Towards a simplified performance-linked value for money model as a reference point for bus contract payments

The burgeoning commitment to contracting the delivery of bus services through competitive tendering or negotiated performance-based contracts has been accompanied by as many contract payments schemes as there are contracts. We are now well placed to design a simplified performance-linked payment (SPLP) model that can be used as a reference point to ensure value for money, given the accumulation of experiences throughout the world which have revealed substantive common elements in contracts. Whether the payment to the operator is framed as a payment per passenger or as a payment per service kilometre, the SPLP identifies efficient subsidy outcomes that are linked to a proxy indicator of net social benefit per dollar of subsidy. We illustrate how the SPLP model can be applied to obtain the gross (subsidy) cost per passenger (or per passenger km) from measures of gross cost efficiency and network effectiveness. This model can then be used as part of a benchmarking activity to identify reference value of money prospects in respect of passengers per $ subsidy outlay by adjusting for influences not under the control of the service provider. A single framework to identify contract payments to operators, and to assess (i.e., benchmark) operator performance on critical KPIs, is provided by internalising critical key performance indicators (KPIs) in the design of the SPLP. The proposed SPLP model is sufficiently general to be independent of the procurement method (competitive tendered or negotiated, for example) and of the treatment of revenue allocation (net or gross based contracts), with the additional advantage of being able to assess value for money for government.     

Using non-real-time Automatic Vehicle Location data to improve bus services

Although real-time Automatic Vehicle Location (AVL) data is being utilised successfully in the UK, little notice has been given to the benefits of historical (non-real-time) AVL data. This paper illustrates how historical AVL data can be used to identify segments of a bus route which would benefit most from bus priority measures and to improve scheduling by highlighting locations at which the greatest deviation from schedule occurs. A new methodology which uses historical AVL data and on-bus passenger counts to calculate the passenger arrival rate at stops along a bus route has been used to estimate annual patronage and the speed of buses as they move between stops. Estimating the patronage at stops using AVL data is more cost-effective than conventional methods (such as surveys at stops which require much more manpower) but retains the benefits of accuracy and stop-specific estimates of annual patronage. The passenger arrival rate can then be used to calculate how long buses spend at stops. If the time buses spend at stops is removed from the total time it takes the bus to traverse a link, the remaining amount of time can be assumed to be the time the bus spends moving and hence the moving speed of the bus can be obtained. It was found that estimation of patronage and the speed of buses as they move between stops using AVL data produced results which were comparable with those obtained by other methods. However the main point to note is that this new method of estimating patronage has the potential to provide a larger and superior data set than is otherwise available, at very low cost.     

Goal achievement with trusting partnerships at the tactical level

Recent Thredbo Conferences have begun to explore the importance of the relationship between public transport service purchaser and provider in the development of successful public transport services. However, practical examples to test the trusting partnership model are rare. Bus service planning and delivery in Melbourne, Australia, has pioneered the trusting partnership approach, from agreement about desirable service standards and requisite operator qualifications (at the Tactical level) to detailed service delivery contracts. New negotiated performance-based metropolitan bus contracts commenced in January 2009, embodying principles discussed in previous Thredbo Conferences. This paper reports on the Tactical planning process that agreed service standards and the subsequent contract negotiation process, reflecting a trusting partnership between purchaser and provider, while remaining transparent and accountable and maintaining performance pressure on the provider. It shows how patronage growth rates have increased dramatically and identifies areas where further enhancements should be explored in the contracting area.     

Workshop 5: Network and system planning

A renewed interest in public transport analysis and development has triggered a debate among policy makers, practitioners and stakeholders regarding technologies, design, pricing, subsidies and contract forms for optimal policy, including social well-being and the financing of public transport reform. Here we present contents and conclusions of workshop 5 of the Thredbo 12 Conference held in Durban, South Africa, where we analysed a series of recent theoretical developments on the links among demand, technology and the design of public transport systems, which we coupled with the examination of several case studies in order to feed the discussion regarding the relations among the strategic, tactical and operational elements that should be considered when designing a public transport policy.