GTZ - Urban Transport Institutions 2004

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Division 44Environment and InfrastructureSector project "Transport Policy Advice"

Sustainable Transport: A Sourcebook for Policy-makers in Developing CitiesModule 1b

Urban Transport Institutions revised December 2004


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O VE RVI EW OF THE SOURCEBOOK

Sustainable Transport: A Sourcebookfor Policy-Makers in Developing CitiesWhat is the Sourcebook?

is Sourcebookon Sustainable Urban Trans-port addresses the key areas of a sustainabletransport policy framework for a developingcity. e Sourcebookconsists of 20 modules.Who is it for?e Sourcebookis intended for policy-makers indeveloping cities, and their advisors. is targetaudience is reected in the content, whichprovides policy tools appropriate for applicationin a range of developing cities.How is it supposed to be used?

e Sourcebookcan be used in a number of ways. It should be kept in one location, and thedifferent modules provided to officials involvedin urban transport. e Sourcebookcan be easilyadapted to t a formal short course trainingevent, or can serve as a guide for developing acurriculum or other training program in thearea of urban transport. GTZ is meanwhileelaborating training packages for selectedmodules, being available from June 2004.What are some of the key features?e key features of the Sourcebookinclude: A practical orientation, focusing on best

practices in planning and regulation and, where possible, successful experience indeveloping cities.

Contributors are leading experts in their elds. An attractive and easy-to-read, color layout. Non-technical language (to the extent

possible), with technical terms explained. Updates via the Internet.

How do I get a copy?Please visithttp://www.sutp-asia.org or http://

www.gtz.de/transport for details on how to ordera copy. e Sourcebook is not sold for prot. Anycharges imposed are only to cover the cost ofprinting and distribution. You may also order [email protected] .Comments or feedback? We would welcome any of your comments orsuggestions, on any aspect of theSourcebook , bye-mail to [email protected] , or by surface mail to:Manfred BreithauptGTZ, Division 44P. O. Box 5180

D - 65726 EschbornGermany

Modules and contributorsSourcebook Overview and Cross-cutting Issues ofUrban Transport (GTZ)Institution al and policy orientation

1a. e Role of Transport in Urban DevelopmentPolicy(Enrique Pealosa)1b. Urban Transport Institutions (Richard Meakin)1c. Private Sector Participation in Transport

Infrastructure Provision(Christopher Zegras,MIT)

1d. Economic Instruments(Manfred Breithaupt, GTZ)

1e. Raising Public Awareness about SustainableUrban Transport(Karl Fjellstrom, GTZ)

Land use planning and demand management 2a. Land Use Planning and Urban Transport

(Rudolf Petersen, Wuppertal Institute) 2b. Mobility Management (Todd Litman, VTPI)Transit, walking and cycling 3a. Mass Transit Options

(Lloyd Wright, University College London;Karl Fjellstrom, GTZ)

3b. Bus Rapid Transit (Lloyd Wright, University College London)

3c. Bus Regulation & Planning(Richard Meakin) 3d. Preserving and Expanding the Role of Non-

motorised Transport(Walter Hook, ITDP) Vehicles and fuels4a. Cleaner Fuels and Vehicle Technologies

(Michael Walsh; Reinhard Kolke,Umweltbundesamt UBA)

4b. Inspection & Maintenance and Roadworthiness(Reinhard Kolke, UBA)

4c. Two- and ree-Wheelers (Jitendra Shah, World Bank; N.V. Iyer, Bajaj Auto)

4d. Natural Gas Vehicles(MVV InnoTec)Environmental and health impacts5a. Air Quality Management (Dietrich Schwela,

World Health Organisation)5b. Urban Road Safety(Jacqueline Lacroix,

DVR; David Silcock, GRSP)5c. Noise and its Abatement

(Civic Exchange Hong Kong; GTZ; UBA)Resources6. Resources for Policy-makers (GTZ)Further modules and resourcesFurther modules are anticipated in the areas ofDriver Training ; Financing Urban Transport ;Benchmarking ; and Car Free Days . Additional

resources are being developed, and an UrbanTransport Photo CD-ROM is available.
http://www.sutp-asia.org/http://www.gtz.de/transporthttp://www.gtz.de/transportmailto:[email protected]:[email protected]:[email protected]:[email protected]://www.gtz.de/transporthttp://www.gtz.de/transporthttp://www.sutp-asia.org/


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Module 1b

Urban TransportInstitutions

Author:Richard Meakin

Editor:Deutsche Gesellschaft frTechnische Zusammenarbeit (GTZ) GmbHP. O. Box 5180D - 65726 Eschborn, Germanyhttp://www.gtz.de

Division 44, Environment and InfrastructureSector Project "Transport Policy Advice"

Commissioned byBundesministerium fr wirtschaftlicheZusammenarbeit und Entwicklung (BMZ)Friedrich-Ebert-Allee 40D - 53113 Bonn, Germanyhttp://www.bmz.de

Manager:Manfred Breithaupt

Editorial Board:Manfred Breithaupt, Karl Fjellstrom*, Stefan Opitz,Jan Schwaab* We would like to acknowledge the role of Karl Fjellstrom for

critical review and appraisal of all contributed articles, identifying and coordinating with contributors, and other contributions

concerning all aspects of the sourcebook preparation as well as for editorial and organisational supervision during the entire process of the sourcebooks development, from its initialconception until the nal product.

Cover photo:Karl FjellstromMayor Antanus Mockus (right) of Bogot, Colombia,Car Free Day, Feb. 2002

Layout:Klaus Neumann, SDS, G.C.

