the organizing of public transport serviceunder service contracts with public planning ·...
TRANSCRIPT
THE ORGANIZING OF PUBLIC TRANSPORT
SERVICEUNDER SERVICE CONTRACTS WITH PUBLIC PLANNING
Emri Juli HARNIS1 and Shoshi MIZOKAMI2
1Member of JSCE, Ph.D. Candidate, Dept. of Civil and Environmental Eng., Kumamoto University (2-39-1, Kurokami, Kumamoto, 860-8555, Japan)
E-mail: [email protected] 2Member of JSCE, Professor, Dept. of Civil and Environmental Eng., Kumamoto University
(2-39-1, Kurokami, Kumamoto, 860-8555, Japan) E-mail: [email protected]
Regulatory reform in public transport has become one of important issues in many countries, in order to improve efficiency and provide better services to users. Since regulatory reform will bring about institu-tional and structure changes of the organization, then it will imply the way of the public transport services regulated and managed.
This paper highlights how public transport service is organized under service contracts system, as one of growing trends recently. That is to say a system of which the service delivery of public transport is con-ducted by business enterprise on specified target which is planned by authority, which works under contract agreement between them.
The study focuses on the two cases namely both London’s and Seoul’s models. These will illustrate how they are put into practice in those cities. It could be significant as an alternative in undertaking local public transport reform efficiently.
Key Words: regulatory reform, public transport, service contract
1. INTRODUCTION
Recently, many local public transport agencies are trying to improve efficiency and provide better services of their public transport. Regulatory reform is one of growing options for these purposes. Indeed, there are various underlying reasons which are con-fronted by them each, such as the reducing of gov-ernment funding for public sector, the changes of regulations in the provision of public transport, or other reasons concerned with the improvement of services quantity and quality.
The extensive evidence internationally showed that subsidized public transport services, provided on a monopoly basis by government’s operators in both developed and less developed countries tended to become inefficient1). They were partial to produce services for more than necessary (at above competi-tive rates), and service quality was often inferior2). The experiences when such services were opened to competition, usually through a competitive tendering and contracting process, were that substantial cost savings were achieved3). In the mean time, the using
of deregulated system in the provision of public transport in some large cities, showed the drawbacks in several aspects, mainly related to the market fail-ure4).
In many countries, governments are pushing for the introduction of competition in the organization of public services and more broadly in public pro-curement5). The development of public-private partnerships around the world is a good illustration of this trend6). Moreover, the emerging of new hy-brid model which is implemented in some countries around the world over the last three decades has been one of alternative choices in the provision of public transport service. In other word, a model of which the public and private sectors share responsibility in delivering the service7).
The service contract system is one of the growing trends under hybrid model. The main feature of the system which is intended here is that the public transport services are planned by a public agency, and procured from business enterprises under service contracts, often with competitive tendering8). In ad-dition, although this system works under contract
agreement between government as authority and business enterprises as operators but then authority takes active responsibility for planning of the service. This paper focuses on discussing of this kind of system. In a rather simpler way, the term of service contract system will then be used to represent such a system hereafter.
In view of the regulatory reform is a process of change, it will bring about the institutional changes or rule of the game, even in public transport sector. Consequently the functions of each stakeholder would also be changed. The new institutional setting including the applying of service contract system creates new roles for all actors to run the system. This will also change the structure of the public transport organization itself. Thus, in the context of public transport service, it will imply and influence the way of the services to be provided, so become important to organize it within an efficient manner.
This paper studies how the public bus transport service is organized in such an organizational form, as explained previously. The two cases, both Lon-don’s and Seoul’s model are used as illustration. It is preceded by explaining the shifts toward the service contracts system in those cities respective. This is then followed by highlighting the organizing of public bus transport services under such systems in the cities, which covers some aspects namely plan-ning, operating, and monitoring. In turn, it could be worthwhile as input for local public transport in conducting regulatory reform.
