the number of passenger kilometres (see Table 10.4). Thenumber of bus seat kilometres has however slightly increased, in spite of the reduction inbus patronage.

Table 10.6 contains the proportion of HTM passengers that is paying for the use of the publictransport system. There is clearly a problem on the tram network, where the number ofpaying passengers has been decreasing due to shortages of inspection staff (see Section10.4.9). There are however no plans to reintroduce guards on the trams, as was done inAmsterdam a few years ago.

Table 10.6Paying Travellers on HTM

1997 (%) 1998 (%) 1999 (%) 2000 (%)

Tram 94.5 93.9 92.4 91.6

Bus 98.5 98.8 98.8 n/a

Source: HTM

10.4.3. Economic Criteria: value for money and accountability


Table 10.7 contains HTM’s financial result for 1998 and 1999.55 It can be seen than in 1999,HTM received about 36 per cent from its income out of farebox and other income, asopposed to around 33 per cent in 1998. The farebox and other income covered around 43per cent of direct operating costs (1998: 37 per cent).56 The 2000 figures are both slightlybelow the 1999 figures.

55 Preliminary figures for the year 2000 have been made available, but these have not yet been published.

56 The total operating costs shown here exclude financing expenses and costs for former personnel


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Table 10.7HTM Financial Details 1998-1999

1999 (€ in Jan 2001 prices) 1998 (€ in Jan 2001 prices)

Government subsidy 96.9 98.1

Income from passenger transport 49.1 45.8

Other income 7.3 5.5

Capitalised own production 4.4 6.6

Total operating income 157.7 156.0

Personnel costs 81.3 76.2

Depreciation costs 22.2 29.9

Other costs 28.2 32.0

Total operating costs 131.7 138.1

Source: HTM Annual Report 1999

It is clear that the percentage of costs that is covered by farebox revenue in the Haaglandenarea is not very high. There are plans to improve the cost recovery ratio to around 40 percent in the next few years, but earlier ideas to achieve 50 per cent have now been abandoned.

The low level of cost recovery is not however perceived as a problem in the Netherlands.Whereas the national government would certainly like to reduce spending on operationalspending somewhat and divert the funds saved to investment projects, it is generallyaccepted that an extensive public transport network with low fares and high frequenciesrequires significant amounts of public funding. Nevertheless, moving towards tendering ofconcessions is certainly expected to generate savings in the order of 10-15 per cent.However, as the available budget from central government will rise by 2 per cent per year inthe years to 2005 and by 4 per cent a year afterwards, the money saved from tendering willbe largely spent on new and improved services, which will keep the cost recoverypercentage relatively low. However, no lines will be operated that recover less than 30 percent of their costs through the farebox. In addition, tramlines are required to carry at least15,000 passengers per day.


Details of operating subsidies are given in Table 10.7 above. In addition, significantinvestment subsidies are made available each year by the national government.


As can be seen in Table 10.7 above, HTM earns small but significant revenue from sourcesother than the farebox. These mainly relate to advertising, though HTM also operates alight-rail service on behalf of Dutch Railways. The company also has a significantconsultancy business.


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HTM produces an annual report which is available to the public. Under Dutch law, allpublic authorities are required to provide information to interested parties on request,subject to privacy and safety issues.


Although the available data on service quality in the Haaglanden area are not very detailed,a number of remarks can be made.

10.4.4.1. Frequency and accessibility

For trams and buses, there is a basic frequency level of six services an hour during daytimeand four per hour during evenings. An extensive network with relatively low frequencieshas been preferred over a sparser network with higher frequencies on key corridors. As aresult, the average distance people have to walk to the nearest tram/bus stop is around 400metres. The policy emphasis is however changing: the aim is to rationalise the bus networksomewhat to achieve an average walk distance of 500 metres.

Train services on the busiest suburban line run every 10 minutes during peak hours (in thebusy direction only) and every 30 minutes at all other times. After the conversion of thelines to light rail operation, off-peak frequencies will increase to the basic frequency levelsthat currently apply to trams and buses (see above).


Around 90 per cent of buses and trams currently run on time, whereas the target is 95 percent.57 On train services, only countrywide punctuality averages are available; punctualityfigures by area are confidential and have not been supplied by NS.


The trams that are used by HTM have an average age of 17 years. All buses however havebeen renewed in recent years, with a current average age of just 2 years. None of the tramshave low-floor entrances but all buses do. The trains on the suburban heavy rail lines are allaround 20 years old, although they have recently been refurbished.

The overall results of the annual HTM customer satisfaction survey are shown in Table 10.8.These scores are measures on a scale from 1 to 10. A score of 7.0 is regarded as an “average”score for this kind of surveys in the Netherlands. Consequently, HTM is now doingrelatively well and clearly improving.

57 It is unfortunately unclear how exactly “on time” is defined.


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Table 10.8Customer Satisfaction among HTM Passengers

Year 1996 1997 1998 1999 2000

Overallsatisfaction

6.8 6.9 7.0 7.1 7.2

Source: HTM



Although there are some good examples of physical integration of public transport servicesin The Hague (for example, the bus station has been built on top of the central train station),the level of physical integration is not to be regarded as best practice. The main problem isthe fact that historically, the tram/bus services on the one hand and the heavy rail serviceson the other hand have been developed and managed separately. Not only is it in manycases necessary for passengers arriving in The Hague by local rail services to make a changebetween modes; the change is also not to be regarded as easy or clearly indicated, especiallyfor the inexperienced user. There are however several radical plans to improve thesituation. A well advanced proposal is the “Randstadrail” scheme, which involvesconverting the existing two dedicated suburban lines to light rail operation and building aconnection between these lines and the existing tram network. This would enable throughservices between the networks. Another plan, building on the Randstadrail scheme, is toradically alter the appearance of the various modes, presenting them as one integratednetwork.

There have been a number of major Park&Ride schemes in the Netherlands. However, mostof them have failed to be successful. The emphasis with regard to Park&Ride is therefore onsmaller-scale schemes by providing good car and cycle parking facilities at stations.


As indicated above, tariff integration in Haaglanden and in the Netherlands can be regardedas strong. There is a national ticketing scheme which enables passengers to use all buses,trams and underground services in the country, as well as train services within the largeurban areas.58 In the case of Haaglanden, this system enables passengers to travel on allpublic transport services in the area. Passengers arriving by train from outside theHaaglanden area can buy an add-on to their ticket if this is a daily travelcard or a seasonticket. No add-ons are available to single and return train fares.

58 Certain coach services (“Interliners”) are excluded.


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It should be noted, however, that there are significant drawbacks associated with theintegrated system. The main problem is to allocate the total revenues over the variousoperators that participate in the scheme. Every three years, a major travel survey isundertaken and the results are used as a basis for allocating the revenues. Consequently,any changes resulting from the introduction of new services or demand shifts are only takeninto account at three-year intervals. Not only does this influence revenue levels but alsosubsidy levels through the revenue-based subsidy system. Also, fare levels are the sameacross the country, although the system is zone-based and some differentiation is possibleby varying the size of the zones.

The problems with the present system are consequently a major driver for the developmentand introduction of a nationwide smart-card ticketing scheme. This system, which isalready operational in a number of trial areas, will be introduced nationwide between 2003and 2006. It will allow price differentiation while preserving tariff integration. However,some people are warning that the possibilities for price discrimination with this system,when introduced nationwide, will not be as wide-ranging as some other people expect.


The level of information integration in public transport in the Netherlands is mixed. Thereare some outstanding examples, such as the National Public Transport Enquiry Service,available by phone and over the Internet. This system provides the user with a travel advicefor a trip from any address in the country to any other address, using all modes of publictransport.

At the Haaglanden level, however, there is a lack of involvement of the Haaglandenauthority in information provision. Consequently, this is currently left to the operators andthis results in mainly operator-specific information with very limited information onpossible interchanges to other operators. There is however an excellent network mapproduced jointly by Connexxion and HTM. At railway stations, maps of the national railnetwork are provided but little or no information is available on tram and bus connectionsapart from the ones directly serving the railway station in question. The national railtimetable does however include a few pages with information on connecting urbantransport in The Hague.


The Netherlands have a very strong tradition in the field of spatial planning. Consequently,the integration between transport and land use in the Netherlands and in Haaglanden isgood. New housing areas are planned either along existing transport links or are providedwith new transport services. In Haaglanden, a new housing area is currently being builtwith 33,500 houses to be built by 2005. In 1999, the first tramline to this area was openedwith the second tramline to follow in early 2002, even though by then, only some 40 per centof the planned new houses will actually have been built.


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There is a national concessionary fare scheme, which allows senior citizens and under 12saround 40 per cent off all fares in the national fare system, and school children 40 per centoff season tickets. The operators do not receive a specific reimbursement under this scheme;the associated costs are recovered via the general public transport subsidy payments.


As indicated in Section 10.4.4.3, almost all buses have low floors entrances but none of thetrams do. NS trains are not accessible for the mobility impaired, but it is possible to getassistance from a number of stations. Mobility impaired can get a permit with which theycan take a travel companion or, if relevant, a guide dog free of charge.


So far, the public transport system in The Hague has been strong in responding to externalchanges, mainly related to the development of large new housing areas. Buses arrived in thenew areas virtually at the same time as the first inhabitants arrived, with the first tramlinealready in operation and the second one due to be completed by the end of 2001. Asindicated above, only 40 per cent of new houses will have been completed by then.

It is worth noting however that the flexibility only concerns routes and service levels, notticketing. The integrated ticketing system brings many benefits to consumers, but does havethe disadvantage that fares in the Haaglanden area cannot be set according to local demandconditions.



One point which is especially noteworthy about the public transport reforms in theNetherlands is the attention that is being paid to the transition process. The key feature ofthe transition is that in almost all cases, the existing operator gets exclusive negotiatingrights for the first concession period. Only after this first period has expired does tenderingof the concession become compulsory.

The method chosen has several advantages. As the operators have traditionally had theinitiative in the specification of public transport services in the Haaglanden area, they alsohave a significant amount of knowledge about the public transport system. Indeed, it hasbeen suggested that one of the main problems of the Haaglanden regional authority is thatthe new body does not currently have sufficient public transport skills. If the concessionwere be tendered immediately and if the incumbent operator lost the tender, a lot of


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knowledge about the Haaglanden public transport system would suddenly disappear. Inother words, awarding the first concession to the incumbent gives the authority more timeto prepare for the future situation in which it will have the initiative without being able tofall back on the experience of the incumbent. Another benefit of awarding the firstconcession to the incumbent is that staff problems become easier to manage. Finally, itallows the concession agreement to be “tested”, so that the subsequent invitation to tendercan be specified as appropriately as possible.

It should however be pointed out there is also a significant drawback associated withawarding the first concession to the incumbent. It allows not only the authority but also theincumbent to “test” the agreement and to gain experience with it. That way, the incumbentmight be able to strengthen the incumbent advantage that it already enjoys.


Unions are powerful in the Dutch public transport market and all agreements are subject tocollective bargaining. In the case of HTM, the relationship with the unions is veryconstructive; no industrial action has occurred in the last 20 years. This relationship isconstructive from the perspective from the operator but also from the perspective of themain union FNV. The gross monthly salary for incoming bus and tram drivers startsapproximately €1,550-1,600, increasing with experience to around €2,250.59 In 1999, 9.3 percent of hours were registered off sick. Staff turnover in the same year was 5.5 per cent. Inspite of the present difficult labour market conditions in the Haaglanden area, HTM is stillable to find enough bus and tram drivers. Finding ticket inspectors however is moredifficult: the total number of inspectors is currently 125, about 50 below the number thatshould be there.

A different story however applies to the interurban operator Connexxion. This companyused to be the national provider of bus transport in the Netherlands outside the eight largestcities. With the onset of liberalisation and deregulation in the Netherlands, it was seen ashaving a dominant position on the Dutch public transport market and was thereforerequired to divest a number of its businesses. This led to significant industrial unrest and in1995, a strike started that lasted for several weeks. Ultimately, the unions were grantedassurances that when a concession transferred from one company to another, all direct staffand a proportionate amount of indirect staff would be transferred as well. The newoperators would consequently be unable to make staff redundant at the start of a concessionperiod, but would be free to make staff adjustments during the concession. This howeverwould be subject to the normal strict procedures with regard to staff adjustments that applyin the Netherlands, which among other things determine that any compulsory redundanciesneed to be approved by a court. At the moment, however, the FNV union regards the

59 Due to the complexity of wage scales in the Netherlands, we do not attempt to make comparisons of these figureswith averages elsewhere in the economy.


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relationship with Connexxion as good, although it was noted that Connexxion is nowbehaving more commercially than it used to do.

An important feature of staff conditions in interurban bus transport is that the sameconditions apply nationally to all employees of all companies. All employees in comparablepositions enjoy exactly the same employment conditions and all operators, including newentrants, are legally required to accept these nationwide conditions. Similar nationwideagreements apply in many other sectors in the Netherlands, for example there also exists acollective agreement for all supermarket staff.

At the rail operator NS, train drivers receive a gross salary that, after a number of years inservice, increases to around €2,150 on the basis of a 36-hour working week. For guards, thecorresponding figure is about €2,000. However, there are significant additional paymentsfor all duties performed outside normal office hours. The percentage of hours registered off-sick is rather high with, in Haaglanden, a figure in excess of 20 per cent. The proportion ofworking hours that are productively spent is low with a figure that is believed to be below50 per cent. NS points out however that similar figures apply to all European railwaycompanies. Staff turnover in the Haaglanden area is about 13 per cent.

At NS, too, unions are powerful and the relationship between management and unions hasbeen tense for the last 10 years. At the moment, a serious conflict is being fought out over aproposal to limit the duties of driver and guards more to specific trains and specific lines, asopposed to the current situation where staff have a large variety in their work. Severalstrikes have occurred and unions repeatedly negotiated a settlement with the operator, onlyto find the deal rejected by militant staff.

The FNV union has indicated that the deeper background to the conflict is staff uncertaintieswith regard to any future liberalisation of the Dutch railway market, particularly those linesthat are due to be put out to tender. With regard to the rural concessions that have so farbeen transferred from NS to new entrants, staff basically have been guaranteed no changesin their working conditions and compensation levels for at least three years. Those whotransferred voluntarily also received a lump-sum payment.

As nor the NS working conditions, nor the working conditions agreed in the nationwideagreement for interurban bus operators, are suitable for the new multi-modal companiesthat are emerging, a new nationwide agreement for multi-modal operators has been agreed.This multi-modal agreement applies to NS staff that transfer to one of these new multi-modal operators. The employment conditions are similar to the ones in the NS agreement,although some requirements as to working times etc. have been altered to reflect the factthat operating practices in a local multi-modal company are different than those in anational rail operator.

Ideally, the unions would like to have a nationwide agreement for all local public transport.This however is difficult to achieve as conditions in some areas, for example Amsterdam, arecurrently more favourable than in other areas. The unions however expect that in the next


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two years or so, there will be another discussion about a collective bargaining agreement forthe entire local public transport sector in the Netherlands.

In general, FNV has indicated that while they did not favour the liberalisation of the publictransport market in the first place, they do not regard the results so far as negative.Basically, the impact of the reforms so far on public transport staff in the Netherlands hasbeen minimal, although the current transition period does result in significant uncertaintiesfor the employees.




10.4.9.2. Access to Airports

Not applicable.

10.4.10.Environmental criteria

Environmental policy and targets in the Netherlands are formulated at the national level.The “National Traffic and Transport Plan 2001-2020” accepts that mobility will continue togrow and, unlike the previous Plan, does not set targets to limit the growth. It does howeverset environmental targets, mainly to be achieved by making vehicle cleaner and less noisy,better protection of houses and environmentally sensitive areas against noise etc. Most ofthe policies will be implemented at national level.

One exception however is local air quality. The Plan indicates that local governments are toan extent responsible for improving local air quality in their area. As far as public transportis concerned, it is suggested that the environmental quality of the vehicles to be used shouldbe one of the criteria in evaluating concessions for public transport operators. InHaaglanden, almost all buses are currently being fitted with filters to limit the emission ofpollutants. This is being subsidised by the national government. As the tram is thedominant mode of public transport in The Hague, local emissions by the public transportsystem are less of a problem than they would be if the public transport system were busonly. The local public transport plan does mention that environmental considerations areone of the factors in favouring tram links over bus links, provided patronage figures justifythis.


Table 10.9 below summarises what we consider to be the most significant positive andnegative aspects of The Hague’s system under each of the criteria for evaluation.


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Table 10.9The Hague Performance Against Criteria

Positive Negative

Economic criteria

• Modal splits are low, partly due tothe popularity of cycling andwalking.

• Relatively low fares

Economic criteria


Service quality

• Customer satisfaction has been risingsteadily.

Service quality

• Moderate punctuality, but failing tomeet targets.


• Good tariff integration.

• Good integration with land use.


• Physical integration relatively poor

• Information integration could beimproved by the more activeinvolvement of the central authority.

Social cohesion

• Social cohesion

• No specific reimbursement forconcessionary fares.

Dealing with change

• Gradual approach to transition hashelped minimise potential problemsand allows a learning process.

• Good response to changes in demandpatterns.

• Good industrial relations, except atNS

Dealing with change

• Awarding the first concession to theincumbent could be regarded as abarrier to entry in that the incumbentwill establish a knowledge advantageover other potential bidders in laterrounds.

• Public transport authority does notcurrently have sufficient skills



• Specific national environmentaltargets.



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10.6. The Hague “Scorecard”

To complete this chapter we present a summary “scorecard” summarising the mainadvantages and disadvantages of The Hague’s system.

Table 10.10The Hague Summary “Scorecard”

The Hague


• Emphasis on careful transition byawarding first concession to theincumbent

• Employment guarantee to bus and tramstaff, and good industrial relations in busand tram operations

• Good integrated ticketing system withrelatively low fares, which will bepreserved despite structural changes tothe public transport market


• Lack of appropriate skills in the publictransport authority

• Poor industrial relations on the railways

• Transport modes, especially bus/tramon the one hand and rail on the other,are not presented as an integratednetwork

• The public transport market share is notvery high, partly as a result of theimportance of cycling

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11. CITY STUDY: TORONTO

11.1. Key Facts

• Bus, tram (streetcar), subway/light rail and heavy rail system.

• Publicly-owned system controlled at the city/municipal level. No single, centraltransport authority.

• One operator in the city centre (covering all modes), one commuter serviceoperator, and single operators serving each of the outer municipal areas.

• Large city with low population density and strong “car culture”, especially on thecity outskirts.

11.2. General Description


Toronto is the capital city of the Canadian province of Ontario, and the largest city inCanada. The Greater Toronto Authority (GTA) area currently has a population of 5 millionpeople, and covers an area of almost 8,000 square kms, while the city of Toronto itself has apopulation of two and a half million, and covers 632 square kms.

Population and building density in Toronto are relatively low by European standards,although quite high by North American ones, where the long distances that people have totravel to work and even local amenities, along with relatively low fuel prices and theprovision of extensive parking facilities encourage a “car culture” and conditions which arenot very applicable to Ireland.

Toronto is located on the shores of Lake Ontario, which forms the southern boundary to thecity. Its location just across the lake from the United States, and its access to Atlantic tradingroutes via the St Lawrence Seaway allowed Toronto to develop into a major trading hub.Toronto has two airports providing international links. Lester B Pearson Airport, situated tothe west of the city deals with the bulk of Toronto’s international air traffic while the muchsmaller city airport is located just off the Lake Ontario shore.

Toronto’s city centre is located close to the lake shore, and is the main commercial andfinancial hub of the city, providing the location for the financial district, including Toronto’sstock exchange, the main municipal administrative centre at Metro Hall, plus majorshopping, tourist and recreational areas. While recent years have seen the ongoingmigration of some major employment areas to locations outside the city centre, the city

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centre is still the location for the majority of work trips. The city centre currently providesover half the 2.5 million jobs available in the GTA.

Toronto’s economy experienced periods of significant recession in the 1990s, but has sincerecovered and is now growing quite strongly. Employment in the GTA is estimated to havegrown by 17.8per cent from 1996 to 2001 (12.6per cent in Toronto), and is forecast to grow ata similar rate over the next ten years, with particularly strong growth in the outer GTAregions. Population growth is also forecast to be strong, growing by 18 per cent in the GTAover the next ten years, and by 10 per cent in Toronto, with even higher rates forecast for theouter GTA regions (particularly York Region, Durham Region and Halton Region). As thesedata suggest, while the region as a whole is growing, the outer regions are growing fastest,and there is a significant and ongoing shift in the proportion of jobs and population locatedoutside central Toronto. The implications of this shift for transportation in the GTA arediscussed in further detail later in this chapter.


The Toronto area is administered by three levels of government: the federal government,provincial Government of Ontario and the local municipal-level government. Within theGTA there are six separate regions, made up of the City of Toronto in the centre, and thesurrounding regions of Durham, York, Peel, Halton and the City of Hamilton.