Print:TZ Verlagsgesellschaft mbHBruchwiesenweg 19D - 64380 Rodorf, Germany

Eschborn 2002 (revised December 2004)

Findings, interpretations and conclusionsexpressed in this document are based on infor-mation gathered by GTZ and its consultants,partners, and contributors from reliable sources.GTZ does not, however, guarantee the accuracyor completeness of information in this document,and cannot be held responsible for any errors,omissions or losses which emerge from its use.

About the author

Richard Meakin holds degrees in law, trans-port planning and political science. He hasspent his entire 35-year professional career inpublic transport, initially as a bus companymanager in the UK, then for twenty years as agovernment public transport planner and regu-lator in Hong Kong, and for the last ten years asan international consultant based in Bangkok.His core experience was gained in Hong Kong

where he played a key role in developing thepublic transport system to meet the needs of thecitys rapidly growing economy and population whilst maintaining public transports share oftrips at over 80%.Richard has undertaken consultancy assign-ments in major cities in more than twentycountries in Asia, Africa, the Middle East andthe Caribbean. Most were studies relating tothe organization, planning and regulationof public transport. His clients have included

international aid agencies, governments and theprivate sector.
http://www.gtz.de/http://www.bmz.de/mailto:[email protected]:[email protected]://www.bmz.de/http://www.gtz.de/


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1. Introduction 1

1.1 The focus of this module 1

1.2 The structure of government 1

1.3 The scope of urban transportresponsibilities 2

2. Foundations of effectivetransport management 3

2.1 Effective institutions 3

2.2 Devolution of functions 42.2.1 Hierarchy of functions by

government tier 4

2.2.2 Distribution of functions withineach tier 6

3. Overcoming constraints 8

3.1 Administrative capability 8

3.2 Alleviating a shortage ofprofessional skills 9

3.3 Clarifying policy objectives 10

4. Transport authorities 12

4.1 The role of a transport authority 12

4.2 Transport authorities in developed cities 144.2.1 Introduction 144.2.2 Examples of transport

authorities 15

4.3 Transport authorities indeveloping cities 194.3.1 Singapore and Hong Kong 20

4.3.2 Metro Manila Development Authority 21

4.4 Administration by governmentdepartments The case of Bangkok 234.4.1 Government role and

procedures 234.4.2 Weak coordination 234.4.3 Ineffective decentralization 244.4.4 Inadequate technical capability 244.4.5 Institutional recommendations

for Bangkok 24

4.4.6 Reorganisation of transportresponsibilities in 2002 25

4.5 Successful transport reformsin South American cities 264.5.1 Colombia, Bogot 264.5.2 Curitiba, Brazil 28

5. Conclusions on urbantransport institutions 29

References 32


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Sustainable Transport: A Sourcebook for Policy-makers in Developing Cities

e distribution of responsibilities between tiersmay be formalized by legislation. ere is atrend towards the devolution of responsibilitiesand more autonomy for decision-making, to the

lower tiers of government.1.3 The scope of urban transport

responsibilities

Urban transport responsibilities are all thosefunctions relating to the planning and manage-ment of the circulation of vehicles, passengersand pedestrians on the road system, and whererelevant, on local rail and water transport net-

works. ey generally include:planning and development of transport infra-

structure (road & rail networks)management of roads and road use, includingthe licensing of vehicles and drivers

public transport organization, developmentand regulationnancing and investment

an interface with land use and urban planning.Governments transport responsibilities may ex-tend to operations where there are state-ownedbus, rail or ferry undertakings, or toll roads,bridges and tunnels.Table 1 illustrates the range of functionsexercised by a sample of urban transport agen-cies. All the agencies listed are responsible forregulating public transport services, but there isa wide variation of other transport functions in-tegrated within the individual authorities. Some

T a b l e 1 : T

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i n

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t i o n

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L T A

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t h o r i

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K o n g

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t

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N e w

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t A u

t h o r i

t y

L T D

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d T r a n s p o r t

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M V V

M u n

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T r a n s p o r t s

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i g h t T r a n s p o r t

I n f r a s t r u c t u r e

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i c e s

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L T A

X

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X

X

X


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Module 1b: Urban Transport Institutions

agencies are limited to public transport plan-ning and regulation only, while others extend tothe management of the road system, and evento freight transport infrastructure. e Singa-pore Land Transport Authority (http://www.lta.gov.sg ) is the transport agency with the widestscope, and the highest level of integration. Itembraces not only road transport but also therail mass transit system, the registration andlicensing of private vehicles, and administeringthe private vehicle quota system and electronicroad pricing.Bangkok is a city with one of the lowest levels ofintegration of urban transport institutions, witharound 20 government departments, agenciesand state-owned enterprises exercising responsi-bilities related to urban transport. A case studyof Bangkok is presented in Section 4.3.It is not suggested that highly integrated agen-cies are necessary to successfully manage urbantransport. However, it is clear that the larger thenumber of agencies involved in urban transport,the greater the difficulties of coordination.

Institutional gridlock in ArgentinaDifculties of institutional coordination, whichcan paralyse policy development, are exem-plied in Buenos Aires. Overlapping authoritybetween national (Republic of Argentina), pro-vincial (Federal District) and city (City of Buenos

Aires) governments has yet to be overcome byany effective coordinating mechanism, despitenumerous attempts. As in Bangkok, urban trans-port policy initiatives developed by one level ofgovernment or agency are frequently blockedby another level of government (or agency) withoverlapping or related authority.