2. THE SHIFTS TOWARD SERVICE
CONTRACTS SYSTEM IN LONDON AND SEOUL Both London’s and Seoul’s cases are interesting
to study since they had difference backgrounds in introducing the service contracts system into their public transport service. Moreover, their previous systems in the provision of public transport service were different each other. In case of London, its regulatory framework in public transport has evolved over the last three decades. It has moved toward new system by introducing competitive ten-dering and undertaking the privatization of its pub-licly owned bus company gradually. It was very different from the Seoul’s experience in conducting its innovative public transport reform, which was prepared in a short time, only around two years, before going into operation in the year 2004.
In historical perspective on regulatory reform of the bus industry, the United Kingdom led the way in significantly deregulating the urban and rural public transport market when it introduced the 1985 Transport Act9). Under the Act there are two distinct systems in providing public bus transport services
through all The United Kingdom. The provision of public bus transport services for local and regional areas outside London is on the basis of unregulated system. This means that the initiative to run public bus transport services for passenger comes from private companies. They can apply and choose routes, arrange timetable and fare to be charged, based on a commercial basis.
At variance with outside London, bus service in London is operated by private bus companies as operators, which work under contract to London Buses (LB), a subsidiary of Transport for London (TfL). In addition, TfL is a functional body that re-sponsible for delivering the Mayor of London’s Transport Strategies. LB manages bus services, by planning routes, specifying service levels and en-suring the quality of services, and also responsible for providing other support services, such as bus stations, and bus stops. The contracts are awarded to private companies through a competitive tendering process, as a selection mechanism.
Previously, the provision of London's public bus service was a publicly owned and subsidized bus operation. Its service operation was an increasingly costly public monopoly at that time. Under the London Regional Transport Act 1984, London Transport (LT), which was then replaced by a new organization called TfL in 2000, was required to set up subsidiary companies to run both bus and under-ground. It was also demanded to introduce competi-tive tendering to ensure LT operated economically and required less financial assistance from public funds. In 1985 LT set up a subsidiary known as London Buses Limited (LBL), which was then split into 13 locally based subsidiaries companies. In the same year, LT also set up the Tendered Bus Division to begin the process of competitive tendering. In a consequence of the Act, LBL had to compete with private bus companies in order to get the right to run public bus transport service. Finally, LBL was sold to private sector in 1994, and all of public bus transport services are run by private companies after that. The introduction of competition for the market and the involvement of the private sector had there-fore been gradual in London6).
The average number of bus passenger in London, carried per day, had increased by 46.92% since 1985, up from 3,124,658 passengers to 5,886,800 passen-gers in 200810). Most of the increase occurred after the privatization. Moreover, based on his study on the deregulation in bus systems of the UK’s metropoli-tan areas, White found the indication that total op-erating costs declined by 10.5% in London11). The reduction in operating cost had been wholly swal-lowed up by subsidy cuts and mileage increase12). The average number of bus passengers per day in
London andIn contra
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Table
Service ch Area of Popula Popula Bus pa Numbe Numbe Numbe
Level of gistration, reFunctionalfor servicePlanning c
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Operation Procure Contrac Fare sy Fare m Bus op
MonitorinMethods o
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om governmeibility of pubd Seoul recet gives themocess for prorvice. tegrated bodyapital's transp
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1 The service c
ITEMS
haracteristicsf service (km
ation (people)ation density pssengers per
er bus routes er of bus comer of buses overnmental esponsible fol body, respone provision competence:planning ncy of servicructure op and terminn and management system
ct system
ystem management
eration mana
ng system of monitoring
ransport agenof maximizresource con
s just accoupecific targe
ental level ofblic bus tranntly is left t
m more powoviding of t
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chairs the boCommissionransport strahas to consu
characteristics a
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untable for dt determined
f administratnsport serviceo local levelwer in decitheir public
esponsible forTfL implemrt Strategy lly. It is diresen for theirappointed byard. The poli
