Presentation for SMI conference 25 April 2001

by Bert Klerk

Doing business on several tracks

Introduction

1. RIB; what is its situation at present?

2. What are RIB’s ambitions?3. What are the ambitions for PPPs?4. Examples and proposals5. Conditions for successful PPPs

RIB; what is its situation at present?

S u p e rv iso ry B o a rd

M a n ag e m e n t & m a in te na n ceN e w co n s tru c tion

R a il s ys te m in n o va tion

Railinfrabeheer

C a p a c ity p la n n ingR a il sa fe tyIn n o va tion

R a iln e d

T a k in g ca re o f & a da p tingra il p ro ce ss

R a ilve rke e rs le id in g

R a ilin fra tru s t B VP ro p e rty

R a ilin fram a n a ge m e nt

M in is try o f T ran sp o rt, P u b lic W o rks a n d W a te r M a n a ge m e ntS T A T E

so le sh a re h o ld er

• ‘State Owned Enterprise’

• Independent of NS (Nederlandse Spoorwegen)

• NS is largest customer

The mission has wider scope than before

“Maximum utilisation of rail infrastructure

through passenger and freight traffic”.

So

Not only the bright, shiny lines

RIB has three types of customer...

RIB

MARKET PLAYERSTransport companies and others: developers,

constructors etc.Customers ànd partners of RIB

GOVERNMENTPrincipal Shareholder‘Lower’ tiers of government: principals ànd partners

CITIZENS / CONSUMERSTaxpayers ànd passengersIndirect customers

…and consequently three tasks

1. Executing government policy

2. Delivering users’ infrastructure

3. Acting as an independent expert

RIB operates in both a public and a private environment This calls for a flexible and transparent organisation

RIB’s ambition: The Schiphol of the railways!

Department of Public Works:

• Task-oriented• Management of infrastructure• Perform to the best of its

ability• Public• Executive• Input-driven• Government manages

directly• Principal for market players• Revenue from the

government

Schiphol:

• Output-oriented• Utilisation of infrastructure• Guarantee a certain result• Hybrid• Enterprising• Output-driven• Government manages at arm’s

length• Principal and partner for market

players• Revenue also from commercial

activities• Transport companies pay RIB• Interest in competition on the railway

Ambitions: Quality in the chain and at connection points

RIB’s ASSIGNMENTBetter use of rail infrastructure

Better use of propertyBetter quality/price for transport

RIB’s AMBITIONSWith regard to quality in the entire public transport chain

With regard to the station as a transfer point

GOVERNMENT POLICYGrowth in traffic and mobility

Quality rail productBetter quality/price

When will PPPs be used? When they help RIB to realise its ambitions

In other words:

1. When the maintenance, management, new construction and innovation of the rail infrastructure could be better or cheaper

2. When the property or the network are better utilised

3. When better integration is achieved in the public transport chain

4. When stations become a better transfer point

1. Improving maintenance, management, new construction

With alliance contracts in which market players and RIB work together to innovate in building, construction or production methods:

A better price-performance ratio as a result of innovation or upgrading of the product

• Risks and cost advantages are shared

• New products are developed

• Better quality is achieved

1a. Example: Waardse Alliance

RIB Partner

Alliance Board

AllianceOrganisation

AllianceFund

TraditionalExecutive Bodies

Alliance for laying a complex route

•Risks and revenues are shared•Both parties have an interest in doing as much as possible for as little money as possible

•Optimisation by using best available people and resources

•Alliance acts as a single party towards subcontractors and the environment

•Once the contract is concluded, the co-ordination costs are much lower

•Arisen out of practical experience

2. Better utilisation of property; multiple use of 3000 km of railway

Additional utilisation:

• Tunnel tubing under the rails for wiring and pipes

• Windmills above the rails

Or better utilisation:

• Co-operation with parties at the connection points; Shared business premises at stations on the Randstad line

• Optimisation of route selection in consultation with government authorities or market players (Sloelijn)

2.a. Better utilisation by usingRIB’s property...