An example is the recent bus priori ty mea-sures devised for the city centre by the nationalgovernment transport ofce. These plans, elabo-rated in great detail, could not be implementedbecause the city government has authorityover trafc management in the city centre. Thecity government in turn were not motivatedto establish bus priority schemes or instigateother much-needed public transport planningreforms, because the licensing authority forthe vast majority of urban buses is held by theprovincial government.GTZ, 2002

2. Foundations of effectivetransport management

Effective public transport management is built

on four foundations:1. A coherent policy , and implementation strat-

egies;2. A structure of the public transport indus-

try that is amenable to competition or regula-tory control;

3. A regulatory framework that provides alegal basis to impose the right mix of obliga-tions and incentives;

4. Effectivesupervisory institutions that havesufficient capability and independence to un-dertake basic network planning, administerregulation and guide the development of theindustry.

Ultimate responsibility for creating and main-taining these foundations rests with centralgovernment.is module deals with item 4. It discusses theprinciples of organisation and the functions ofsupervisory institutions, and gives examples ofeffective institutions in different countries withdifferent transport policies.

2.1 Effective institutions

An effective institution is one that is capable ofpursuing and achieving its assigned objectives,and capable of managing a transition to new orrevised objectives. Institutions that are not effec-tive tend to muddle through, with incrementalmeasures to issues as they arise.e following are essential requirements for aneffective public transport planning and regula-tory institution: clear, attainable objectives which are consis-

tent with broader policy objectives; well-dened working procedures with limits

to officers discretion; adequate resources: funds and qualied, mo-

tivated staff; an appropriate and sound legal basis for the

exercise of powers and duties; accountability for performance to a higher

administrative or political body;

procedures for public reporting and consulta-tion with stakeholders.
http://www.lta.gov.sg/http://www.lta.gov.sg/http://www.lta.gov.sg/http://www.lta.gov.sg/


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2.2 Devolution of functions

Government structures vary widely betweencountries, but all share a basic hierarchical struc-ture, with responsibility delegated downwards to

local levels, and accountability upwards.Government comprises several tiers of politicaland administrative institutions: National; Provincial (or state in a federal system); Metropolitan or county; Municipal (or city); Town and district.

Not every country has each tier of government.Efficiency requires that responsibilities aredistributed efficiently by:Devolution whereby functions are devolvedfrom central government to regional or localtiers of government; arrangements are made forthe (vertical) accountability of each tier to thetier above, and supervision of the tier below.Distribution compatible functions aregrouped into departments within each tier ofgovernment; and internally within those agen-cies. Arrangements for (horizontal) cooperationand consultation within each tier; and account-ability of the administrative body to the politi-cal body are necessary.Principles of devolution and distribution areaddressed in the following sections.

2.2.1 Hierarchy of functions bygovernment tier

e degree to which transport functions aredevolved to regional or local tiers of governmentvaries presents a dilemma: transport servicesmust be responsive to the needs of users at local(village or district) level, but the framework forthe provision of services, including: Strategic urban land-use and infrastructure

plans which are integrated with road networkand public transport network plans;

e roles of various transport modes; e regulatory framework; and Long-distance bus networks

are most efficiently planned on a large-scale, atthe metropolitan or provincial government tier.

In practice, there are wide differences betweencountries as to the level at which transport

planning and regulatory responsibilities arecarried out.

In France, a 1982 law devolved responsibilityfor the planning and procuring of passenger

transport services, together with budgetaryprovision, down to the level ofcommune . ereare 36,700 communes in France and 85% haveless than 2,000 population. ey functionby combining to form voluntary district as-sociations (communauts urbaines ). e Frenchsystem of public transport administration isdescribed in Section 4.2.

Some developing countries have devolvedresponsibility for local transport to the govern-ments of provinces (e.g. Sri Lanka, Pakistan andIndonesia) and metropolitan cities. is enablesthe geographical scope of the authority to coverthe full extent of the conurbation transportnetwork, overcoming problems of coordinationbetween constituent authorities.

However, in other cases, for example in the Asian megacities Bangkok and Manila, centralgovernment still exercises key urban transportfunctions due to the dominance of the capitalcity in the economy and the lack of professionalexpertise at metropolitan and city levels.

In Hong Kong and Singapore, central govern-ment exercises all transport planning andregulatory functions because a regional tier ofgovernment does not exist, except for purelylocal issues. is unity of government structurehas contributed to their success in maintainingconsistent and progressive policies and strategiesto manage urban transport.

International experience indicatesthat the old model of a government-owned and operated bus systemis neither cost-effective nor, moreimportantly, does it provide thelevels of service necessary to supportthe economic growth and socialrequirements of a community.

World Bank, Options for Bus Transport the Overseas

Experience ,http://www.worldbank.org/transport/urbtrans/

pub_tr/chinan.doc
http://www.worldbank.org/transport/urbtrans/pub_tr/chinafin.dochttp://www.worldbank.org/transport/urbtrans/pub_tr/chinafin.dochttp://www.worldbank.org/transport/urbtrans/pub_tr/chinafin.dochttp://www.worldbank.org/transport/urbtrans/pub_tr/chinafin.doc


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Whilst acknowledging the wide variety ofpractice between countries, the following sec-tion suggests some norms for the distribution oftransport responsibilities between the national,

state/province and metropolitan/city tiers ofgovernment. It is followed by case studies whichillustrate how the norms are applied in variouscities and countries.