ner for Transptegy in Lonult with Gre
and some aspec
LO
1,572 7,753,600 4,932 5,886,800 700 17 8,000 Local level, thLondon CounTransport for subsidiary Lo
LB LB TfL LB
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605.25 10,208,302 16,866 4,605,000 369 66 7,748 Local level thpolitan GoverThe SMG thrtransport auth
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In various mesophisticated
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SEOUL
hat is the Seournment (SMGrough its comhority
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arried out by ment System
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must also cons of bus serv
esponsibilityvice in Seoud by some pu, operating,
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ervices. It isblic bus trans
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DapppartSMgreaon tducroutcomwerbidsof ofinayea
Bin LGroQICcostatorretanet an i
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vices. Thereel of fundingPractically, ing system ient configuraa routes-basenerally tendere as other rvice changesere are 700 rfor competit
fore the privampetition wanies initially.As part of sws every rouLB takes in
ed parties. Tvice specifices will take,
d capacity ofm performaed to providvice, and thviding the sissues Invit
erator based nce. Contracthieving the come withinder evaluatioing into accotures under QDiffer from L
plied for trunt of the refo
MG. This sysater metropothe public bu
ced, it was ctes. The ope
mpanies eachre establisheds in each zonoperating coal four werears14). Basically, thLondon and oss Cost ConC in London t model withrs linked to ains the revecost and groincentive to
fore, this is g assistance fthe organiziin London aations, thougd contract. Inred individuaroutes in thes. It is taken outes approxtive tenderingatization of
as between p urface transp
ute prior to tnto account oThis input wication, whicthe frequenc
f vehicles toance standarde a schedulee total cost
service to thtations to Teon pre-qual
ts are awardmost econ
n the resourcon is based oount of qualitQuality IncenLondon, comnk lines in Sorm, which istem works olitan area inus depots. Wcomprised oferators formeh. There werd from 38 comne. They werst, service aselected fo
e contract sySeoul nowa
ntract (GCC)currently is a
h direct finanthe quality nue. This is
oss cost contachieve qua
expected tofrom authoriting of compand Seoul apgh basically n London casally, but oftene same area effect to ent
ximately whg in Londonits public co
private and
port within tender. In adof views froill be used t
ch covers thcy of the servo be used, anrd. Operatore to deliver
t plus profithe specificatiender (ITT) lification pro
ded with the nomically aces availableon best valuety and safetyntive Contrac
mpetitive tendSeoul, as a nis held by a
on the divnto four zoneWhen it was f 10 major aed consortiumre 8 consortmpanies, witre evaluated
and operationor a set of p
ystem which adays is on ). The impleman extensionncial incentivof services, in response
tracts which ality targets1
o reduce thety in turn. petitive ten-ppear in dif-
making usese, routes aren at the sameto facilitate
tire network.ich has been. In addition,ompany, thepublic com-
TfL, LB re-dition, to do
om the inter-to provide ahe route thevice, the typend the mini-rs are thenthe level ofmargin for
ion. Further,to approvedocess in ad-intention ofdvantageous
e. Nowadayse for money,y as essentialcts (QIC)17).dering is just
new concept,team of the
ision of thees, centeringfirstly intro-axes and 19ms of 4 or 5tiums whichth 2 tenderedon the basis
n plans. Theperiod of six
is used boththe basis of
mentation ofn of the grossves for oper-insofar TfLto the olderhad no such
17). In Seoul,
e
--e e e e .
n , e -
-o -a e e -n f r ,
d -f s s , l t , e e g -9 5 h d s e x
h f f s -
L r h ,
under joint revenue management system, the SMG retains fare revenue, and operators are secured the reimbursement in compliance with total distance of service, according to bus operation each. In addition, in case of shortage, the SMG will subsidize bus op-erators. Table 2 shows some aspects of competitive tendering and contract system in London and Seoul.
Due to the authority retains fare revenue of bus operation then it involves the central pooling of fare revenues, and payments to operators which con-cerned with the services and performance which is delivered. Consequently, there must be agency that
responsible for collecting and distributing it. In London and Seoul, such tasks are carried out by a traffic card company in behalf of authority, in this matter TfL and the SMG.
Under GCC, despite the risk of service produc-tions is transferred to private companies, but then they are still protected from full commercial risk, since revenue risk is born by authority. It is different from net cost contract where operator bears both production and revenue risk. The while under man-agement contract, both production and revenue risk are borne by authority18). The type of contracts on the
Table 2 Competitive tendering and contract system in London and Seoul.