Each of the regions surrounding the City of Toronto have their own municipal governments.For example, Peel Region consists of three Municipalities (Caledon, Brampton andMississauga), and York Region of nine (Vaughan, Richmond Hill, Markham, King,Whitchurch Stouffville, Gwillembury East, Newmarket and Aurora). Until 1998, the City ofToronto had a similar “two tier” structure, of seven separate municipalities, knowncollectively as Metro Toronto. However, in 1998 these municipalities were merged into thenew amalgamated City of Toronto, creating a larger and “one tier” level of local government(with 44 individual wards).

Historically, public transport has been the responsibility of the municipal and provinciallevel governments. The federal government does not generally involve itself in these issues,although it has the potential to have indirect impacts through associated policy areas, suchas environmental policy. The provincial Government of Ontario has traditionally played asignificant role both in terms of funding and responsibility. However, three years ago thecurrent right-wing government adopted a “downloading” policy, which involvedtransferring responsibility and funding for a number of areas wholly to the municipalgovernments in return for taking over responsibility for a number of other areas. Publictransit was included in this transfer. This change has had significant impacts on publictransit in the GTA, and is discussed in further detail below.

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11.3.1.1. Toronto Transit Commission

Public transport in the GTA (except for taxis) is provided by publicly-owned and largelyvertically integrated operators, who have a monopoly over provision. By far the largestpublic transport company is the Toronto Transit Commission (TTC), which accounts for 85per cent of public transit trips in the GTA. TTC is fully vertically integrated and has amonopoly over public transport in the City of Toronto. It is owned and funded by the Cityof Toronto, and provides bus, streetcar (ie, tram) and subway services, along with theScarborough Rapid Transit (SRT) system, which extends the subway system to the East ofthe city.

TTC has been under municipal control in some form since 1921 when the local authoritiesexperienced difficulties in getting the formerly private sector franchisee to extend services togrowing parts of the city. The Toronto Transit Commission itself came into being in 1954,under the 1953 Metropolitan Toronto Act, which significantly extended its area of operation.TTC now operates the second largest transit system in North America after New York,providing a total of 410.5 million passenger journeys in 2000.

Figure 11.1TTC Service Area

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Figure 11.1 shows TTC services. The thin lines show bus and streetcar routes, and thethicker lines the subway network. As Figure 11.1 shows, TTC services cover all of the Cityof Toronto (with some gaps in the far North East), but do not as a rule stretch into theneighbouring regions of the GTA.

11.3.1.2. GO Transit

Commuter services from the surrounding GTA municipalities, through the outer areas ofthe City of Toronto and into the CBD are provided by GO Transit, which is also publiclyowned and has a monopoly over these longer distance commuter services, coveringjourneys of up to 60 to 70kms. Its operation is almost exclusively express, long distancecommuter services, and so the services offered by GO and those offered by TTC both remaineffective monopolies. Over 96 per cent of GO’s rail services travel to and from UnionStation, and 70 per cent of its bus ridership is to and from the City of Toronto. Its area ofoperation is confined almost exclusively to the GTA region, although some bus routesextend a bit beyond this, as shown in Figure 11.2.

Figure 11.2GO Transit’s Service Area

GO Transit operates both heavy rail and bus services on a radial network, for which thecentrally-located Union Station is the hub. GO has grown from a single rail line in 1967when its services first started, and now operates seven rail corridors and six bus corridors.

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There is some vertical separation in the provision of rail services, where stations and tracksare owned by the private rail infrastructure companies Canadian Pacific (CP) and CanadianNational (CN). (However, note that there have some been some recent developments in thisarea, with GO Transit and the City of Toronto purchasing Union Station and its approachingtracks from CP and CN, who owned it jointly. This point is covered in more detail later inthis chapter.)

11.3.1.3. Surrounding municipal transit services

In the GTA regions surrounding the City of Toronto, public transport services havetraditionally been provided by individual municipally-owned operators. For example, inPeel Region, there are separate transit companies for each of the three municipalities(Caledon, Brampton and Mississauga). However, in some regions, public transportprovision has recently been amalgamated to the regional level. Examples include themerger of the municipal public transit companies in York Region into one regional transportoperator, and the merger of Ajax Transit and Pickering Transit in Durham Region (of whichmore later in this chapter).

In these areas, operators are again vertically-integrated public sector monopolies, andservices are all bus-based. Operating areas are almost entirely exclusive. These operatorsare primarily concerned with the provision of local services and connections to otherservices into the city centre, rather than with the provision of urban and urban commuterpublic transport services per se. For this reason, TTC and GO transport will be the mainfocus of this chapter, but the “local municipality” services are examined to some extent,particularly when considering integration criteria.


11.3.2.1. TTC

TTC is both owned by and answerable to the municipal City of Toronto government. Itoperates as an independent Commission, known as a “special purpose body” with its ownpowers, rights and authorities under the 1953 Metropolitan Toronto Act, and as such, has an“arms length” relationship with the City. Since the creation of TTC in 1954, there have beena number of investigations into the relative pros and cons of TTC continuing to operate as anindependent body, or being transferred into an amalgamated part of City Hall. Eachinvestigation, including the most recent one in 1997 The Track Ahead: Organisation of the TTCUnder the New Amalgamated City of Toronto has supported the status quo. Following thisreport, the Council of Metropolitan Toronto unanimously endorsed the current structure.

The main arguments given for supporting the “arms-length” structure were that the currentsystem appears to work well. The Commissioners at the head of the company are generallywell-informed and devote sufficient time to their duties, and the potential threat ofdissolution or takeover by others keeps the board in check. There is a good corporateculture with a certain amount of pride in operating one of North America’s most successful

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public transport systems, and there is a fear that an attempt to amalgamate a bodyconsisting of mainly hourly-paid, very specialised service providers with the general officeworkers that make up much of City Hall would be difficult.

TTC is run by a Commission of seven elected members of the City of Toronto council,increased from five in the early 1990s. These politicians effectively form the board of TCC.TTC is afforded a large amount of autonomy in day to day operations and also in morestrategic areas such as the setting of fares, quality of service issues, and choice and frequencyof routes. However, the fact that the Commission is made up of elected politicians meansthat significant strategic decisions or areas of dispute can be debated at the municipalcouncil level as well as the TTC Commission level. The monthly meetings of theCommission are open to the public.

Until 1998, funding for TTC was provided by a combination of the municipal and provincialgovernments who funded operating expenditure (opex) not covered by TTC’s own revenues(note that this includes expenditure on capital maintenance, such as the overhauling ofrolling stock). For capital expenditure, the TTC has been almost wholly reliant on acombination of municipal and provincial government funding in recent years. Before 1998,75 per cent of this was provided by the provincial government, and 25 per cent by themunicipal government (the incentive implications of this in a situation where actual capitalinvestment decisions were made predominantly at the municipal level is discussed furtherin Section 11.3.2.4). The federal government has never played a part in the funding ofCanadian municipal/regional-level transit systems.

Until the 1967, TTC recovered enough revenue to be almost totally self-funding in terms ofoperating costs, and also contributed a significant amount to capital costs. However, fromthat time onwards, funding requirements from both municipal and provincial governmentsincreased, and as a result, both levels of government began to exert a greater influence overTTC policy. Examples include the imposition of a single fare system in 1974 (of which morelater), and “tied” funding from the provincial government, based on a requirement topurchase for example rolling stock from certain Ontario suppliers, even where this was notthe most cost-efficient choice. Provincial government also had a significant input intodecisions on major capital expenditure (capex) projects, as most of these were dependent onit for funding.

As described in Section 11.2.2, in 1998, as part of the Harris’ Provincial Government policy of“downloading” responsibility for certain functions to the municipal government inexchange for taking over other services, all responsibility for TTC, including all funding, wastransferred to the municipal government, and all provincial subsidies were eliminated.

As a result of this change, TTC relies on the City of Toronto for all of its capital andoperational funding above that which is covered by the farebox and other sources ofrevenue (such as advertising). Similarly, all planning and regulatory functions (except for

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eg Federal Law) are now conducted at the municipal level. The implications of this changeare discussed further in Section 11.3.2.4.

11.3.2.2. GO Transit

As was the case for TTC, 1998 saw a significant change to the regulatory and fundingarrangements under which GO Transit operates. Prior to that date, GO Transit, as acommuter service for the GTA, had been funded and overseen entirely by provincialgovernment. However, full responsibility including all funding responsibility for GOTransit was “downloaded” to the municipal level in 1998.

While in the case of TTC it is just the City of Toronto that has overall responsibility, GO isthe joint responsibility of all the municipalities in the GTA, and all the municipalitiescontribute to its funding for all capex and all opex not recovered through the farebox orother revenues. In order to co-ordinate the running of GO, a regulatory board, the GreaterToronto Services Board (GTSB), was set up in overall charge of GO in 1999.60 The GTSB ismade up of elected politicians from the municipalities in the GTA. The fact that GTSBmembers have representatives from the different regions of the GTA allows individualregions to protect their own public transit interests in relation to commuter services bycontributing to GO’s capital planning and budget processes.

The GTSB’s remit is to “promote and facilitate co-ordinated decision making among themunicipalities in the Greater Toronto Area”, and exercise overall direction and control.However, currently the GTSB has mainly a funding role in relation to GO, and the day today management of GO is carried out at “arms length” by GO’s own internal board.61

The board of GO Transit, (GO is also known as the Greater Toronto Transit Authority, butstill operates as GO Transit), is made up of seven councillors and meets monthly. Meetingsare open to the public on written request.

11.3.2.3. Other municipal transit companies

The other municipal transit companies report directly to, and are funded by their respectivemunicipalities.

In some regions, the municipalities have recently decided to merge their transit companies.One example is York Region, where the five urban municipalities within that region(Aurora, Markham, Newmarket, Richmond Hill and Vaughan) transferred from municipal-level public transport operation to a single integrated regional transit system in January

60 The GTSB was set up under the “Act to Establish the Greater Toronto Services Board and the Greater TorontoTransit Authority” 1998, which also amended the Toronto Area Transit Operating Authority Act.

61 The GTSB’s mandate suggests that the organisation could deal with the full range of services provided bymunicipal governments, but thus far its focus has been on transportation.

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2001. The main reasons for the amalgamation were to increase service integration acrossmunicipal boundaries, to allow greater operating cost efficiency, to improve links with TTCand GO, to improve specialized services for the disabled, and to improve co-ordination ofpublic transport with road improvement decisions being made at the regional level. Giventhat the amalgamated service has only just been implemented, a number of these initiatives,including the better integration of services and the development of a ten year capital plan forthe York region are still underway.

11.3.2.4. Subsidy arrangements

According to the transit companies themselves and the others interviewed as part of thisproject, the new funding arrangements present a significant problem to public transportoperation in the GTA. The “downloading” of funding responsibilities to the municipalgovernment has left the City of Toronto itself, as well as the other GTA municipalities andthe transit companies themselves, unsure as to how subsidy requirements are going tocontinue to be met.

In the case of TTC, it is estimated that the annual subsidy requirement from the City ofToronto in order to allow TTC to maintain its current services in good working order, andassuming that it continues to cover approximately 80 per cent of its operating costs from itsown revenues will be some €350 million.62 However, the City projects that it will struggle tocover these operating subsidies under its current revenue raising powers. These are limitedto the property tax – the municipal government does not have the power to raise funds fromany other source such as sales taxes, road taxes or fuel taxes (either on a hypothecated basisor not). While there is some facility to raise funds through development charges, theProvincial Development Charges Act limits this as it specifies that the planned level ofservice funded by development charges cannot exceed the average provided by the localmunicipality over the last ten years.

Moreover, the City of Toronto reports that it is not currently able to provide funds to TTCfor any capital investment. TTC estimates that it can continue to operate current serviceswithout any such capital expenditure for the next two years. However, by 2003, TTCexpects to need to replace parts of its rolling stock, and states that it will not be able tomaintain current services, let alone extend services should demand require, without capitalinvestment at that stage.

GO Transit reports that it faces a similar situation, with operating costs currently covered,but a lack of funds for future capital investment being available from the GTAmunicipalities. GO Transit see this as been a particular constraint in its case, as recent yearshave seen ridership increasing significantly, both as the result of the continuing growth of

62 “The Track Ahead: Organisation of the TTC under the new amalgamated City of Toronto” 1997. The $€350 millionestimated requirement is made up of €124 million to cover operating losses, €31 million to cover Wheeltranzservices for the mobility impaired, and €194 million to cover repair and maintenance costs.

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the Toronto commuter belt, and as a result of people switching from motor use to GO busand train services. GO considers the scope for its future expansion to be significantly limitedby its inability to raise further capital funds. A number of the local governments providingtransit services in the outer regions of the GTA have reported similar concerns (for example,York Region and the City of Hamilton).

No real signs of a solution to this funding issue have emerged as yet. The provincialgovernment has promised to provide €194 million for municipal transit services outside ofthe TTC area, including GO Transit. GO Transit is currently hoping to secure funding fromthe Federal Government for the upgrade of the Lake Ontario line that its heavy railcommuter services use as part of a wider regional upgrade of rail infrastructure. Anotherpotential source of Federal funds may be in connection with Canada’s obligations to reducefuel emissions under the Kyoto Agreement, part of which the Federal Government may seekto achieve through the upgrading of municipal public transit services. However, it isthought unlikely that any of these sources will provide a regular source of funds, and thereis an argument that the inability to tell what funds will be available in the future preventsthe transit companies from conducting investment planning in the most efficient manner.

One more positive aspect of the “downloading” of funding entirely to the municipal level isthe improvement in incentives to make the most efficient capital investment decisions. Priorto 1998, TTC capital investment projects were funded 75 per cent by the ProvincialGovernment, and 25 per cent by metropolitan Toronto. However, the main weight ofdecision-making for what capital investment to undertake lay with metropolitan Toronto.Capital investment planners therefore faced a “25 cent dollar” when making investmentdecisions. Some interviewees suggested that this may have led to some capital projectsbeing undertaken that would otherwise not have happened.


This section of our report considers the performance of Toronto’s public transport servicesagainst the criteria for evaluation that we identify in Chapter 2.



Within the generally car-dominated culture of North America, Toronto has a reputation forhaving been relatively successful in public transport system use. Table 11.1 provides detailsof splits between the different transport modes.

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Table 11.1Modal Splits for Toronto : 1996

Mode All journeys(%)

All AM peakjourneys (%)

1986 all AMpeak journeys

(%)

All journeysfrom 905 areato Toronto (%)

AM peak journeysfrom 905 area to

Toronto (%)

Walking/cycling 9 13 11 0 0

Public transport 25 32 35 12 21

Private car 65 55 53 87 78

Taxi 1 0 0 0 0

Total 100 100 100 100 100

Source: A Transportation Vision for the City of Toronto Official PlanNote: The 905 area is the part of the GTA covered by the 905 telephone code – ie the area outside City Centre Toronto.

As Table 11.2 shows, the private car dominates, although other modes of transport accountfor a total of 35 per cent of all journeys. Public transport and walking/cycling capture aslightly larger proportion of peak journeys as a whole. However, when the current statisticsare compared to those for 1986, a small erosion in the share of public transport is observed,some of which has been lost to the private car. A comparison of the modal splits for totaljourneys with those for journeys from the 905 area (the parts of the GTA surrounding theCity of Toronto, named after the telephone code for these regions) to Toronto centre showsthat for longer distance trips, a large majority are made by private car, especially out of themorning peak.

Cordon Counts carried out by the Joint Program in Transportation of the University ofToronto at a disaggregated level (split by individual screen lines) report the followingresults for the morning peak in 1998, compared to 1985:

Table 11.2Modal Splits on Specific Screen Lines during the Morning Peak

Peel-Toronto1998 (%)

Peel-Toronto1985 (%)

Durham-Toronto1998 (%)

Durham-Toronto1985 (%)

Peel-Simcoe-

York1998 (%)

Peel-Simcoe-

York1985 (%)

Durham-York

1998 (%)

Durham-York

1985 (%)

Private Car 67 71 75 74 88 84 87 88Transit 25 21 19 20 1 8 4 3Other 8 8 6 6 11 8 8 9Total 100 100 100 100 100 100 100 100

Source: GTA Cordon Count Program Analysis of Traffic Trends 1985 to 1998, University of Toronto Joint Program inTransportation.

These data provide further evidence that dependence on the car is significantly higher fortrips between the outer regions of the GTA than for trips into the City of Toronto. Thesedata also suggest a relatively mixed picture in terms of how public transit’s modal share has

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been changing over time, although the general picture appears to be one of relatively littlechange from 1985 to 1998.

11.4.1.2. Patronage

Table 11.3 provides details of patronage figures for TTC, measured as total passengerjourneys.

Table 11.3TTC Total Passenger Journeys (millions)

1988 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000Passengerjourneys

463.5 459.0 424.2 404.3 393.5 388.3 388.2 372.4 379.9 388.7 392.6 410.5

As Table 11.3 illustrates, total passenger journeys for TTC fell quite significantly in the late1980s/early 1990s, but have been making a steady recovery since 1996. TTC report that theyexpect this trend to continue, not least because of the steady economic and populationgrowth that is forecast for Toronto.

GO Transit has also recorded strong growth in ridership in recent years. In 2000, there were40 million passenger journeys on GO Transit (32.5 million on bus and 7.5 million by train),an increase of 1.5 million (4 per cent) on the 1999 figure. Like TTC, GO experienced somefall in ridership levels in the early 1990s, but passenger journeys have now more thanrecovered, and GO Transit has been achieving new records in the total number of passengerjourneys for four successive years. GO predict increasingly strong growth over the next 20years – total ridership by 2020 is expected to exceed 60 million passenger journeys.However, GO’s 10 Year Capital Plan reports that they will need capital investment ofaround €78 million a year to 2011 and €39 million a year for 2011 to 2021 and keep pace withthis growth, particularly to be able to expand peak services which are already at capacitylevels, with crowding on services and in stations at peak times. Discussions with GOsuggest that under the current subsidy arrangements, the ability to achieve the expansionneeded is under significant threat.

When the figures in Table 11.3 are considered against trends in modal splits, along withfurther evidence reported by GO Transit, it would appear that for journeys into the city,Toronto has been relatively successful in maintaining the modal share of transit andwalking/cycling, and has even increased its share on some routes. The growth in ridershipobserved is a combination of the increased total number of trips being made, plus somegrowth in model share, especially in the case of GO Transit.

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11.4.1.3. Fares

TTC operates a single, flat fare system in its area of operation, irrespective of the distancecovered or number of modes used for a single trip. Table 11.4 below summarises the mainfares available from TTC.

Table 11.4TTC fares (from 3rd June 200)

Single adult cash fare €1.75Student/OAP fare €1.17

Child fare €0.39Monthly pass €72.68

Annual pass (price per month) €66.66Single/group day pass €5.83

For longer journeys, the flat rate fare is considered to offer relatively good value for money,particularly given that passengers can obtain free transfers between different TTCvehicles/trains that are part of one trip. However, this is less true for passengers needing tomake relatively short trips, perhaps not even entering the CBD. The lack of a zonal ordistance-based charging system means that there is significant cross-subsidisation to thedetriment of those wishing to make shorter journeys. Arguably, such a system could havepoor implications for social cohesion and present difficulties for low income groups relianton public transport for local journeys, for example to shops and places of entertainment.TTC also observed a noticeable step decline in their levels of farebox operating cost recoverywhen the flat fare was introduced in 1974.

Table 11.5 shows how TTC fares have increased over time.

Table 11.5TTC Adult Single Fare 1990 to 2000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Adult single fare (€)nominal terms63

0.78 0.83 1.01 1.01 1.01 1.17 1.24 1.24 1.24 1.32 1.55 1.75

Adult single fare (€)2001 prices

0.98 0.99 1.19 1.17 1.16 1.32 1.38 1.36 1.35 1.41 1.61 1.75

Adult single fare ($)nominal terms

1.00 1.07 1.30 1.30 1.30 1.50 1.60 1.60 1.60 1.70 2.00 2.25

Adult single fare ($)2001 prices

1.26 1.28 1.53 1.50 1.50 1.69 1.78 1.75 1.73 1.81 2.07 2.25

63 ie, “money of the day” not adjusted for inflation.

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The rate of increase has been relatively steady, although 2000 and 2001 saw a relatively highincreases, partially as a result of increased fuel prices. TTC report some initial adversereaction from the public in response to fare increases, with potentially a small fall-off inridership in the very short term, but in general ridership trends tend to be unaffected.

Unlike TTC, GO Transit fares are based on a zonal system. Rather than splitting the GTAinto a relatively small number of concentric zones or a similar arrangement, there are almost100 individual zones split by their positions on each of the seven rail and six bus corridors –ie, the fare system is arguably more distance-based than zonal-based. Minimum adult singlefares for travel within one zone are €2.14 ($2.75), rising to around€12.44 ($16.00) for the verylongest journeys. For example, the single adult fare for a trip from Newcastle in the far Eastof GO’s network, to Hamilton in the far west costs €12.79 ($16.45). However, a commutingtrip from these outer regions to the city centre would cost around half this (for example€6.53($8.40) from Newcastle to Union Station, a distance of over 60kms).