Transport responsibilities vested innational government National policies, strategies and programs for

the transport sector; Integration of transport sector policies with wider economic, planning and environmentalpolicies;

National transport legislation, including de-ning powers devolved to regional levels;

Matters relating to national or internationalnetworks of roads, railways and air services;

Technical regulations e.g. standards of vehicledesign, including safety and environmentalstandards;

Collecting and collating national transportsystem data;

Budgets: administration of national taxes and

disbursement of grants and subsidies to localgovernments; Research and development.

Transport Responsibilities Vested in State/Prov-ince Government

Planning and regulation of transport services within the province, including the power toenact provincial regulatory legislation.

Devolution of public transport responsibilitiesto provincial level is provided by the Constitu-tion in Indonesia and Sri Lanka and has beenthe practice in India and Pakistan since Inde-pendence. It does give rise to variations in policybetween provinces.

Transport responsibilities vested inmetropolitan/city governmentMost large cities in developed countries andmany large cities in developing countries com-prise a number of municipalities or districts,each with a local government. is often occursbecause the urbanised area has outgrown the

city boundary and extends into neighbouringdistricts, or because several satellite towns have

merged into a metropolis. For example, MetroManila comprises 17 municipalities, each withits own government.e constituent municipal governments control

many internal local services, but transport, andespecially public transport, is most efficientlyplanned and administered on a metropolitanscale, across municipal boundaries.ere are several approaches to the coordinationof transport within a metropolitan conurbation:1. A metropolitan tier of government adminis-

ters all functions, including urban passengertransport (Shanghai);

2. ere is no metropolitan tier of governmentbut passenger transport is administered atmetropolitan level through a metropolitantransport authority which comprises rep-resentatives of the constituent municipali-ties common in Europe (see the descriptionof Passenger Transport Authorities in UK inSection 4.2) and the USA;

3. Certain transport functions such as strategicplanning, setting fares and operating stan-dards are administered by a metropolitanauthority, while other functions, such as thelicensing and regulation of local services areadministered at local (municipal) level;

4. ere is no joint authority but municipal gov-ernments within the conurbation cooperate toadminister urban transport (communautsurbaines in France);

5. Metropolitan transport is managed directlyby central government, or by provincial gov-ernment where city government lacks thenecessary funding and staff resources (Dhaka,Bangladesh; Bangkok, ailand; and Lahore,

Pakistan). While options 1-4 above reduce the problemof coordinating transport across jurisdictionalboundaries within the metropolitan area, theproblem of coordination across the outerboundary remains. It is common for serviceslicensed by an authority outside the metropoli-tan area to operate across the boundary, andto carry passengers on journeys wholly withinthe metropolitan area. e effect is that themetropolitan transport authority does not have

regulatory control of all services within itsboundary.

Conicts between cityand national governments

Such a conict arose in theUK in 1984. The socialistcontrolled Greater LondonCouncil adopted a socialapproach and permitted low-er levels of cost recovery andlower fares from bus and railservices it controlled throughthe London Transport Execu-tive (LTE). This was in conictwith the Conservative centralgovernments commercialapproach. The conict wasresolved by central govern-ment dissolving the LTE andreconstituting it as London

Regional Transport directlyunder state control.

More recently, a similarconct has arisen in Lon-don, with the current MayorKen Livingstone developinga transport strategy (seehttp://www.london.gov.uk/approot/mayor/strate-gies/transport/index.jsp )in which several elementsare opposed by the nationalgovernment.
http://www.london.gov.uk/approot/mayor/strategies/transport/index.jsphttp://www.london.gov.uk/approot/mayor/strategies/transport/index.jsphttp://www.london.gov.uk/approot/mayor/strategies/transport/index.jsphttp://www.london.gov.uk/approot/mayor/strategies/transport/index.jsphttp://www.london.gov.uk/approot/mayor/strategies/transport/index.jsphttp://www.london.gov.uk/approot/mayor/strategies/transport/index.jsp


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Bandung provides an example of the problemscaused. e Bandung city transport authorityimposed a limit on the number of small mini-buses (angkot ) that could operate in the city, inthe interests of limiting congestion. However,large numbers of minibuses licensed by theadjoiningkabupaten (regional government)operated radial routes into the city and, becausethe urban sections of those routes were the mostprotable, tended to run short-workings insidethe metropolitan area. us, the need for coordi-nation across the metropolitan boundary remains.

A few cities, including Hong Kong and Sin-gapore, are city-states which basically have asingle-tier of government, as their district coun-cils deal with purely local management matters.us there are no institutional boundaries basedon administrative areas or hierarchical levelsof government. is, and the continuity andauthority of government in these two cities, hasgreatly simplied the administration of urbantransport. Other one-tier governments includeMauritius, and Middle East states such as Ku- wait and Bahrain.

Case studies which describe the various ap-proaches to the management of metropolitanurban transport are considered in Chapter 4 below.

2.2.2 Distribution of functions withineach tier

e tiers of government (national, provincial,metropolitan, municipal) form a hierarchy.

Within each tier of government, agencies arealso arranged hierarchically, with high-levelpolicy and strategic planning bodies at the top,and implementation and executive agencies atthe bottom.