ITEMS LONDON SEOUL
Competitive Ten-dering (CT) sys-
tem
• Route tendering system for entire network
• Route tendering system for trunk lines only
Executor of CT • LB as subsidiary of TfL • The team of SMG The number of
operator • Increase, since enables potential op-
erators to take part in the process of CT
• Reduce, since some operators had to form consortium to take part for CT
Process of CT • Competition was between private and public companies before privatization
• Apply pre-qualification system, be-fore issuing Invitations to Tender (ITT) to approved operators
• Work on division of the greater metropolitan area into four zones, centering on the public bus depots
• Comprised of 19 routes, with 2 ten-dered bid in each zone when it was introduced
Evaluation crite-ria of CT
• The best value for money, taking into account of quality and safety by Quality Incentive Contract
• Operating cost, service and operation plans
Contract system • The Quality Incentive Contract which is the extension of Gross Cost Con-tract
• TfL retains fare revenue, contract payments related to mileage operated and overall reliability of the service
• Under joint management of revenue, SMG retains fare revenue, and reim-burse bus operators based on total distance of service per vehicle
• Shortage will be subsidized by SMG
Contract period • A 5 year contract with possibility to a 2year extent based on performance
• A 6 year contract for trunk lines which are put for tendering system
Table 3 The type of contracts based on the division of risks between authority and operator.
Type of Contracts Production risk: Revenue risk:
Authority Operator Authority Operator
Gross Cost Contract √ √
Net Cost Contract √ √
Management Contract √ √
basis of the division of risks between contracting parties, both authority and operator, in the provision of public bus transport service can be seen in Table 3.
However, in London, there was an attempt to transfer the both risks to operators under net cost contract, which was applied in preparation for the privatization of its publicly owned company, London Bus Limited (LBL), until routes were tendered. It was not only to shift the revenue risk to the operators but also gave them the incentive to generate more revenue by increasing the quality of the services. Initially this contract system was not subject to competition as the routes were allocated to the in-cumbent operators by negotiating. However, this trial seemed not successful, and only gross cost contracts have been offered since 199919).
Concerned with the contractual form, the time period of contract should be considered as well. Under Quality Incentive Contract, LB signs up the contract with operator for a 5 year contract with the possibility to a 2 year contract extension on the basis of operator’s performance. In Seoul, under competi-
tive tendering, all contracts are signed for finite time period of 6 years. The longer contract term will allow for the bidder to offer the low price related to scale economies, but reduce the opportunity for competi-tion amongst potential operators.
(3) Monitoring of bus services
The monitoring is an important part in manage-ment cycle, including public transport sector. This is being more significant as the right of operating pub-lic transport service is left to some operators. Under a gross cost regime, operators always have an incen-tive to supply less than the contracted amount of service, so the agreement needs to be enforced19). Thus, the establishment of an efficient monitoring system is required to ensure bus services are pro-vided as defined target. Further, it could also be used as feedback for policy formulation and development to provide better public transport services to citizen as users.
As part of efforts to maintain the quantity and quality of public transport service which is provided, there are various monitoring systems which have
Table 4 Bus monitoring systems in London.
