Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 20
a capital improvement plan, prioritizing the most tary police officers, city police officers, postal work- needed repairs and/or capital expenditures for ers, EPTC employees, transit employees, and citi- approval by the federal government. The federal zens aged 65 and older. government reviews the plan and selects the most At the same time, the transit system is challenged important projects for implementation. These proj- to sustain itself. As in other Brazilian cities, transit in ects compete with other government needs for capi- Porto Alegre is expected to be self-sustaining from tal improvement funds. The federal government has farebox revenue. Management is particularly con- set policies that preclude Metrovias from raising cerned with the impacts of raising fares, fearing that fares, implementing congestion pricing, or provid- this could cause more people to choose to drive. ing discounts for multiple trips. The federal govern- Despite these challenges, the bus operators con- ment also is responsible for negotiating with labor tinue to invest in the system and provide an improved unions and setting salaries. customer experience. Carris, a major public operat- Bus services in Buenos Aires are still dispersed ing entity, has continued to purchase new vehicles among a number of private operating companies, and introduce more and more amenities with each which often compete with one another along major purchase; today, its fleet averages 5 years. Some of corridors. Large numbers of bus operators with vehi- the vehicle improvements have included automatic cles of differing colors and service overlap, making transmissions, rear engines, air conditioning, and it difficult for the casual user to ride the bus network. accessibility improvements, such as level boarding To aid passengers in navigating the system, indi- for high platform stations and low-floor buses with vidual buses include a large easy-to-read destina- ramps for wheelchair access. Currently, 73% of Car- tion sign on the front, and bus stops are outfitted ris's fleet is outfitted with automatic transmissions with signs that clearly indicate which buses, routes, and rear engines, and 43% of the fleet has air condi- and destinations serve that stop. There has been no tioning and is accessible to those with disabilities. demonstrated need to change operations from the The overall philosophy is to improve customer private sector to the public sector, because the cur- comfort to stem the loss of passengers to automobile rent bus operators are providing an adequate level of travel. Change in the system has occurred gradually. service and complying with the requirements of the The introduction of BRT service was initially lim- permit/franchise program imposed by the federal ited to one corridor and has been gradually expanded government. throughout the city. Other changes, such as the intro- duction of low-floor buses and electronic fare collec- tion, have similarly been implemented incrementally. Porto Alegre, Brazil Maintaining vestiges of the old system, such as the Because motorcycles and cars are increasingly continued use of conductors for fare collection, has affordable to its citizens, Porto Alegre focuses on ensured that the system does not change too rapidly providing and promoting transportation alternatives for its customers to understand and adapt to new tech- to single-occupant vehicles. The city has adopted a nologies and procedures. goal of increasing the effectiveness of the public transit network as a means of countering the social REVENUE SOURCES disbenefits of increased auto and motorcycle use in AND FUNDING MECHANISMS order to further Porto Alegre's position as an envi- ronmentally conscious community. Marketing and Guayaquil, Ecuador customer information are a big focus, as are public Fares/Fare Structures/Fare Collection awareness campaigns and efforts at improving facilities for walking and biking. EPTC also offers In Guayaquil, the full fare is US$0.25, while the employers reduced rate bus passes, which can be pro- average fare is US$0.235 because of reduced fares for vided in lieu of a portion of an employee's salary. seniors, students, and the disabled. Unlimited trans- While all the systems visited on this mission fers are included in the fare. All transfers occur at des- offered free or discounted passes for students and ignated transfer stations; therefore, there is no need seniors, Porto Alegre demonstrated the most gener- for any type of documentation or transfer slip to enter ous policy in this regard. Groups who receive free or a connecting bus. Fares are paid at each station as a reduced rate passes include students, teachers, mili- customer enters through a turnstile. 20
OCR for page 20
Fare collection and accounting is outsourced to a evasion is a serious problem despite having been private contractor/bank. The money is picked up by reduced from 20% in 2007 to 15% in 2009. The bip! the bank twice a day at all of the BRT stations, after card is used throughout the system. Although the it has been counted by the contractor and prepared smartcard can be personalized with a picture, the for deposit. Fares collected by the feeder services are card can be used by multiple passengers to gain taken to the stations for deposit and subsequently col- admission into the transit system. The card costs $4 lected as part of the station activity as well. to purchase and is rechargeable. All fare collection equipment is monitored at a The electronic fare media system is administered centralized control facility. Computers are used to through a private contractor that was created in 2005 identify each turnstile at each station and its current to issue, sell, and administer the smartcard. In addi- condition. The fare collection equipment also trans- tion to selling and administering the smartcard, the mits passenger counts, with reports generated daily contractor (AFT) acts as a clearinghouse for the tran- that relay both revenue and ridership. sit fare revenue. As such, the contractor is in charge of general revenue collection and the administration Funding/Subsidy of resources and payments to the rest of the Transan- tiago system. The contractor is responsible for the A fundamental aspect of the new structure is that procurement, installation, and maintenance of all it does not receive any operating subsidies from the onboard collection equipment. The contractor is also government. The system is entirely self sufficient. accountable for daily ridership and revenue data. Passenger fare revenue is distributed to the conces- sionaires based on "real income" as opposed to a Funding/Subsidy formula based on miles or hours of service, thus pro- viding a high incentive for performance. It is note- The majority (90%) of the current general rev- worthy that the Metrovia Foundation is funded not enue comes