A typical vertical structure of a major city govern-ment is that of the Shanghai Municipal Govern-

ment (in year 2000) shown in Figure 1 below.Note however that the four key transport func-tions of urban planning, traffic police enforce-ment, public transport planning and regulation,and roads and traffic fall under four differentpolicy-level bureaus. us, coordination ofroads and transport policy must be resolved atthe level of Vice-Mayor.

ig. 1

e hierarchicaltructure of thehanghai municipalovernment ote: only agencies with transportponsibilities are shown


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By contrast, Figure 2 illustrates the organisationof transport functions in the Hong Kong Gov-ernment. ree key urban transport functionsof public transport planning and regulation,traffic management and urban planning con-verge in a single Transport Bureau at the Policy

and Planning level.ere is a dilemma here: Responsibilities for the higher-level functions

of planning and policy development need tobe highly integrated, and therefore consoli-dated into as few agencies as possible;

ere is a need to keep the executive depart-ments within a manageable size and withouttoo many diverse professional disciplines; thisimposes a constraint on the degree of consoli-

dation possible.Professional discipline is often the basis of arational division of functions between depart-ments. Another dilemma is then evident: A greater degree of specialisation within each

department requires a larger number of de-partments, but also:

More complex inter-department and inter-pro-fession coordination is needed, which adds tobureaucratic processes and increases cost.

Most governments have created specialisedtransport departments to deal with urban

transport development and management. escope of these departments varies.Urban transport can be divided into ve mainfunctional areas as a basis for organisationalgrouping:

Planning1. Integrated strategic transport planning and

land use planning 2. Transport infrastructure (road & rail) plan-

ning and programming 3. Transport network and service planning

Transport system management4. Management of roads and road use5. Public transport development, management

and procurement

Dedicated Transport Departments usually em-brace functions 2-4 above. Land use planningis usually the responsibility of a separate agency.For example, in Hong Kong, strategic planning(land use and major transport infrastructureplanning such as roads, bridges and railways) isadministered by a specialised strategic planningagency.

Regulatory functions should beclearly separated from those of system

operations.

Fig. 2

Division of functions by professional discipline(here: Hong Kong goverment)


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3. Overcoming constraints

3.1 Administrative capability e previous sections showed how transport

functions may be organized within differentlevels of government, and considered someexamples.

In practice, in the developing world, a widerange of administrative structures may be seen.ese often reect a countrys historical legacyand political system. In many former coloniesthe structure of government still reects thestructure adopted during the colonial era. Inthe newly independent countries of the former

Soviet Union, the Soviet structure is still visible.In China the unitary structure, in which eachtier of government shows the same functionaldivisions, each corresponding with a tier of thePeoples Congress, still reects the structure cre-ated when the Peoples Republic was founded.

Differences between developed anddeveloping countriesere are major differences between developedand developing countries which have implica-

tions for urban transport institutions.In the developing world, metropolitan cities tendto be much larger, relative to national popula-tion, than in developed countries . Many of thesemegacities dominate their national economies.

For example, Bangkok Metropolitan Regionaccounts for 56 percent of ailands GrossDomestic Product. Because of the economicprimacy of Bangkok within the country andthe political sensitivity of urban transportissues, central government ministries and theCabinet deal extensively with metropolitanissues. is would not matter if central govern-ment responsibility resulted in consistent andeffective strategic planning. Unfortunately,the effect is contrary. Competition for powerbetween the fragmented transport agencies ofthe central government precludes the strategicfunctional coordination so essential to effectivemetropolitan transport planning. Meanwhile,the city government has little incentive to

develop its capability in transport planning andmanagement.

e shortage of professional skills in developingcountries inhibits the devolution of transportresponsibilities to the city (metropolitan andmunicipal) level of government . Where profes-

sional resources are scarce, expertise tends to beconcentrated in central government. Sometimesthis is a strategy to create a centre of expertise,but more often because more budget is avail-able and employment opportunities in centralgovernment are more favourable.

A related factor inhibiting initiatives by citygovernment is that central government oftenhas not laid a framework of transport policiesand objectives for cities to follow. erefore citygovernments have no principles or guidelines to

help develop and implement initiatives. Policyinitiatives then tend to be ad hocor experimen-tal, and are often misguided. Without a policy,each initiative creates a new precedent, with therisk of a reaction from stakeholders which thecity government may be unable to manage.In developed countries, policy-makers and the public are much more aware of the social, eco-nomic and environmental costs of failing to man-age urban transport efficiently.In European andNorth American cities the need to subsidise

urban public transport from public funds hasled to a situation where in many cities less thanhalf of operating costs are recovered from fares.e need to allocate and administer subsidiesand to account for the use of those funds hasintroduced a political element into the urbantransport equation.In developing countries, the economic, socialand environmental benets of developing ahigh quality, high capacity public transportsystem are increasingly recognized. Developing

countries are characterised by relatively lowaverage incomes, low private vehicle ownership,and high population densities in the cities.ese conditions are favourable to a high levelof transit ridership. In many developing cities ahigh proportion of public transport has alwaysbeen in the private sector, often using basic,small vehicles in individual ownership. Qualityhas been low, but fares have remained afford-able without subsidy. e practical problems ofadministering a subsidy to a transport industry

largely comprised of loosely organized owner-drivers, and accounting for performance, are


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beyond the administrative capability of mostdeveloping city governments.

Consolidation of the industry A strategy that has proved successful in break-ing the low-cost, low-quality equilibrium byraising quality while not raising fares beyond af-fordability by users, is to consolidate the publictransport industry. is usually means replacingminibuses operated by individuals with bigbuses operated by corporate bodies, which en-ables the introduction of professional manage-ment, coordination of services and economies ofscale. Fragmentation of the industry is not justrelated to minibuses: Buenos Aires for examplehas an excessively fragmented large bus industry,as does Surabaya, Indonesia.Even this strategy requires reforms: a system ofroute franchising to replace individual vehiclelicences, and improved planning and regulatorycapacity in the government. ese are fairlymodest reforms, but despite technical assistancein several developing countries, have beenpartially implemented only in Pakistans cities.