Monitoring System
Objects Methods Executor Attributed to bonus & deduc-tion of payment
Mileage operated
Lost mileage within operator control
• Compare to contract agreement London Bus (LB)
Yes
Reliability Operator’s ability to schedule
• Roadside survey about regularity and punctuality of service (3-5% of the whole services)
LB Yes
Driver and vehicle delivery
Service quality in compliance with contract
• Mystery traveler survey, covers: Static audit, survey at bus stands Mystery shopping survey
Research agency in
behalf of LB
Yes
Driver quality Driving skill of driver
• Covertly assessment • Driver receives a graded score
Specialist Contractor
of LB
No
Engineering quality
Maintenance pro-cedure and vehi-cles mechanical condition
• Regular check of 25 % of each operator’s fleet the whole year
• The average number of point per vehicle, by scoring any defects
Independent contractor
of LB
No
Costumer satisfaction
survey
Satisfaction of users
• Interview, includes: safety and security, information, reliability, cleanliness, staff behavior
LB No
Public corre-spondence data
Public information • Made by phone, email and letter • Data is analyzed at route level
LB No
Contract compliance
audits
Operator’s com-pliance with the specifications in the contract
• Regular visits to operating garag-es, focus on administration sys-tem, handling and accounting for bus revenue and LB’s owned equipment
Team of LB No
been appliemileage opelivery, drivesurvey saticontract comremedies cotors17). The are shown in
The thrementioned bility, driveused to deteon the basiwhich is imto Minimumagreed betwthe contract
The dedujust executetrol, such asbeing mechMoreover, tthe basis oschedule, coresult from services. Mdriver and vity and in cby carrying service. Bebonus and dis also shareto address afied. Furthebeing concethese are nounder QIC.
The whibles LB ansatisfaction vices whichimprovemensystem, safand drive bcollates puband addresstaking fieldsive to userinformationation of tendnew contraformance isment, but thcontract as anearly all mually, howe
ed in Londerated, reliaber quality, enisfaction, pumpliance audoncerned wit
monitoring n Table 4. ee earlier ofabove, nameer and vehicermine finanis of operato
mplemented inm Performanween LB andt signed. uction of payed for some rs non availabhanically fitthe reliabilitof assessmeontrol and aroadside su
Moreover, thvehicle delivompliance wout mysterysides it is a
deduction payed with operany area of wer, driver quaern of moni
ot attributed d le, the custo
nd bus operaof customer
h is provident needed. fety and secubehavior. Mblic informas specific co
d investigatior’s need and n will be takeders and recocts. Basicallssues throughen it retainan ultimate s
monitoring mever, TfL has
on recently.bility, driverngineering qublic corresdits, and otheth the perforsystems in L
f the monitoely mileagecle delivery ncial bonusesor’s performn London nonce Standard d operator at
yment for threasons with
bility of staff t to be usey of service
ent of operaadjust serviceurvey of 3-5e monitorin
very, focuses with contracty traveler survassociated wyment, the darator, so theyweaknesses wality and engitoring objecdirectly to in
omer satisfacators to monrs in term thd, and identIt is includurity, cleanl
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Fig.5 Mon
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g at bus stopanaging and ture the puncher, as part oormance whn concernin
ervice operatMG in givingy accordinglyhe monitorincontrol of thation Serviceansport mananate all of tracts and procived from rely card whichatic violatioand transport
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nitoring system
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hem more relof public bu
e operators isystem (BMSMG. By util) technologyntre to monithe number o communicaime informaps or via thetracking bus
ctuality and sof the monitholly, the reng both reltion will lateg incentives ay 14). ng of bus o
he Transportae (TOPIS) thagement sysaffic conditiocesses all trlevant sourceh is automa
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and generalsfer, to trackThis tracking
ed iBUs, toiable. us operations undertaken), as a func-izing intelli-, this allowstor bus loca-of buses as-ate with busation to pas-e internet. Ins operation itsafety of busoring of bus
ecorded dataliability andr on be con-
and penalties
operation ination Opera-hat functionstem to mon-ons and situ-ransportationes, including
atic paymentment system,ng. some otherare also un-
in Seoul.