GO offers a range of fares, all of which are also zonally based. Half price fares are offeredfor children and OAPs. Discounts are also offered to students and those buying a ten-rideprepay ticket, monthly passes (including the TTC-GO “Twin Pass” which is discussedfurther in the section on tariff integration) and daily group passes. Table 11.6 provides anexample of the magnitude of discounts offered for a single adult fare of €3.89 ($5.00).

Table 11.6Sample GO Transit Fares (March 2001)

Singleadult

Adult tenride

Adultmonthly

Studentmonthly

Child/OAP

GroupFare

TTC/GOTwin Pass

€ 3.89 35.18 122.82 76.18 1.94 15.55 115.05$ 5.00 45.25 158.00 98.00 2.50 20.00 148.00

Like TTC, GO transit has had to impose fare increases in 2000 and 2001 partially as a resultof fuel price increases, and partially to cover the cost of increases in service. In both years,the increase was €0.12 ($0.15) for every adult single ticket – ie, the proportionate increase hasfallen most onto customers making shorter journeys. GO report that for the average riderbuying a monthly pass, the fare increase equates to €3.11 to €3.89 per month.


TTC, GO and the local municipal transit providers are only directly involved in demandmanagement insofar as their services help to draw passengers off the roads and onto lesscongesting forms of transport. For example, GO Transit reports that it carries as manypeople on the average weekday morning into the city centre as six congested expressways(ie motorways) would.

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The Transportation Services department of City Hall is responsible for all roads in the Cityof Toronto, including road system design, traffic signals, facilities for pedestrians andcyclists, and the provision of other street furniture such as bus stops. It also operates a seriesof 40 traffic cameras across the city (RESCU cameras) and is responsible for monitoringcurrent traffic conditions. Members of the public can access information on current trafficconditions either by telephone or internet link.

The City of Toronto recently published an “Official Plan” for the city, detailing how CityHall proposes to improve services and conditions for the people of Toronto. As part of thisprocess, significant attention has been paid to public transport. City Hall Commissioned apaper: “A Transportation Vision for the City of Toronto Official Plan” by Professor RichardSoberman (formerly of University of Toronto, now a member of Trimap communicationsconsulting group). Amongst the options considered for improving transport in Torontowere improvements to transit priority arrangements for buses and streetcars that shareroutes with other traffic. Reserved lanes, protected rights of way and signal priority atintersections have all been suggested as potential improvements on the current Torontosystem.

The construction and maintenance of Provincial highways are the responsibility of theGovernment of Ontario, who are also responsible for driver licensing and vehicle testing.


No detailed data were available on traffic speeds in Toronto. GO Transit noted that theirservices generally travel at around the relevant speed limit in outer areas, but that speedsfall in the centre, especially in more congested areas.


Table 11.7 below shows total kilometres operated by the different TTC public transportmodes from 1990 to 1999.

Table 11.7Kilometres Operated 1990 to 1999 (millions)

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999Bus 101.9 98.8 102.1 99.0 100.5 100.9 93.7 93.7 94.5 94.4Streetcar 13.1 12.7 12.0 11.5 11.2 11.1 10.9 10.6 12.1 11.4Subway 70.9 67.8 65.1 63.6 63.8 62.8 63.9 65.5 67.6 67.4Scarborough RT 3.3 3.3 3.5 3.7 3.6 3.7 3.6 3.7 4.1 3.9Total 194.6 187.4 183.2 178.5 179.1 178.5 172.1 173.5 178.3 177.2

As the table shows, bus is the most important transport mode by volume in central Toronto,followed by subway. Total kilometres operated fell overall during the 1990s, although thelate ‘90s showed overall growth.

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Within North America, Toronto has a generally good reputation as an efficient transportoperator. One of the statistics often quoted is the ratio of revenues to costs. Table 11.8 belowsets out the ratio of revenues to costs (including capitalised costs) for TTC.

Table 11.8TTC’s Revenue-Cost Ratio

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999Revenue to cost ratio 0.67 0.65 0.66 0.66 0.69 0.69 0.76 0.80 0.79 0.81

Note: Figures for 1991 to 1993 are slightly lower than typical, due to the exclusion of revenue from Toronto Coach Terminalin 1991, and no draws from the Transit Improvement Reserve Fund in 1992 and 1993.

As Table 11.8 shows, TTC’s revenue to cost ratio has increased strongly since 1995.Operating cost to operating revenue shows a similar trend, but the ratio is slightly higher,reaching 0.82 in 2000. Much of this observed increase appears to have been due to asignificant increase in operating revenues from €355.5 million in 1995 to €489.7 million in2000 – a combination of the increase in ridership and the fare increases. Operating costshave also risen, but to a lesser extent.

TTC has undergone a significant efficiency programme in recent years, the most significantof which was instigated by the then TTC Managing Director David Gunn from 1995. In1995, the TTC suffered a fatal subway accident. During the investigations that followed,questions were raised about the ability of the TTC’s operational structure to operateefficiently and to have a clear chain of command and responsibility. In response, DavidGunn was appointed and TTC underwent a significant operational overhaul, with reformsto company structures and chains of command, and arrangements for accountability. Part ofthis programme also involved increasing operating efficiency. As a result of this, operatingexpenditures per trip, per kilometre, and per employee all fell in the late 1990s. Overallsubsidy levels, and subsidy per trip and per kilometre operated have all also fallensignificantly in recent years (subsidy levels are discussed in greater detail in Section11.3.2.4).

GO Transit report that the ratio of operating revenues to operating costs to have been“consistently 80 per cent to 90 per cent” in recent years. Indeed, the reported ratio for 1999is a record 92.4 per cent, although the fact that GO exclude some of their costs frompayments to the railways for track access, (because they argue that other operators do notface these charges), fare integration costs and depreciation costs means that this figureshould in fact be a little lower (around 88 per cent). Employee costs (labour and benefits)account for 28 per cent of GO’s operating costs, although comparisons with other operatorsare not possible due to the fact that GO contracts out a lot of its operations.

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GO private sector outsourcing - GO Transport outsources a large proportion of its operationto the private sector, including train maintenance and station design and construction. GOtrains are operated under contract by Canadian National Railway and St Lawrence andHudson Railway using crews supplied by the railways. The railways also own much of thetracks. GO report that 65 per cent of its budget for services is provided by the private sector.Discussions with GO revealed that the main motivation for this public sector involvementwas to ensure that cost efficiency is maximised by the competitive process. However, GOstressed that they have a policy of ensuring that all staff in direct contact with the public areGO employees, in order to help them control customer service standards, particularly thehelpfulness of staff. GO describe themselves as “a prime example of a public-privatepartnership that works”.64

As mentioned in Section 11.3.1.2 GO Transit and the GTSB have recently jointly acquiredUnion Station and its approach tracks from the private sector rail companies (CN and CP).GO report that this has been done because of an unwillingness by the private sectorcompanies to expand the infrastructure sufficiently at this key bottleneck on the GO system.The ability to control infrastructure maintenance, which can impact on reliability, has beencited as a further reason. Rail infrastructure access charges are also not subject to economicregulation in the way that they are, for example, in the UK. GO and the GTSB havetherefore undertaken to maintain and expand the infrastructure themselves (using privatesector contracting-out), following what they regard as an inadequate service from theprivate infrastructure owner. In discussions, GO Transit suggested the reason for CP/CN’sreluctance to spend more on infrastructure expansion and maintenance was that it did notoffer the same profits for CP/CN shareholders as expenditure on other capital projectselsewhere. GO has plans to systematically acquire rail corridor tracks over the comingyears.


Section 11.3.2 provides details of the recent changes to funding arrangements in Toronto.

As mentioned earlier, TTC subsidy levels have fallen quite significantly in recent years.Table 11.9 shows operating and capital subsidies for 1990 to 1999 in 2001 prices (ie in realterms).

Table 11.9TTC Operating and Capital Subsidies (millions, 2001 prices)

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000Operatingsubsidy €

236.7 276.7 287.5 270.3 238.7 242.1 187.8 173.6 158.3 148.2 149.1

Capitalsubsidy €

2,433.3 2,443.5 2,540.6 2,675.3 2,918.8 3,089.4 3,391.8 3,736.8 4,277.1 4,836.9 n/a

64 “The State of the System” GO Transit – The Year in Review, 1999-00.

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As might be expected from these figures, operating subsidies per passenger trip have alsofallen significantly, from €0.43 in 1995 to €0.27 in 1999 as have operating subsidies perkilometre operated, from €0.93 in 1995 to €0.61 in 1999.

GO Transit’s 2001 subsidy will be €1,130 million, made up of €21.1 million operating subsidyand €92.0 million capital subsidy.

Both GO Transit and TTC receive subsidies as a “lump sum”, based on approval of theirbudgets, and views on achievable revenue-cost ratios. Subsidies are not directly related to,eg the volume of passengers, the number of concessionary fares, and so do not form as sucha direct incentive to, for example, maximise ridership.


While 95 per cent of TTC’s revenue comes from passenger fares, it does have a number ofsmaller income streams, the largest of which is advertising, forecast to bring in 2.2 per centof TTC’s revenues in 2001 (€10.7 million). In 2001, TTC is also projected to make €5.5 millionfrom property rental, €4.4 million from outside city services and charters, €1.9 million fromcommuter parking, and €1.7 million from other sources. TTC’s revenue from “outside cityservices” comes from other municipal transit providers who contract out services on somesections of their network to TTC (although the extent of this is relatively small).


TTC appears to have very good arrangements for accountability and transparency in place.Following the organisational reforms under David Gunn from 1995, TTC was restructuredinternally to ensure clearer lines of command and responsibility. TTC produces internaldocuments annually showing detailed organisational charts for the whole company. It alsoproduces annually a document setting out the forthcoming years’ departmental goals andobjectives, against which internal performance can be measured ex post. Goals andobjectives are very detailed, and cover all areas of operation, for example ranging fromenvironmental targets, targets for reducing crime, internal targets for training, absenteeismrates etc, targets to increase ridership, and operational targets eg on equipment reliability.

TTC operates a detailed and regular reporting system. Every month, TTC produces a reportto the Chief General Manager describing performance against a detailed set of targets,including performance against opex and capex budgets, projected ridership, and against arange of operating performance measures. The performance measures include percentage ofbus and streetcar services that are within three minutes of scheduled times, and the numberand duration of delays on the subway. Delays are split into those considered controllableand uncontrollable. The sections of the report dealing with budgets include detailedcommentary explaining any divergences, for example due to unexpected ridership changes,and the state of the local economy. Performance against budget is also split by department.TTC produces annual accounts which are audited by external auditors, and which areavailable to the public on request.

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All politicians on the Commission’s board have access to the Chief General Manager’sreport. Other factors that enhance accountability are the fact that the Commission’s monthlymeetings are open to the public, the fact that Commission board members are electedpoliticians rather than appointed officials (as was the case originally), and the fact that theCommission can refer issues for debate at City Council level.

Public access to TTC information is generally good. TTC’s website provides a large amountof information, including the minutes of Commission board meetings, and summaries of theChief General Manager’s reports.

GO Transit also publishes an annual budget plan, which includes details of performanceagainst the previous year’s budget. It also produces audited financial statements annuallywhich are also publicly available. As for TTC GO’s internal board is answerable to a boardof elected politicians (the GTSB).


11.4.4.1. Frequency

Service frequency on the subway is good throughout the day/week. During peak hours,services typically run every 2 to 3 minutes, and every five minutes or so off peak and atweekends. After 9pm, services also typically run every five minutes or so. Services startaround 6am and finish around 1.30am. Frequencies on the streetcars vary from about everyfive minutes during peak times to every ten minutes in the evenings. Streetcar services runfrom about 6am to 1am, although on some lines, the hours of operation are more limited(7.30 am to 8pm, and later on weekends). For bus services, frequencies vary much moredepending on the route. On ordinary TTC routes, they vary from every 10 minutes for peakperiods/locations, to around every half hour at less popular routes and times. On TTC“express” services, and on the majority of GO’s heavy rail and bus services, services are onlyoffered during peak periods. TTC also offer a night bus service (Nightlink).

TTC and GO set frequencies according to average vehicle loading factors per route, althoughthis is currently being limited in at least some locations by a lack of capital expenditure.

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TTC’s Bus and Streetcar routes aim to run 75 per cent of services to within three minutes ofscheduled times. TTC failed to meet this target in 2000, but the information availablesuggests that TTC are achieving around 70 per cent compliance. TTC information oncustomer complaints shows bus/subway delay to account for a relatively low proportion ofdelays (8.7 per cent for 2000). In 2000 the largest causes for complaint were in relation tostaff discourtesy, defective vending machines and complaints concerning fare enforcement.

On the subway, TTC have set 2001 delay targets as follows:

• incidents of delay per 1,000 hours of subway train operation: 2.9 for TTC controllableincidents, 3.6 for non-controllable incidents;

• minutes of delay per 1,000 hours of train operation: 16.2 mins for TTC controllable,30.9 for other;

• average length of delay: 5.5 mins for controllable, 7.8 mins for other.

The information available showed TTC to be meeting these targets so far, although the factthat information was only available for the first few months of the year means that this mustbe treated with some caution.

Despite setting itself reliability targets which are published, TTC does not face any formalexternal penalty for failing to meet its targets (other than its potential impact on ridership).The same applies to GO Transit.

Service reliability in Toronto can be affected badly by severe winter weather. For example,January 1999 saw severe snowstorms which caused delays of several hours on GO services.


Accessibility is good within the city centre, with routes connecting all major streets.Accessibility is further improved for the mobility impaired/the elderly by the operation of anetwork of “community buses” that operate on four routes from 9.30 until 5.30 on weekdaysonly, connecting homes for the elderly/infirm with shopping centres, community centresand hospitals. There are six such buses, providing 83,900 passenger journeys in 1999.Further details of services for the mobility impaired are provided in the section on socialcohesion.

However, provision of all services is less comprehensive outside the city centre, andparticularly on orbital routes as opposed to routes running into the city centre. In their 1998report for the University of Toronto Joint Program in Transportation, Transit Realities in theSuburban GTA, Crowley and Dalton noted that the significant economic development of the905 Area (ie the GTA area outside the City of Toronto) has contributed to a significantgrowth in the number of work trips now being made across the GTA, rather than into the

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city centre. For example, between 1986 and 1996, the number of home to work tripsincreased by 40 per cent to Downtown Toronto, but by 65 per cent between GTA regions,and by 51 per cent for cross boundary trips within a regional municipality. In terms ofabsolute numbers, trips within the local municipality increased the most, by 56,000,compared with a 23,000 increase in trips to Downtown Toronto.

Crowley and Dalton report that Toronto’s public transit system has so far failed toaccommodate this pattern of growth. The inadequacies of public transit links across theGTA were also raised by Richard Soberman in his report for City Hall on the transportationaspect of the Official Plan, and in his NERA interview. TTC also acknowledge that “acrosstown” services are not a strong as “into town” ones.

Given that GO Transit provides almost exclusively a commuter service, accessibility (interms of, for example, being able to walk to a station or stop in so many minutes) issomewhat limited. However, when considering accessibility, this has to be balanced againstthe speed the express service offers, the good parking facilities, and the fact that carownership levels are high. GO Transit also offer “Train Buses” – buses which operate for afew hours on their train routes outside peak hours when the trains do not run.


Overcrowding levels are generally quite high in peak periods, when both GO and TTCservices are generally full, with people standing on TTC buses and streetcars and on GOtrains. TTC sets acceptable maximum vehicle load standards as illustrated in Table 11.10. Ifthese are consistently exceeded, then increased service frequencies are considered.

Table 11.10TTC Acceptable Maximum Hour Average Vehicle Loads

Vehicle Type Peak period acceptable loads30 foot bus 4040 foot bus 60

articulated bus 90streetcar 75

articulated streetcar 110

TTC reports that this equates to a ratio of approximately 1.2 persons to a seat, but a smallsample of peak services across all modes suggests that this is often exceeded. Servicereductions are considered when loads fall below half a seated load.

Cleanliness on TTC and GO services is generally good. While TTC vehicles (particularlybuses) have a significantly longer average life than might be observed elsewhere (18 years orin some cases more), aging vehicles are subject to a complete overhaul and refurbishment

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when needed. Bus/streetcar stops are provided with shelters in some but not all cases in thecity centre, despite the bad winter weather.

The quality of timetable information is relatively good for both TTC and GO. Bothcompanies provide telephone and internet services giving full details of timetables, androutes, and regular updates on timetable changes (eg TTC makes a number of changes to itsservice on a seasonal basis, as well as to take account of changing patterns in demand).Timetables are also available at stations, on subway platforms and at bus/streetcar shelters.TTC route details are available at stations, on the internet, by telephone, at bus/streetcarshelters and in local Yellow Pages directories.



Physical integration within the City of Toronto is generally good. GO commuter rail andbus services link in directly with TTC subway services at key locations including UnionStation in the city centre, Kipling Station at the West end of the subway line, Finch, YorkMills and Yorkdale stations to the North, and the Scarborough Centre to the East. There isalso good interconnection between GO services and TTC bus and streetcar services, with theTTC routes linking directly with all the major GO rail stations and bus terminals. Similarly,TTC services are generally very well integrated in a physical sense with other TTC services.For example, many streetcar and bus stops are located on the corners of the main streets,allowing easy interchange between services.

TTC buses and streetcars generally put down and pick up within the subway concourses –once past the main entrance ticket barriers, passengers are within a “ticket paid” zone, anddo not have to show tickets again to board the next transport mode within that concourse.This minimises queues and the need for staff to check tickets.65 Passengers do however haveto pass ticket barriers when moving, eg between GO rail services and TTC subway servicessituated within the same concourse. For TTC services, customers can buy pre-paid tokens,which allow passengers to pass automatically through ticket barriers and speed upmovement.

Integration between the private car and public transit is also good, particularly at the outerGO commuter rail stations, the majority of which provide extensive parking facilities. The“park and ride” culture is encouraged by the provision of free parking for Metropassholders (the GO/TTC monthly travelcard) at most GO stations, the availability of reservedparking spaces at all GO stations in return for a pre-payment, as well as “pay-as you go”cash parking. TTC also offers free parking at outer stations. Take up has been good, with

65 This system does present the theoretical opportunity for fare dodging if passengers enter the station concourse egalong the bus lanes rather than thorough the ticket barriers. Spot checks are carried out but are not extensive.However, TTC report very low fare evasion levels, which they put down to cultural reasons rather than very goodentry control.

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car parks generally in high demand. In many cases, car parks can reach capacity in peakperiods, and illegal parking can be a problem.

In terms of physical integration with services provided in the municipalities surroundingCity Centre Toronto (eg Brampton, Mississauga, Vaughan, Richmond Hill and Markham),physical integration is less extensive. GO train services generally link directly with local busservices run by the local transit companies. GO bus services also link with every municipaltransport system, but links are arguably less comprehensive, as GO bus services are largely“express” commuter services and make only a limited number of stops in these outer areas.

The bus services offered by the outer municipalities do not generally link with TTC subwayservices (links at York Regional Terminal to the North of the city centre being an exception)due to the fact that the subway system does not generally extend this far. The vast majorityof these connections tend to be with bus services. While there is some physical integrationbetween TTC bus services and the other municipality bus services, integration is not ascomprehensive as it is in the city centre. In almost all cases, the other municipality busroutes do not extend into TTC areas and a change of bus is required to reach more centrallocations. However, these areas are linked with the centre via GO services, especially duringpeak periods.

A rather unique feature of Toronto’s transport integration system is PATH, the undergroundwalking network that links directly into subway/GO stations, major shopping areas andplaces of work and entertainment. PATH provides a fairly comprehensive network for theCBD. It is particularly relevant to Toronto given the bad winters. GO Transit have observeda close correlation between the extension of the PATH network, and their ridership levels.Being able to walk to and from the GO station and their place of work without having tobrave the elements has increased the attractiveness of the public transport option for manycommuters.


There is full tariff integration between all TTC services. TTC operates a flat-rate cash fare(€1.75 ($2.25) for adults in Spring 2001) on all of its services, and passengers can obtain freetransfers to other TTC modes (for example subway to bus, streetcar to subway, bus to busetc.) so long as the journey is part of one continuous trip (ie, not a return journey or onebroken by eg trips to the shops). Similarly, Metropasses (ie monthly or annual passes) andday passes are valid on all modes and for all areas within the TTC operating area.