Government provision of infrastructure A strategy used in many cities in the developing world, which enables some costs to be borneby government but without the administrativecomplexity of operating subsidies, is for govern-ment to bear the cost of infrastructure. ismay mean (as in Hong Kong) that governmentprovides bus terminals free of charge to theoperators, and land for depots at below-marketcosts. e governments of Hong Kong andSingapore gave nancial support to their masstransit railways by, respectively, providing sub-stantial equity, and meeting the full costs of theinfrastructure.In the highly successful bus rapid transitsystems in Bogot and Curitiba, governmentprovided the track and station infrastructure,enabling the private buses using the system tobenet from very high operating speeds andreliability.By contrast, Indonesian city governments levycharges on all minibuses using terminals. Illicitcharges are also levied by gangs ( preman) who

control access to the terminals, adding furtherto operating costs.

3.2 Alleviating a shortage ofprofessional skills

Developing countries often have a shortage ofprofessional skills. Exacerbating this shortage isthe fact that skills are continuously lost throughemigration to developed countries.

Two strategies may be used to alleviate a short-age of skills: increase the supply of skills, andmake more effective use of the skills available.

1. Improve the availability of the particularskills needed in the transport sector.

Increasing the supply of skills is a function ofthe education system. Transport is a multi-dis-

ciplinary sector, utilising a range of technicalskills in monitoring, analysis, forecasting,planning and design. Many of these skills havetheir basis in civil engineering and statistics,but specic applications in transport probablyrequire post-graduate education at Masters leveloverseas. Non-numerate, economic skills arealso needed for service regulation and policy-making.

2. Utilise and organize skills so that they

are used most effectivelyConcentrate available expertise in expertagencies, or think-tanks with a degree ofautonomy that can prepare the all-importantpolicy framework, oversee implementationand act as an agent of change. Creatingexpert bodies frees staff from day-to-day ad-ministrative duties which are usually orientedtowards re-ghting (prioritising short-termsymptoms of problems rather than their fun-damental causes).

Conduct a skills analysis to assess the rangeof specialisations and minimum number ofqualied personnel required to staff an expertunit, and ensure those skills are acquired.

Reward key expertise with market-level sala-ries to retain skills, even though salaries maybe higher than civil service salary scales. isis feasible within an expert unit.

Make use of external expertise, like consul-tants, universities and other expert establish-

ments (for example, the Small and MediumIndustries Development Authority, Pakistan).


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Avoid an excessive turnover of staff in keyposts. Allow generalist staff to learn from thespecialists.

Put experts in positions where they can inu-

ence policy. Ensure that scarce skills are not rendered inef-fective because they are engaged in uncoordi-nated initiatives, or in unnecessarily compli-cated systems (see margin note).

3.3 Clarifying policy objectives

e key to making transport institutions effec-tive, within resource constraints, lies in theorganization of the sector. A consistent, progres-sive and rational approach must be adopted.

Once objectives, principles and priorities have been established andaccepted by stakeholders, the tasks ofthe city government become greatlysimplied.

Policy framework An urban transport policy which denes objec-tives for the sector and enable priorities to beset, is a fundamental requirement. Sub-sectoralpolicies should be compiled at least for non-mo-torised transport, road use and public transport.e policy framework must address difficultpolicy areas such as:

managing the allocation of road space be-tween competing demands,

how to regulate public transport fares, and control and management of informal para-

transit services.e policy for each sector should be supportedby strategies that pursue the policy objectives.e policies, plans and strategies will form ahierarchy (as discussed in Module 1a:UrbanTransport and Development Policy ):1. Policy framework: urban transport policy,

with modal sub-polices2. Strategies to pursue policy objectives, such as

regulatory procedures3. Implementation: plans, programs

4. Management and enforcement5. Operations.

implifying aegulatory system

egulatory frameworkse often inappropriate todustry conditions and

ureaucratic, becauseey are not matched toeir objectives, or their

bjectives are not clear ornambiguous. It may beetter to simplify a regulatoryystem so that it is withine capability of availablesources to administer it,ther than administer anappropriate framework

artially, ineffectively orscriminately.

Strategies and planse benets of adopting a rational approachas outlined above are that, once objectives,principles and priorities have been established

and accepted by stakeholders, the tasks of thecity government become greatly simplied.Instead of having to argue for each initiativeas it arises, the government can focus onimplementation, and on repeating the cycle ofpolicies and plans. Governments response tostakeholders objections and representationscan be more authoritative once principles andprecedents are established. Objectors will bemuted if they see that: e government is resolute in its policies and

programs. Policies and programs are rational and confer

benets on the community which outweighthe disbenets to individual stakeholders.

Different stakeholders are treated equitablyunder the programs.

e polices and programs have the supportof the community and the political level.

Of course, compiling a rational set of policiesand programs requires both consistent direction

and support from the political level, and highlevel administrative and professional capabil-ity. ese may be difficult to locate in practice.Hence there are advantages in using externalresources, perhaps on a consultancy basis, or anexpert think-tank comprising representativesof academia and the industry to prepare the rstround of policies and plans and to conduct therst round of consultation.To change the status quo and to sustain changesin the face of opposition from vested interestsrequires political will. In the absence of a com-mitment to policy, this is often lacking.

The 'muddling through' approach A management culture of muddling throughinvolves decisions based on short-term expedi-ency and reaction to pressures. Where therational approach of policies, strategies andplans recommended above has not been ad-opted, administration tends to become sporadic,rigid and bureaucratic. is is evident where

public officers have some discretion to confervaluable rights, such as vehicle or public trans-


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port service licences or rights to use road space.e process rather than the result then takesprecedence.ese conditions promote illicit practices, col-

lusion between officials and their clients, andcorruption. Under such conditions, clientsbenet by organizing themselves into groupsso that they can more effectively negotiate withthe officials. Access to officials then allows thesegroups to consolidate their control over otheroperators, and to extract charges. Collusion be-tween operators groups and officials may thenbecome formalized, and corruption syndicatedto senior levels in the government structure.

