The Transport Syndicate of the Paris Region (STIF)

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1 Thierry DESCLOS Abstract Urban transport in the Paris region (Ile de France) is organised differently from the rest of the country primarily because the Transport Syndicate of the Ile de France (STIF) is a transport authority responsible for the whole region on all modes of ground transport, and also because the operators in central Paris are not yet chosen by a bidding procedure as in other regions in France. STIF was originally set up by the central government which chaired it until it decided to pull out in 2005 as part of a decentralisation process and transferred the presidency of the board to the elected president of the Paris region. The relationship between STIF and operators has been based on contracts since Over the years, the impetus has been put by STIF on expanding and improving the supply and quality of transport services. As regards financing, the situation is similar to the rest of the country, with the transport tax (VT) levied on companies and administrations being the main resource to finance urban transport. Introduction The Paris region (Ile de France) has a population of around 11.6 million inhabitants. In 2011, public transport modes were used by more than 4.1 billion passengers (Figure 1). Three main operators manage transport in Paris, two of them public companies. The RATP Group manages the underground métro, and some underground trains (RER), Figure 1. Paris Metro Three main operators manage transport in Paris, two of them public companies. The RATP Group manages the underground métro, and some underground trains (RER), buses and trams; the national railway company (SNCF) operates mainly suburban trains and some RER; and OPTILE, an association of bus operators, runs buses in the suburbs. buses and trams; the national railway company (SNCF) operates mainly suburban trains and some RER; and OPTILE, an association of bus operators, runs buses in the suburbs. Governance is an important issue in the region, which covers more than 1,300 towns and villages. The loi d orientation des transports intérieurs (LOTI) of 30 December , the framework law on transport, which decentralised transport responsibilities to elected local authorities, created the concept of urban transport 79

2 authority (AOTU), of which some 281 exist today in France. The transport authorities are created by locally elected town representatives who decide upon their geographical boundaries (PTU) and are entitled to levy transport tax (VT). Authorities organise urban transport, formulate mobility plans, define the level of service offered, set the fares and the rate of VT, finance the development of the networks and choose the operators. The situation in Paris is unique as its legislative basis is not the LOTI but the ordinance of 7 January 1959 by which the central government created a public authority in charge of organising public transport for passengers and set its geographical boundaries (PTU). Thus, contrary to other regions, a single authority is in charge of all modes of transport for the whole region. The Institutional Structure of STIF STIF is a syndicate composed of the Region (Ile de France), the city of Paris, the seven départements (counties) of the region and other partners. Its board has 29 members and the Region holds the absolute majority with 15 representatives. The city of Paris has five and each of the départements one. There is one representative of the cooperation set up by the towns and villages of the region 2, and one representative of the private companies paying the transport tax (VT). A representative of other stakeholders (labour unions, employers organisations, consular institutions, users associations and municipalities taking part in the financing of transport services in the region) sits on the board but does not have voting power. Since its creation in 1959, under the name of STP (Transport Syndicate of the Paris region), STIF has evolved gradually. With the law of 13 December 2000 the Paris region became a member of its board, and on 1 July 2005 the President elected for the Paris region became its chairman in place of the government representative (the Préfet of the Ile de France), thus completing a process of decentralisation from the central government to the Region. STIF is in charge of organising, coordinating, modernising and financing public transport. As such, it formulates the urban mobility plan (PDU), determines the routes, chooses and appoints the operator 3, sets the operational, management and financing guidelines, and ensures the coherence of investment programmes. It also sets the rate of transport tax (VT), decides on fares policy and oversees school transport, transport on demand and regular passenger boat transport. Managing parking is not among its responsibilities as local mayors set the rates and collect the proceeds. The government sets the amount of police fines (for traffic and parking) and collects them. In the Paris region, 50% of the proceeds from fines goes to STIF, 25% to the départements and the rest to the Region. Driver licensing and vehicle registration are other responsibilities that come under the central government. STIF is entitled to recruit its own personnel and has around 330 staff (as of December 2012). STIF is in charge of organising, coordinating, modernising and financing public transport. As such, it formulates the urban mobility plan (PDU), determines the routes, chooses and appoints the operators, sets the operational, management and financing guidelines, and ensures the coherence of investment programmes. 80