Tariff integration between GO and TTC services exists, but is more limited. Wherepassengers use a TTC service immediately before and after a GO service, they can board thesecond TTC vehicle on a free transfer. Customers wishing to purchase a monthly Metropassfor both GO and TTC services are able to purchase a Twin Pass, which offers a €7.77 ($10)discount on the cost of buying the two passes separately. This discount used to be €15.54,with €7.77 each being contributed by GO and TTC. However, TTC have now withdrawn

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their contribution. There are no similar integration arrangements for cash fares, day passesor the GO 10 ride tickets.

Perhaps the weakest aspect of Toronto’s integration policy concerns tariff integrationbetween the TTC and other municipal transit companies and between the municipal transitcompanies themselves. Here, integrated tariffs are not available at all for journeys that crossfrom a municipal transit company service to a TTC service or another municipal transitcompany area. Customers making such trips are required to pay an extra fare whencrossing the border into the TTC area, whatever TTC mode they use.66 The only exception isthe GTA weekly pass, which allows unlimited travel within the GTA, including TTCservices, some GO services (the Yonge C service) and services provided by the othermunicipal transit companies. However, this pass is generally regarded as relativelyexpensive €28.18 per week or $36.25) and is only suitable for those making a relatively largenumber of trips within the GTA.


A Greater Toronto Area Transit Ride Guide is published annually by TTC, which provides amap of all public transit services (ie covering TTC, GO, and other municipal transitcompanies). This map is available at stations and at bus/streetcar shelters and isdownloadable from the internet. TTC, GO and the other municipal transit companies allprovide direct links to other transit company websites.


Land Use planning has traditionally been the remit of City Hall in the City of Toronto, andof the planning departments of the other municipalities. The City of Toronto Official Plan,and similar plans adopted by an number of the other GTA regions have set out proposals toincrease the integration between transport planning and land use planning, which, whilereasonably good in the City Centre, is generally seen as having been poor in the outermunicipalities. TTC are consulted by City Hall on all major land use planningdevelopments (for example the creation of a new office complex). While TTC do not haveformal powers, they are always consulted and can make recommendations. TTC monitordemand on individual routes closely, and have high levels of autonomy when makingdecisions over what routes to open, close or modify.

66 This applies whether or not the passenger has to change vehicles – in some cases this is not always necessary, aswhile TTC and surrounding transit company service areas are generally separate, TTC does operate some servicesunder contract to the local municipalities.

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As discussed earlier in this chapter, the flat rate fare that applies to all TTC journeys withinthe City of Toronto provides generally good value for money for longer trips, but less goodvalue for money for shorter trips, which may potentially act to the detriment of those on lowincomes. The flat rate increases of €0.12 ($0.15) on GO services in 2000 and 2001 have alsobenefited long-distance travellers at the expense of those travelling shorter distances.Concessionary fares are offered to students and OAPs (at roughly 75 per cent fare for TTC,although discounts can be lower for some of the other municipal transit companies). Childfares are low, at only €0.39 ($0.50) for TTC.


Facilities for the mobility impaired appear to be relatively good, and are improving asoperators upgrade their rolling stock. In addition to the community busses mentioned inSection 11.4.4, TTC run a Wheeltranz service. This service operates on a telephone book-ahead basis, and provides a door-to door fully wheelchair accessible service. The service isrelatively extensive, with 1.4 million passenger trips being made in 1999, operating a total of10.2 million kms. 18,300 Toronto residents are registered Wheeltranz users, served by 220vehicles (including some contract vehicles). Wheeltranz is estimated to cost about €31million per year to run.

TTC currently operates 102 low floor buses. Low floor or lift buses serve 34 of TTC’s bus 134routes. Accessible elevators are provided at 14 subway stations, including all the majorones.

GO transit offers full wheelchair access (including onto and off trains) at 30 of its 49 stations.Some trains have a specifically-designed carriage for wheelchair access, with eightwheelchair positions – access to non-specialist carriages can be provided by portable ramp.GO Transit operates a wheelchair accessible service on three of its six route corridors. Anindividual who is accompanying a disabled passenger in order to assist them is entitled totravel free on GO services.


The transit companies of Toronto have been faced with some quite significant externalchanges over recent years. Perhaps the most significant of these has been the“downloading” of responsibility and all funding obligations to the municipal governmentlevel. (Prior to that date, GO had been run and funded by the Provincial government, andTTC by a combination of the Metro Toronto and the Provincial government.)

Both TTC and GO (plus some of the other municipal operators) feel that this may seriouslydamage their ability to maintain and grow the network, particularly in relation to capital

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investment. TTC argues that there is little excess “fat” in the organisation that can beremoved in order to breach the funding gap. Operational revenue-cost ratios are alreadyhigh for both GO and TTC.

The relative autonomy that both TTC and GO have in setting fares and service levels doesgive them some flexibility in how they respond to the funding problem, but only in the formof restrictions on future services or further fare rises. GO Transit has also responded bylobbying the Provincial and Federal governments for funds for specific initiatives, but thesesources of income are unlikely to be steady ones. A number of interviewees suggested thatthe fact that municipal governments can only raise funds for public transport though theproperty tax was a significant source of inflexibility. The Provincial government set up aspecific task force to deal with the implementation of all aspects of its “downloadingpolicy”, and these changes were implemented gradually.

Section 11.4.3 set out how TTC responded to the subway accident of 1995, by fundamentallyrestructuring, and at the same time achieving some efficiency gains, this is also discussedfurther below.

The ability of Toronto public transit in general to respond to changes in demand is mixed.While companies monitor demand on routes carefully and aim to tailor their servicesaccordingly, there is a widespread view, as reported earlier in this chapter, that publictransit has failed to respond to the changes in patterns of demand in terms of the growth oftrips being made across the outer regions of the GTA. The new Sheppard Subway extensionrunning East-West in the North of TTC’s operating area may provide some help, but it isonly 6.4kms long. Transportation for Toronto (City Hall) have expressed hopes that thingswill improve as part of Toronto’s Official Plan, but such initiatives are generally still in theirearly stages.

Operators in Toronto are currently considering the possibility of using smart cardtechnology to improve tariff integration. TTC recently conducted a study into options forintroducing automated ticketing and ticket barriers, particularly on the subway. However,they concluded that fraud levels are low, and the expense would not be justified.

11.4.8. Economic criteria: responding to internal changes


Not applicable for Toronto

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Table 11.11TTC Employment and Wages

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999Number ofemployees

10,351 10,218 10,051 9,717 9,621 9,459 9,129 9,133 9,462 10,049

Employees permillion km operated

53.2 54.5 54.9 54.4 53.7 53.0 53.0 52.6 53.1 56.7

Average hourlywages € 2001 prices

24.47 24.67 25.86 25.80 25.15 24.77 25.64 24.62 24.45 24.97

Note that wages in 1994 and 1995 were subject to the government’s Social Contract, which froze wages.

Table 11.11 provides data on TTC employees. It shows significant reductions in the numberof employees from 1990 to 1997. Employees per million kms operated fell from 54.9 in 1992to 52.6 in 1997, but have since increased. Of total employees, 81 per cent are involved inOperations, and 78 per cent are hourly-paid members of operations branch (ie the “frontline” drivers, station attendants and so on).

Average hourly wages rose only slightly throughout the 1990s after adjusting for inflation.Indeed, average hourly real wages fell in real terms overall from 1992 to 1998, but recoveredin 1999.

Employee costs, including benefits account for 73 per cent of TTC’s current operatingbudget, and total €460.1 million.

As mentioned earlier, the late 1990s efficiency programme saw significant reductions in thenumber of TTC employees. Total employees fell from 10,351 in 1990 to 9,133 in 1997 (buthave since expanded due to service expansion). As part of the internal reform process, 1,250jobs were eliminated, and 450 new ones were created, ie, a fall of around 800 jobs. Thereductions in staff numbers fell particularly heavily upon the administrative workers. Whilethe overall number of staff fell by 7 per cent, numbers of administrative staff fell by 17 percent. The administrative staff at TTC have lower levels of union representation than theoperational staff.

These cuts in employment were met through a combination of “natural wastage”,redundancies, and redeployment. TTC was able to redeploy a lot of workers into other roleswithin TTC, something that was not too difficult given the size of the organisation. Oneform of redeployment was the setting up of a consultancy arm within TTC. The consultancyarm operated for a couple of years, but has since folded. TTC reports that the morale ofworkers was adversely affected by the restructuring and downscaling process, but is nowrecovering. There was very little staff resistance to the proposed changes, at least partiallydue to the fact that they had been initiated by a fatal accident, and there was a feelingamongst staff of “wanting to help”.

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The current policy is to achieve any further staff reductions needed through natural wastagewhere possible. If this is not possible, all employees are offered the option of redeploymentas a matter of policy.

Union representation is high amongst TTC workers, at close to 90 per cent, and union poweris quite strong. TTC workers are represented by the Amalgamated Transit Union (ATU),which represents the largest proportion, the Canadian Public Employees Union and a fewmembers by Lodge 235 (apprentices and machinists). TTC tends to negotiate a generalagreement with ATU first, and then has more specific discussions with the other workers.The ATU also represent around 1,000 GO Transit workers.

Relationships between the unions and TTC are reported as generally good by TTC.Discussions with the ATU have confirmed this. TTC and the unions meet regularly withTTC staff to discuss any impending changes and to try and avoid any sudden surprises.Activity by the unions is generally quite high (for example, on grievance proceduresfollowing staff dismissals) but the unions report that it is conducted in a generallyconstructive and diplomatic manner.

Industrial unrest is considered to be low, given the size of the organisation and the power ofthe unions. The last strike was by ATU workers in 1999. ATU report that the strike wasover the level of pay increases and the levels of allowances including clothing allowances,safety footwear allowances, and physiotherapy costs allowances. After two days, staffreturned to work and the case went to arbitration, with the unions achieving around 60 percent of the original overall package they asked for (this included a 7.75 per cent wageincrease over three years, compared to the 9 per cent asked for).

As part of the restructuring process, there has been an overhaul of training. Training hasgenerally increased, and each job has a set training programme. TTC have increased theirinitial screening of prospective employees and monitor training failure rates. For exampleprospective employees are required to spend some time with operators at work beforecommencing their job, in order to give them a clearer idea of what is involved.

Salary structures are currently being reviewed in an attempt to reduce the currently largenumber of pay bands. Salary levels are compared to those offered in the marketplace on aregular basis, both to illustrate to unions that pay levels are “fair” and to help staff retention.TTC do suffer from some retention and recruitment difficulties, but this tends to be atspecialist and management levels rather than in general. During the period of the SocialContract (1994 to 1995), when the Provincial Government imposed a wages freeze on publicemployees, the unions were supportive. More recently, salaries have risen, and are nowconsidered quite competitive by TTC. The ATU confirmed that wages for hourly–paidworkers are relatively good when compared to the private sector in Toronto, with wages fordrivers being around double those offered to drivers in private sector companies.

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TTC Human Resources report job satisfaction to be generally good. TTC tries to foster aculture of pride in the running of a good transport system, and seems to have been relativelysuccessful in doing so. The ATU also report staff morale to be relatively good.

Benefits offered to staff include free TTC travel, life insurance, accidental death andinjury/disability insurance, sickness insurance, a comprehensive medical plan and a dentalplan. Costs are covered for full time employees by TTC, and 50-50 for part-time employees.Employees can also take out additional life insurance, the cost of which is shared 50-50 withTTC.



TTC and GO transport service link well with labour market areas in the centre of town, butas mentioned earlier, they link less well with the more rapidly growing out of town joblocations, which are currently served predominantly by car. Growth in the economy couldpotentially be stifled by two major constraints. The first is the relative lack of servicesconnecting the outer GTA areas. The second is an inability to expand Downtown commuterservices sufficiently to keep pace with demand, due to funding constraints.


Access to Toronto’s airport is by road only. Highways connect the Airport and the citycentre, and regular bus services are run by both TTC and by other companies who offer anexpress service (this appears to be the only example of competition). There is no heavy railor subway link, and the route to/from the airport can become congested at peak times.Private operators charge €10.89 ($14.00) for a single adult fare on their express service fromthe airport to the city centre. TTC airport services charge standard TTC fares.


To the extent that public transit in Toronto takes people out of their cars and reducescongestion and total emissions, it makes a valuable contribution to the environment. Cityplanners have identified public transit as a way of improving Toronto’s environment, alongwith initiatives for walking and cycling (for example, Toronto has a “Cycling Master Plan”which aims to double the number of cycle trips by 2010 by extending the current network ofcycle paths from the current 180kms to 980kms and by improving route connectivity withmajor destinations). The Canadian government is signed up to the Kyoto Agreement, and itis possible that it will contribute funds to provincial and municipal-level public transportinitiatives in order to help achieve this, but there have been no real developments so far.

TTC have an annual environmental program. Much of the work from 2000 involved theremoval of asbestos from subway lines and the upgrading of containment systems (eg forbatteries/transformers) rather than being emissions-orientated. However, TTC has bought

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125 natural gas powered buses in recent years in an attempt to help reduce emissions. Ie,while some services operate voluntary “eco-friendly” policies, these are not obligatory.Another example is that GO Transit uses low sulphur diesel in its locomotives during thesummer months to help prevent smog.


Table 11.12 below summarises what we consider to be the most significant positive andnegative aspects of the Toronto system under each of the criteria for evaluation.

Table 11.12Toronto Performance Against Criteria

Positive Negative

Economic criteria

• Good arrangements foraccountability and transparency.

• Very good cost recovery.

• Use of contracting put to privatesector an interesting feature.

• Modal splits reasonably good in thecity centre, especially in the peak.

Economic criteria

• Modal splits low in the outer regions.

• Serious funding difficulties forecastin the near future.

Service quality

• Frequency, accessibility andcleanliness are good.

• Relaiblility is fairly good.

Service quality


• Good tariff, physical and informationintegration.

• Extensive park and ride facilities.

• Integration with land use historicallylow, but now improving.


Social cohesion

• Good provision for the mobilityimpaired partially on generalservices, bus especially throughspecific services eg Wheeltrans.

• Concessionary fare system.

Social cohesion

• Flat rat fare is expensive for thoseneeding to make short journeys.

Dealing with change

• Internal changes in the mid to late1990s took place quite smoothly.

Dealing with change

• System has not adapted well to shiftsin demand to the outer regions of the

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Positive NegativeSpecific provision for staff maderedundant.

• Good labour relations.

• Good training, wages and benefitspackages for staff.

city.

• Downloading funding responsibilityto the municipal level has led tofunding difficulties.



• Some initiatives including a “CyclingMaster Plan”, but many currentinitiatives are voluntary.


11.6. Toronto “Scorecard”

To complete this chapter we present a summary “scorecard” summarising the mainadvantages and disadvantages of the Toronto system.

Table 11.13Toronto Summary “Scorecard”

Toronto


• Good cost recovery

• Good fares and information integration

• Good lessons in contracting out aspectsof the provision of rail commuterservices to the private sector

• Training and employee benefits systemgood

• Clear and comprehensive procedures fortransparency and accountability

• Extensive facilities for the mobilityimpaired

• Good response to change

• Flat fare discourages short journeys

• Current funding arrangements areinadequate, especially for future capex

• Relatively poor service provision in outerGTA, especially for journeys betweenregions rather then in/out of centralToronto. Poor modal share in these areas

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12. CITY STUDY: ZURICH

12.1. Key Facts

• Tram and bus services operated by a single, publicly-owned operator. Very littletendering of services.

• Heavy rail services also state-owned and operated.

• Zurich Public Transport Authority responsible for co-ordination, funding, andfares setting.



Zurich, located in the northern part of Switzerland on Lake Zurich and the Limmat River, isthe economic centre of Switzerland. It is also one of the main international financial centres,with a compact inner city structure. The inner centre also has a public transport orientatedstructure, while the surroundings are more similar to other European conurbations.

Switzerland is organised into 26 Cantons, the Canton Zurich is divided into a number ofmunicipalities, one of which is the city of Zurich. The Canton of Zurich in the biggestCanton in Switzerland. It covers 1,834 square kms with a population of 1.24 million peopleand 700,000 employees. It consists of 171 municipalities.

The city of Zurich covers 91.9 square kms, with 360,850 inhabitants in 1994. Populationdensity is about 42 inhabitants per hectare. The city has about 800 kms of streets and 180kms of main roads. In the city itself car ownership is 364 cars per 1,000 inhabitants, while inthe whole Canton it is about 452.

The region is strongly dominated by services, especially in the financial sector, althoughtechnical industry and research and development also play an important role.


Switzerland is organised in a federal structure, with three levels of government: national,regional (Canton) and local communities (Gemeinden). The national level is primarilyresponsible for the road and rail networks although the Canton administration alsocontributes to the financing of the road networks. The Traffic Separation Regulation sets thefinancing of the different modes based on the revenues raised from fuel taxes. Recently ageneral lorry tax was introduced, marking a clear movement towards internalisation ofexternal costs. The framework for land use planning and policy is established at the national

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level and the Cantons are responsible for developing their own land-use and transportlegislation and plans.

The Cantonal traffic law of Zurich has the target of providing high standard and efficientpublic transportation in the Canton of Zurich. The Zurich Public Transport Authority (ZVV)is in charge of a co-ordinated and economical transport system including an integrated faresystem. It is a Canton owned company. It was established in 1990 by the Canton of Zurichespecially to plan and co-ordinate schedules, frequencies and networks for public transport,set and integrate fares, market and marketing services, provide capital assistance andadminister operating grants. ZVV does not operate any services itself.

ZVV and other organisations that are involved in the Zurich public transport system arerequired to balance their powers carefully. It is not seen as appropriate if one or anotherorganisation obtains too much power in the Canton when it comes to (public) transport.

The Transport Department (Amt für Verkehr, AFV) is a new organisation that has been inexistence for about a year. This organisation has three goals:

• to develop an integrated transport concept for the Canton of Zurich;

• to develop strategic planning of transit and transport; and

• to exercise strategic control

In contrast to ZVV, AFV is active at a more strategic level and not only deals with publictransport but with all the transport modes within the Canton. It co-ordinates action from theBau direktion (spatial planning, road construction and environment),Volkswirtschaftsdirektion (ZVV) and the Direction für Soziales und Sicherheit (police). AFVis currently drafting a long-term strategic plan that will be finished by the end of 2001.



In the Canton there are more than 270 public transport lines, consisting of bus lines, tramlines, and rail lines, as well as boat connections. Over 180 of these lines are regional buslines, and 55 are city bus transport lines. The public transport system is highly integrated.

The rail lines are marketed under the name “S-Bahn”. The first S-Bahn link opened in 1990and more lines have opened since. The lines were constructed by converting and upgradingexisting railway lines, many of which continue to carry long-distance and freight traffic aswell. Where possible, however, segregated S-Bahn infrastructure has been provided. Mostof the S-Bahn lines are operated by the national rail operator SBB, although some areprovided by one of the regional railway companies in Switzerland.

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In order to pay operators to run these lines a budget is agreed between ZVV, the Canton andthe municipalities. The ZVV must design services and set fares with these resourcesavailable. ZVV enters into two-year agreements with the concessionaires to serve specificareas. Under these agreements, the operator agrees to provide a given timetable. ZVV paysoperators based on a mutually agreed upon reimbursement system, indexed to the amountof services rendered and performance criteria. The ZVV has a watchdog role in encouragingoperators to restrain costs where possible.

The operators present a proposed budget, which is accepted if it fits in the fundingauthority’s framework. Some parts of the costs, such as the cost of fuel are variable. Underthe gross cost contract used, ZVV collects the fares and pays each operator according to thenegotiated agreements usually based upon their total of vehicle kilometres. At present thereis almost no competition for service operation.

The operators are controlled through the quality of service they deliver. If their quality iswell below the average then ZVV takes action, which can include tendering of services.However, during the last five years only a few lines have been tendered. As a result, ahandful of lines are now operated by private and leisure operators.


Figure 12.1 shows the links between the Canton of Zurich, the municipalities and theoperators. By law, the Canton sets the strategic objectives. Fifty per cent of the deficitbetween income from ticket sales and costs is covered by the Canton, and the other 50 percent by the municipalities. The amount to be covered by each individual municipalitydepends for 20 per cent on the level of the municipal tax, which is based on the tax capacityof the community, and for 80 per cent on the service level that the municipality enjoys. Theservice level considers the number of departures of public transport weighed by an indexrepresenting the quality of the various modes.

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Figure 12.1ZVV Organisation Scheme

Canton of ZurichExecutive Council and

CantonalCouncilGuidelines for development,

service fares, credit frame, budget

171 municipalitiesconsulted on fares, participation in

schedule, planning

ZVV, headed by traffic boardFinal decision on fares and services, financing, marketing,

public relation

8 partner companies:S-Bahn Zürich, VBZ, Postauto Zürich, WV, VBG, SZU,VZO, ZSG

The other 32 operators

ZVV proposes a budget with a certain level of subsidies to the Canton and themunicipalities. The Canton and the municipalities can then agree whether to accept thisbudget or not. ZVV pays the operators for the running costs including personnel andmaintenance. Investment for capital equipment is financed by special traffic funds.

