Innovative Funding and Financing of Public Transport. Part 1: Introduction

Transcription

1 WG 3 Market Organisation April, Leipzig, Germany 3rd Working Group Meeting on Innovative Funding and Financing of Public Transport Part 1: Introduction Martin Ruesch, Rapp Trans AG Zurich, Switzerland

2 Contents SPUTNIC Partners in MO Scope of the workshop / topics addressed Self-introduction of participants Objectives / expectations for the meeting Questions to be discussed Programme for the WG Meeting Communication Rules Validation of problems/challenges

3 Profile Rapp Trans AG, Switzerland Consulting company in traffic and transport Established in 1896 Private limited company based in Switzerland Subsidiaries in France (Paris), UK (London) and the Netherlands (Amsterdam) Around 70 transport and traffic consultants Services in public transport Public transport network and service planning Planning of tariff and fare systems Planning and design of tariff and transportation associations Development of revenue distribution systems Development of financing models Tendering projects Organisation models Monitoring/Controlling projects Institutional consulting (regulation, etc.) More Information:

4 Profile VTI, Stockholm, Sweden VTI, Statens väg- och transportforskningsinstitut, carries out applied research in the fields of infrastructure, traffic and transport. State owned, 170 staff in four towns, turnover 20 M, Public Transport and its links to urban planning, retail patterns and regional development Several Light Rail projects for instance costs compared to other forms of guided transport and buses Competition and Tendering in the Transport Sector New contract forms in the PT sector

5 Strategies for Profile VVO Public Transport Authority of Upper Elbe Region One of 5 PTA s in the State of Saxony Halle Leipzig Bautzen Main tasks of VVO: Integration of several Public Transport modes Timetable integration Integration of tariff and fare system Görlitz Dresden Chemnitz Zwickau Plauen established in m² 1,2 Mio. inhabitants 194 Mio. passengers per year 16 PT operators

6 Challenges relating to Market Organisation Low integration between local and regional (and national) transport networks and services, in overall mobility and transport planning Missing integrated tariff and fare systems Decreasing public ressources for public transport and lack of funds to finance investments and operation Low contribution of revenues to cost coverage Low co-operation between PT companies Unstable or unclear regulatory setting Unclear division of responsiblities between actors in PT Frequent political interference Low implementation of quality and performance monitoring Few incentives for PT operators to cut costs and increase revenues

7 Adressed topics within Market Organisation Topic 1: Integration and Tariff Systems Topic 2: Institutional Framework and Cooperation Topic 3: Innovative Funding and Financing of Public Transport Topic 4: Incentive Contracts and Monitoring Systems

8 Self Introduction of Participants Institution / Company Position Experiences relating to funding and financing Interests / Expectations relating to funding and financing

9 Scope: Terms Funding and Financing Funding the setting-up and operation of the PT system on the whole Financing of investments if the necessary funds are not available at the time needed, namely by recourse to other people s money (loans etc.) The workshop will deal with funding and financing of infrastructure and equipment (rolling stock, ticketing system etc.) as well as operation of urban public transport.

10 Funding Sources: Direct Commercial Revenues Fares from PT users (adressed in Barcelona Workshop) direct commercial revenues Other businesses Advertising Additionnal Services Sale of products Premises and facilities Freight transport fares other business advertising services sale of products premises & facilities freight transport

11 Funding Sources: Indirect Non-Commercial Revenues indirect non-commercial revenues general budgetary resources tax exemptions cross utility fiunding specific taxes and levies earmarked for PT car users employers property owners shopkeepers trade other industries compensation for public service obligation fuel tax rebate fuel tax Employees tax Value capture supplement to sales tax subsidies corporate taxes vehicle taxes etc. Tax Increment Financing tourism tax etc. parking fees general land value taxes etc. road pricing etc.

12 Financing Infrastructure and Equipment Special purpose infrastructure funds providing extrafunds EU-funding: Structural and cohesion funds Loans connected to guarantees and conditions from International Finance Institutions European Bank for Reconstruction and Development (EBRD) European Investment Bank (EIB) World Bank Private Sources Private bank loans PPP Private finance initiatives

13 Objectives for the meeting To identify and validate main problems/challenges, trends and challenges in CEEC related to funding and financing of PT To exchange information, experiences and know how on funding and financing between CEEC and other European cities/urban areas To present and discuss good practices examples from operators and authorities from CEEC and other European Countries To derive conclusions on challenges and need for action

14 Important questions to be discussed What are the most pressing problems with respect to funding and financing PT? What are the most promising alternative funding and financing solutions in urban areas? How to devise operators internal strategies for generating additional revenues by offering additional services creating new market potential? How to tap additional sources of funds for PT? How to lobby towards the government for more resources or indirect support? How to make use of all available financing possibilities? What are the possibilities and risks of relying on International Finance Institutions? How to access EU funding?