from fares; the remaining 10% comes through fare revenue, but through advertising income from advertising and other sources. Capital projects and property rents. are funded at 67% by the federal government, with The government does, however, provide the basic a 33% local match. The structure launched in 2007 infrastructure for operation. In this regard, the munic- envisioned self-sufficient operation of the transit ipality invested $92 million for the construction of system; no operating subsidies from the government the first three BRT trunk lines. This expenditure were expected. included the exclusive bus lanes, priority signaliza- However, the poorly executed operational aspects tion, bus stops/stations, and the terminals. This was of the system negatively affected the bottom line as funded through municipal bonds for which the federal well. Therefore, some loans and subsidies have been government pays the debt service. provided by the federal government for short-term The concessionaires have invested $75.6 million financing. The current subsidies decrease annually to purchase the buses. This funding was privately and are scheduled to sunset in 3 years, at which time secured, with banks providing loans of up to 60% of the system needs to be self-reliant, or new subsidies the cost of a bus and with a payback period of 4 years. will have to be approved at the federal level. Thus the concessionaires were required to invest at The financial problems underlying the need for least 40% of the cost. In many cases, this revenue a subsidy are a result of overestimated revenue and required for the "down payment" was generated underestimated costs. Revenue deficits were pri- through the sale of the old buses. In some cases, prior marily caused by fares that were insufficient, free individual operators banded together to form a con- transfers, extended transfer time, and passenger fare sortium, which either became the concessionaire or evasion. Contributing factors for the cost increases a part of the concessionaire. included technology that failed to optimize opera- tions, poor route and schedule planning, incomplete infrastructure, and additional vehicle requirements. Santiago, Chile Fare revenue is disbursed to the service providers based on ridership, but at a scaled level. The per pas- Fares/Fare Structures/Fare Collection senger payment decreases as the number of passen- The fare in Santiago is equivalent to US$0.80 gers increases beyond a set level. From a practical with three transfers permitted within 2 hours. Fare standpoint, the operators receive the per passenger 21
OCR for page 20
payment plus a subsidy to make them whole. The ment plan is submitted to the government as part of subsidy is based on actual expenses compared with its annual budget process. The World Bank has also projected contract expenses. provided loans to fund the system. Buenos Aires, Argentina Porto Alegre, Brazil Fares/Fare Structures/Fare Collection Fares/Fare Structures/Fare Collection The fare in Buenos Aires is approximately The transit fare is approximately US$1.25, while US$0.25; this subway fare is one of the lowest in the average fare is significantly lower at nearly the world, according to Metrovias staff. Govern- US$0.86. This discrepancy is the result of discounts ment regulation has kept fares artificially low over offered to students, teachers, justice workers, and the past 10 to 15 years as a result of the economic others, and free rides are given to a host of groups difficulties experienced in Argentina. Also, discounts including the elderly, military, postal workers, and and/or free rides are provided to students and seniors municipal workers. Free rides are also provided to of low income. Transfers between bus, rail, and sub- some individuals based on income, while everyone way are common, but require a separate fare for enjoys free rides on 6 days annually. each mode. Most fare collection is accomplished through an Electronic fare media, used by 60% of the riders, electronic system that was introduced after a history is the most popular form of payment. Magnetic of token usage. Most (85%) customers pay with an tickets are also available in single and 10-ride form. electronic farecard; the others pay cash to an onboard Because of a coin shortage, the government imposed "collector" who makes change and operates the vehi- a cashless system in 2009. The smartcard is in the cle turnstile. The widespread use of the farecard indi- process of being expanded to all public transit, thus cates general acceptance of and satisfaction with the moving the system to a regional universal farecard. electronic system. The electronic fare system provides accurate rider- The electronic fare system, or transporte inte- ship figures for the bus system. Access to the sub- grado, is a joint venture of the transit system over- way system is granted through turnstiles, which also sight agency and the consortium. The electronic facilitates ridership counts. media, known as "tri," was implemented with the objective to achieve more accurate passenger counts, Funding/Subsidy reduce fare evasion, improve transfers, and increase safety. The information generated from the system Currently, government subsidies for the transit is invaluable to operations as it is utilized for system have reached approximately 60% for rail and more thorough analyses of customer demand, which 50% for buses, which is a long way from the intent helps to optimize route scheduling and plan service of the privatization concept implemented in 1994. It changes. is particularly significant considering that from 1998 to 2004, the system not only did not require subsi- Funding/Subsidy dies, but also saw a positive cash flow back to the government from the concessions. The transit system does not require any govern- The federal operating subsidies are funded pri- ment subsidies, as the recovery ratio is designed to marily through gas and oil taxes and are mainly dis- balance fares with costs. Fares are reviewed annually bursed based on ridership volumes per km. Also, the for readjustment on the basis of a formula that con- transit service providers only pay 30% of the market siders cost/mi and passengers/mi, with costs includ- cost for gasoline used in operations. ing both fixed and variable. Moreover, the fare is Capital funding for new rail lines is provided automatically increased if inflation exceeds 8%. through the sale of federal land, while infrastructure The management of compensation to the individ- for existing lines was specified as a contractor respon- ual contractors is a responsibility of the consortium. sibility in the original bid documents. However, It accounts for daily revenue, which is distributed on because of the changes imposed by the government the basis of a percentage of the total ridership and the and the economic environment, a capital improve- miles of service delivered. 22