There are about 40 public transport operators in the Zurich area. These consist of: twofederal companies (SBB, Postauto); two inter-cantonal railroads (Südostbahn, Bremgarten-Dietikon-Bahn); two municipal transport authorities (Zürich, Winterthur); two privaterailroads (Sihltal-Zürich-Uetliberg-Bahn, Forschbahn); 27 bus companies; two boatcompanies; two funiculars (Polybahn, Dolderbahn); and a cabin lift. The two biggest playersare VBZ, the operator in the city of Zurich and the SBB (national rail operator).

As effective cooperation between this large number of operators can be difficult, ZVV haveappointed the eight largest companies as partner companies. ZVV organises publictransport together with these organisations. The other 32 operators fall under thejurisdiction of one of the eight partner companies. ZVV meets up with the eight partnercompanies and leaves it to them to communicate with the other operators.

ZVV employs about 80 people. Finance is the biggest department with ten people. Otherpeople work on planning, marketing, ticket sales, communication and scheduling. Thecurrent idea is to let the eight partner companies do most of the work related to thetendering procedure.

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The market share of public transport in the Zurich area is high. About 41 per cent of thecommuters entering the city of Zurich use car or motorcycle, with the remaining 59 per centusing public transport. Public transport is used by 22 per cent of journeys for leisure andshopping in the whole Canton. For transport in the city of Zurich mode share is car (27 percent), bicycle (8 per cent), walk (28 per cent) and public transport (37 per cent).

12.4.1.2. Patronage

The development of rail and bus patronage in the city of Zurich over the last four years isshown in Table 12.1.

Table 12.1Bus and Rail Patronage in Zurich on an Average Day (000)

1996/97 1997/98 1998/99 1999/00

Bus (VBZ) 882 865 869 876

Rail (alloperators)

220 220 227 242

Source: ZVV

It can be seen in Table 12.1 that bus patronage on the main bus operator VBZ has been moreor less stable during the last four years. The use of rail in 1999/00 was however some 10 percent higher than the 1996/97 level. Patronage on the entire S-Bahn network has grown by 32per cent in the period from 1989 (pre-conversion) to 1999. Although this is a high growthrate, it is lower than the some of the rates elsewhere, e.g. Manchester Metrolink. The S-Bahnconversions however are less radical, whereas the 1989 patronage may already have beenrelatively high due to the traffic restraint policies in Zurich that were already in place by thattime.

It is intended to increase overall public transport patronage in the period to 2006 by 15 percent, compared to the 1999/00 level.

Table 12.1 shows the journeys, passenger kilometres and average trip length in the city ofZurich by mode. It can be seen in the table that trams account for 66 per cent of journeysand 60 per cent of passenger kilometres.

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Table 12.2Public Transport Patronage in the City of Zurich

Journeys (boardings) per year(million)

Passenger kilometres (million)

Tram 189.7 333.5Trolley 46.5 94.8Bus city lines 32.4 65.7Bus suburban lines 2.5 4.0Bus region lines 15.9 49.2TOTAL 287.0 547.2

Source: VBZ

12.4.1.3. Fares

The most important ticket types are contained in Table 12.3.

Table 12.3Summary of Key ZVV Fares

Ticket Price (€) Description

Single ticket (short journey) 1.37 Valid for 30 minutes

Child (under 16) short journey 1.02 Valid for 30 minutes

Single fare 2.16 Valid for one hour, covers most singlejourneys in the city of Zürich

Child (under 16) single fare 1.56 Valid for one hour, covers most singlejourneys in the city of Zürich

Day card 4.72 Valid within the city of Zurich

Child (under 16) day card 3.12 Valid within the city of Zurich

Rainbow monthly pass 45.85 Monthly pass tariff for journeys within thecity of Zurich

Under 25s monthly pass 30.00 Monthly pass tariff for journeys within thecity of Zurich

Rainbow monthly pass 68.12 Monthly pass for journeys into the city ofZurich from an adjacent zone

Under 25s monthly pass 46.00 Monthly pass for journeys into the city ofZurich from an adjacent zone

Source: ZVV

Tickets are valid on all public transport modes, and it is possible to transfer between modesusing the same ticket.

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The average traffic speed in the city of Zurich is 16 km/h by car and 13 km/h by publictransport. These speeds are measured on a door-to-door basis.


In the city of Zurich the main operator VBZ operates the tram and bus lines. VBZ providescapacity for about 95,000 seated and standing passengers on a network that provides 270kilometres of route, including 117 kilometres of tramlines. Most tram and bus services onthese routes run every six to eight minutes. Details on the VBZ public transport network inthe city of Zurich are shown in Table 12.4.

Table 12.4VBZ Route Network in the City of Zurich

Network Route kilometres (million) Vehicle kilometres (million)Tram 109.3 18.9Trolley 54.0 5.6Bus 84.0 5.4Small bus 28.7 1.3Funicular 0.4 0.1Regional network 202.9 5.4Total 479.3 36.7

Source: VBZ

Some aggregate statistics on public transport services in the entire Canton are presented inTable 12.5.

Table 12.5Public Transport Services in Canton of Zurich (1999/00)

Rail Regional bustransport

City transport Other publictransport

Total

Lines 24 181 55 18 278

Network (kms) 900 1,00 300 100 2,00

Number ofvehicles

185 347 670 24 1,226

Vehiclekilometres peryear (million)

19.5 21.9 26.1 0.4 63.0

Source: ZVV

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Table 12.6 contains ZVV’s revenues and costs from 1991/92 to 1999/00. The table includessubsidy payments as far as these are made by the federal government or by neighbouringcounties. The deficit is the amount to be covered by the local governments.

Table 12.6ZVV Revenues and Costs, 1991/92-1999/00 (€, millions)

1991/92 1994/95 1996/97 1997/98 1998/99 1999/00

Farebox revenue 165 163 158 159 165 165Other revenue 49 42 43 41 39 41Subsidy from neighbouring counties 1 1 1 1 1 1Federal subsidy 9 8 21 26 25 24Total revenue 224 214 223 227 230 231

Payments to bus and tram operators 414 407 393 375 364 362Payments to SBB (rail operator) - - 40 33 32 29Other costs 6 9 9 10 10 10Total costs 420 416 442 418 406 401Deficit 196 202 219 191 176 170

Source: ZVV

It can be seen in Table 12.6 that the proportion of total costs covered by farebox and otherrevenue was around 50 per cent in 1991/92, then declined to around 45 per cent in 1996/97and increased again to around 50 per cent in 1999/00. It can also be seen that costs havebeen reduced in real terms, both in the case of the bus/tram operators and in the case of therail operator. As a result, the deficit in real terms increased by about 10 per cent in theperiod from 1991/92 to 1996/97, but then declined sharply. Currently, the deficit is morethan 20 per cent below the 1996/97 level and around 15 per cent lower than in 1991/92.

Individual operators cover their costs from the ZVV payments, but do not make any profitsor losses. For example, VBZ in 1999/00 received €236 million from ZVV, which exactlycovered the company’s operating expenses. The €32 million of other income that thecompany earned during the year was refunded to ZVV.


ZVV receives subsidies at both the federal and county level. These are set out Table 12.6above.



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12.4.4.1. Frequency

Please see the section below on accessibility.


About 80 per cent of all the buses and trams have a deviation of less than 30 to 40 secondsfrom their scheduled time, and 98 per cent have one less then four minutes, a high level ofreliability. This information is known because 3,000 induction loop sensors are implantedthroughout the city’s road system, providing the traffic control with information. In everyVBZ-tram the driver can see his amount of delay or whether he is ahead of schedule and canact upon it by speeding up or slowing down. This punctuality information shows that theservice in Zurich runs close to time. Nevertheless when research was undertaken intopunctuality, some 10 per cent of the travellers reported that they missed a connection duringthe previous week.


The services in the Canton have an integrated fare structure and uniform service as well asfares. There are three service levels:

• base service level, with public transport arriving every 60 minutes;

• standard service level, with public transport every 30 minutes; and

• city area service level, with public transport every 5 to 15 minutes.

The Cantonal Public Transport Act of 1988 and the relevant Transport Supply Order call forthe provision of good public transport services for all urban areas with at least 300inhabitants, jobs or trainees/students. “Good” means that there must be a bus or tram stopwithin a distance of 400 meters or a train stop within a distance of 750 metres with at leastone service per hour.


Every two years a passenger survey is carried out. The survey includes questions on:

• punctuality;

• driver behaviour;

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• ticket sales;

• quality of the public transport vehicle;

• possibility of transporting packages, bikes etc. while using public transport;

• the stops on the public transport system;

• the quality of the public transport network;

• cleanliness;

• ticket control;

• feelings of security;

• management of failures or disturbances;

• information supplied in the public transport vehicle;

• possibilities of obtaining information at home;

• ticket machines;

• price and assortment of transport tickets;

• dealing with complaints; and

• ZVV itself.

Currently the average satisfaction score is about 77 per cent. The plan is to increase thistowards 81 per cent by the year 2006.



Since 1950, office employment has greatly increased in the city, with serious congestion andenvironmental problems as a result. Traffic limitation policies have been implemented sincethe mid 1980s and Zurich has become famous for its success in promoting public transport(bus and tram only) with a high degree of integration between public transport modes. Thebackbone of the public transport system is formed by the street running trams, co-ordinatedby an efficient and sophisticated operations control centre assuring the integration with thecomplementary bus network and the overall quality of the services. In the 1990s theintegration concept was also successfully spread to the suburban areas. Walking andcycling are stimulated as well, with political priority given to the implementation anddevelopment of footpath and cycling networks.

Another part of the integration of transport is the disincentive regarding the amount ofparking spaces available in the city centre. The level of parking spaces has been stabilised at

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the 1990 level, at least for visitors. When a new parking garage is build, the same amount ofplaces is taken out on the street. For the last 25 years however no new parking garages havebeen built.

Overall, we regard the degree of physical integration of the (public) transport system inZurich as outstanding.


There is an integrated ticketing system (one ticket for bus, train, tram and boat), which hasbeen in existence for some time, and is promoted by ZVV. Details of fare levels are given inSection 12.4.1.

The tickets are valid for all public transport modes and allow changes, i.e. a single journeyinvolving multiple legs requires one ticket only. Because of these features, we regard thelevel of tariff integration in Zurich as very good.


ZVV is responsible for the provision of information, although the operators are allowed toadvertise their own name and brands. ZVV produce very clear network maps that presentthe network as an integrated network and show very clearly the interchanges that arepossible, using colours to distinguish between lines and modes.

Although the operators are allowed to advertise themselves, they do not provide their owntimetable or fare information. For example, the electronic timetable on the VBZ websitelinks automatically to the ZVV timetable.

Some train stations have real time information and for buses it is currently being tested.Real time information is however regarded as expensive.

We regard the level of information integration in Zurich as good. However, the fact thatindividual operators are allowed to advertise themselves alongside ZVV is potentiallyconfusing. As the operators do not bear the revenue risk on their services, there would notappear to be an immediate need for them to advertise themselves.

12.4.5.4. General transport policy

Already some 30 to 40 years ago the city of Zurich responded to worsening trafficcongestion not by expanding capacity, but rather by redistributing road space to publictransport. In the first instance the idea was to introduce a kind of metro system. A pre-metro however was rejected in the 1960s, and a full underground system was rejected at thebeginning of the 1970s because of loss of accessibility and high costs. This decision byreferendum caused a shock to transport professionals, and had a major influence ontransport policy.

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In 1977 after further discussions and another referendum, it was decided to improve thealready existing public transport system by upgrading the tram service. This cost €131million instead of the €523 million, which would have been the cost for the first metro line.

A directive by the Zurich City Council in 1979 stated three objectives:

• build separate bus lanes and more dedicated tracks so as to convert trams more intoLRT type of vehicles;

• give priority to transit vehicles at intersections regulated by traffic signals that aredirectly actuated by trams and buses by means of a dynamic traffic control system;and

• install information technology that identifies vehicle location and deviations fromscheduled timetables, allowing for corrective actions

Because even improved public transport can never match the door-to-door service that thecar offers, complementary measures were taken to restrain car use: traffic calming inresidential neighbourhoods, parking management and maintaining city wide road capacityat a constant level. Today, Zurich’s trams and buses occupy as much highway space asautomobiles.

The improvements took place by increasing the reliability and speed of the tram. During the1980s for example, the associated reconstruction of the tram system and the installation ofcomputerised traffic signal systems were undertaken. In the areas not served by tram, thebus service was also improved.

The conclusion is that Zurich copes very well with its enormous amount of transit tripsResidents make about 560 transit trips per year, almost twice as much as in Europe’s largestcities: London, Paris and Berlin. Zurich’s success lies largely in the execution of numerouscarefully conceived measures – from efficient management of road space, to neighbourhoodtraffic calming, to deeply discounted fares that reward customer loyalty – that altogethergive clear priority and preference to trams, buses, cyclists and pedestrians.



There are special fares in the ZVV fare system for children until 16 years old and, to a lesserextent, for the under 25s. There are also special family tickets. There are however nodiscounted tickets for the elderly. Fare levels are set out in section 12.4.1.


The service is not very well equipped for disabled users who cannot gain access to the tramsand some of the S-Bahn services. VBZ has only 82 low floor buses out of the total of 239

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buses. Disabled people can however take an accompanying passenger or a guide dog free ofcharge.

Importantly, though, the Swiss take the pragmatic view that it would be very expensive tobuild in full access for disabled passengers, and that it is better to provide taxi or specialtransport services for their needs. A special service called “Promobil” enables registereddisabled people to use taxis at a deeply discounted rate. The service is however onlyavailable for leisure trips. ZVV supports the service by an annual payment of CHF 6 million(€3.9 million)


The planners at ZVV change and extend their schedules according to statistics they obtainabout construction works for offices and houses. They also look at the saturation levels ofpublic transport lines.

One of the main factors behind the success of the Zurich public transport system as seen bythe local government is the stability of local organisation and decision-making. The aims forpublic transport have not changed during the last 30 years. In 1974 already, the localgovernment had formulated its goals, one of them being to stabilise motor vehicle traffic.There is a wide consensus about the policy. It could be argued that here, it is the absence ofchange that has been a particularly beneficial factor.



As mentioned in Section 12.4.7, there has been little change in public transport in Zurich inrecent years.

12.4.8.2. Staffing Issues

VBZ, one of the main operators in Zurich, has about 2,000 employees. Around 1,240 of themwork as drivers and some 670 in maintenance. Around 15 per cent of VBZ staff is female.Bus drivers earn between €3,793 and €3,924 per month. The total VBZ wage bill in 1999/00of €138 million suggests an average cost per member of staff of approximately €69,000.Although this seems very high, it includes social security payments and should be evaluatedin the light of the generally very high wage (and price) levels in Switzerland.

The bus drivers of the private operators earn around €2,950 per month and have fewerholidays. These bus drivers often are not native Swiss people. Some staff from operators arepaid as local government officers, like VBZ and Postauto, other have private companycontracts. There have not been any strikes in the public transport system for the last 10years. Importantly, any new companies entering the market are required to match thewages of the existing companies.

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Unions

There are two major unions in the Canton of Zurich. One is called Vpod, or SSP. It is thepublic service trade union in Zurich, that deals with the urban public transport. The secondmajor union is the SEV, the regional federation of railway workers. Two smaller ones arethe Post Union and the Christian Union. Vpod is responsible for co-ordinating thecommunication between the four unions and the ZVV.

Communication links between ZVV and the unions have only been in place for two years.The decision to introduce formal links, with Vpod acting as the union co-ordinator arosewhen ZVV launched a plan to extend working time by 30 minutes, which resulted in thethreat of strike action by the unions. After the strike had been threatened, the proposedextension to working hours was dismissed.

In Switzerland for the last few years there have not been any strikes. Next to the one inZurich there were only two other threats in Switzerland in the area of public transport: onein St. Gallen in 1999 where the planner also wanted to extend working hours, and one inLuzern in 2000 due to proposals to open the public transport market. The Unions wanted aguarantee of working conditions, which was subsequently agreed on. There is now aregional contract regarding the definition of wages and working times.

The Unions in Zurich are still negotiating the working conditions for the workers after themarket opens in 2003. Major problems the Unions currently have are the hours publictransport services are provided. Services now run until 2 a.m. in the morning and start againat 4 a.m., while for example services used to stop at midnight. The second problem is thework becoming more and more efficient. Short breaks between services are diminished orskipped completely, causing extra stress and increasing sickness leave.





There is a regular train service running between the airport station and the city centre. Thisservice runs on average every 10 minutes, and takes about 15 minutes from airport to citycentre. A single ticket costs €3.53 (CHF 5.40), which is more expensive than a standardsingle fare elsewhere in the city. Tickets can also be bought over the internet for an extracharge. The train service is operated by the national rail provider SBB.

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In 1999, ZVV issued a policy to reduce the emissions of the bus fleet operating in its area bybetween 90 and 99 per cent. To achieve this ambitious target, two measures are currentlybeing implemented. The first step is to use sulphur-free fuel, which is currently used bymost buses. The costs for the cleaner fuel are borne by ZVV. The second measure is toequip all buses with a so-called Continuous Regenerating Trap (CRT)-filter. The systemreduces the emissions of harmful particles by 90 to 98 per cent. Around 100 buses arecurrently being equipped with the filter, with all remaining 460 buses to be replaced entirelyby the year 2005.


Table 12.7 below summarises what we consider to be the most significant positive andnegative aspects of the Zurich system under each of the criteria for evaluation.

Table 12.7Zurich Performance Against Criteria

Positive Negative

Economic criteria

• Relatively high modal splits.

• Falling real costs, and moderate butimproving cost recovery levels.

Economic criteria

• Lack of competition does not givestrong incentives for cost efficiency.

Service quality

• Common targets are set for frequencyand accessibility.

• Very good reliability.

• Regular passenger surveys.

Service quality


• Strong, central transport authorityhelps ensure good integration andinformation provision.

• Integrated fare structure.


• Advertising by individual operatorscan be confusing.

Social cohesion Social cohesion

Dealing with change

• Little change experienced. Industrialrelations are generally good.

Dealing with change


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Positive Negative


• Good environmental initiatives withchallenging targets.


12.6. Zurich “Scorecard”

To complete this chapter we present a summary “scorecard” summarising the mainadvantages and disadvantages of the Zurich system.

Table 12.8Zurich Summary “Scorecard”

Zurich


• Very well integrated public transportsystem, both in physical terms and interms of tariff integration

• High quality and reliability

• Strong and consistent transport policy,resulting in a high market share of publictransport

• Small but strong Canton public transportauthority

• Good industrial relations

• Lack of competition for the provision ofpublic transport services does notprovide the strongest incentives for costefficiency

• The fact that individual operators areallowed to advertise themselvesalongside ZVV (the public transportauthority) does not enhance theintegration of the network in terms of theway it is being presented to thecustomers

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13. STRENGTHS AND WEAKNESSES OF THE MODELS

This section summarises what we regard as the main strengths and weaknesses of thedifferent models that we have examined, by bringing together the “scorecards” from the endof each city study chapter.

13.1. Adelaide

Adelaide


• Low fares encourage public transport useby socially excluded

• Good facilities for mobility impaired

• New contracts were intended to encourageinnovation in provision of services

• Good service reliability

• Very low cost recovery

• Bad industrial relations

• Badly managed transition tocompetitive contracts in early stages,including staff redeployment

• Poor incentives to increase patronagewith new contracts

• Falling ridership and modal splits(although rate of decline slowing)

In Adelaide, the public transport system appears to be particularly strong on social cohesionissues. The structure and level of fares (particularly concessionary fares), the provision ofinformation in a well-integrated way, and the provision of good facilities for the mobilityimpaired all contribute to the popularity of this system with passengers. Indeed, someservices are even provided free of charge. However, it should be remembered that suchgood provision does entail a cost. Cost recovery is typically very low, and is particularlylow for heavy rail services where the incumbent operator is still providing the service.

There appear to be two major downsides to the Adelaide model. One is the fact thatopening the system up to competitive tendering (on the buses at least) has not beensuccessful in stopping the declining ridership and modal splits for public transport.However, the fact that the decline has slowed, and that the new system has not been fully inplace for many years suggests that strong conclusions cannot yet be drawn in this area.

The second major weakness appears to have been the way that the transition period washandled. Transition resulted in turmoil within the industry with unrest amongst employees,difficulties in recruiting drivers, and an assortment of problems with the structure of thenew contracts.


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13.2. Copenhagen

Copenhagen


• Integrated system with common faresstructure and common service branding

• Phased transition to concession system

• Performance regime based on customersatisfaction surveys

• The gross cost contract system failsto include any output incentives.

The phased approach to the introduction of a concession system in Copenhagen has helpedto minimise some of the turbulence associated with the structural and institutional changethat has been observed elsewhere. Good integration, particularly of ticketing, and the use ofa common service brand have also been beneficial to consumers. Copenhagen has includedservice quality regulation as part of the gross cost contracting system that it operates.Perhaps the main disadvantage of the current contract structure is that it fails to provide anyincentives for the operators to maximise ridership.

