Swedish PT Market aspects:

Transcription

1 Swedish PT Market aspects: A brief overview of the bus and rail passenger sector Anders Wretstrand K2 Swedish Knowledge Center for Public Transport Presentation at the K2 Sweden meeting at Napier University

2 Agenda Background market aspects Railway sector Bus sector

3 Market Aspects - Sweden The PTX2 aim: doubling of the PT market share! sustainable urban development trends common aims, collaboration PTA - OP increasing net costs: >50% subsidies Recent re-regulation stronger PTA focus on strategic planning open for market initiatives Market concentration a few, large (foreign state owned!) operators Deutsche Bahn/Arriva, SNCF/Keolis, Caisse des dépôts et consignations+veolia/transdev, NSB/Nettbus, Nobina First, a step back

4 Challenges Source: Rye & Wretstrand

5 Challenges II Source: Rye & Wretstrand

6 Challenges III Source: Rye & Wretstrand

7 Challenges IV Further international operators still bidding and hoping for first contracts, like Abellio Municipalities and counties (regions) have financial problems estimated need for tax raise 1.5-2% will only maintain current services (all local/regional public obligations) Operators have some financial challenges (data from 2010): Turnover MSEK Result MSEK Res % 2012 margin 2012 t.o margin 2013 t.o margin 2014 t.o. Company Nobina (2011) ,3% 2,0% ,9% ,9% Keolis ,6% -0,1% ,6% ,3% Veolia ,9% 4,6% ,7% ,9% Arriva ,5% -1,3% ,1% ,1% Nettbuss ,8% Total ,6% Source: Rye & Wretstrand

8 Regulatory changes: SJ Statens Järnvägar State Railways Market Passenger services Regional (nonprofitable) SJ holds monopoly and receives subsidies Procurement by competitive tendering (competition for the tracks); since 1990 Open access (competition on the tracks); since 2011 Inter-regional (nonprofitable) SJ holds monopoly and receives subsidies Procurement by competitive tendering (competition for the tracks); since 1993 Open access (competition on the tracks); since 2011 Inter-regional (profitable) SJ holds monopoly Open access (competition on the tracks); implemented step by step Freight services SJ holds monopoly Open access on all lines (competition on the tracks); since 1996 Source: Alexandersson, 2015

9 Regulatory changes: SJ Statens Järnvägar State Railways Employees Vertical separation 140 Million train-km employees operations ~ in the rail industry Source: Berggrund, 2012

10 Regulatory changes: vertical separatation Transportstyrelsen 2009 Järnvägsstyrelsen 2004 Järnvägsinspektionen Järnvägsinspektionen Trafikverket 2010 Banverket 1988 Banverket Banverket 2001 SJ Tågtrafikledningen 1996 SJ AB Infranord 2010 Vectura 2009 SJ SJ SJ 2001 Green Cargo AB Jernhusen AB ASG AB TR EuroMaint AB Swebus Sweferry Unigrid AB Nordwaggon AB TraffiCare AB Source: Berggrund, 2012

11 Recent development Veolia/Transdev: Snälltåget (Schnellzug), Stockholm- Malmö, Malmö-Berlin Skandivaniska jernbanor Blå tåget, Luxury/tourist, Stockholm- Gothenburg Tågåkeriet Low-cost, low standard, Gothenburg- Dalarna County MTR Large-scale, high quality, Stockholm- Gothenburg

12 Bus sector - historical development Private companies from the start Linjebuss -> Connex -> Veolia -> Transdev Ödåkra buss -> Arriva -> Arriva (Deutsche Bahn) Orusttrafiken -> Nettbuss (NSB) Statens Järnvägar (State railways) SJ Buss (+Post bus+gdg) -> Swebus -> Stagecoach -> Concordia -> Nobina Community bus- and tram companies ML, SL, GS, VL, LLT (still publ. owned) T-Buss, SL Buss, Näckrosbuss -> Busslink -> Keolis The forming of CPTAs (THM): CPTA companies in each county to achieve better regional services But Source: Rye & Wretstrand

13 Bus sector - challenges Slow progress Scandinavian model with gross contract needed to be developed Low profit increasing costs New legislation was proposed

14 Suggested solution 2009/2010 Transport policy Availability, accessibility. Market initiative Announced supply, no subsidy Public response Fulfilling the policy through contracting Reactions: criscisms from both large operators and public bodies! Hooray from small enterprises, some municipalities and neoliberals! Source: Rye & Wretstrand

15 Legislation Transport policy Availability, accessibility. Public response Fulfilling the policy through contracting Market initiative Announced supply, no subsidy Reactions: general satisfaction! However: public bodies compete on-the-road with private sector Source: Rye & Wretstrand

16 Co-op contract Tomorrow Stakeh. Relation Public Owners Political board Public PTA Democratic control Hierarchic control Operator I Operator II Model: van de Velde et al., Strategic Transport policy Social policy Discussion Discussion Mobility Availability Tactic Price Price Commercial Routes Time tables Routes Time tables services Vehicles Vehicles in sync Operational Sales Information Sales Information with Staff Staff public Veh., infrastr. Veh., infrastr. interests?? Source: Rye & Wretstrand

