New Bus Service Framework for Budapest - jsp.com.mk 2012/New... · Two level municipal system (since 1990): ... • OPEX HUF 40 billion ... • Gradual shift to the competitive tendering

New Bus Service Framework for

Budapest high quality for passengers, opportunity for market players

László Sándor KERÉNYI

Head of Transport Strategy Department

BKK Centre for Budapest Transport

László Sándor Kerényi: New Bus Service Framework for Budapest 2

Contents

• Budapest facts and figures

• Current status of the bus sector

• Challenges for better services

• The new model

• Lessons learnt

3

Budapest facts and figures

Budapest / the Capital (since 1873):

• 1.700.000 inhabitants

• 600.000 car trips/day

• Modal Split: 60% personal / 40% public

• 3,56 million passengers/day on BKV

Agglomeration (Pest County, 80 settlements):

• 800.000 inhabitants

• 400.000 car trips/day (66% of all trips!)

László Sándor Kerényi: New Bus Service Framework for Budapest

4


Two level municipal system (since 1990):

• Municipality of the City of Budapest (the Mayor of Budapest)

• 23 municipalities (23 mayors) of 23 districts

Transportation tasks of the Municipality of the City of

Budapest: [National Law LXV.1990. 63.A§ g]

• Public transportation

• Traffic management on the whole road network of Budapest

(4500 km)

• Road and bridge maintenance tasks on roads and bridges

owned by the City of Budapest, or used by public transport

(1000 km)

• Transportation development projects

• Permitting and legal control


5


Road network:

• Full length of the road network: 4500 km

• Length of the main road network: 1200 km

• 9 Danube road bridges (including M0 bridges)

• Over 1000 traffic signaled intersections

Public transport network:

• Length of the public transport network: 1100 km

• Number of stops and stations: 4700

• Rolling stock: app. 3000 vehicles (176 million km run)

• Average occupancy of vehicles: 23,8%

• Average circulating speed of vehicles: 16,7 km/h

• 1,37 billion passengers/year, 5,1 billion passenger km/year


6



New transport management model (since 2010):

7


General tasks of BKK:

• Ordering services of public transport (network planning,

commission, control, issuing and controlling tickets, regional

coordination)

• Operation of roads, bridges and the traffic management

system (development and coordination of reconstruction and

construction works)

• Integrated administration and development of urban

transportation (elaboration and updating of transport strategy,

development and management of projects, professional

coordination)

• Elaboration and operation of general transportation

regulatory systems (parking, congestion charging, heavy

weight traffic charging)


8

Current status of the bus sector


Bus service facts and figures:

• Share: 40%

• 556 million passengers p.a.

• 177 million vehicle kms

• full geographical coverage

• 7/24 service

• 206 bus lines (daytime)

• 38 night bus lines

• Peak hours passenger load above 90% on 80% of the

lines, average passenger load 24.0%

• OPEX HUF 40 billion (EUR 135 mn) per annum

• Total number of passengers 1.39 million per annum

Rate of passenger numbers by vehicle

types

40%

28%

22%

5%5%

Bus Tram Subway Trolleybus Suburban Railway

9


• First-door alighting to

be extended gradually

• Operational and planned

replacement of BKV’s

fixed-rail services

• Mid-term general goals:

• more fixed-rail services

• less bus services

• Automated fare collection to be rolled out

(fully managed by BKK)

• GPS-based AVL system to be mounted on all surface vehicles

(even private operators)

• Gradual shift to the competitive tendering model


http://img.lapunk.hu/tarhely/sefcsikgergelyvf/galeria/699055.jpg

10



Bus fleet facts and figures:

• 1,353 buses

• 624 pcs „articulated” (18m-long)

• 698 pcs „solo” (12m-long)

• 31 pcs „midi” (8m-long)

• Average age of fleet:

18.13 years

• BKV’s subcontractors:

2 operators (1 private,

1 government controlled)

• own depots 0

50

100

150

200

250

300

350

400

11



IK 260

377 pcs

IK 280

270 pcs

IK 435

171 pcs

IK 415

160 pcs

Volvo 7700 A

150 pcs

IK 412

114 pcs

http://img3.lapunk.hu/tarhely/sefcsikgergelyvf/galeria/699013.jpg

12


Bus fleet vs. services:

• Many break-downs and cancellations

• 75% high-floor

• 83% no A/C

• Mostly EURO-0, up to EURO-III

• Deteriorated outlook, passenger area


13



Bus depots of BKV:

• 4 bus depots

• 1 trolley bus + bus depot

• 300-350 buses per depot

• all owned by BKV

• on-site petrol stations

• on-site car wash

• Full Wi-Fi coverage (as part of the AVL system „FUTÁR”)

• Not to be sold – can be utilized by future private operators

14

Challenges for better services


Main questions related to the new model:

• How to deal with current technical conditions of the fleet?

• How to involve private funding?

• How to improve services for passengers?

• How to generate competitive pressure for BKV?