Governments response to stake-holders representations can be moreauthoritative once principles and precedents are established.

Operators then have little incentive to invest,since there is no real competition; rights arenegotiated and often controlled by criminals orlocal strong-men. e interests of users are notconsidered in this process. In many cities, thisfreezes the route network and leaves gaps inthe quality range, or network coverage of publictransport services. ese gaps may be lled byunlicensed, informal public transport such asminibuses. Officials may take advantage of im-munity from enforcement by getting involvedin operation, particularly of informal or illegalpublic transport services. Since users are relianton unlicensed services, the government musttolerate the unlicensed services.is complex combination of interests espe-cially with the complicity of officials entrenchesthe illicit system, making it difficult to imple-ment any reform strategies.e existence of a systematic and transparentprocess of planning that ensures that servicesare responsive to the changing needs of users,together with policies that provide clear guide-lines for the exercise of official discretion, willprovide much less opportunity for the forma-tion of illicit control structures.ere is clearly a cycle at work. Figure 3 (see

also Module 3c:Bus Regulation and Planning )illustrates the process whereby the lack of a

Fig. 3

A vicious cycle illustrating how the lack of acoherent policy and adequate administrativecapability by government can paralyse an urbantransport system.Louis Berger Inc., et al, Urban Public Transport Policiesin Bandung, Final Report, March 2002

coherent policy for public transport can impactnegatively on the condence of operators andinvestors. is leads to unsatised demand for

services, a proliferation of illegal operations, andillicit control and regulation. In extreme cases,as may be observed in some cities in Indonesia,the regulatory authority has effectively sur-rendered most of its powers to groups illicitlycontrolling the industry, with whom it works incomplicity.e vicious cycle shows how the lack of acoherent policy and inadequate administrativecapability in the city government, aggravatedby a regulatory regime which is outdated and

inappropriate to current conditions, paralysesthe urban transport system.


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4. Transport authorities

4.1 The role of a transport authority e focus of this module is on the agencies that

plan, procure and regulate public transport.ese may be government transport depart-ments, or public transport authorities. issection reviews the roles of a transport agencyunder three regulatory models:no competition;controlled competition and open competition. Itconcludes that an effective supervisory body isnecessary for any of the models to be successful.Under the no competition model a supervisorybody is required to ensure that, in the absenceof competition a monopoly operator meets

certain general standards of service coverage,performance and quality. However, in the caseof a private monopoly the authority may haveno effective recourse if the standards are notmet since the incumbent operator will be dif-cult to replace in the short term and will oftenblame his shortcomings on deciencies in theregulatory or operating environment. In theabsence of a comparison, the authority will tendto accept these uncritically. is may discourageeffective planning by the authority.

In the case of a public sector monopoly operatorthe supervisory body is likely to be under thesame roof as the operator (usually a depart-ment of city government) and not independent.

A monopoly has weak incentives to control costsand the supervisory agency may have the task ofpresenting requests to the government to fundever-increasing operating decits.Under controlled competition for the market the authority will be responsible for the plan-ning and development of the whole publictransport service, including all the modes, per-haps down to the level of operating timetables.e authoritys tasks will include: planning of transport infrastructure and tech-

nical systems (such as information and ticket-ing systems);

dening each route in the network and speci-fying the service parameters;

procuring services through tendering andcontracting, and the management of those

contracts; resolving coordination issues between operators;

monitoring the operators compliance of eachroute contract;

monitoring the overall network against de-mand;

fare-setting.e authority will also be the governmentsmain advisor on public transport policy. It willrecommend service standards including capac-ity and quality, environmental standards, fares,vehicles and labour conditions.Under an open market a supervisory body is re-quired to maintain and enforce minimum safetyand environmental standards for operators andbuses and to ensure that operators meet generalstandards of service coverage, performanceand quality. e role of the authority will notinclude comprehensive planning of the networkand services this will be done by the operatorsin the market, although the authority may haveresponsibility for procuring any services thatthe market is unwilling to provide. is will bedone through tendering and contracting.It is also necessary for the body to monitor theindustry to ensure that competition remainseffective and that operators, or illicit organisa-tions, are not controlling or restricting entry tothe market or access to passengers. lllicit controlin some form is almost always present where thepublic transport industry is fragmented, andespecially so where vehicles are unregulated.It has been noted earlier that transport supervi-sory agencies take a variety of forms, includinggovernment departments and autonomousagencies, and that urban transport may beadministered at almost any level of governmentfrom national level (Bangkok) to town andvillage level (France).Nevertheless, there is a clear distinction be-tween developing cities and developed citiesin respect of the basic characteristics of theirpublic transport systems.Dedicated public transport authorities areusually associated with conditions that prevailonly in developed cities, particularly thesubsidisation of public transport services frompublic funds. Subsidies require sophisticatedadministrative mechanisms to ensure they are

allocated efficiently and agencies are account-able. Developing city governments often lack


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The Singapore Land Transport Authority (LTA)Source: http://www.lta.gov.sg

Powers of the Singapore Land Transport Authority Empowering legislation Powers conferred on the LTA

Street Works Act To plan design construct and maintain roads, pedestrian walkways, busstops, shelters, interchanges and terminals, taxi stands. Maintain, oper-ate and improve road trafc signs and signals, trafc control and roadlighting equipment.