13.3. Évora

Évora


• Public transport planning andmanagement body includes the localoperator

• Car parking funds used to help fundpublic transport, making SITEE lessdependent on governmental loans andsubsidies, while limiting car use in the citycentre at the same time

• Good service reliability combined withcheap public transport

• High acceptance of SITEE because ofpublic discussions, immediate visibleimprovement in public transport andrestricted use of car in old city centre

• Complete and simple tariff integration

• Revenues lower than expected due tolack of ticket checks

• Very poor access for mobility impaired


The introduction of the new planning and management body, SITEE in Évora includes theinvolvement of the local operator, and so can benefit from its expertise. The integration ofcar parking revenue collection into this body has also meant that funds raised from carparking charges can be used to cross-subsidise public transport. Service reliability is good,


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and the fact that there is only one operator also means that there is good tariff andinformation integration. However, Évora offers no facilities for the mobility impaired.

13.4. Lyon

Lyon


• Powerful transport planner

• Ownership of vehicles by transportplanner facilitates investment andreduces barriers to entry

• Having a single operator for the bus,tram and metro network facilitatesintegration

• Versement Transport

• The gross cost contract used does not givethe operator an incentive to increaserevenue

• Tendering the whole network at onceincreases entry barriers, with typicallyonly two or three bids received pertendering round

• Poor labour relations with very frequentstrikes


In Lyon, the public transport system benefits from a strong, central transport planner whoowns the vehicles, thus helping to ensure that there is sufficient investment in new rollingstock/vehicle quality, and helps to remove the barriers to entry for firms who would not beable to buy/bring in large bus fleets and helps remove bias towards the incumbent operator.

The fact that there is only one operator helps ensure a well integrated system in terms offares, services and information. However, this in itself does present a significant entrybarrier to smaller potential operators, so that competition for the market is often limited toonly two or three bidders, potentially reducing the overall scope for efficiency gains. Thefact that the operator faces a gross cost contract also reduces incentives to improve eg servicequality, as there is no benefit to increased ridership.


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13.5. Manchester

Manchester


• High level of cost efficiency and highcost recovery

• Metrolink high quality and successful,innovative funding and concessioningarrangements, good environmentalintegration

• Very good central information provisiondespite multi-operator system


• Instability in the bus network afterderegulation

• Lack of physical integration betweenservices

• Poor tariff integration compared withcities in other countries

• Bus staff earnings suffered

• Quality of rail services suffered afterprivatisation due to an over-ambitiousfranchise bid

Manchester suffered a significant amount of instability in services at the time ofderegulation, again highlighting the problems of a very sudden transition. Similarly, railservice quality fell significantly due to an over ambitious franchise bid. The deregulatedsystem also gives no incentives for physical integration, and relatively poor tariff integrationalthough information integration is good despite the multi-operator system. Both customersand staff have lost out, in the form of high fares and falling earnings. However, theMetrolink system is generally regarded as a success.

13.6. Preston

Preston



• Very high bus frequencies and networkcoverage – a good quality bus-basedpublic transport system

• Flexible system due to operator freedomto determine service levels and timetables

• Staff at the main operator own thecompany themselves and enjoy goodworking conditions


• Initial instability following a major “buswar”

• Competition tends to disappear andoperators stick to their own territory

• Poor tariff integration

• Information integration is not very good,especially with operators publishingtheir own timetables without alwaysincluding competing services


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As in Manchester, Preston suffered a significant amount of instability in the immediateaftermath of deregulation, with changes to services and competitors gradually disappearing.Like Manchester, it also suffers from high fares, and relatively poor tariff integration.Information integration is also relatively poor. However, cost efficiency and cost recoverylevels are good, and passengers enjoy good network coverage and frequent services. Stafftoo enjoy generally good working conditions with the main transport operator, and own thecompany themselves.

13.7. The Hague

The Hague


• Emphasis on careful transition byawarding first concession to theincumbent

• Employment guarantee to bus and tramstaff, and good industrial relations in busand tram operations

• Good integrated ticketing system withrelatively low fares, which will bepreserved despite structural changes tothe public transport market


• Lack of appropriate skills in the publictransport authority

• Poor industrial relations on the railways

• Transport modes, especially bus/tramon the one hand and rail on the other,are not presented as an integratednetwork

• The public transport market share is notvery high, partly as a result of theimportance of cycling

Unlike some of the other cities studied, the Hague seems to have taken a more carefulapproach to transition. This was achieved by awarding the first concession to the incumbentto allow a more gradual transition, and by features such as the employment guarantee forbus and tram staff. The interests of passengers have also been considered, with a decision tomaintain the current well integrated ticketing system and fare levels. However, thetransition has not been without its problems. There are poor industrial relations in the railsector, and the public transport authority suffers from a skills shortage. Physical integrationcould also be improved, and the relatively low fares are balanced by low cost recoverylevels.


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13.8. Toronto

Toronto


• Good cost recovery

• Good fares and information integration

• Good lessons in contracting out aspectsof the provision of rail commuterservices to the private sector

• Training and employee benefits systemgood

• Clear and comprehensive procedures fortransparency and accountability

• Extensive facilities for the mobilityimpaired

• Good response to change

• Flat fare discourages short journeys

• Current funding arrangements areinadequate, especially for future capex

• Relatively poor service provision in outerGTA, especially for journeys betweenregions rather then in/out of centralToronto. Poor modal share in these areas

The Toronto public transport system is generally regarded as of a good standard with goodfares and information integration, and good provision for the mobility impaired. Both themain operators achieve very high levels of cost recovery and GO Transit particularly hastaken advantage of contracting-out operations in order to achieve cost efficiencies. Recentreforms appear to have taken place relatively smoothly with industrial relations generallygood, and have introduced a clear structure for transparency and accountability.

While the TTC flat fare system may be simple and good value for long distance travellers,we do not regard it as providing good value for money for all users, particularly thosewishing to make shorter trips, who may include socially-disadvantaged groups. Perhapsthe two most serious weaknesses of the Toronto system are the inability of the currentfunding system to allow the operators to respond to growing demand, and the inability ofthe system to respond to the shift in employment and population patterns, which have led tostrong growth in journeys outside the city centre, which are relatively poorly catered-for.


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13.9. Zurich

Zurich


• Very well integrated public transportsystem, both in physical terms and interms of tariff integration

• High quality and reliability

• Strong and consistent transport policy,resulting in a high market share of publictransport

• Small but strong Canton public transportauthority

• Good industrial relations

• Lack of competition for the provision ofpublic transport services does notprovide the strongest incentives for costefficiency

• The fact that individual operators areallowed to advertise themselvesalongside ZVV (the public transportauthority) does not enhance theintegration of the network in terms of theway it is being presented to thecustomers

Zurich benefits from a generally well integrated, high quality, reliable public transportsystem, run by a strong transport authority, that enjoys good industrial relations. However,we regard the current system as failing to meet the full scope for efficiency gains, due to thelack of competition in provision of services.

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14. CONCLUSIONS

14.1. Introduction

This report has identified a set of criteria by which public transport systems can beevaluated. After providing a relatively brief review of performance in Dublin and the Irishprovincial cities, we have then considered nine separate cities in detail using these criteria.The cities provide a broad spectrum of different approaches to the provision of urbantransport services, ranging from the fully regulated and largely publicly-operated system inToronto, to the deregulated and privately-operated system in Preston. In between are avariety of approaches for providing public transport services to meet publicly-specified (andusually publicly-funded) requirements through competitive processes that are designed toprovide incentives for efficiency and innovation.

In this chapter we seek to draw together the lessons from the case studies that we haveinvestigated in the course of this study, and apply them to the particular circumstances ofDublin and the provincial Irish cities. Our case studies have been detailed ones, and wesought to summarise the main lessons from each city together at the end of each of the citychapters in a brief “scorecard”. We then reviewed these lessons in the previous chapter. Onthe basis of this, we do not believe that there is a single “city model” that is most appropriatefor application everywhere. Consequently we wish to draw on the strengths, and avoid theweaknesses, of each of the cases we have considered.

In determining the appropriate solution to the provision of public transport services, it isnecessary to take account of important aspects of the overall framework within whichservices are being provided in a particular city. We believe that this framework has thefollowing two important components:

• the way in which the private car is treated; and

• the mix of modes within the city.

The way in which the private car is treated. In Chapter 2 we noted that the first bestsolution to the problem of urban traffic congestion is to charge road users for the marginalsocial costs they impose through some form of congestion charge, which is likely to vary bytime of day. Such a form of road pricing was introduced in Singapore in the 1970s in theform of an Area Licensing Scheme, and in the late 1990s this was converted into a fullelectronic road pricing scheme in the Central Business District and on the city centreexpressways. Congestion charging is currently under serious consideration in London, andin a number of other British cities. However, full congestion charging may be difficult tointroduce because of political objections. Nevertheless, while congestion charging wouldrestrict car use and increase capacity available for road-based public transport modes, thereare other ways to restrict cars’ use of capacity and improve public transport service quality.We have seen how the high emphasis on public transport in the centre of Zurich has been

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achieved by making road capacity available to trams, by giving public transport vehiclespriority, and by restricting parking. Some roads in the centre of Manchester are reservedexclusively for trams, and trams have priority at intersections. Quality Bus Partnerships inGreat Britain, and the Quality Bus Corridors in Dublin, can make extra capacity available tobuses through dedication of bus lanes. The overall culture and attitude toward the motorcar is an important aspect of the approach to be adopted to improve transport in cities byplacing increased emphasis on public transport.

The mix of modes within the city. The solutions to be adopted in any city will in partdepend on the types of mode that provide services within the city. This mix will in turn bepartly dependent on the way that the city’s transport infrastructure has developed. Inparticular, rail-based modes may demand different solutions to bus-based ones, so onewould expect the solution in cities with all-bus systems like Preston and the Irish provincialcities to be different to those like Dublin with mixed modes of bus, heavy rail and (in duecourse) light rail. Cost recovery may be lower in traditional heavy rail operations whereinfrastructure costs need to be covered and where traffic densities on some routes may below. However, the Manchester experience shows that it is possible for light rail systems tocover their operating and maintenance costs where systems are designed in such a way as togenerate good traffic volumes.

In the remainder of this chapter we consider the appropriateness of different solutions toIreland under the following main headings:

• Responsibility for public transport services;

• Provision of bus services;

• Provision of rail-based modes (light rail and heavy rail); and

• Managing transition.

14.2. Responsibility for Public Transport Services

A major issue is that of where responsibility for public transport services ultimately lies. Acommon approach is to have a single public sector organisation responsible for publictransport services in a city.

There are a number of such organisations in our case study cities:

• In Toronto the Toronto Transit Commission is a vertically integrated public transitcompany having a monopoly over public transport services in the City of Toronto,providing bus, tram and metro services. The TTC operates at an “arms length”relationship to the City, and is responsible for setting fares, determining quality ofservice standards, and choosing routes and frequencies.

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• In Zurich ZVV (the Zurich Public Transport Authority) is responsible for co-ordinating the public transport system, providing funding and setting fares. ZVVitself does not operate services. The main operator is VBZ, which operates the tramand bus network in the city. There is very little tendering of services.

• In Lyon SYTRAL is the public agency responsible for local transport services.SYTRAL is responsible for decisions about service levels and fares. It also owns theinfrastructure and public transport vehicles. Services are operated by a singleoperator under a management contract. The present contract, which runs for sixyears, was won by SLTC in 1999. The operator is responsible for operational serviceplanning decisions.

• In Adelaide the Passenger Transport Board (PTB) is responsible for public transportservices. The PTB is required to create and maintain an integrated network ofservices, and it controls fares. The PTB also does not operate services itself, butcontracts with other organisations to do so, using gross cost contracts with outputincentives. The PTB is responsible for providing information about services. ThePTB also provides the public transport vehicles to operators, which it in turn leasesfrom Transport SA.

• In The Hague the regional body, Haaglanden, is responsible for public transport inthe city region. There is an integrated urban public transport fare system in theNetherlands, with fares determined nationally, although regional governments likeHaaglanden can set lower fares if they wish.67 Service levels are determined byHaaglanden, although until recently this was the responsibility of the operators,subject to approval by Haaglanden. The public transport system is being changedfurther, so that from a present system of monopoly publicly-owned transportoperators, competitive tendering will in due course have to be introduced.

• In Copenhagen bus services are operated by private sector bus companies under asystem of competitive tendering. The public transport authority, HUR, is part of theGreater Copenhagen Authority, and is responsible for an integrated zone-based faresystem. Contracts with operators are based on gross costs, though there is aperformance regime based on consumer satisfaction surveys. Services are providedunder a common livery, so customers are not immediately aware that there aredifferent operators.

• In Manchester, the Greater Manchester Passenger Transport Authority, operatingthrough the PTE, has overall responsibility for public transport services. However,unlike transport authorities in the other large cities in our survey, it does not controlall such services, since decisions on commercial bus service levels and fares aredetermined by private sector operators. The role of the PTE in regard to bus services

67 But we have seen that the incentives to do so are limited.

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is limited to filling the gaps left in commercial services and in determining andfunding the concessionary fares system.

• In Preston the relatively few public transport planning responsibilities aredischarged by the county council, Lancashire County Council, which administers theconcessionary fare system and tenders out non-commercial bus services to privateoperators.

All public authorities with responsibility for providing public transport services need asource of revenue. Such funds are provided by a combination of national, regional and localgovernments. Most of these sources are not directly transport-related, though there will beprovision for road pricing revenues to be used locally in Great Britain when congestioncharging is introduced, while in France there is a direct workplace levy, the versement, onemployers which feeds into an urban public transport fund. Financing needs in a city willprimarily be determined by the cost recovery ratio achieved by the public transport system,which we have seen can vary considerably between cities, as well of course by the overallscale of operations. The introduction of some form of competition is usually seen as oneway to reduce these financing needs.

Dublin is rather different from the cities we have studied because no overall public transportauthority exists, apart from the Dublin Transportation Office (DTO) that was set up in 1995with limited powers. Funding for the two CIE subsidiaries that between them provide thegreat majority of public transport services in Dublin is the responsibility of the nationalgovernment. There is also no centralised fare determination for Dublin public transportservices.

The lessons from our case studies indicate that the existence of a powerful publictransport authority is highly beneficial. Most public transport authorities have achievedintegrated networks, tariff integration and an overall coordination of the development of the(public) transport system. Given the importance of a well-planned and well-integratedsystem if people are to be encouraged to use public transport instead of the private car, weconsider a central authority to have a very important role, especially in larger cities wherethe most co-ordination is needed. We therefore conclude that the development of a strongcentral public transport authority for Dublin would be highly beneficial.

The city case studies have illustrated the importance of retaining staff with appropriateexperience and capabilities within the planning authority. In the case of Dublin, weconclude that the Dublin Transportation Office could be expanded both in terms of size andin terms of powers to become a full public transport authority, having both planning andregulatory responsibilities.

The role of the expanded Office will be partly dependent on the system of reform that iseventually adopted. Major headings of responsibility can include:

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• determination and funding of minimum service levels, to ensure that citizens allhave minimum access to the public transport system so as to preserve horizontalequity and preserve social inclusion;

• determination of fare structure and levels;

• management of the process to determine which operators provide services; and

• information provision.

As can be seen from our review of experience in different cities, the expanded Office mightalso own some of the infrastructure used in the provision of public transport services, suchas light rail systems (as in Manchester) or buses (as in Adelaide and Lyon). In Dublin thiscould be achieved by transferring ownership of Dublin Bus’ fleet to the Office, which wouldthen make vehicles available to operators of services, for example successful tenderers ifcompetitive tendering were to be introduced. We note that in a situation where there iscompetitive tendering, this sort of arrangement can have the advantage of opening up themarket to smaller operators who might not otherwise have the resources be able to tender.We also note that it is one way in which the planning authority can exert direct “qualitycontrol” over the type of vehicle used (eg age, low floor access etc.) Adelaide buses are oneexample of this. However, the city studies also highlight the fact that attention needs to begiven to whether the operators are obliged to use these buses only, or whether they can alsouse other buses. Another key issue is deciding responsibility for maintenance and safety,and how these will be monitored effectively.

As mentioned earlier, one requirement for effective planning of public transport services isthat the Office has the required expertise. This will not be easily built up, so any reform willneed to take into account the availability of these skills, both from within and beyond thecity where reform is being contemplated. Such skills will include skills in planning busnetworks that may currently reside with the operators in Dublin and in the other Irish cities.

14.3. Provision of Bus Services

14.3.1. Introduction

In this section, we discuss the options for the provision of bus services in Ireland and forman opinion on them. In Section 14.3.2, we discuss the issue of who should determine andprovide public transport service levels. Section 14.3.3 deals with the issue of specifying farelevels.

14.3.2. Service levels

Our case study cities can be divided in a number of general models for the determinationand provision of public transport services. These are:

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• A public authority determining and providing service levels without competition(Toronto);

• A public authority determining services, which are then provided mainly bydifferent operators without competition (Zurich);

• A public authority determining service levels with competitive tendering for eitherroutes (Copenhagen), areas (Adelaide) or the entire network (Lyon); and

• The market determining commercial services, with a public authority filling gapsthrough competitive tendering (Manchester, Preston)

We have seen in our case studies that the Toronto public transport system, specified andprovided by the same public authorities, functions well. The Toronto system combines ahigh quality network with a high cost recovery, steadily falling operating subsidies and agood integration. Consequently, the Toronto case shows that the model of a publicauthority determining and providing service levels without competition can work very well.

Similarly, our Zurich study shows that the model of a public authority determining services,which are then provided mainly by different operators without competition, can work verywell too. The Zurich public transport is highly integrated and provides an excellent servicequality. In combination with car restraint measures, this results in a very favourable modalsplit towards public transport. Cost recovery in Zurich is by no means as high as in Toronto,but here too, costs have been reduced steadily and deficits have been falling.

However, whereas we have seen that public provision of public transport withoutcompetition can work very well, there is no guarantee that it will work well in allcircumstances. In Manchester and Preston (previously) and The Hague (currently), publicprovision of the public transport system was not found to be ideal. In these cases, publicprovision led to high costs, poor cost recovery and a lack of customer orientation. Often,publicly owned public transport providers do not have strong incentives to reduce costs orto increase revenue. Publicly owned companies cannot generally go bankrupt and theirmanagers cannot easily be fired when they are performing poorly. These constraints areoften effective in the private sector.

Furthermore, we also note that the Toronto model has not been successful in adapting to theexternal change of shifts in transport demand from city centre commuter routes to journeysfrom one outer region to another, not least due to the significant funding difficulties thatToronto is currently suffering, especially with regard to capital expenditure. A number ofrecent discussion papers on options for improving public transport services in Toronto, anda number of people interviewed in Toronto have recently suggested that the way forward tomeet the demand for public transport on the outskirts of the city may be to introduce someprivate sector involvement. Examples include the paper A Transportation Vision for the City ofToronto Official Plan published by the Urban and Development Services Department of theCity of Toronto in April 2000. The results of our interviews with GO Transit also revealed

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the very high level of contracting-out of non-“front-line” operations to the private sector,which GO Transit consider to make a very important contribution to their current levels ofoperating efficiency.

Further points to consider include the cultural differences between cities such as Torontoand Zurich, and other cities, such as the cities of Ireland. Our country studies have revealedthat the levels of motivation/culture of pride/wanting to “be the best” observed in forexample Toronto play an important part in the success of those systems but are be no meansa universal culture, and do not seem to apply in many other cities. We therefore believe thatthe examples of Toronto and Zurich are the exception rather than the rule. When such aculture exists or can be created, public provision of public transport can work well.However, partly as for the reasons described above, we are sceptical as to the possibilities ofestablishing such a culture in publicly owned public transport providers in general. Wethink that in general, introducing an element of competition into the provision of publictransport can provide stronger incentives for efficiency, customer orientation and qualitythan the provision by the public sector can.

Although we have relied upon our case studies to draw our conclusions, we are aware that alarge number of studies have been undertaken in an attempt to identify the level ofefficiency gains that can be captured through the introduction of competitive tendering.Examples include the studies of London bus tendering by Kennedy, Glaister and Traversthat reported a 20 per cent saving in costs (1995)68, and the study by Mackie and Preston(1996)69 that reported a thirty five per cent drop in real costs between 1985/86 and 1993/94as a result of the introduction of competitive tendering, as well as earlier results reported byBeesley and Glaister (199*).70 It is not part of the scope of this study to review such studiesin detail, but we note that efficiency gains resulting from the introduction of competition aretypically around 20 per cent. Clearly this figure can be lower depending, for example on theexact transitional arrangements and protections afforded, but significant gains are stillusually reported.

