VBB Verkehrsverbund Berlin-Brandenburg GmbH. Gross-cost incentive contracts an innovative instrument for financing local and regional railways
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1 VBB Verkehrsverbund Berlin-Brandenburg Gross-cost incentive contracts an innovative instrument for financing local and regional railways Dr. Alexander West Center of Public Transport and Quality Management VBB Dresden, 26 November 2010 VBB
2 Agenda VBB a short overview structure and financing of regional and local rail transport procurement and types of contracts incentives schemes VBB
3 VBB: In the heart of Europe Germany Surface: km² Inhabitants: 82 millions 16 Federal States Berlin and Brandenburg 3
4 A big region Berlin: Surface: 891 km² 3,4 Mio. Inhabitants 12 Administrative districts Brandenburg: Surface: km² 2,5 Mio. Inhabitants 14 Counties, 4 County-level cities 419 Cities and communities VBB: Surface: km² 5,9 Mio. Inhabitants Two states 4
5 VBB: significant disparities Highly populated metropolis Berlin Inhabitants: 3.43 million Population density: inhabitants/km 2 Thinly populated area county Ostprignitz-Ruppin Inhabitants: Population density: 41 inhabitants/km 2 5
6 the regional rail network and its performance Regional passenger traffic: 36 million train-km 55 million passengers 40 Lines 330 Stations Long-distance and regional trains 6
7 The structure of regional and local rail transport organization State of Berlin State of Brandenburg VBB Responsible for public transport Regional Railways: 9 contracts in service, 5 train operators
8 Financing of PT in Germany Federal Republic of Germany Regionalisation funds 6.6 billion Infrastructure railway, stations Federal States Transport Associations Train operating companies Other transport companies U-Bahn, Tram, Bus, Trolleybus, Ferry, other alternative services Counties County-level cities 8
9 Sources of finance in public transport in Berlin- Brandenburg Passenger Fares Public sector funds 55 % Mio. 735 Mio. 40 % app. 83 M. 5 % Total: app M. (2009) Base 2009 without investment on infrastructure States: Berlin, Brandenburg Cities / Districts Passengers Fares 2009 VBB-wide 9
10 Competition in the rail transport market Carrier in Germany 78% DB Regio AG Competitors 28% Carrier in VBB DB Regio AG ODEG NEB Arriva 65% 28% 3% 4% 70% awarded in competition 10
11 Types of Contracts net-cost contract gross-cost incentive contract revenue risk: train operating company revenue risk: states of Berlin and Brandenburg currently three contracts currently nine contracts, seven networks in operation two new contracts, operation Dec negotiated contracts tendered contracts 11
12 procurement of rail services: development in the VBB-area first steps 2004 getting familiar with competitive tendering 2009 tendering timetable t discretionary award of contract prevails first experiments with competitive tendering, net-cost contracts new competitors enter the market first experiences with gross-cost incentive contracts Stepwise tendering of the whole regional rail transport in Berlin and Brandenburg gross-cost incentive contracts are standard 12
13 Contracts in VBB-area contract Arriva/PEG DB Regio AG type net cost contract ODEG mbh NEB NEB ODEG mbh OE OLA gross cost incentive contracts ODEG mbh DB Regio AG ODEG mbh DB Regio AG
14 Incentive schemes and performance monitoring demand sales quality payments depend on demand commission on tickets sold payments dep. customer satisfaction payments dep. on quality monitoring 14
15 Demand incentive biding process before operation starts during contract period , , , ,08 train operators offer incremental factors for ridership increases passengers are counted and a reference level is fixed Reference level is compared to actual passenger demand 15
16 Quality monitoring system Catalogue of penalties fixes fines for irregularities regular performance control rides train operator s monthly status report operations vehicles personnel safety information and customer assistance sales marketing cooperation with VBB 16
17 Customer satisfaction incentive 1. every year evaluation of customer satisfaction criteria punctuality cleanliness equipment absence of damages safety seat availability availability of information friendliness ticket purchase in trains 2. monetary values attributed 1 (very good).. 6 (extremly bad) acceptance value A malus range of tolerance neither bonus nor malus bonus 17
18 Customer satisfaction 2009 Regional traffic Total Trains about 2861 users, rating scale 1-6 (1 = very good, 6 = extremly bad) 18
19 What have we achieved? increased performance significant reduction in costs (10-40 %) better monitor on quality 19
20 Thank you! Dr. Alexander West Center of Public Transport and Phone: +49 (30) Quality Management Fax: + 49 (30) west@ D-
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