l k g o
n n --s --s -n t s s a d -s
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dertaken inpassengers services whvestigation faction surveconomic freliability, scovers the circumstancIn the earlysurvey was the new systwell. The retake quick and to be fareas whermonitoring can be seen
The invorequired to isfactory ofLondon, thTransport UBus Reformsignificant rpublic transagreement areform propcitizens. Evcontinued toSeoul publia variety isindependentsentative of and citizen Bus Reform
(4) Consens
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Fig.6 The e
n Seoul. Theto make re
hich is provias well. Somvey focus ofeasibility cosafety, driveradequate of
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tem which wesult of contaction to solfeedback forre some obs
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g and policy pects which
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ns up accesggestion in tonducts field
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watchdog is oncerning unbus serviceto the Lon
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d citizens, at Seoul publ
ngs as explampetent authod managing sense and worurage to muties. It could
d afraid of thtion against tThe Seoul’s wed that wied by his kn
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lic transport ined previouority must plsuch kind ofrth discussiotual understalso functio
em in terms their interest.experience inith his stronnowhow stafforts in a coppositions od by the Bu
was born to sum in Seoul. ting and dische reform prn the basis o
ng the refoomewhat difestion, it extuthority whiion to run suregulations. itiated the der tenderingn of its publiefficiency of
was realized
nitoring of ondon and S
ognition and h are confrot service itseeasure as prey. It has to beately. Since
d respond to . It will giveectives and thpriate circum
result of grastribute to theties accordinnflict of intere of the systef concerned uation. Diffeconcerning t
significant tohe reforms. nion, bus comng of the intt reform, refusly. In thilay a role in f conflicts byon. This proctanding amo
on to lessen tof guarantee. n public tran
ng commitmffs, the May
certain direcof the interesus Reform Cupport and sm By doing cussion the roposal consof collective
orm, the exfferent fromtremely depich is left to uch functionIn case of reform by
g system and ic bus compaf its public bby stipulati
public busSeoul as ex-understand-nting in the
elf, should beeceding stagee undertakenthe deliverythe differentguidance to
he designingmstance. Allsping the ex-e discussiongly. est would beem could in-
parties thaterent groupsthe reform’s assure them
mpany uniontroduction offlected suchs regard theanticipating
y facilitatingcess will en-ong relevantthe hesitancyeing the pro-
nsport reformment, and as-
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st groups. HeCitizen Com-mooth publicintense andSMG could
sensus to beunderstand-
xperience ofm the Seoul.
ends on theempowered
ns prescribedLondon, theintroducingundertaking
any, in orderbus transporting formerly
s --e e e n y t o g l -n
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m
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m -l s e -c d d e -
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some undewhich was into reality, sole it to laLondon is ru
Absolutein performinof concernecreating of aas referenceprobably enoperation sydefinition measures ofof subsidy wrun. TherebIn turn it wthe role andin the provisrelation betwvery likely considerablThus the avpacity becoof service coption may
Moreoveperhaps impitself. Someconsequencstaff membewell before could also hin term of duction of terator who like workshcant concerstanding torelevant par
Based onsome consid
Fig.7 Some service
erlying acts followed by either throu
arger bus oprun by privateely, the policng public traed existing reappropriate le in applyinncompassingystem, and cof involvedf financial suwhich possib
by it could sewill also facild responsibilision of publiween them ithat lack of e obstacles vailability omes crucial
contract systenot be possi
er the changeplies to some related matce of the reguers, and drivthe implem
have some imoperating sy
the new systewill manage
hop and trainrn so as to imo members orties concernn all of the ederations wh
consideration ie under service
or regulatiotechnical pr
ugh managemperators17). Ae companiescy support isansport reformegulation is ilegal institut
ng the new sg the regulacompetition sd parties, upport, likes ble needed fecure an effecitate to elaboity of each paic transport sin detail late
f any of thesefor the refo
of sufficient issues in theem. In the abible7). e of the bus o
me issues wittters of resouulatory reformer status, shoentation. In
mplications anystem. It reqem to both a
e and operatening should mprove the of staff, driv
ned, in advanexplanations hich could be
n organizing pucontract system
ons accordinrocess to brinment buyout
All bus servic thereupon.
s highly requm. The overvimportant forional framewsystem. It coation about system, the and regula a large amo
for the systemctive realizatorate concernarty who invervice, and w
er on. Since,e areas could
orm to run winstitutional
e implementabsence of it,
operation syshin organizaurces transfem, such as aould be manathe meantimnd consequenquires the inauthority ande it. Thus, thbecome sigskill and un
vers, and otce. above, therepaid intentio
ublic bus transpm.