2.b. … or by getting transport moving

Soon the Betuwe route will be ready…but there are (still) no customers. 10 billion guilders are invested and then it becomes clear: the border is not a final destination and transport companies will have to invest more

In PPP-construction RIB can initiate:

•Investments in necessary new technology for equipment (lowering of thresholds for transport companies)

•Organisation of points beyond the border where other companies take over

•Regular running of services with space for containers

3. Chain integration = co-ordination between numerous parties

Door

CycleBusCarTaxiTram

Park

Sta

tion

Train journey

Sta

tion

Park

CycleBusCarTaxiTram

Door

RIB’s responsibility

operators

transport companies

traffic controllers

owners

municipality

construction firms

services

3.a. The parties in the chain are both public and private

RIB seeks PPPs with market players in the chain who have parallel objectives.

For us the main issues are:

•A quick, stress-free journey

•High frequency, few cancellations, seats for everyone

•Good links with modes of transport used before and after the train journey

•Good information provision

3.b. Example: Innovation of cycle sheds

Train-cycle transfer is high; capacity of sheds is not enough

One formula for rent-a-bike in the country will not be profitable

Public transport - cycle collaboration:

• Innovation in shed systems and enhancing capacity

• Cycle manufacturing for more practical cycles

• Rental chains for logistical expertise

• Fiets BV for expertise in the area of operation and formula management

4. Stations as a transfer point

A station is rarely a final destination, but rather a transfer point in the public transport chain:

A terminal can be given basic quality, but also optimum quality:

• Better environment in the terminal

• Social and physical safety

• A high quality urban environment

• A smooth mobility connection point

PPPs add quality; opportunities are wasted if public and private resources are not combined

4.a. Example: Arnhem

• Nicer hall, better passageways, more pleasant atmosphere

• Through investments from private parties - above the basic level

• In exchange for m2 for commercial use at the connection point

• Agreement at an early stage between all parties concerned (municipality, NS, project developers)

• RIB is a broker and partner and provides:

Expertise in the Logistics of building over the railway, External safety and Improving quality of links between platforms and stations

NS

4.b. Furthermore, barriers in the city are being removed

Not like this: But like this:

NS

A wide range of ways to carry out ‘public’ tasksPPPs are only one form

Public-private partnerships

Subsidising

Privatisation

Stimulate government authority co-operation

Vouchers

Innovative tendering

Introduce competition; allow private parties in

Government public/private limited companies/foundation

Create internal marketFormation of a fund

Private

Public

Public-private

Fiscal policy

Outsourcing: contracting out, concessions, franchise

PPPs are more than innovative tendering

PPPs are collaborations with a clear, jointly endorsed goal

In these projects more is achieved than when private and public parties operate independently, because:

• The specific expertise of the parties is combined

• The scope is wider than just creating an infrastructure

• Risks and revenues are shared

The first Dutch PPP in railinfra-structure was initiated by RIB!

• In itself innovative tendering can be a good thing: efficiency & spreading of risks

• However, the principal - contractor relationship remains in place

• It all depends on what the best way is of achieving a (public) goal

For HSL-Zuid innovative tendering was used, but not a PPP

Conditions for successful PPPsfor RIB vis-à-vis the market

• Reliability; no instability due to changing policy

• More responsive and market-oriented competences

• Willingness to bear risks

• Only in projects in which RIB’s core competences add value

• Willingness to contribute expertise

Conditions for successful PPPsfor RIB vis-à-vis the State

• Freedom of action within output definitions

• Being able to generate and invest revenues

• Transparent responsibility and supervision that fits in with ambitions

• Internal divison of key tasks and ‘market activities’

Conditions for successful PPPsfor private partners

• Objectives in line with RIB’s ambitions

• The same openness as between private parties

• Long-term commitment to the joint project

• Willingness to bear risks

• Willingness to be innovative

• Willingness to make expertise available

• Willingness to trust

In conclusion...

How does RIB maintain its independent role as advisor and executive body of the ministry?

Through transparency, separating the market activities and giving account for all activities.

Improper competition in relation to the market players?

RIB is the manager of unique property.

Does ‘The Schiphol of the railways’ involve a stock market launch in 2003?

RIB operates from within the public domain and does not manage a profitable product.

A production of: Bert Klerk, René Buvelot, Gert Dijkstra (RIB)and Babs van den Bergh (Public SPACE)