3 Financial Resources The financial resources of STIF come mainly from the transport tax, fares, the contributions of its members 4, the proceeds of road traffic fines collected in the region, public subsidies, the fees collected for services rendered and the compensation given by the government for school transport. The Transport Tax Like other urban transport authorities in the country, the main financial resource of STIF is the transport tax (VT), created in This tax is paid by employers (private and public) employing more than nine staff, located in the area of jurisdiction of the AOTU, as a percentage of their wage bill. The rates are decided by STIF, within ceilings fixed by the government and the percentage set is applied to the total payroll. Three rates are applied within the area under STIF s purview: 2.7% in the city of Paris and Hauts de Seine, 1.8% in Seine Saint Denis, 1.5% in the other départements. They have all been increased by 0.1% since July 2013, as stated in the Budget law for 2013 period. situation and the economic environment prevailing in the metropolitan area considered. The amount collected varies greatly from one transport authority to another due to different economic conditions. VT is often subject to criticism primarily because companies of less than nine employees do not pay it even if they often are located in town centres and benefit fully from urban transport facilities (small businesses for example). Most of the major transport authorities including STIF have set their VT level to the ceiling allowed by central government and are currently looking for new resources and considering increases in fares. The transport tax (VT) is a tax collected locally and used locally. Its rate is dependent on the national economic situation and the economic environment prevailing in the metropolitan area considered. The amount collected varies greatly from one transport authority to another due to different economic conditions. The transport tax (VT) is a tax collected locally and used locally. Its rate is dependent on the national economic The financial resources of STIF come mainly from the transport tax, fares, the contributions of its members, the proceeds of road traffic fines collected in the region, public subsidies, the fees collected for services rendered and the compensation given by the government for school transport. Fare Revenue STIF is in charge of setting the fares, based on a zoning principle. Five zones exist (eight existed initially but the number was reduced gradually), zones 1 and 2 being central Paris, the fare increasing the further you go away from the centre 5. This system is criticised, however, for favouring the most well-off residing in the central area. The objective of the STIF board is to reduce the number of zones to one and put in place a unique fare system based on the fare for zones 1 and 2. But the estimated financial losses of between 500 and 600 million need to be addressed. A unique zone system already applies 81

4 over the weekend as passengers can travel over the whole network using whatever pass they have. STIF is totally free to set fares. However, as part of the consultative process, it set up a committee in 2001 comprising users associations, elected representatives, trade unions and businesses paying transport tax. Fares do not always keep pace with inflation and STIF tends to modulate fare increases according to the zones, with more increases in the central zone (zones 1 and 2). This modulation is publicly acknowledged when increases are decided. Reimbursement of Season Fares by Employers Public and private employers in the region must reimburse their employees 50% of their urban transport season fares, according to the law of 4 July The reimbursement is made monthly when salaries are paid. Subsidies from the Central Government For investments in transport, the subsidies from central government are set in the project contract between the central government and the Region (CPER). For operations till the end of the year 2000, the main subsidies came from the government. Since it left the STIF board in July 2005, it only compensates school transport. for the coming 20 to 30 years. It is revised every 15 years and other planning documents must be in accordance with it. the project contract between the central government and the Region (CPER) sets for a period of seven years ( ) the financial involvement of both partners. The central government finances only the projects planned in the SDRIF. These documents mandate political decisions on transport and STIF s expertise is required for their preparation. The Region decides on investments but the central government has a veto right on the SDRIF. For projects not in the SDRIF, the Region can proceed on its own through contracts with the counties (départements). Overall, the system is such that the Region and central government have to come to an agreement on major investments of public interest. Once decisions are taken, STIF is in charge of conducting the studies and all the different phases of a project require its approval. As regards the rolling stock, decisions are taken by STIF, with no involvement of central government or the Region. RATP or SNCF are consulted for technical expertise and are in charge of the acquisition process. Framework for Investment Decisions and Financing Decision Process for Transport Investment Several documents set the framework for transport investments (Figure 2): the master plan (SDRIF), prepared by the Region and approved by the central government, plans the major infrastructures (not only transports ones) Overall, the system is such that the Region and central government have to come to an agreement on major investments of public interest. Once decisions are taken, STIF is in charge of conducting the studies and all the different phases of a project require its approval. 82