ngly ng it ts or ce in
uired view r the work ould bus role
atory ount m to tion. ning
volve work
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e are on in
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4. SOST
pubSeotheieratauthplanope
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Bauthformthorof ithe servachfaciservhavformbusbilitquameaintris ntranvertmodlinkvanavosystinfomen
appbodsuch
port
er to organizbrid model, p
m with public
SOME MOPERATIOSEOUL The implemblic bus opeoul seems to hir public bustion carried hority or its anning and leaerators under In London ca
mpany had bebeen run by
rity still mablic transportwork. Meantem in Seoulponsibility iblic bus servere authorityBy managinhority to oumance targetrity to plan ats public busauthority to
vice adequathieve the socilitate the invice. In addive played a mmation techniness, it is vty public tra
ality of pubasure as manroduction of tnot only to insport operated highly code of public king system. ntages in teroiding duplictem. It is inormation synted.
However, tplied in Londdy of authorith a system. T
ze public busparticularly planning. It
MERITS OON SYTEM
entation of tration systemhave the sam transport seout by priva
agency takesaves the bus gross cost c
ase, notwithseen privatizedy private comaintains coort services bywhile the ch is actually inn controllinvices whichretains all ro
ng entire rouutline servicet. Thereby iand achieve ths transport semaintain the
tely, respondcial goals ofntegrated systion, the intemajor role innology onto
very helpful insport and e
blic transpornifestation oftrunk lines anintegrate an
ation previouompetition btransport beiIt also enab
m of efficiecation of serncluding the stem which
the service codon and Seouty to undertaThis is not o
s transport sservice cont
t can be seen
OF PUBLM IN LON
the new arraem both in Lme purposes. Tervices underate managems active resposervice deliv
contract systestanding pubd and public mpany, howrdinated struy managing echange of buntended to re
ng the provh was weak outes as wellutes networke specificatiit is much ethe goals of tervices. It alse quantity and to passengf service prostem of pubegrated systen Seoul. By o their publin creating a
enhancing efrt service. f integrated snd feeder linunorganized
usly, but alsbetween buseing a mutualbles to securency of the rvices withinintegration
h has also b
ontact systemul require theake some funonly to condu
ervice undertracting sys-in Fig.7.
LIC BUSDON AND
angement ofLondon andThey controlr service op-ment. Publiconsibility forvery to someem. blicly ownedbus services
wever the au-ucture of itsentire routesus operationestore public
vision of itspreviously,
l thereafter.k, it permitson and per-asier for au-the provisionso allows fornd quality ofger demand,ovision, andlic transportem seems tografting in-
lic transporta more relia-fficiency and
A concretesystem is thenes system. Itd public busso has con-es and otherslly beneficialre others ad-
services byn the wholeof fare and
been imple-
ms which aree empowerednctions underuct planning
r -
S D
f d l -c r e
d s -s s n c s ,
s --n r f , d t o -t -d e e t s -s l -y e d -
e d r g
tasks, but also to procure the service from operators, manage bus operation, and monitor the service pro-vided by operators.
Despite both London and Seoul apply service contract systems under control of local level author-ity directly, however, the structure of organization which is responsible for planning, procuring, and monitoring the service in those cities emerge in dif-ferent forms practically. Indeed, it is concerned with the underlying acts and process of the reform itself. All of such functions are held and coordinated by London bus in London. The while, in Seoul, to do so, the SMG is assisted by some specific organizations and competence authority. Moreover, the Seoul Bus Association, who represents the interest of bus companies in Seoul, plays a part in bridging the co-ordination between bus operators and the SMG.
With the total number of routes which is great, round about 700 routes, LB holds competitive ten-dering every 2-4 weeks. Therefore, it seems to be reasonably the present of LB as particular organiza-tion in handling such functions of public bus transport services in London. This is not only re-sponsible for enforcing continued tendering but also executing other tasks concerning planning, operating, and monitoring of bus service in London.
Under a quasi public system, not all bus routes are put on competitive tendering system in Seoul. As a new concept, part of the reform, competitive ten-dering was just applied for 19 routes (5.2% of total number of routes), when it was first introduced. It was just applied for trunk lines, while for the feeder lines, public bus service operation is still run by a large number of private companies that work based on agreement with the SMG under joint revenue management. This system is adopted as a new rule in Seoul, results from consensus of the interested par-ties who involved in the reform process, particularly the SMG and the Seoul Bus Association who played leading roles in the reform process.