15 Programme: Day 1 14:15 15:00 Working Group Session Part 1: Introduction Rapp Trans Introduction by cluster leader - scope of the workshop / topics addressed - self-introduction of participants - Objectives / expectations for the meeting - Questions to be discussed - Programme for the WG Meeting - Communication Rules - main trends and challenges in CEEC / other countries - validation incl. statements from experts & discussion 15:00 18:00 Working Group Session Part 2: Opportunities and risks of creating additional commercial revenues Target 17:30! Introduction by VVO incl. results from inquiry Presentation: The case of the Verkehrsbetriebe Zurich (VBZ) by Dieter Egger, Rapp Trans (to be confirmed) Rapp Trans Presentation: Creating additional commercial revenues - a bouquet of possibilities - some German cases by Arne Beck, BSL Management Consultants Structured group discussion addressing the key questions Moderation: Martin Ruesch 16:30 17:00 Coffee break Presentation: Experiences from an international operator by Michel Quidort, Veolia Structured group discussion addressing the key questions Conclusions 20:00 Dinner

16 Programme: Day 2 (morning) 9:30 12:30 Working Group Session Part 3: Financing issues VTI Introduction by VTI incl. results from inquiry Presentation: Financing PT projects by the EBRD by Guido Bruggeman, independent transport consultant (former EBRD transport specialist) Presentation: Financing by International Finance Institutions - the Sofia case by Metodi Avramov, Public Transport Company Sofia Presentation: Financing PT projects by the EIB by Krzysztof Szyszko, European Investment Bank (EIB) Structured group discussion Moderation: Bertil Hylén 11:00 11:15 Coffee break Presentation: Funding and financing solutions for urban PT in Madrid by Angeles Echevarria, Equipo de Técnicos en Transporte y Territorio S.A. (ETT) Presentation: Equity finance and risk sharing via PPP - the Pforzheim case by Arne Beck, Metropolitan Consulting Group Structured group discussion Conclusions 12:30 13:30 Lunch

17 Programme: Day 2 (afternoon) 13:30 15:15 Working Group Session Part 4: alternative (noncommercial) sources for funding PT Rapp Trans Introduction by Rapp Trans incl. results from inquiry Presentation: Land value capture in Copenhagen by Bertil Hylen, VTI Presentation: PT funding examples from Switzerland - tourism tax and infrastructure funds by Martin Ruesch, Rapp Trans Moderation: Dieter Egger Presentation: EU funding of PT by Sebastian Emig, UITP Structured group discussion addressing the key questions Conclusions 15:15 16:00 Working Group Session Part 5: Main findings & outlook Rapp Trans Conclusions and main findings Moderation: Martin Ruesch 16:00 16:30 Coffee Break 16:30 17:30 Closing session (Plenary) 20:00 Dinner

18 Communication Rules Discussions are the main part of the working meeting Presentations feed the discussions: Keep to the maximum of 15 minutes for the presentation Try to keep the focus on the topic innovative funding and financing Statements and inputs from your experiences are very welcome Please do not use your mobile, blackberry or labtop during the meeting!

19 Results of Questionnaire: Main Problems for Funding low fare revenues / cost coverage (6) difficult to increase fares declining patronage demand for salary increase (costs) municipal budget (4) no/little state aid (3) little funds from region no long term investment plan lack of PT legislation (responsibilities)

20 Results of Questionnaire: Main Problems for Financing lack of public resources (6) limited possibilities for bank loans (4) duration of PSC too short credit rating lack of operator s reserves (2) missing legal framework for PPP on local level slow procedures with EU financing lack of political support

21 Main Trends and Problems Growing welfare, car ownership, urban sprawl and individualisation with complex patterns of activity tend to decrease PT patronage and thus the degree of cost coverage by passenger fares Public funds for PT are being cut back due to general budget restrictions in most European countries and cities. However, at present some local authorities in some MS experience a budget surplus thanks to the thriving economy in general. Indirect (external) beneficiaries (employers, landowners etc.) of PT will be growingly integrated into PT funding, thus internalising their external profits and relieving public budgets Growing liberalisation and competition might help to reduce costs and deficits Concern about the environment, policies of supporting PT and modal shift may increase acceptance of subsidies for PT

