new bus service framework for budapest high quality for passengers, opportunity for market players

New Bus Service Framework for Budapest

high quality for passengers, opportunity for market players

László Sándor KERÉNYIHead of Transport Strategy Department

BKK Centre for Budapest Transport

2László Sándor Kerényi: New Bus Service Framework for Budapest

Contents• Budapest facts and figures• Current status of the bus sector• Challenges for better services• The new model• Lessons learnt

3

Budapest facts and figuresBudapest / the Capital (since 1873):• 1.700.000 inhabitants• 600.000 car trips/day• Modal Split: 60% personal / 40% public• 3,56 million passengers/day on BKVAgglomeration (Pest County, 80 settlements):• 800.000 inhabitants• 400.000 car trips/day (66% of all trips!)

László Sándor Kerényi: New Bus Service Framework for Budapest

4

Budapest facts and figuresTwo level municipal system (since 1990):• Municipality of the City of Budapest (the Mayor of

Budapest)• 23 municipalities (23 mayors) of 23 districtsTransportation tasks of the Municipality of the City of Budapest: [National Law LXV.1990. 63.A§ g]• Public transportation• Traffic management on the whole road network of

Budapest (4500 km)• Road and bridge maintenance tasks on roads and

bridges owned by the City of Budapest, or used by public transport (1000 km)

• Transportation development projects• Permitting and legal control


5

Budapest facts and figuresRoad network:• Full length of the road network: 4500 km• Length of the main road network: 1200 km• 9 Danube road bridges (including M0 bridges)• Over 1000 traffic signaled intersectionsPublic transport network:• Length of the public transport network: 1100 km• Number of stops and stations: 4700• Rolling stock: app. 3000 vehicles (176 million km run)• Average occupancy of vehicles: 23,8%• Average circulating speed of vehicles: 16,7 km/h• 1,37 billion passengers/year, 5,1 billion passenger

km/yearLászló Sándor Kerényi: New Bus Service Framework for Budapest

6

Budapest facts and figures


New transport management model (since 2010):

7

Budapest facts and figuresGeneral tasks of BKK:• Ordering services of public transport (network

planning, commission, control, issuing and controlling tickets, regional coordination)

• Operation of roads, bridges and the traffic management system (development and coordination of reconstruction and construction works)

• Integrated administration and development of urban transportation (elaboration and updating of transport strategy, development and management of projects, professional coordination)

• Elaboration and operation of general transportation regulatory systems (parking, congestion charging, heavy weight traffic charging)


8

Current status of the bus sector


Bus service facts and figures:• Share: 40%• 556 million passengers p.a.• 177 million vehicle kms• full geographical coverage• 7/24 service• 206 bus lines (daytime)• 38 night bus lines• Peak hours passenger load above 90% on 80% of

the lines, average passenger load 24.0%• OPEX HUF 40 billion (EUR 135 mn) per annum• Total number of passengers 1.39 million per

annum

Rate of passenger numbers by vehicle types

40%

28%

22%

5%5%

Bus Tram Subway Trolleybus Suburban Railway

9

Current status of the bus sector• First-door alighting to

be extended gradually • Operational and planned

replacement of BKV’s fixed-rail services

• Mid-term general goals: • more fixed-rail services• less bus services

• Automated fare collection to be rolled out (fully managed by BKK)

• GPS-based AVL system to be mounted on all surface vehicles (even private operators)

• Gradual shift to the competitive tendering model


http://img.lapunk.hu/tarhely/sefcsikgergelyvf/galeria/699055.jpg

10



Bus fleet facts and figures:• 1,353 buses• 624 pcs „articulated” (18m-long)• 698 pcs „solo” (12m-long)• 31 pcs „midi” (8m-long)• Average age of fleet:

18.13 years• BKV’s subcontractors:

2 operators (1 private,1 government controlled)

• own depotsIK

405

IK 26

0

IK 26

3

IK 41

2

IK 41

5

Van H

ool A

300

Merced

es C

itaro

O 530

IK 28

0

IK 43

5

Irisbu

s Ago

ra

Volvo 7

700 A

Van H

ool A

G300

IKARUS V

187

0

50

100

150

200

250

300

350

400

11



IK 260377 pcs

IK 280270 pcs

IK 435171 pcs

IK 415160 pcs

Volvo 7700 A150 pcs

IK 412114 pcs

http://img3.lapunk.hu/tarhely/sefcsikgergelyvf/galeria/699013.jpg

12

Current status of the bus sectorBus fleet vs. services:• Many break-downs and cancellations• 75% high-floor• 83% no A/C• Mostly EURO-0, up to EURO-III• Deteriorated outlook, passenger area


13



Bus depots of BKV:• 4 bus depots• 1 trolley bus + bus depot• 300-350 buses per depot• all owned by BKV• on-site petrol stations• on-site car wash

• Full Wi-Fi coverage (as part of the AVL system „FUTÁR”)

• Not to be sold – can be utilized by future private operators

14

Challenges for better services


Main questions related to the new model:• How to deal with current technical conditions of

the fleet?• How to involve private funding?• How to improve services for passengers? • How to generate competitive pressure for BKV?