Indeed, the establishing of organization to plan, manage and coordinate the whole services should consider the efficiency and effectiveness of its func-tion. Since, it requires additional budget allocation from authority to support the operation of the or-ganization. The choosing of organization form could be associated with task’s function and responsibility, including the size of area to be served, the complex-ity of service, and the usage of kind of technology just like the scientific bus operation system which has been applied in Seoul.
In term of the competitive tendering system as a selection mechanism to designate operators to run public bus services, it has been successful in London. Direct savings from competitive tendering have av-eraged 15 to 20 percent21). In the meantime, London
Transport found that competitively tendered service had generally higher quality, and that when the public operator provided service in a competitive environment (faced with the threat of contract can-cellation, like private carriers), service quality im-proved on the same services2). The while, competi-tive pressure from tendering process leads to situa-tions in which operators must innovate in order to be competitive in the market22). This indicates that competitive tendering is not only could increase production cost efficiency through direct saving as a result of its process but also enhance service quality. Further, for the authority it could reduce asymmetry information as some operators offer the best com-petitive price and quality of service, in order to get the right to run the services on the certain routes.
In the context of monitoring system, in London, under quality incentive contract, the reliability of service, concerning both regularity and punctuality of service provided by operators, is measured by carrying out roadside survey. It is very different as compared to Seoul, which has applied the using of appropriate technology for such functions. By uti-lizing an intelligent transport system (ITS), global positioning system (GPS), and using a sophisticated fare collection system, it could be conducted effec-tively. Under this system, authority can also monitor the safety of bus service operations, and analyze the statistic performance of bus companies by utilizing smart card’s recorded data and others related infor-mation. All of available information will be analyzed by TOPIS, and then used by the SMG as considera-tion in decision making policy for better service to community as users. This system is not only to help in creating flexible and efficient control over inte-grated public transport, but also in ensuring demand responsive routing and scheduling, based concrete demand data.
5. CONCLUSION
This paper focuses on the study of organizing of local public transport service, based on London’s and Seoul’s experiences. This describes the two previous different systems of public bus operation, which move toward the service contract system, under various rational behind their reform respective. It shows that the previous systems of public bus operation both under public monopoly and unregu-lated system run by a large number of private com-panies are allowed for shifting toward such a system.
The changes toward the new arrangement of public bus operation system in those cities were highly concerned with the underlying acts or regu-lations and the processes which took effect in con-ducting the reforms themselves. These determined
the way of the competence authorities to take initia-tive to start, perform, and encourage the reform process to come up with their expected goals, and influenced the result itself as well. It became more relevant due to the reform process involved many interested parties.
The separation of planning from operation under gross cost model which are applied in those cities shows the role of involved parties both authority and private operators clearly. Moreover, since authority more focuses on maximizing the service and dele-gates operational right to provide public bus services to operators, so the availability of an effective or-ganization and appropriate technology become sig-nificant in supporting to run and control public bus services. Indeed in applying such a system, the so-lution adopted by one city cannot be directly trans-ferred to another city. However, it is important to recognize that local circumstance of an area is dif-ferent individually. Therefore it should be seen and put in particular situation of an area in question, including by linking it with policy objectives of the service provision, as is the case in London and Seoul. The information on service contracts system of their best practices, should be developed and fitted with real situation by making the best use of the ad-vantages, things like competitive tendering system, the utilizing of appropriate technology for planning, managing, and monitoring of service, and consider-ing obstacles to effective service contract system of a certain area, like institutional capacity, the availa-bility of reasonably operators, and the choosing of procurement and contractual type as well.
This study doesn’t come to the conclusion of which one is the better of those experiences. It is beyond of the scope of the study, in view of the backgrounds, the former systems, and the processes of change both in London and Seoul were different at all. The stressing is more given to the way of or-ganizing public bus transport service in those cities each. Finally, it could be useful inputs and alterna-tives in conducting local public transport reform under service contract with public planning.
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(Received February 25, 2011)