REGULATORY FRAMEWORKS AND LEGISLATION IN PUBLIC TRANSPORT

1. REGULATORY FRAMEWORKS AND LEGISLATION IN PUBLIC TRANSPORT TRANSPORT TEACHING MATERIAL Transparencies 2003 EU-funded Urban Transport Research Project Results www.eu-portal.net

2. MODULE 1 DEFINITIONINTRODUCTION TO LEARNING MATERIALS • KT Regulatory framework of public transport contains: • legal and • organisational aspects • Transparency, efficiency and quality are the keys for a friendly and efficient PT. • The co-existence of authorities and operators, the necessary allocation of responsibilities sharing of risks as well as co-ordinated ”pull” and ”push” measures are other crucial issues

3. SOURCES The following EU-objects served as key sources for this KT: • ISOTOPE (improved structure and organisation for transport operations of passengers in Europe) • MARETOPE (managing and assessing regulatory evolution in local public transport operations in Europe) • QUATTRO (quality approach in tendering urban public transport operations)

4. NATIONAL DIFFERENCES Short description of the national differences in the following parts of Europe. The following categories of financing can be distinguished: • UK • Western Europe • Central Europe Capital cities regions are often approached in a different manner than rest of the country.

5. MODULE 2 • Structure of presentation • Definition • Sources • Right of initiative • Levels of planning and control in PT • Contractual relationships between actors • Quality assurance in PT • Financing and subsiding • Differences and Examples

6. Note! Tendering of the realization is possible in all models! Organisational forms Authority initiative Market initiative Public system Conces-sion Authorisa-tion Open entry Delegated management Dominated by private companies) Public management Dominated by public companies) RIGHT OF INITIATIVE • competition on the road (UK) market initiative • competition off the road (very common throughout the EU) authority initiative Source: MARETOPE

7. RIGHT OF INITIATIVE • The market initiative regimes have as common characteristic that commercially viable services are meant to appear out of autonomous market processes. Authority initiative regimes have as common characteristic that services can only result from a conscious action by the authority. As such no services can appear as result of simple market forces as no legal provision makes such autonomous entry possible.

8. It is important to state that few real-world examples will fully correspond to any of these theoretical organisational forms. Normally it is a blurry blend of several forms . Organisational forms Authority initiative Market initiative Source: MARETOPE

9. MODULE 3 Source: MARETOPE

10. LEVELS OF PLANNING AND CONTROL IN PT Level Decision „Software „Hardware“ General description Strategic General goals: transport policymarket shareprofitability General description of the services: areatarget groupsintermodality What do we want to achieve? Long term (5 year) Detailed service characteristics Tactical Which services can help to achieve these aims? faresimageadditional services vehiclesroutestimetable Medium term (1-2 year) Operational Sales selling activitiesinformation to the public… Production infrastructure management vehicle rostering and maint. personnel rostering and mngt. How to produce these services? Short term (1-6 months) Source: MARETOPE

11. EXAMPLE: TENDERING OF THE DESIGN AND REALISATION(CONCESSIONING) • The freedom of operators is limited by the minimum standards defined by the concessioning agency which organises the tendering of all services, area-wise, according to the instructions of the transport authority. In many cases decisions pertaining to one topic, such as fares or routes, will not be attributed totally to soley one actor. Source: MARETOPE

12. Actor “The People” Transport Authority Tendering organisation Transporters Politicalcouncil TransportDepartment Independant Organisation Private companies Relation Democratical control Hierarchical control Instructions Contract with tenderung organisation Strategic Transp. Pol. Social pol. Mobil. Std. ( (discussion) Accessib. Std. ( (discussion) Fares Tactical (Min.std.) Routes (Min.std.) Timetable (Min.std.) Translation ((Min.std.) Vehicle type Competitive tendering Operational (Min. std .) Sale (Mid. std .) Information Person. Mngt. Vehicle Mngt. Source: MARETOPE