Main aims of the new bus model:

15

The new model


• Hundreds of low-floor, air-conditioned,

EURO-5 or EEV buses to be put into

operation until 2014

• No CAPEX

• Competitive tendering

• Cheaper, more efficient, better

• Risk-sharing between BKK and the

operators

• BKV’s bus operations: competitor and

benchmark

16

The new model


Competitive framework:

• EU public procurement directives, HU public procurement law

• Two phases:

• Prequalification: open for application for years – since

21/10/2011

• Competitive tendering: actual call for tender for those

operators who have successfully passed the pre-

qualification

• First tender due: December 2011

• „Larger” and „smaller” fleet contracts

• Contract term depending on age of fleet; with new buses

planned term: 8 years

• Planned contract sizes between 50 and 300 buses

17

The new model


Service level agreements:

• Punctuality

• Cleanliness

• Passenger comfort (heating, A/C)

Strict control regime:

• Incentives and penalties – „bonus-malus” (stick / carrot)

• Ever increasing service level control

• BKK-managed AVL system to track each vehicle

Target: high quality services

18

The new model


Gross cost contracts:

• Km-based service fee

• Service fee to be reviewed per annum

• Fare revenue to be collected by BKK

Contract term:

• Based on turnover of CAPEX and 1370/2007/EC

• Average planned contract term 7-8 years

• Option to extension

Risk-sharing, spreading of costs:

• Minimal standards to be set

• Application of greatest possible freedom for operators

Target: acceptable service fee

Costs:

19

The new model


Factors on possible price increase Potentials to decrease costs

• Higher amortization

BKV’s buses are amortized to

zero now

• Higher maintenance costs

Higher qualified maintenance

staff and more expensive

• More diesel used by new

buses

New technology, A/C increases

fuel consumption

• Risks

Diesel price increase, use of

BKV depot, trade unions

• Experience of operators

Experience with cheaper

buses, existing processes,

workflows

• More efficient processes

Maintenance, roistering, ever

increasing cost optimization

• Risk coverage

Overhead costs spread

across other activities

20

The new model


Phase 0

Tenders

150 pcs 450 pcs 750 pcs 900 pcs

• Phase 0: replacement of BKV’s subcontractor contracts (until 1/5/2012)

• Tenders: gradual and continuous increase of number of contracts and operators

• Target: more than half of the fleet size are new buses on the new tender regime

„urgent”

Public

procurement

preparation

Service

provision

Roll-out of the new service framework:

The first tender: under time pressure…

21

The new model


Phase 0 (under time pressure) Later phases service framework

• BKK-BKV consortium to procure

• Short-term contract(s) (1-2 years)

• Small fleet size (25-50)

• Acceptance of high-floor/low-entry

buses

• „Compromises” on technical

expectations

• Subcontracted to BKV

• Direct contract award

• Service to start on 1/5/2012

• Buses to be distributed across the

Budapest bus network (mixed with

BKV buses)

• Tenders from 1/5/2012

• BKK to procure

• Long-term contracts

• Smaller and larger fleet sizes

(100-300)

• Only new buses

• High quality expectations

• Service contract with operators

• Competitive tendering

• Redistribution of buses on the

network

22

The new model


The first tender: urgent need to act quickly

• BKV’s Public Service Contract and BKV subcontracts

expire on 30/4/2012

• Before 1/5/2012 BKK had no authority to conclude

procurement and award contracts

• BKV has no extra 110 buses for replacement

• New contract needed to provide capacity

• Time pressure leads to phase 0 „contradictions” with the

new service framework

23

The new model


Activities

BKK internal decisions

Prequalification

BKK to draft tender documents

Submission of applications

Evaluation of applications

Negotiations with applicants

RFP

Decision by BKK/BKV

Room for appeal

Contract Award

Preparation for Service Provision

Week

November December

44 45 46 47 48 49 50 51 52 1 2 3 4 5 6 7 8 9 10 11 12

January February March April

13 14 15 16 17

2011 2012

Service contracts Part 1 to 6

24

The new model


Parts Winner Number of

buses

Contracted

performance Pricing method Details of the buses

1. - - - - -

2. VT-Transman

Kft. 25

2 000 useful bus

km/year

+ 20 % optional

Useful bus km with

penalties

Used

Low floor

With airconditioning

3. VT-Transman

Kft. 25

2 000 useful bus

km/year

+ 20 % optional

Useful bus km with

penalties

Used

Low floor


4. - - - - -

5. VT-Transman

Kft. 25

825 useful bus km/year

+ 100 % optional

Useful bus km with

penalties

Used

Partially low floor


6. VT-Transman

Kft. 25

825 useful bus km/year

+ 100 % optional

Useful bus km with

penalties

High floor

Without air-conditioning

25

The new model


Service contracts Part 7 and 8:

• Part 7: 25 new solo buses + 200% optional

• Part 8: 25 new articulated buses + 200% optional

Specifications:

• Low floor, with ramp

• Minimum EEV engine

• Additional points for the alternative propulsion

(CNG, hybrid, electric etc.)

• Air-conditioning

• Built-in CCTV security system

• Built-in passenger counter system

26

Lessons learnt


Main lessons after the first tenders:

• No real bonus/malus: only penalties can apply due to the

Hungarian procurement procedures → new regulation?

• BKV is not allowed to bid on these procurements → New

prequalification tender without BKV

• Only Hungarian bidders → minimum fleet size to bid for

new market is around 200

• No Hungarian buses → ???

No change:

• Integrated bus fleet control remains in the responsibility of

BKK (FUTÁR system will be integrated on all vehicles)

• Continuous quality control to be performed

Thank you for your kind attention!

27

László Sándor Kerényi

Head of Transport Strategy Department

[email protected]

Documents

New Bus Service Framework for Budapest - jsp.com.mk 2012/New... · Two level municipal system (since 1990): ... • OPEX HUF 40 billion ... • Gradual shift to the competitive tendering