22 Main Challenges To create acceptance for the fact that in most cases fare revenues alone cannot fund a PT system To establish reliable and sustainable funding mechanisms for urban PT enabling PT operators to work within fair framework conditions The increasing constraints on public budgets have to be offset by innovative financing models and alternative sources of revenues To identify alternative ways to fund infrastructure and operation, e.g. by identifying external beneficiaries of PT and by internalising their windfall profits To identify measures and options to generate additional revenues, e.g. by commercialising stations or other real estate assets or by applying new business models (advertising, freight transport etc.) To simplify funding structures (too many different PT funds hinder an efficient and integrating PT financing) To find ways and means to finance the urgent renewal of neglected infrastructure, equipment and creation of new services To identify alternative ways to finance infrastructure and equipment, such as Public Private Partnerships or loans by International Finance Institutions

23 WG 3 Market Organisation April, Leipzig, Germany 3rd Working meeting Innovative funding and financing of Public Transport Part 2: Opportunities and risks of creating additional commercial revenues Martin Ruesch, Rapp Trans AG, Zurich, Switzerland

24 Programme Part 2 (15:00 18:00) Introduction/Overview Results from the Inquiry Presentation by Mr. Dieter Egger, Rapp Trans Presentation by Mr. Arne Beck, BSL Management Consultants Structured group discussion Coffee break Presentation by Mr. Michel Quidort, Veolia Structured group discussion Conclusions

25 Introduction/Overview Main challenges regarding additional commercial revenues: offsetting the increasing constraints of public budgets by alternative sources of revenues identifying measures and options to generate additional commercial revenues

26 Introduction / Overview

27 Introduction / Overview direct commercial revenues Fares other business advertising services sale of products premises & facilities freight transport

28 Advertising main supplementary source of income for PT operators in most European cities although the significance of this business varies largely: Paris 11% of total revenues Dublin it is only 1% design or style in line with the political correctness of the PTO

29 Renting/selling of premises and facilities use of premises and facilities by renting: shops and offices spaces for vending machines (e.g. at bus stops) car parks leasing the right of way to use the infrastructure leasing the right to communication companies in order to lay any kind of transmission wires Dublin: buildings are hosting telecommunication masts, fibre optic cables are installed into railway track beds and overhead-lines are used to carry voice and data signals

30 Providing additional services Stockholm: underground metro equipped with a mobile phone network access is rented to telecommunication service expanded to offer WiFi-Internet-access in all bus-stop weather shelters Bucharest: PT operators offer car services to third parties (mechanic, electric, tin, dye work and vulcanisation) Dresden: DVB (PTO) offers Sightseeing-Tours by bus

31 Sale of products use of the extensive distribution network by selling additional goods London underground ticket offices also sell tickets for major tourist attractions merchandising using the image of public transport London underground name and symbol have a very strong brand association with London and many people choose to buy these items as a souvenir Sold items also include scrapped vehicles and station signs or old train seats that have been used for recycling into cushions Berlin s PTO sells underwear bearing the names of metro stations

32 Freight transport Matkahuolto Group in Finland offers freight services in connection with PT making use of the company s comprehensive scheduled bus network on certain lines bus operators get more money from freight than from passenger transport removement of passenger seats to have more space for freight transport in addition to the usual 10m³ luggage room some cities have also investigated freight transport to city centre stores by means of metro/light rail tunnels

33 Results from the Inquiry What kind of supplementary revenues are common in PT? Supplementary revenues range from 2 Mio. 22 Mio. per year (1 13 % of operational costs). Most common (5 out of 7 people) is advertising range from 0,6 Mio. 12 Mio. per year. Quite common (3-4 out of 7 people) are Additional services (maintenance, building, energy) Renting of premises/vehicles. Rare (1 out of 7 people) is selling of products.

34 Results from the Inquiry Supplementary revenues are contribute to the PT financing? Yes, it can contribute. 57 % Yes, it should contribute. 71 % What are the main barriers for supplementary revenues? Strategic reasons 86 % Missing entrepreneurship 71 % Legal obstacles 43 % No market 14 %

35 Structure of group discussion Most of the experts think, that supplementary also commercial - revenues can contribute to PT financing. In which fields do you see still opportunities? What are the strengths of PT with respect to additionnal services? Where are the limits of commercial revenues? Which risks are linked with the generation of commercial revenues? If the frame is optimal Which maximum contribution commercial revenues could/should have?