5 Figure 2. Dedicated Bus Corridor In 2012, the amount of investments was 640 million, financed as follows: 40% loans, 17% auto-financing, 12% subsidies, 31% fines. Service Planning and Operations Service planning is done through the urban mobility plan (PDU) formulated by STIF and contracted to operators through four-year contracts. Investment Financing Investment cost is shared among the central government, local authorities, STIF and operators according to the type of investment: the creation of lines or extension of existing ones is financed through: * the CPER. For , 3 billion will be spent (60% financed by the Region, 25% the central government, 15% départements). * specific contracts between the Region and départements (CPRD). For , it amounts to 1 billion (50% the Region, 50% départements). for local improvements to buses, stations, accessibility and public information, subsidies come from the Region and STIF, with operator s participation. the rolling stock is financed by STIF in two ways: a subsidy is given to the operators and the provisions for depreciation are financed through the contract between STIF and operators. As regards rolling stock for RATP, STIF has been financing 100% since For SNCF, it finances 50% additional rolling stocks and 100% new ones 6. STIF s contribution is set in the contract with the operators. Contrary to other French urban transport authorities, STIF can only choose the operators in the suburbs, but not in central Paris. This situation is bound to evolve due to recent EU requirements. On 3 December 2009, EU regulation n 1370/2007 on public transport services of passengers by rail and roads came into force, and as a result, operators will have to be chosen after a bidding procedure in the future. As a consequence, from 3 December 2009, new services will have to be operated either by STIF or an operator chosen after a bidding procedure. Existing services will be opened up to a bidding procedure gradually: the bus network on 31 December 2024, tramways on 31 December 2029, undergrounds on 31 December So far no specification has been made on the duration of future contracts and STIF has not yet decided on the duration of contracts to be offered to the operators. For the rest of the country, where the contracting system is based on bidding procedures, the duration is eight years. Contrary to other French urban transport authorities, STIF can only choose the operators in the suburbs, but not in central Paris. This situation is bound to evolve due to recent EU requirements. 83

6 The reform has also ownership consequences and a transfer of assets between STIF and RATP has been organised. Ownership of the rolling stock was transferred from RATP to STIF and ownership of the underground infrastructure assets transferred to RATP 8. The law allows STIF to take control of the bus depots or the maintenance facilities if it wishes. Framework for Operations Financing Decision Process for Operations Financing Since 2000, operators have signed a multi-year contract with the STIF which specifies the extent of the services offered, the quality to be delivered, the amount operators are paid and the profit-sharing mechanisms. The contract also includes an incentives/penalties system based on performance indicators, with a total potential liability of 28 million. Contracts are fixed price contracts and payments are made by STIF to the operators every month (Figure 3). The latest contracts signed with RATP and SNCF in March and April 2012 are more demanding on the quality of services offered, the number of trains running effectively, punctuality and regularity 9 during rush hours, information delivered to travellers 10, cleanliness of the stations, and accessibility for the disabled. More stringent criteria are set for incentives. Figure 3. Passengers waiting at a Tram Station Since 2000, operators have signed a multi-year contract with the STIF which specifies the extent of the services offered, the quality to be delivered, the amount operators are paid and the profit-sharing mechanisms. The contract also includes an incentives/ penalties system based on performance indicators, with a total potential liability of 28 million. Contracts are fixed price contracts and payments are made by STIF to the operators every month. The opinion poll conducted yearly is widened in scope and more weight is given in assessing the overall performance (120,000 passengers will be interviewed each year). As regards the underground, STIF will work with 750 lines witnesses belonging to users associations. There are more indicators to assess the services and they are more precise (114 for RATP and 54 for SNCF). Quality is measured by the operators but STIF conducts its own assessment and studies from time to time during the year. Every year, an amendment to the contract is made, taking into account new services offered. Meetings are held between STIF and the operators every three month on areas such as quality of service, transport offer, investments and communication. As far as OPTILE is concerned, the contractual relationships have also evolved. Contracts are more individualised and quality focused and the financial contribution of STIF is calculated on the service real costs. Since 2003, STIF has organised bidding procedures for the new services in the suburbs. 84