13. MODULE 4: CONTRACTUAL RELATIONSHIP BETWEEN ACTORS Contracts in the public transport world usually divide between production cost risks and revenue risks. Risks can be shared in various ways implying many intermediate forms of contracts are thinkable as can be seen in the shaded boxes. Source: MARETOPE

14. Production risk borne by Authority Operator Authority Management Contract (M) Gross Cost Contract (GC) M with Productivity incentives GC with Shared production risk GC with rev. incentives and shared prod. risk M with Revenue incentives M with productivity and revenue incentives GC with Revenue incentives Revenue risk borne by NC withshared revenue and production risk NC with Shared revenue risk Net Cost Contract (NC) NC withSharedproduction risk Operator Source: MARETOPE

15. CONFLICT TYPES • There are internal (industrial relations) and external (between an authority and an operator) and will vary in their magnitude of importance. • Contracts should include provision for remedy covering all the risks that may be foreseen at the outset. Flexibility is one important part to guarantee a sustainable service which can cope with future challenges. CONFLICT TYPES Responsabilities Finance Objectives to Reach Fare Policy Perfomance Other Source: ISOTOPE

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

17. Ownership Public Private Private Delegated management Private concession (wb: Management contract) (wb: Regulatory contract) Management Public management (wb: Performance contract) Public Source: MARETOPE

18. FIXED VERSUS FLEXIBLE PLANNING In the context of tendering, decision making at the tactical level can be organised. • prior to the contracting out and operators have no tactical powers (London, Copenhagen) • (prior to the contracting out and operators have some tactical powers (Helsingborg, Sundsvall) • during the contracting out (Netherlands, France) simultaneously with the contracting out of the operational level • during the contracting out not simultaneously with the contractingout of the operational level

19. FIXED VERSUS FLEXIBLE PLANNING These various forms are ordered in into four main options for the place of the tactical (T) decisions. T Determined During contracting/tendering T Determined prior to contracting/tendering T Changes During contract • Contracting/tendering of: • the realisation • with redevelopment incentives. • Contracting/tendering of: • The Development and • the realisation • with redevelopment incentives. T Fixed Duringcontract • Contracting/tendering of: • The Development and • the realisation • Contracting/tendering of: • the realisation Source: MARETOPE

20. MODULE 5 QUALITY ASSURANCE Quality loop The quality loop is based on four distinctive benchmarks: Analysing differences between these four benchmarks (see figure 11) help decision-makers to improve their service. Source: MARETOPE (on the basis of QUATTRO),

21. Gap 5 MODULE 5 Word-of-mouth Past experience Perceived Expectationof quality Quality loop Personal needs Gap 1 Competitive alternatives Gap 2 Planned quality Expectedquality Gap 3 Gap 6 Perceived quality Realised quality Gap 4 Stated quality Provider Customer Source: MARETOPE (on the basis of QUATTRO)

22. CONTRACT DESIGN The contract should specify: • objectives of continuous improvement • tools and responsibilities, including measurement and/or monitoring programs • consequences of the measures, including financial incentivesand/or penalties • control of these results • recourse procedure in the case of non application of the contract

23. CONTRACT DESIGN This specification of services should stimulate operators and authorities to cover all operational/tactical fields of interest by the continuous improvement system: • Transport (including access/exit by users) • Connections (inside UPT/with other modes) • Information to customers (static/real time) • Fares and sales system • Environmental impact (in a broad sense)

24. MODUL 6 INTEGRATION • The contract should specify: • Logical integration • Physical integration • Traffic integration • Continuous improvement • By ”continuous improvement” of urban public transport, we consider the need for continuous adjustment of the service design and of the organisation in charge of providing the service, in order to maintain or increase its value. Innovation in service and management is generated by continuous improvement systems.

25. FINANCING AND SUBSIDING • Pricing and financing in Urban Transport are closely related concepts since the level of prices determines the self-financing capacity, and consequently the need for subsidies. • The following categories of financing can be distinguished: • Transport users contributions • Contributions from public sources and public companies • Contributions from other beneficiaries • Private sources