There are a range of possible ways in which to introduce competition in urban public transport. The major choices which have to be made by the public authorities are: firstly, between monopoly or competition; secondly, between competition “in the market” or “for the market”; and, where competition for the market is appropriate, between gross or net cost tendered franchises. Associated with that latter choice are decisions about the size of package, duration of contracts, etc. In making those strategic choices governments need to bear in mind both their own specific national context and the common issues of the complexity of the urban public transport situation. To learn more about the nature of these strategic choices, click here (MS-Word document).
Issues of Institutional Complexity.
While in principle there is a need for public transport planning and supply to be closely integrated with the rest of urban planning, in practice this is often complicated by excessive fragmentation of local planning responsibility; disconnect between policy power and financial responsibility; excessive functional separation of responsible authorities; absence of skills in transport functional agencies; and absence of a secure local funding source. For more information about the nature of these complications, click here (MS-Word document). There are various institutional devices that can be employed to overcome these difficulties, including the creation of joint planning teams, inter-jurisdictional arrangements for the sharing of planning capabilities and responsibilities, as well as the pooling of financial responsibility and resources. For more information about possible solutions to problems of institutional complexity, click here (MS-Word document).
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The Land Use Planning Context.
In expanding transport, provisions should match that expansion. There is much to be said for allowing the private sector to provide whatever services they wish on an unsubsidized basis as an insurance policy against gross inadequacies in public transport supply. But the availability of transport facilities can also influence the pattern of development in important ways, especially where land use planning controls are ineffective. This would suggest that some unremunerative services might be provided as a catalyst to a desired pattern of development, which need to be provided for in franchising arrangements. The existence of a well articulated development plan is necessary if public transport franchising strategy is to play an important role in structuring development. In some countries, such as Japan, combined development of commercial centres and transport links has been particularly common and the packaging of land and property development rights with transport investment concessions is now happening in primate cities such as Bangkok and Manila.
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System Management and Modal Coordination.
Public transport is one part of the total transport facilities of urban areas, which should be carefully co-ordinated to ensure the best overall use of resources. There are a number of dimensions of coordination which need to be considered in designing a commercialization of public transport supply. First, there is the issue of the contribution of public transport to the reduction of road congestion which may be a justification for provision of priorities in the use of infrastructure, or even subsidy, for public transport as a whole (though never on a discriminatory or open ended basis for public sector suppliers). Second, there is a need to ensure coordination between various public transport modes, which is easier to achieve under some forms of commercialization (notably gross cost franchising of services) than others. But the necessary degree of modal coordination will vary from circumstance to circumstance, and should also be considered in designing a system. For more information on modal coordination and commercialization, click here (MS-Word document). Third, it is necessary to consider the extent to which, and means by which, public road passenger transport services themselves are to be co-ordinated. Finally, both within free entry and within franchising systems, it is necessary to consider carefully the way in which the informal sector is to be treated.
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