7 Examples of indicators 1) Punctuality Punctuality represents the number of passengers who arrive on time or with a delay of less than five minutes to their final destination. It is calculated on all the lines and during the whole day. A goal is set for each line, taking into account specific constraints. Thus, it is 94% for the RER line A, 94% for the B line, 93% for the C line, 92.5% for the D line and 95% for the E line. The operator receives an incentive if the result is above the target and a penalty when it is not met. 2) Cleanliness A synthetic indicator on the cleanliness of the stations, the maintenance of the equipment and information facilities has been designed. For example, in the metro, RATP is requested that 90.7% of the stations meet the level of cleanliness set as a reference, as well as 90.5% of the trains. 3) Availability of escalators and lifts in the metro The target set is 97% of escalators and lifts working. This indicator is very important for escalators and lifts affect greatly the quality of service and local elected representatives are watching closely. Operations Financing The amount spent on operations was 8.3 billion in The resources came from transport tax ( 3,120 million, 37.4%), fares ( 2,524 million, 30.3%), local authorities( 1,687 million, 20.2%), employers ( 773 million, 9.3%), other resources: advertising, proceeds of fines ( 232 million, 2.8%). The breakdown of expenditure is as follows: 54% for RATP, 35% for SNCF, 11% for OPTILE, 3% for others (Figure 4). Since 2000, the total amount of spending on transport in the region has increased by 67%, with significant increases after decentralisation of STIF. Figure 4. Operations Financing Financial Sources for Operations (2011) Expenditure by Operator (2011) fares, 2,524m, 30.3% transport tax, 3,120m, 37.4% RATP 54% OPTILE 11% local authorities, 1,687m, 20.2% employers, 773m, others, 9.3% 232m, 2.8% SNCF 35% 85

8 Conclusion The transport governance of the Paris region has matured and evolved gradually over the years. STIF has progressively asserted its role since decentralisation. EU requirements and the Grand Paris project, announced in 2009 to improve trips from suburb to suburb via the creation of a circular automatic metro and improvements to the existing network, imply more evolutions to come. One change should take effect soon. The decentralisation law currently debated in Parliament contains an article on urban transport authorities (AOTUs) which, if voted in, will transform them into sustainable mobility organising authorities (AOMDs), giving them increased responsibilities. Notes 1 The law is now codified in the transport code. See notably article L 1241 and following concerning the Paris region 2 This representative is justified notably by the fact these towns and villages finance the bus system in the outer suburb for around 60 million. 3 So far this only applies for the suburb as Paris operators still retain a monopoly for a few years 4 The percentages set by decree are: The Region: 51%, City of Paris: %, the rest being shared among the départements according to their population. These percentages are applied to cover the remaining expenses once other resources have been used. 5 A monthly pass for the central zones (1 and 2) costs and for zones 1 to 5, (as of May 2013) 6 In the past, operators used to finance their rolling stocks 7 Trains operated by the SNCF are not involved in this reform but will be in the coming one on passenger railway. 8 RFF, the railtrack operator, owns railway tracks 9 Regularity and punctuality are measured line by line 14 days a month with the Siel data system, developed by STIF, 10 A Master Plan has been contractualised with operators Thierry Desclos is a senior urban transport specialist at the World Bank. He works at the transport anchor (TWITR) where he is on a secondment from the French Ministry of Ecology, sustainable development, transport and housing. At the French Ministry of Ecology, sustainable development, transport and housing, he was in charge of the urban transport and railway division. He was also deputy head of the international affairs division and in charge of the Union for the Mediterranean project. He also worked for five years at the Ministry of Social affairs where he was in charge of a programme to improve the governance and performance of health agencies. He has a master s degree in English and was educated at the French national civil service school (ENA). 86