Once again, although we have not relied upon it in drawing our conclusions, we are alsomindful of the recent proposals from the European Commission, supporting theintroduction of competition into the provision of public transport services. These proposalshave significance not only in terms of what may become European law in the future, but alsoin terms of the research that has gone on in the drawing up of these proposals, including the

68 Kennedy, D, Glaister, S, and Travers, T (1995) London Bus Tendering London School of Economics.

69 Mackie, P and Preston, J (1996) The Local Bus Market: A Case Study of Regulatory Change Avebury (Aldershot,Hants).

70 See also the earlier study Beesley, M and Glaister, S (1991) “Bidding for tendered bus routes in London”Transportation Planning and Technology vol 15.

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ISOTOPE study.71 We are also aware of the work undertaken within Ireland itself on thissubject (for example by the DPE), but have not used this work to inform our conclusionsdirectly.

In sum, we conclude that a system which includes some form of competition is the systemthat would be most effective in Ireland, given both the findings from our case studies, andthe attention that we have paid to how applicable those findings are to Ireland.

As we have seen earlier, there are two basic models for the introduction of competition intothe provision of public transport. On the one hand, it is possible to have competition for themarket by introducing some form of competitive tendering for the right to operate services.Of our case studies, Copenhagen, Adelaide and Lyon have adopted different versions of thismodel. Competition for the market allows the benefits of competition to be achieved with atthe same time a public authority continuing to specify service levels and manage theintegrated network.

On the other hand, it is possible to have competition in the market by moving towardscomplete deregulation of the market. This is the model we have seen in Manchester andPreston. Supplemented by tendering for gaps in the network identified by a transportplanning authority, this option does provide good coverage of public transport services.The British experience shows that bus services have been increased, and operators have beeninnovative in the provision of services. But without fares regulation, fares can be quite high,while there can be instability in the provision of services. The transition can be painful forthe workers in the industry. Nevertheless, a medium-sized city like Preston can end up witha good quality public transport service, which meets the needs of residents for most publictransport trips. However, a large conurbation like Manchester has suffered from an unstablenetwork, adverse impacts of competition and a lack of public authority influence over faresand service levels.

71 ISOTOPE was a research study conducted as part of the EC Transport RTD programme. The report described andcompared the organisational and legal structures used in urban public transport in European countries. Itanalysed the pros and cons of these alternative structures and considered how organisational structures might beimproved. Summary details can be found at http://europa.eu.int/comm/transport/extra/res-isotope.html

The study made a number of general recommendations but emphasised that local circumstances, particularlyconcerning the availability of technical competency in the transport authority and the existence of enoughcandidate operators, may dictate different choices. In general, though, the study concluded that a system oflimited competition (i.e. competitive tendering) would be preferable over both regulated and deregulated systems,as such a system can achieve cost reductions while preserving the stability of the system. In large cities, contractsshould be let for sub-networks as opposed to the entire network. It also suggested creating a strong mobilityauthority, not just covering public transport.

Within limited competition models, it was suggested that net cost contracts would be the preferred optionprovided a number of conditions were met. The conditions included the existence of a strong authority with atradition of information gathering, and the need for a monitoring system of the operator to prevent the operator tobuild up a dominant possession of information. As we will see in Section 14.3.2.2, not all these conditions arecurrently satisfied in Ireland.

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For the provincial Irish cities, we do not think that the deregulated option is entirelyinappropriate. There is little public authority tradition of planning bus services in thesecities, and local bus operators would be in the best position to identify and meet marketneeds. Where existing operators are unable to do so, the potential for new entry wouldencourage innovation, and new operators might be able to develop local networks inparticular cities. The scale of entry would not need to be particularly high, so there wouldbe opportunities for smaller companies to participate.

However, the benefits of this approach would need to be compared with the benefits of acompetitive tendering system. In particular, the Lyon model might be appropriate for theprovincial cities, especially the smaller ones. It might be possible to periodically tender outthe management of the entire network in these cities. Subject to some minimum requiredservice levels, the operator would have a degree of freedom to develop services and torespond to changes in demand. The operator would have this freedom both in advance ofthe concession period, by being allowed to submit bids to operate more than the minimumservice levels specified, and during the concession period, by being allowed to run anyadditional services that earn extra profits. To facilitate entry, the local authority might retainownership of vehicles, although the operator would be free to bring in more vehicles asrequired.

We believe that this system would achieve much of the benefit of an entirely deregulatedsystem without the disadvantages, in particular of the painful transition phase. It alsoallows some more public influence over the public transport system, for example by settingminimum service levels and maximum fares, within the limited resources in terms of publictransport skills that the provincial city councils currently have. Therefore, we would prefera management contract approach for these cities over complete deregulation, although itmight be feasible to conceive a limited amount of controlled competition within themanagement contract framework.

As far as the congested area of Greater Dublin is concerned, we do not think that thecomplete deregulation model is appropriate there given the lessons that we have learnt fromour case studies, and particularly from Manchester. Pressure on road space in the Dublinarea is tight and increases in bus-kms run as a result of on-the-road competition wouldimpact adversely on traffic congestion, and hence too on bus speeds. In addition, oneimportant issue that we believe will need to be addressed in Dublin before long is the waythat the interaction between bus and light rail services is to be handled. In a fullyderegulated environment bus operators will not want to feed traffic into a light rail system,but will instead wish to compete directly. They may be able to do this where the geographyof the road network allows and where light rail vehicles are subject to some delays atintersections. In addition, bus services may have more leeway to compete on fares. This iscertainly what happened in Sheffield, where the light rail right-of-way involves considerableon-street running and traffic light-controlled junctions between light rail vehicles and roadtraffic, so that buses could compete with trams. It also happened in Tyne and Wear where,before bus deregulation, bus services had been designed to feed passengers into the light rail

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system: after deregulation bus operators were no longer prepared to do so. Consequently,the issue of bus-tram competition will need to be addressed in Dublin.

Our recommendation for Dublin therefore is to introduce a form of competitive tenderingfor the right to operate bus services. The network can be specified such that directcompetition between bus and light rail in the corridors served by light rail services is limitedor avoided.

There are a number of major issues in designing competitive tendering systems, including inparticular:

• Whether to tender individual routes, or to adopt some form of area tendering;

• Whether to use gross cost contracts or net cost contracts;

• How to split up tenders so as to provide opportunities for different types of operatorto compete, in particular to enable small operators to compete on an equal basis withlarger scale operators.

We will discuss these issues in turn in the next three subsections.

14.3.2.1. Route or area tendering?

A number of our case studies presently apply some form of competitive tendering for theprovision of bus services. The major examples are:

• In Copenhagen, where the entire network is tendered out, tender packages aredevised that comprise groups of lines. In The Hague, which will move towards atendered system in the next few years, it has been explicitly indicated that the“Copenhagen model” will be adopted there as well.

• In Adelaide, an area franchising system has been used by dividing the city up intoseven geographical areas.

• In Lyon, the area that is tendered out is equal to the entire network.

• In Manchester and Preston, only specific unprofitable routes are contracted out bymeans of competitive tender and consequently, it is the route tendering system thatis used here.

The idea behind the Adelaide area franchise system is that it gives the operator somefreedom to develop services within its area. Clearly, this will only work if either a net costcontract or gross cost contract with output incentives are used (see Section 14.3.2.2).However, the policy was relatively unsuccessful during the first contract phase as contractpayments depended heavily on patronage and operators were risk-averse. However, the

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output incentive in more recent contracts in Adelaide has been reduced and now, routechanges are starting to be proposed.

A disadvantage of an area-franchising model is that it becomes difficult to operate throughservices between areas. Although a city like Dublin is relatively strongly focused on the citycentre, there is also a significant number of orbital bus lines. With the construction of LUASand with an increased importance of the DART/suburban rail network, the importance oforbital bus lines, relative to other bus lines, is likely to increase. We do not therefore regardthe area-franchising model as suitable for Dublin.

The Lyon model of tendering the entire network has the advantage that having a singleoperator in the city facilitates the integration of the public transport network. The modelhowever implies significant entry barriers, although these are mitigated by the publictransport authority retaining ownership of the vehicles. This is particularly a problem inlarge cities like Dublin. Moreover, it places the operator in a powerful position with regardto the authority: the authority will not easily terminate the entire contract if the operatorunder performs. We do not think that the Lyon model is suitable for Dublin either. As wehave already indicated, it may however have its merits for the provincial cities in Ireland.

For Dublin, we would recommend a route-based tendering system. While it would bepossible to tender out routes individually, it would seem preferable to devise tenders forgroups of routes because of the increased transactions costs and co-ordination difficulties oftendering out every route individually. The groups should not be made too large; byallowing operators to submit single bids for multiple groups, the market will show when itis efficient to have multiple groups of route operated by a single company. It may be morepractical to use smaller groups of routes and to allow operators to bid for multiple groups,than to use larger groups of routes and to allow operators to bid for just a part of the group.

14.3.2.2. Gross or net cost contracts?

In our case study cities, the following types of contract can be found:

• In Copenhagen, gross cost contracts are used with quality incentives. Payments tothe operator can be increased or decreased if agreed quality benchmarks have orhave not been met.

• In Adelaide, gross cost contracts with output incentives are being used. The operatorcan receive a higher or lower tender payment if output exceeds or falls short of anagreed base line level. There are also set service standards, with penalties for theoperator if not met.

• In Manchester, net cost contracts are used for most scheduled services. A few yearsago, however, it became difficult to find bidders for some school contracts under thenet cost system, and some of these have therefore been switched to gross cost

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contracts. In all cases, the operator has to comply with minimum standards. In thecase of non-performance, the contract can be terminated.

• In Preston, the choice is left with the operator. If an operator tenders both on a netcost and a gross cost basis, the authority decides on the basis of the merits of eachindividual bid. For school contracts, however, gross costs contracts are used in allcases. Like Manchester, the operator has to comply with minimum standards withthe possibility of contract termination if it fails to do so.

• In Lyon, the network is contracted out on a gross cost basis, with penalties if agreedquality standards are not being met.

A common theme from our case studies is the fact that if gross cost contracts are being used,additional incentives are required to ensure the operator delivers a quality service. Thisusually takes the form of penalties if quality falls short of the agreed levels, although inCopenhagen, bonuses are payable as well if an operator performs relatively well. InAdelaide, an alternative approach is taken which focuses on output as well as penalties forpoor service standards. Here, too, the operator can either receive more if it performs well orreceive less if it carries less passengers than the benchmark.

If net cost contracts are used, the operator will automatically get penalised for poor qualityby means of lower patronage and thereby lower revenue. However, the nature of publictransport demand is such that operators can usually provide a poor service without losingsignificant numbers of passengers, for example because certain groups of passengers do nothave an alternative means of transport. In other words, the savings to the operator ofcutting quality will often be greater than the costs in terms of revenue foregone. Thisimplies that, as seen in Manchester and Preston, additional quality incentives are requiredeven in net cost contracts.

Another lesson from the case studies is that sometimes, net cost contracts can discouragepotential bidders from tendering. Smaller operators in particular may not be prepared toaccept the revenue risk involved with net cost contracts. A related issue is related to tariffintegration and fare levels. Tariff integration can in theory be achieved both with net costand gross cost contracts. In both types of contracts, it is possible for the authority to set farelevels. However, if operators cannot influence the fares they charge, the revenue risk theybear in net-cost contracts will be increased further. Small operators may be even morediscouraged from bidding, whereas larger operators will increase the risk premium theyrequire.

On the basis of the future competitiveness of any future tendered public transport market inDublin and the other Irish cities, and in view of the lack of, we would recommend that grosscost contracts be used at least initially. This will enable the existing private operators tocompete as much as possible on an equal basis with the CIE subsidiaries. Also, gross costcontracts reduce the risk of regulatory capture of the transport authority by the operator,which is important given the lack of a strong public transport authority tradition in Ireland.

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Net cost contracts could possibly be used at a later stage, and it should be noted that it iseasy to switch between the two variants when contracts are due for renewal. We would alsorecommend that any output-based incentive regime be limited to just a small part of thecontract payment or not introduced at all. Quality incentives will however be essential andwe see merit in the Copenhagen model where the operator cannot just lose by failing to meetthe agreed standards, but can also gain by exceeding them.

14.3.2.3. Equality of market access

We note the current structure of the public transport market in Ireland and the dominance ofthe CIE subsidiaries. To ensure effective competition in any competitive model, it isessential that smaller companies not be hampered by their size. In Copenhagen, it isexplicitly acknowledged that tender packages should be accessible to both large and smalloperators. The Manchester and Preston models are also suitable for attracting smalleroperators but the Adelaide and Lyon models are not.

In the previous subsection, we have already argued that mainly for this reason, a modelusing gross contracts should be used, at least initially. We have also argued that in Dublin, aroute-based tendering model is preferable over models based on area franchising.

However, using a route-based model does not necessarily imply that a tender should beissued for each individual route. As discussed above, we consider the tendering of groupsof routes to be preferable to the tendering of individual routes in Dublin, not least due to thelower transactions costs that this involves.

14.3.3. Fare levels

The analysis of our case studies has shown two distinct models with respect to theresponsibility for setting fares. In Manchester and Preston, the principle is that it is theoperator who sets fare levels. This applies to commercial services and, in the case ofManchester, to tendered services as well. As a result, tariff integration in both cities is poor,although there are multi-operator travelcards in Manchester but not in Preston. Moreover,fare levels are generally high in both cities.

Attempts to achieve a higher degree of tariff integration are viewed with suspicion by theBritish competition authorities, who fear that fare agreements may reduce thecompetitiveness of the bus market. The idea is that each operator should be free to competeon fares. Consequently, only under certain conditions are certain types of agreementallowed. It should be noted however that, as we have seen in both UK case studies, pricecompetition in the deregulated bus market is a rare phenomenon.

In all other case studies, the responsibility for setting fare levels rests with a public authoritythat usually achieves an integrated tariff system. In Toronto, the public operator has a largeamount of autonomy in setting fare levels. In The Hague, fares are effectively set at a

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national level. In Adelaide, Lyon, Zurich, Copenhagen and Évora, fares are set by the localpublic transport authority or the local government.

We believe that a basic requirement of any public transport fare system is that it is simple touse and easy to understand. We do not think that the situation in Manchester and Prestoncurrently meets this requirement. The fact that daytime fares from A to B can differ fromevening fares from B to A does not seem a particularly attractive feature of the system. Thesystem does offer the theoretical benefit of competition on price, but this does not normallyoccur in practice.

Consequently, we recommend that a public authority in Ireland should be responsible forsetting fares, at least in the Greater Dublin market if this market is to be franchised.Comparing tariff integration in our comparator studies with tariff integration in GreaterDublin suggests that there is significant scope for improving the Greater Dublin tariffsystem. For the regional Irish cities, if their public transport systems are tendered out on thebasis of a management contract, we see merit in the operator having a greater say in settingfare levels, although the contract should specify maximum levels for key fares.

14.4. Provision of Rail-Based Modes (Light Rail and Heavy Rail)

At present heavy rail services, particularly DART, provide an important component ofDublin’s public transport services. One possibility would be for present arrangements tocontinue, with DART losses subsidised out of IE’s, and thence CIE’s budget, and little co-ordination between rail and bus services in the Greater Dublin area. This would be rathersimilar to the situation in a number of our case study cities, where suburban rail servicescontinue to be provided by the national rail operator.

However there are alternative possibilities, mainly related to the following:

• responsibility for determination of service levels and fares could be removed from IEand placed in the hands of the Dublin Transportation Office, but with IE continuingto provide services under contract; and

• responsibility for operation of services could be removed from IE, and a newoperator could contract with the transport authority.

Up until 1968 responsibility for decisions on service and fare levels on suburban rail servicesin British conurbations lay with British Railways. However, once the Passenger TransportExecutives had been established in these conurbations, they took over responsibility for suchdecisions, and funded these services (with financial assistance from Central Government)through operating grants under Section 20 of the 1968 Transport Act. Until rail privatisationin the 1990s, services continued to be operated by the British Railways Board. Thejustification for the change to local control had been that decisions on provision of servicesby different modes could be co-ordinated to maximise value-for-money from subsidy.

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The European Commission have required separation of rail operations from infrastructure,and accounting separation has been achieved in IE. The next step may be to achieveoperational separation, and this raises the possibility of competition for the right to operatespecific groups of services. The most obvious group of these might be the DART electrifiedservices, or smaller Dublin suburban groups such as individual groups of diesel services.Franchising of rail services has become commonplace in Great Britain, but suburban railservices have been let by competitive tenders in other cities, including Melbourne inAustralia, and Stockholm in Sweden.

Another example, considered in detail in the present study is the provision of GO railcommuter services in the Toronto region, using services operated over the tracks of nationalrailway operators (in the GO case, both Canadian National, itself a former state-ownedorganisation, and Canadian Pacific). We saw in the GO case the extensive use of privatecontracting to provide services, as well as the increased desire of the train operator toexercise greater control over infrastructure use by the acquisition of strategic assets like thetracks into the city centre station.

One relevant consideration is timing. It does not seem sensible to consider detailedapproaches to be adopted for the rail sector until the solution for the bus sector has beenselected and is on its way to implementation. A possible first step might however be to setup a more separate organisational unit within Iarnród Éireann for the operation of theDART, and possibly also the other Dublin suburban services.

14.5. Achieving Transition

Our case studies indicate that one of the most difficult but also one of the most importanttasks is to achieve a smooth transition from the current Irish city models, both for theconsumer (in terms of fares, service quality and service integration), and for the staff (of bothincumbent and any new operators, and of the regulatory agencies involved).

We note that a number of the cities we have examined experienced a variety of problemsduring their transition from previous to current institutional and regulatory models. Forexample, service quality for passengers in Manchester was adversely affected by theconsiderable instability in the bus system in the immediate aftermath of deregulation, with alarge number of new routes opening and subsequently closing. Similar problems wereexperienced in Preston, where although services increased due to aggressive competitionshortly after deregulation, these levels of provision were unsustainable, and some serviceswere subsequently withdrawn. In Manchester too, and more recently, rail passengers havesuffered because the main local rail franchise operator’s bid was based on unrealisticexpectations. We understand that there have also been rail service quality problems inStockholm, a city outside our case studies. Another example where passengers suffered is inthe loss of certain “through bus services” in Adelaide following the implementation of areafranchising with limits on the total number of buses per area.

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Difficulties in transition have also had serious impacts upon employees. In Adelaide, theintroduction of privatisation of the bus industry led to some industrial unrest, low morale,and some sabotage of buses and bus infrastructure in the early contracting rounds. Therewere also difficulties in recruiting old staff into the new companies initially, due to the waythe severance contracts had been arranged. In addition, some staff were retained on thebooks of the public authority with no work to do, with consequent waste of resources.Other examples include the poor industrial relations experienced in Lyon and the fall inearnings for bus company staff in Manchester.

Lessons for the Irish cities are that careful planning is needed to avoid, or at least minimise,any negative aspects of the transition period. The incentive impacts of new institutionalarrangements on public transport operators should be considered carefully. For example, isthere a risk that under the new arrangements operators will increase fares sharply, or arefares subject to control? Are funding arrangements such that they will incentivise operatorsto maximise ridership/offer off-peak services/cater for the mobility impaired? (i.e., do thecost-recovery arrangements allow this?) If fares are fixed, will operators be incentivised tomaintain service quality?

In the context of impacts on the employees undergoing any change, careful consideration isalso needed. In order to minimise negative impacts, we would recommend that carefulconsideration is given to setting up schemes to allow the redeployment of staff to other jobs,while still retaining incentives to employ staff productively and for staff to act efficiently.Examples might include “guaranteed” job transfer to work for new operators, orredeployment in to other parts of the company/public sector (perhaps particularly usefulfor administrative workers). Consideration might also be given to ensuring pay levels orbenefits such as medical schemes are not lost in the transition. It will also be important toensure that any new bodies that are set up (such as planning, co-ordinating and regulatorybodies) are staffed with adequately trained and experienced staff. Again, theencouragement of staff re-deployment, along with close attention to training arrangementsshould help to ensure this. Toronto has particularly good lessons in regard to the provisionof good training facilities for public transport staff.

At a high level, we consider it useful to consider a gradual approach to change, so thatlessons can be leant during the process, and to ensure that operators, staff and customershave adequate time to adjust to the new arrangements. This will also help allow time for theappropriate legislation to be introduced. In many cases, it would appear that a lot of thetransitional problems that have arisen have done so due to the very sudden nature of thechangeover. The instability in Manchester and Preston are clear examples. Similarly, thefact that many lessons were learnt in Adelaide during the first few contracting rounds, andthat changes could then be applied to make the subsequent rounds more successful isperhaps a good example of the advantages of gradual approach. We note that tendering inCopenhagen was conducted in stages, while it is also planned that the transition to a systemof competitive tendering in The Hague will also be achieved in a phased way by awardingthe first concession for each line group to the incumbent operator and only moving to

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competitive tendering from the second round onwards. Given the time it will take to set upor expand the public transport authorities, such an approach may have its merits for theIrish situation too.