15

Main aims of the new bus model:

The new model


• Hundreds of low-floor, air-conditioned, EURO-5 or EEV buses to be put into operation until 2014

• No CAPEX• Competitive tendering• Cheaper, more efficient, better• Risk-sharing between BKK and the

operators• BKV’s bus operations: competitor

and benchmark

16

The new model


Competitive framework:• EU public procurement directives, HU public

procurement law• Two phases:

• Prequalification: open for application for years – since 21/10/2011

• Competitive tendering: actual call for tender for those operators who have successfully passed the pre-qualification

• First tender due: December 2011• „Larger” and „smaller” fleet contracts• Contract term depending on age of fleet; with new

buses planned term: 8 years• Planned contract sizes between 50 and 300 buses

17

The new model


Service level agreements:• Punctuality• Cleanliness• Passenger comfort (heating, A/C)

Strict control regime:• Incentives and penalties – „bonus-malus” (stick /

carrot)• Ever increasing service level control• BKK-managed AVL system to track each vehicle

Target: high quality services

18

The new model


Gross cost contracts:• Km-based service fee• Service fee to be reviewed per annum• Fare revenue to be collected by BKK

Contract term:• Based on turnover of CAPEX and 1370/2007/EC• Average planned contract term 7-8 years• Option to extension

Risk-sharing, spreading of costs:• Minimal standards to be set• Application of greatest possible freedom for

operatorsTarget: acceptable service fee

19

Costs:

The new model


Factors on possible price increase Potentials to decrease costs

• Higher amortizationBKV’s buses are amortized to zero now

• Higher maintenance costsHigher qualified maintenance staff and more expensive

• More diesel used by new busesNew technology, A/C increases fuel consumption

• RisksDiesel price increase, use of BKV depot, trade unions

• Experience of operatorsExperience with cheaper buses, existing processes, workflows

• More efficient processesMaintenance, roistering, ever increasing cost optimization

• Risk coverageOverhead costs spread across other activities

20

The new model


20122013

20142015

Phase 0

Tenders

150 pcs 450 pcs 750 pcs 900 pcs

• Phase 0: replacement of BKV’s subcontractor contracts (until 1/5/2012)• Tenders: gradual and continuous increase of number of contracts and

operators• Target: more than half of the fleet size are new buses on the new

tender regime

„urgent”

Public procurement

preparation

Service provision

Roll-out of the new service framework:

21

The first tender: under time pressure…

The new model


Phase 0 (under time pressure) Later phases service framework

• BKK-BKV consortium to procure

• Short-term contract(s) (1-2 years)

• Small fleet size (25-50)• Acceptance of high-floor/low-

entry buses• „Compromises” on technical

expectations• Subcontracted to BKV• Direct contract award• Service to start on 1/5/2012• Buses to be distributed across

the Budapest bus network (mixed with BKV buses)

• Tenders from 1/5/2012• BKK to procure• Long-term contracts• Smaller and larger fleet

sizes (100-300)• Only new buses• High quality expectations• Service contract with

operators• Competitive tendering• Redistribution of buses on the

network

22

The new model


The first tender: urgent need to act quickly• BKV’s Public Service Contract and BKV

subcontracts expire on 30/4/2012• Before 1/5/2012 BKK had no authority to conclude

procurement and award contracts• BKV has no extra 110 buses for replacement• New contract needed to provide capacity• Time pressure leads to phase 0 „contradictions”

with the new service framework

23

The new model


Activities

BKK internal decisions

Prequalification

BKK to draft tender documents

Submission of applications

Evaluation of applications

Negotiations with applicants

RFP

Decision by BKK/BKV

Room for appeal

Contract Award

Preparation for Service Provision

Week

November December

44 45 46 47 48 49 50 51 52 1 2 3 4 5 6 7 8 9 10 11 12

January February March April

13 14 15 16 17

2011 2012

24

Service contracts Part 1 to 6The new model


Parts WinnerNumber of

busesContracted

performancePricing method Details of the buses

1. - - - - -

2.VT-Transman

Kft.25

2 000 useful bus km/year

+ 20 % optional

Useful bus km with penalties

Used

Low floor

With airconditioning

3.VT-Transman

Kft.25

2 000 useful bus km/year

+ 20 % optional


Used

Low floor

With airconditioning4. - - - - -

5.VT-Transman

Kft.25

825 useful bus km/year

+ 100 % optional


Used

Partially low floor

With airconditioning

6.VT-Transman

Kft.25

825 useful bus km/year

+ 100 % optional


High floor

Without air-conditioning

25

The new model


Service contracts Part 7 and 8:• Part 7: 25 new solo buses + 200% optional• Part 8: 25 new articulated buses + 200% optional

Specifications:• Low floor, with ramp• Minimum EEV engine • Additional points for the alternative propulsion

(CNG, hybrid, electric etc.)• Air-conditioning• Built-in CCTV security system• Built-in passenger counter system

26

Lessons learnt


Main lessons after the first tenders:• No real bonus/malus: only penalties can apply due

to the Hungarian procurement procedures → new regulation?

• BKV is not allowed to bid on these procurements → New prequalification tender without BKV

• Only Hungarian bidders → minimum fleet size to bid for new market is around 200

• No Hungarian buses → ???No change:

• Integrated bus fleet control remains in the responsibility of BKK (FUTÁR system will be integrated on all vehicles)

• Continuous quality control to be performed

27

Thank you for your kind attention!

László Sándor Kerényi Head of Transport Strategy Department [email protected]

new bus service framework for budapest high quality for passengers, opportunity for market players

Documents

budapest bus service

bus sectorchallenges

bus sector lszl sndor

road network of budapest

city of budapest

figures lszl sndor kernyi

bus sectorfirstdoor

budapest34budapest facts