Annex 9 BRT Operating Plan

Institutional Framework

An operating plan for the BRT scheme should outline the framework and role of the different players and cover regulation, bus franchising or concessioning, rights of way, fare structure, and so on. It is important to establish that the BRT will be operating under a legal framework that guarantees continuity and the legal rights of both users and operators.

The first stage should be to review the existing transit regulatory structure and decision-making process. Module 3: Bus Service Improvement provides guidance on this process. Two typical existing scenarios may be considered, i.e., firstly a government undertaking (or the municipal government) enjoys a monopoly in bus service provision, and secondly, when there is no monopoly.

The second scenario is in which there is no monopoly and bus operations are informal with weak regulation. Many Latin American BRT systems were developed from such a baseline and their experiences are well documented. Unregulated entry or the simple issuance of permits to operate BRT are not viable options for introducing a major new public transport system and technology. BRT routes should be tendered to operators, who bid for certain lines.

Development of BRT can provide the means to reorganize and rationalize a fragmented bus operating environment. Individual operators can be encouraged to form consortiums, who may then bid for BRT routes. The old vehicles of existing operators may not be redundant as they can be used for feeder services to the BRT trunk lines, or be scrapped in line with tender requirements. As some operators will lose business in the new tendering system, the municipality may provide support or advice for other bidding opportunities.

Whilst an all-in-one-go, city-wide transformation to support BRT introduction and operation has benefits, it is often advisable for the regulatory structure to be changed and bus consortiums subsequently formed well before a BRT system is introduced, or introduced incrementally with new regulatory bodies applying only to the new BRT lines. This allows sufficient time for transition within the capacity and resources of the government.

It may be advisable to encourage local bus companies to partner with international bus operators, who have experience in modern BRT operations. New skills may need to be acquired to operate a BRT service including accounting and customer service, as well as technical aspects.

Operator Tendering

Operating contracts need to be designed to provide sufficient incentive to concessionaires within a BRT system while providing high service quality to the passenger. Competition can be controlled by paying operators for a minimum vehicle-kilometers of service rather than the number of passengers, which can otherwise lead to reckless behaviour. Also, as BRT is often a new concept to a city, it can be difficult to forecast the level of passenger demand and operators may be deterred by the risk of investment. Bidding can take place for various components of a BRT scheme including the trunk lines, feeder services, fare collection systems, infrastructure maintenance, and so on.

The bidding evaluation process can be facilitated by a points system under various categories to quantify the relative strengths of operators. This principle was adopted in Bogota’s BRT system, which was designed to encourage operators to form consortiums and favor existing operators. A long concession period increases the value of the contract and therefore the quality as well as encouraging investment by the operator. The period should at least allow operators to recapture their investment, which in the case of BRT can include procurement of special purpose high capacity buses. However, long concessions can limit flexibility to modify the system.

Quality incentive contracts encourage operators to deliver high quality services as their performance is linked to payments. Penalties for poor performance can include reducing the number of vehicle kilometers within the contract. In the same way, high performance can be rewarded with additional payments. Components of a quality incentive contract include maintenance practices, customer service, driver safety, and so on. Again, the Bogota system provides a good example of best practice, which can be replicated.

Establishing a Special Purpose Vehicle (SPV)

A Special Purpose Vehicle may be necessary to oversee the planning and operation of city bus and BRT services. This should represent all stakeholders (transport related). The SPV may be headed by the City Mayor and could have the following as members:

  • Collector (Vice Chairman)
  • Chief Executive of the City Development/Planning Authority.
  • Commissioner of the City Corporation.
  • Representative of the Police.
  • Representative of Commuters’/Citizens’ Associations.
  • Transportation Planning Expert.
  • Representative of a Government Transport Organisation.
  • Chief Executive of the SPV.

Initially, the SPV can be set up with an Executive Order, but when it enters into contracts it should be given a corporate status. This could be done by registering it as a Government Company. The function of the SPV would be to assess the public transport requirement in the city, to plan the transport system and to contract with bus operators for services. It would have to be authorized for this purpose by the State Government. The bus operators could be private entities or a government company. The internal structure of the SPV is shown in Module 3 (Figure 4). Once the system stabilizes, the SPV could be converted into a statutory body with powers of regulation, fare setting etc.

Fare Management and Operation

Regarding fare structure and operation, there are several key aspects to be considered including fare policy, ticketing, revenue distribution and compensation mechanisms, fraud control and subsidies. BRT typically forms part of an integrated system allowing passengers to use more than one mode of transport and therefore different operators. Therefore distribution of fare revenues needs to be considered.

The framework for managing fare operation can include a fare collection, fare inspection operator, and an external clearing house.

Entity Function
Fare Collection Operator Collects fare revenues from all integrated modes and transfers them to the clearing house. Investment is required in equipment such as ticket counter or vending machines.
Fare Inspection Operator Provides control against fraud and collect fines to transfer to the clearing house. Provides visible security due to patrolling of networks
External Clearing House Redistributes fare revenues among different operators and manages subsidies. It is outsourced from the regulator, which may improve transparency to the benefit of private operators as well as increased efficiency

The Municipality should consider the need for each of these entities by consideration of the existing situation and required improvements.

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