Appendix A

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APPENDIX A. SOURCES AND INTERVIEWS

Appendix A

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A.1. Dublin

A.1.1. Interviews

• Bus Éireann – Tim Hayes and Paul Delemere – 29th March 2001 (NERA: JohnDodgson, Emma Kelso, TIS: Manolo de la Fuente)

• Chambers of Commerce of Ireland and Irish Business and Employers Confederation– 1st March 2001 – Simon Nugent (CEO), John Dunne (South Dublin), Tony Lambert(Swords Fingal), Michael Geary (Cork), Reg McCabe (IBEC) - (NERA - Emma Kelso)and 29th March 2001 (also Bus Operators: Eugine Finnigan, Diedre Barrie, and CorlaCons and Dublin Chamber of Commerce: Declan Martin) – (NERA: John Dodgson,Emma Kelso, TIS: Manolo de la Fuente)

• Córas Iompair Éireann (CIE) – Jim Cullen, Chief Financial Officer - 2nd March 2001(NERA – Emma Kelso, TIS – Rosario Macario)

• Department of Finance – Paul Byrne – 2nd March 2001 (NERA – Emma Kelso)

• Department of Public Enterprise – Maev Nic Lochlainn, Orla Corrigan, Fintan Towey– 2nd March 2001 (NERA – Emma Kelso, TIS – Rosario Macario)

• Dublin Bus – Alan Westwell, Katrina Murphy, Garry Maguire, Shane Doyle, PaddyDoherty - 29th March 2001 (NERA: John Dodgson and Emma Kelso)

• Dublin Transportation Office – John Henry, CEO – 28th March 2001 (NERA: JohnDodgson, Emma Kelso, TIS: Manolo de la Fuente)

• Iarnród Éireann – Joe Meagher and Tom Finn – 29th March 2001 (NERA: JohnDodgson and Emma Kelso, TIS: Manolo de la Fuente)

• Irish Congress of Trade Unions – 2nd March 2001 (Emma Kelso – NERA)

• Office of the Director of the Director of Traffic , Dublin Corporation – Eileen Brady,Eoghan Madden – 28th March 2001 (NERA: John Dodgson, Emma Kelso, TIS: Manolode la Fuente)

• Public Transport Partnership Forum – Steering Committee – 1st March 2001 (NERA –Emma Kelso) and 29th March 2001 (NERA: John Dodgson, Emma Kelso, TIS: Manolode la Fuente)

• Public Transport Partnership Forum Voluntary Pillar – Dan Boyle and MaeveKennedy Grimes – 1st March 2001 (NERA – Emma Kelso)

A.1.2. Documents and data

Central Statistics Office website: www.cso.ie

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Córas Iompair Éireann (1999) Group Annual Report and Financial Statements 1999

Department of Public Enterprise (August 2000) A New Institutional and Regulatory Frameworkfor Public Transport

Department of Public Enterprise (May 2000) Regulation of the Bus Market in the Greater DublinArea

Department of Public Enterprise (November 2000) Guidelines for the Consideration ofApplications for Annual Bus Passenger Licences in Respect of the Greater Dublin Area Under theRoad Transport Act 1932

Dublin Transportation Office (September 2000) A Platform for Change – Outline of an integratedtransportation strategy for the greater Dublin Area 2000 to 2016

Dublin transportation Office website: www.dto.ie

Dublin Bus (1999) Annual Report and Financial Statements 1999

Dublin Bus website: www.dublinbus.is

Data on operational statistics, costs and revenues supplied by Dublin Bus, Bus Éireann, andIarnród Éireann.

Iarnród Éireann website: www.irishrail.ie

Road Transport Act 1932

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A.2. Regional Irish Cities

A.2.1. Cork

A.2.1.1. Interviews

• Joe Fitzgerald, Area Manager Bus Éireann – 24th May 2001 (NERA – Jan Peter van derVeer)

• Conall Mac Aongusa, Group Engineer WS Atkins – 24th May 2001 (NERA – Jan Petervan der Veer)

• Iarnród Éireann – 24th May 2001 (NERA – Jan Peter van der Veer)

• Cork Corporation – 24th May 2001 (NERA – Jan Peter van der Veer)

A.2.1.2. Documents

Bus Éireann (2000) Annual Report and Financial Statements 1999

Cork Corporation (1997) Cork City Development Plan Review 1998

Cork Corporation, Bus Éireann, Iarnród Éireann, Cork County Council (1998) Cork PublicTransport Investment Review

A.2.2. Galway

A.2.2.1. Interviews

Iarnród Éireann

• Brian McKiernan – 25th May 2001 (NERA – Jan Peter van der Veer)

Bus Éireann

• Sean Gleeson, Area Manager – 25th May 2001 (NERA – Jan Peter van der Veer)

A.2.2.2. Documents

Bus Éireann (2000) Annual Report and Financial Statements 1999

Galway Corporation, Galway County Council (1999) Galway Transportation and PlanningStudy

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A.3. Adelaide

A.3.1. Interviews

• PTB - Heather Haselgrove – Director, Contracts – 10th May 2001 (NERA – NicolaTully)

• PTB - David Bray – consultant from Economic and Policy Services Pty, working forPTB – 10th May 2001 (NERA – Nicola Tully)

• SERCO – Bob Pritchard – Contract Manager – 10th May 2001 (NERA – Nicola Tully)

• SERCO – Barrie White – Operations Manager (NERA – Nicola Tully)

• Australian Transit Enterprises (Southlink) – David Hurley – Finance manager – 11th

May 2001 (NERA – Nicola Tully)

• RBTW Union – Ray Hancox – 10th May 2001 (NERA – Nicola Tully)

• Transit Systems Australia (Torrens Transit) – Neil E Smith – Director – 11th May 2001(NERA – Nicola Tully)

• TransAdelaide – George Erdos – Manager for Infrastructure Services – telephoneinterview – May 2001 (NERA – Nicola Tully)

• Professor Derek Scrafton – Transport Systems Centre, University of South Australia -21st March 2001 (NERA – John Dodgson, Emma Kelso, Jan Peter van der Veer)

A.3.2. Documents

Adelaide website: www.Adelaide-sa.gov.au/About_Adelaide

Adelaide Metro/Passenger Transport Board (PTB) website: www.adelaidemetro.com.au

City of Adelaide (1999) Economic Profile 1999

Department for Transport, Urban Planning and the Arts (2000) 1999-2000 Annual Report

Murray F Young and Associates (1997) City of Adelaide Traffic Management Strategy – Stage 1 –Draft Preliminary Objectives and Strategies

Passenger Transport Board (1999) Annual Report 1998/99

Passenger Transport Board (2000) Service Contracts: Report of the Passenger Transport Board tothe Minister for Transport and Urban Planning

Scrafton, D and Bray, D (2000) The Adelaide O-Bahn: Ten Years On – Joint Conference on LightRail Transit, Dallas, Texas, 2000

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A.4. Copenhagen

A.4.1. Interviews

People interviewed:

• Anders Schwarz Lausten (HUR) – telephone interview

• Fleming Smith – SID Union, Copenhagen – telephone interview

A.4.2. Documents

Information used:

• Per Als, Making that change – Reorganising Public Transport

• Website: www.ht.dk, last visited in June 2001 on the World Wide Web

• Website: www.hur.dk, last visited in June 2001 on the World Wide Web

• Map: Trafikkort 02-07-2000 / 16-06-2001 , Copenhagen, 2000

• HUR, From Copenhagen Transport to Greater Copenhagen Authority, TransportDivision, Copenhagen, 2000

• MARETOPE, first draft of Copenhagen case study, Copenhagen, 2001

• HT, Hovedstadsomradets Trafikselskab Arsberetning 1999, Copenhagen, 2000

• HT, Copenhagen Transport Annual Report 1999, Copenhagen, 2000

• Rejsekort, The Copenhagen Travel Card, Copenhagen, 1998

• HUR, Greater Copenhagen Authority, HUR, Copenhagen (presentation)

• IMAGITA, Danish Public Transport Newsletter, www.imagita.dk, last visited inMarch 2001 on the World Wide Web

• HT, Tender Conditions and Specifications, Eighth Invitation to Tender, Copenhagen,June 1998

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A.5. Évora

A.5.1. People interviewed:

• Mauro Fernandes, BELOS

• António Leirão, SITEE

• Ines Morais, Municipality of Évora

• Joao Rato, Sindicato dos Trabalhadores Rodoviarios e Urbanos do Sul (union)

A.5.2. Information used:

• Website http://www.evora.net/sitee/horarios.htm, last visited in June 2001 on theWorld Wide Web

• Website http://www.cm-evora.pt/sitee , last visited in June 2001 on the WorldWide Web

• SITEE, paper with replies on questionnaire

• TRANSPLUS, draft case study Évora, Lisbon, 2001

• SITEE, year account 2000, Évora, 2001

• Municipality of Évora, Ratification of the revised Évora general urban plan, Évora,1993

• Municipality of Évora, Évora’s integrated transport and parking system: Report andcharacterisation of the system, Évora, 1992.

• CEDRU, Global study about land use and valorisation of planned or potentials forthe establishment of local priority zones

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A.6. Lyon

A.6.1. Interviews

• Alain Nérot, SLTC

• Yvette Lartigau SYTRAL

• Pascale Gilbert-Ledru, Communauté urbaine de Lyon

A.6.2. Documents

• Website www.tlc.fr , last visited in June 2001 on the World Wide Web

• Website: www.sytral.fr, last visited in June 2001 on the World Wide Web

• Les chifres clés 1999, TCL

• Plan du résau TCL, TCL

• Lyon 2010, structure plan for the conurbation, www.iclei.org/egpis/egpc-145.html,last visited in March 2001 on the World Wide Web

• Le Grand Lyon, Plans de Déplacement de Secteurs (including several annexes)

• SYTRAL, Budget 1999, Lyon

• SYTRAL, Le plan des déplacements urbains de l’agglomération lyonnaise, Lyon,1997.

• TCL, mini plan

• SYTRAL, Satisfaction Clients du Reseau TCL, questionnaire and results

• TCL, Plan de nuit

• SLTC, l’annee 1999, Lyon 2000

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A.7. Manchester

A.7.1. Interviews

Greater Manchester Passenger Transport Executive

• Bill Tyson, Head of Integration - May 29th (NERA - John Dodgson)

• Steve Wurr – May 17th (NERA – Jan Peter van der Veer)

• George Boswell, Bus Services Coordinator – May 17th (NERA – Jan Peter van derVeer)

Transport and General Workers’ Union

• Fred Greer – June 28th (NERA – Jan Peter van der Veer)

A.7.2. Documents

DETR (1999) From Workhorse to Thoroughbred: A Better Role for Bus Travel. London: DETR

DETR (2000) Transport Statistics Bulletin: GB 2000 edition London: DETR

GMPTE (1999a) Moving Forward: Strategic Development Plan for Public Transport in GreaterManchester 1999

GMPTE (1999b) Trends & Statistics 1986-1998

GMPTE (2000) The Integrate Project Second Annual Report 1999/2000.

Greater Manchester Local Transport Plan 2001/02-2005/06

Mackie, P and Preston, J (1996) The Local Bus Market: A Case Study of Regulatory ChangeAvebury (Aldershot, Hants)

Office for National Statistics (2000) New Earnings Survey.

Office for National Statistics (2000) Regional Trends London: The Stationery Office

Office of Fair Trading (2001) Public Transport Ticketing Scheme Block Exemption – FormalConsultation Draft

Strategic Rail Authority (various years) Performance Bulletins

Transport Act 1985 London: HMSO

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A.8. Preston

A.8.1. Interviews

Preston Bus

• Peter Bell, Managing Director – 16th May 2001 (NERA – Jan Peter van der Veer)

Stagecoach North West

• Christopher Fowles, Commercial Director – 17th May 2001 (NERA – Jan Peter van derVeer)

John Fishwick & Sons

• John Brindle, Managing Director – 17th May 2001 (NERA – Jan Peter van der Veer)

Lancashire County Council

• Tony Moreton, Group Manager Bus Services - 17th May 2001 (NERA – Jan Peter vander Veer)

• Ray Worthington – 17th May 2001 (NERA – Jan Peter van der Veer)

Transport and General Workers’ Union

• Fred Greer – June 28th (NERA – Jan Peter van der Veer)

A.8.2. Documents

Lancashire County Council (2000) Local Transport Plan

Mackie, P and Preston, J. (1988) “Competition in the urban bus market: a case study”.Proceedings PTRC Summer Annual Meeting, Seminar C: Public Transport Planning andOperations, pp 157-170

Mackie, P and Preston, J (1996) The Local Bus Market: A Case Study of Regulatory ChangeAvebury (Aldershot, Hants)

Office of Fair Trading (2001) Public Transport Ticketing Scheme Block Exemption – FormalConsultation Draft

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A.9. The Hague

A.9.1. Interviews

Ministry of Transport, Public Works and Water Management

• Roeland Schuurman, Section Governmental Relations and Public Transport Policy –21st May 2001 (NERA – Jan Peter van der Veer)

• Hans van Dijk, Section Governmental Relations and Public Transport Policy – 23rd

May 2001 (NERA – Jan Peter van der Veer)

Stadsgewest Haaglanden

• S.D. Renzema, Head of Public Transport – 23rd May 2001 (NERA – Jan Peter van derVeer)

Haagsche Tramweg Maatschappij (HTM)

• Hans Derksen, Strategy, Marketing and Communication – 22nd May 2001 (NERA –Jan Peter van der Veer)

Dutch Railways

• Donald Hatch, Account Manager Business Development – 22nd May 2001 (NERA –Jan Peter van der Veer)

• Yvonne Lentz, Manager Public Affairs – 22nd May 2001 (NERA – Jan Peter van derVeer)

• Alex Bruijn, Productmanagement - 22nd May 2001 (NERA – Jan Peter van der Veer)

FNV Union

• Dik Ketting, 4th July 2001 (NERA – Jan Peter van der Veer)

A.9.2. Documents

HTM (2000) Annual Report

Stadsgewest Haaglanden (2001) Meer en Beter Openbaar Vervoer: Beleidsnota Openbaar Vervoer2001-2010. Unpublished draft

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A.10. Toronto

A.10.1. Interviews

TTC

• Paul Buttigieg – Chief Accountant, Financial Services – 15th May 2001 (NERA –Emma Kelso)

• Mitch Stambler - Manager, Service Planning – 16th May 2001 (NERA – Emma Kelso)

• Theresa Clarke – Superintendent – Compensation and Organisational Design –Human Resources – 16th May 2001 (NERA – Emma Kelso)

GO Transit

• Gary McNeil - Managing Director – 14th May 2001 (NERA – Emma Kelso)

City of Toronto Transportation and Panning Divisions

• Tom Mulligan – Director of Transportation – 15th May 2001 (NERA – Emma Kelso)

• Rod Mc Phail – Toronto Official Plan – 15th May 2001 (NERA – Emma Kelso)

University of Toronto/Trimap Communications

• Dr Richard Soberman – 14th May 2001 (NERA – Emma Kelso)

Amalgamated Transit Union

• Paul McLaughlin – Executive Vice-President – 28th June 2001 (NERA – Emma Kelso)

A.10.2. Documents

City of Toronto (2000) Toronto at the Crossroads: Shaping Our Future

City of Toronto Urban Development Services (April 2000) A Transportation Vision for the Cityof Toronto Official Plan

City of Toronto Urban Development Services (June 2000) GTA Population and EmploymentProjections to 2031

Crowley, D F and Dalton, P (1998) Transit Realities in the Suburban GTA Data ManagementGroup, Joint Program in Transportation, University of Toronto

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Data Management Group, Joint Program in Transportation, University of Toronto (1998)Greater Toronto Area Cordon Count Program: Analysis of Traffic Trends 1985 to 1998

GO Transit (2000) The Year in Review: The State of the System January 1999 to July 2000

GO Transit (August 2000) Route Map to the Future

GO Transit (2000) Year 2001 Budget Plan

GO Transit (March 2001) Fares Customer Bulletin

GO Transit (March 2001) Fare Guide – North Corridor

GO Transit (March 2001) Fare Guide – Lakeshore Corridor

GO Transit (March 2001) Fare Conversion Tables

GO Transit website: www.gotransit.com

Legislative Assembly of Ontario Bill 56 (1998) An Act to establish the Greater Toronto ServicesBoard and the Greater Toronto Transit Authority and to amend the Toronto Operating Authority Act

Ontario Labour Management Services (various 2000 and 2001) Ontario Quarterly Review onOntario Collective Bargaining Developments

Soberman, R M (1997) The Track Ahead: Organisation of the TTC under the new amalgamated Cityof Toronto University of Toronto

Soberman, R M (March 2001) Reducing Car Dependence: Transportation Options for the City ofToronto

TTC (1999) Annual Report 1999

TTC (May 2000) Greater Toronto Area Transit Ride Guide

TTC Transit in Toronto

TTC (May 1990) Service Standards Process

TTC (March 2001) Benefit Plans: Staff

TTC (March 2001) Benefit Plans: Union

TTC (May 2000 and April 2001) Chief General Manager’s Report

Appendix A

254

TTC (2001) Operating Budget and Operating Budget Overview

TTC (1999) Operating Statistics 1999

TTC (2000) 2001 Organisation Charts

TTC (2001) 2001 Departmental Goals and Objectives

TTC website: www.ttc.ca

Appendix A

255

A.11. Zurich

A.11.1. Interviews

• Christian Schärli, Amt für Verkehr – May 2001 (TIS – Manolo de la Fuente)

• Ruedi Ott, Tiefbauamt des Stadt Zürich – May 2001 (TIS – Manolo de la Fuente)

• Dominik Brüwiler, ZVV – May 2001 (TIS – Manolo de la Fuente)

• Dominik Bernet, ZVV – May 2001 (TIS – Manolo de la Fuente)

• Michel Jampen, ZVV – May 2001 (TIS – Manolo de la Fuente)

• Stefan Giger, Vpod union – June 2001 (TIS – Manolo de la Fuente)

A.11.2. Documents

VBZ, Vekehrsbetriebe Zürich, 1999, Fakten, Zurich, 2000

ZVV, Wir sind verantwortlich, Der ZVV in Kürze, Zurich, June 2000

Tiefbauamt der Stadt Zürich, Zürich Stadtplan, Zürich, 1998

VBZ, Geschäftsbericht 1999, Zurich, 2000

ZVV, Vernetzt sind wir stark, 10 Jahre Zürcher Verkerhsverbund, Zürich

ZVV, Wir sind vernatwortlich, Geschäftsbericht 1998/99, Zürich

ZVV, Tickets & Preise

ZVV, ZVV, Making the net work, Zurich, presentation

Tiefbauamt der Stadt Zürich, Kennziffernspiegel, Zürich, 1994

Peter Jones, Study of policies in overseas cities for traffic and transport (S.P.O.T.T.), London,1993

ZVV, Welcome 24/48, Zürich, 2000

ZVV, 50 Ausflüge im Zürcher Verkehrsverbund, Zürich, 2000

SBB, Der Schritt in die Zukunft

ZVV, S-Bahn undf Busse

Appendix A

256

Amt für Verkehr, Bahnhof Löwenstrasse und weitere Schlüsselinfrastrukturen, Zürich,November 2000

Amt für Verkehr, Verkehrsentwicklung im Wirtschaftsraum bis 2025, Zurich, 1999

Amt für Verkehr, Hochleistungsstrassen im Kanton Zürich, Strategie und elemente, Zurich,June 2000

Stadtplanungsamt der Stadt Zürich, 20 Jahre verkehrsberuhigung in Zürich, Zurich 1995

EMTA News, Why measure the satisfaction of customers and how? The Zurich publicsurvey, Paris, 2001

ZVV, Umfrage zur Kundenzufriedenheit,

Amt für Verkehr, Auftrag regierungsrat (presentation), Zurich, 2001

ZVV, S-Bahn-Vision, Zurich

Socialdata, Mobilität in Zürich, Verhalten, München, 1993.

Socialdata, Mobilität in Zürich, Einschätzungen, München, 1993.

Socialdata, Mobilität in Zürich, Potentiale, München, 1993.

ZVV, Freizetsgenuss im Zürcher Verkehrsverbund,

ZVV, Strategie 2002 – 2006, Zurich, November 2000

Tiefbauamt der Stadt Zürich, Zürich West – Ein Stadtteil entwickelt sich… auchverkehsmässig, Zurich, 1999

Verkehrspolitik der Stadt Zürich, Stand März 1994

R. Ott, Conurbation transport policy in Zurich, Switzerland (paper)

R. Ott, Cobining landuse and mobility policies in Zürich (paper)

Creating first class transit with transit first policies: Zurich, Switzerland (chapter from book)

Appendix A

257

A.12. Conclusions

TIS et al. (1997) ISOTOPE – Final Report