PPP for solving Public Transport woes in India

For World Bank Group Online course onPublic-Private Partnerships: How can PPPs help deliver better services?

24.06.2015By

Amit Kumar Jain

What is the infrastructure problem that the PPP is trying to solve?

EXISTING TRANSPORT INFRASTRUCTURE IN INDIA

Most of our Cities are stuck in Congestion trap

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Accidents

Traffic Jams

Frustrations

Urban Transport Problems

Source: World Wide Web

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Parking Difficulties

Noise

Pollution/Emissions

Urban Transport Problems - 2

Source: World Wide Web

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Benefits of Public Transport

Time savings – benefit to transit users

Fuel savings from transport operations

Air quality improvement (reduced emissions)

Green house gas reduction

Noise and vibration reduction

Other environmental improvement (reduced solid and liquid

waste, reduced impact on flora and fauna)

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Public Transport system employment

Commercial sector

Social benefits

City image

Urban form

Political

Amenity benefits to passengers: comfort, prestige

Benefits of Public Transport - 2

Integrated Public Transport

BASIC PREMISE

• The TRANSPORT SYSTEM of a city is the SUM of ALL MEANS of TRANSPORT

• Different MODES should be COMPLEMENTARY, not competitors.

WHY INTEGRATION ?

• Rational

• Cost-effective

• Efficient Public Transport System=Integrated & Optimized Modes • But also Improving the passenger’s experience in PT

WHY INTEGRATION?

• PAX desire “non stop-non transfer” journeys

• But the Transport Network is composed by different systems (buses, trains, mototaxi, etc)

• Commuters has to transfer between modes, with a feeling of “time loss” and “discomfort”.

• “minimise the need to transfer but maximise the opportunity to transfer”

HOW TO INTEGRATE?

• Integrated planning- low PHPDT by bus, high PHPDT by MRTS

• Seamless passenger interchange among different modes- station/stop planning

• Unified ticketing

• Adequate signages- information, pamphlets

• Complementary scheduling of services

• Fare concessions on using multiple modes

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Integrated Public Transport

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What services are to be provided and are these services affordable?

• The cities need an effective, efficient & affordable public transport services to meet the transportation demand.• The cities need to create Integrated Mobility Plans with an objective

to provide adequate, affordable & low carbon public transport system.• An integrated public transport may be sum of Mass Rapid Transport

system (MRTS), conventional bus system, autorikshaw, bicycles, pedestrians depending upon the demand along different corridors.

• However, transportation being capital incentive, the user fee to cover complete costs may be prohibitively high. The public authority may have to arrange Viability Gap Funding (VGF) to make the project financially sustainable and attractive to the private sector.

What are the reasons that the private sector would want to participate?

• The private sector may charge an appropriate user fee (fare) from the users to cover his capital and recurring cost.

• The private sector may also be interested in generating revenue from commercial activities like advertising, renting & leasing of commercial spaces etc.

What are the reasons that the private sector would want to participate?

• However, transportation being capital incentive, the user fee to cover complete costs may be prohibitively high. The public authority may have to arrange Viability Gap Funding (VGF) to make the project financially sustainable and attractive to the private sector.• If a private player is given right to develop all the modes of transport

in the city, he would select the most efficient one for a particular corridor as per demand. Like for high demand corridors- the Mass Rapid Transit System (MRTS) would be required, for low demand corridors- autorikshaw based service would suffice the demand. The private player would be more interested in operating all modes of transport to avoid inter modal competition.

Risk Allocation

Risk Allocation

• As a principle, the risks should be allotted to one who can best manage it. As such the risks may be allotted in following manner:• The risks pertaining to availability of land for the project, traffic

regulations, change of law, change in tax structure, should rest with the public authority.• The risks pertaining to construction, procurement of rolling stock,

operation & maintenance of system, timely completion of the construction and start of operations shall rest with the private player.

Risk Allocation

• The risks due to low traffic demand than estimated should be shared by both public authority and private player. • The risks due Force Majeure condition should be shared by both

public authority and private player. •