Public Private Partnership for Urban Transport – London, Singapore,Bogota all cities have done it!

The Mayor of Bogota, Columbia, Enrique Penelosa, was a star a few years ago when he fixed Bogotá’s public transport system through the Bus Rapid Transit (BRT) system. A city that had been plagued with traffic congestion and air pollution, showed the world how a powerful mayor office and a very systematic private sector inclusion can transform a city’s transportation problems. From a very high personal vehicle use, Bogota made a drastic shift to use of the BRT, not just relieving the traffic congestion, but also saving considerable carbon emissions. The city offered a safe and reliable transport solution within a short period of time, thanks to a public private partnership (PPP) model for operating urban public transport.

Its quite surprising to see that the people who hailed the Bogota example and Mayor Enrique Penelosa for his progressive foray into the public-private partnership for public transport, are the ones who are suspicious and critical of a PPP model for Pune’s bus service.

  • Let’s look at some facts about Bogotá’s BRT PPP model:
    Bogotá’s mayor office and their government department of Road and Transport invests in the infrastructure, like bus stops. A consortium of private entities operate four lines and the seven feeder bus lines to these four main lines. Investments for buying buses, Fare collection and all the allied equipment and systems required to operate the bus service are done by the private agencies, including. Setting up and running a public transport control centre.
  • The entire urban transport system in Bogota is managed by three sets of teams namely,
    Regulators – Ministry of Transport and Municipality of Bogota. These agencies formulate policies.
    Managers – The TransMilenio and the Institute or Department of Urban Transport. These agencies generate specific route plans, constructs and maintains infrastructure including pedestrian infrastructure, sidewalks etc.
    Operators – Are different private companies that invest in and operate routes as per the directive given by the two entities above. The Operator companies are either single entities or a consortia of companies that have national and international investors and who own buses, hire drivers and manage maintenance personnel.
  • As with any public transport across cities, the investment in the initial infrastructure of the BRT remains un-recovered with the revenue from the fares and operation. This is generally the norm and public expenditure has to be made despite this. The money for this investment came from fuel tax, local tax contribution, national grant, World Bank grant.
  • For the operation of the BRT, no subsidies or public funds were given to the private operators. But the entire ticketing fare revenues are retained by the private operators. However, any additional costs and investments that need to be done is also borne by the private operators. There is a revenue sharing contract that allows the private entities are withdraw funds at a certain percentage of passenger fares, while contributing to the administrative fund.
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Similar to Bogota, numerous cities, through various methods, tests and trials, have arrived at suitable PPP models to improve their respective urban transport system. Right from London to Singapore, almost all cities that boast of a good transportation system, have some or the other form of PPP models in place.

Prof. Shivanand Swamy and Gautam Patel had presented a paper in the 2nd Asian BRT conference, highlighting various aspects and issues related to use of PPP models in operating public transport in cities of India. Ahmedabad, for one, has attempted this model to improve urban transport in the city.
Concept of Gross Cost Contracts and Net Cost Contracts has been explored to see which PPP models can suit Indian conditions and what type of urban transport. Apart from Ahmedabad, Indore, Jaipur have all attempted to work with the PPP model for urban transport and we have the learning from these available for study.

Pune has just begun its journey in trying out public-private collaborative model to fix its bus system. To completely debunk the idea is like debunking the urban transport solution of most successful cities of the world. At the same time, to think that the first model proposed will be the final and successful model is also foolishness. PPP models in urban transport is a new way forward and Punekars should welcome it. As we try it out, its problems, pitfalls will become apparent. It is at this juncture that we really need experts and political parties to join forces to find a model that will most suit and benefit the city of Pune. If an initiative is killed in its nascent stage, political will and administrative confidence loses its impetus to work for better solutions. Then, all we, Punekars will be left with, is our everyday rant that “Pune needs a good public transport system” for many more years to come.

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