17 The regulatory cycle Process Return to public ownership in reponse to high perceived cost of service Regulated public monopoly Process Free entry or franchising to combat regulatory capture and budget burden Regulated private local monopoly Competitive private supply Gwilliam (2008), based on Needham (1983) Process Direct regulation or quality agreements in response to local pressures Private sector area monopoly Process Consolidation by merger or success in franchise competitions Source: Rye & Wretstrand

18 Procurement market - Sweden For over 20 years, the majority of local and regional public transport in Sweden has been provided through procurements The Scandinavian contracting model. Today, about 96% of all bus services (except for interregional coaches and commercial holiday tours) are subsidized (>50%) and regulated: 350 contracts between the 21 PTAs (with few exceptions) 92 commercial operators > 80% of the volume contracted out to very large firms Contract size buses year contract periods Source: Danielson & Wretstrand

19 Contract Principles - General 1. Pure cost-based models cost/veh.km, no incentives 2. Hybrid models forecasts of ridership, cost/veh.km, no incentives 3. Pure cost-based models ridership and/or service incentives 4. Hybrid models ridership and/or service incentives Hensher et al., 2013 Source: Danielson & Wretstrand

20 Contract Principles - Sweden 1. Pure cost-based models cost/veh.km, no incentives 2. Hybrid models forecasts of ridership, cost/veh.km, no incentives 3. Pure cost-based models ridership and/or service incentives 4. Hybrid models ridership and/or service incentives Different size and combination, CSI as well as ridership Source: Danielson & Wretstrand

21 Contract Principles - Sweden In Sweden, numbers 1 and 3 are dominating 41% of the volume of vkm consists of gross-cost contracts without any incentives at all 45% of the volume consists of low incentives (< 25% of payments) 14% consists of high incentives ( 25%) Source: Danielson & Wretstrand

22 Example: Stockholm - Objectives SL has defined three main objectives for the development of future transport services financial efficiency increased ridership customer satisfaction Example, Stockholm city economic efficiency improve! market share from 37 % to 42 %! 100% accessible vehicles for older and disabled! 100 % use of renewable energy! customer satisfaction unchanged! Source: Danielson & Wretstrand

23 Example, governance and contracting: VBP Model Compensation per Verified Boarding Passenger verified boarding AND paying passenger! % of the remuneration relate to VBP Fares structure and levels decided by PTA ticket income kept by PTA Source: Danielson & Wretstrand

24 VBP Model II Selected preconditions set by SL: Route and frequency framework Vehicle and environmental requirements Minimum customer satisfaction requirements Last year s number of VBP (vbp) Index model (inflation) OP s bid: Network proposal Annual total cost (Tc) Only one VBP price (Tc/vbp), same for all years Source: Danielson & Wretstrand

25 Ksek Economic Forecast Costs and incomes Con income/pta cost VBP PTA ticket income PTA net cost VBP Con cost Con revenue VBP PTA net cost prod Source: Danielson & Wretstrand 1 USD ~ 8 SEK

26 Operators likely to adapt The operator will probably: optimise supply - demand verify all tickets try to minimize number of vehicles in peak use larger vehicles instead of increased frequency try to increase ridership on short routes not be willing to increase frequency towards the end of the contract period Source: Danielson & Wretstrand

27 Sek/VBP Scenarios 16,00 15,50 Sek per VBP passenger Best case scenario: market share reduced 15,00 14,50 14,00 13,50 Worst case scenario: more passengers during peak 13,00 12,50 Increased VBP registations and population growth Inc. VBP reg, pop. growth, increased peak hour Inc. VBP reg, pop. growth, increased market share Inc. VBP reg, pop. growth, increased peak hour and market share Inc. VBP reg, pop. growth, decreased market share No changes att all Source: Danielson & Wretstrand

28 Does the VBP Model meet the objectives? Cost efficiency yes More passengers in general yes in some situations no increase ridership during peak hours not tempting for operators Satisfied customers - yes/no Better for older and disabled no Improved environment yes/no Source: Danielson & Wretstrand

29 Observation in Tenders Risk premium so far - remains unchanged Number of bids possibly fewer - a few large tenderers Content quality ambitious bids Varying planning and operations solutions - both good and bad Cost effects lower price than before Source: Danielson & Wretstrand

30 Experiences after 1-2 Years Norrtälje Area Two express routes New type of buses Satisfied customers Poor punctuality Reduced emissions Better traffic management Contract design and implementation contributes to target objectives Northern Area A lot of start-up problems Now acceptable standard Development of ridership uncertain Major losses for the OP Mismatch: supply - demand Too early to evaluate Source: Danielson & Wretstrand

31 Reflections Coordination between services? There might be conflicts between parallel production-based and VBP contracts The regime might be labelled as hybrid Flat fare, passengers pay the full ticket cost Concentration and competition Fewer bids liquidity and perseverance required Regulatory skills required Formulate long term strategic goals Define minimum service level Etc etc Source: Danielson & Wretstrand

32 Contact information Anders Wretstrand K2 / Lund University anders.wretstrand@tft.lth.se

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