Parking Places Act To provide, license and regulate the use of motor vehicle parking places.Rapid Transit Systems Act To plan, design, build, operate and maintain rapid transit systems including

the MRT system, and to regulate the operation of these systems.Road Trafc Act Powers for the registration and licensing of motor vehicles and collection

of fees and charges. Licensing procedures and systems for road transport.Other Responsibilities To grant permits for land transport purposes Trafc management strategies and practices To promote land transport policies and programs

To excavate, resume or close any road To compulsorily acquire land for building roads and railways.

Fig. 4

Traffic police retaina major traffic

management rolein Bangkok, withan effective veto

power over policyinitiatives, including pedestrianisation intourist areas such as

Khao San Road.

The Authoritys mission statement is to providea quality, integrated and efcient land transport

system which meets the needs and expectationsof Singaporeans, supports economic and environ-mental goals, and provides value for money.

Essentially a merger of four government agen-cies (Registry of Vehicles, Road and TransportDivision of the Public Works Department, MassRapid Transit Corporation, Land Division Ministryof Communications) LTAs responsibilities extendto the planning, design, development and manage-ment of all land transport infrastructure and policiesincluding road building and maintenance, the de-sign, building and operation of the MRT and anyfuture rail systems, vehicle ownership and demandmanagement policies. The authority integrates allgovernment functions relevant to land transport,except land use planning, within one agency.

Although it regulates the operation the MRT, busand taxi services by licence and legislative pow-

ers it does not own the systems. They continueto have a degree of managerial independence ascorporations or limited companies.

The powers vested in LTA by its Act are largelyderived from the legislative powers of its constitu-ent bodies though these have been augmentedto remove the administrative boundaries betweenroad, rail and the various forms of land transportto promote the maximum degree of integration.The Authority is directed by an appointed Boardcomprising thirteen representatives of business,academia, the professions, labour and communityorganisations.

this level of capability, so service quality tendsto fall to a level that permits cost-recovery.ere are relatively few examples of developingcities with subsidised bus systems except by

ex post (i.e. their decits are paid from public

funds) payment of the operating decits of apublicly-owned bus undertaking.e need for subsidy usually arises where policyobjectives require a high quality of service thatmakes public transport attractive compared tothe use of private vehicles, and which enablesthe adoption of constraints on car use. Publictransport must also meet high environmentalstandards. Electric rail modes provide thehighest service quality in both respects, but at

the highest capital cost. Integration of differenttransport modes (bus, tram, subway) in the
http://www.lta.gov.sg/http://www.lta.gov.sg/


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interests of overall efficiency means that farescannot reect the cost components of eachmode. Indeed, a universal fare scale and com-mon ticketing for all modes is now common

in many developed cities; the authority collectsand retains revenue or an arrangement for dis-tributing revenue between operators is in place.However, procedures are needed to ensure thatthe best value is obtained for funds expended onsubsidy.Satisfying these policy objectives and ensur-ing value for money in public funds requiressophisticated planning, monitoring and serviceprocurement mechanisms, which are mostefficiently undertaken by a transport authority.

Transport authorities vary widely in the scopeof their powers, their degree of autonomy andtheir constitutions. ey also go under a varietyof titles.It is common for an authority to be governedby a supervisory board or committee made upof appointed experts, lay members or electedrepresentatives of constituent municipalities.

An authority will also usually be governed by astatute which sets out its constitution, funding,powers and duties.

Although the most common form of publictransport authority is an autonomous agency,operating under a statute and directed by anappointed board, some agencies using the titleauthority are government departments or partsof government departments. Others (such as theBangkok Mass Transit Authority BMTA) arepublic corporations operating transport services,

which may also have powers of regulation overother operators.

While public transport authorities are quitecommon in Europe and the US, a few citieshave transport authorities responsible forboth public transport and road network management,including parking, for example, Singapore LTA,Transport for London. In Singapores case, theauthority is also responsible for vehicle anddriver licensing.

While public transport authorities are quitecommon in Europe and the US, a few citieshave transport authorities responsible for both

public transport and road network management,including parking, Singapore LTA , Transport

for London. In Singapores case, the authority isalso responsible for vehicle and driver licensing.

4.2 Transport authorities in developed

cities4.2.1 IntroductionMany would argue that a public transport au-thority (PTA) is necessary to plan co-ordinateand regulate a mature public transport system

where subsidy and integration, or state-owner-ship of some operating undertakings, havemuted market incentives. An independent bodyis needed to create a level playing eld forpublic and private sector companies.

e PTAs duties and responsibilities should bedened by law, to ensure it is independent fromboth government and the transport operators. Amulti-year service contract between governmentand the PTA will further dene its dutiesand responsibilities and ensure continuity offunding.Management and staff should be professional,competent and sufficient, and should includein-house legal, economic and nancial expertise.e powers and duties of the three parties (localgovernment, the PTA and the operators) mustbe clearly dened: the local government must take strategic deci-

sions, including developing a comprehensivepublic transport policy and implementationplan;

the public transport authority is an interme-diary between government and operators andis responsible for all tactical-level decisions,basically implementing the governments pub-

lic transport policy; the public transport operators, both public and

private, are solely responsible for operations. An independent supervisory council, consistingof elected representatives of the government, thetransport operators and public transport usersshould monitor the PTA to ensure politicalcontrol over transport policy and the use offunds used to support public transport.Specic tasks of a public transport authority are:

advisor to government on public transportpolicy development and standards;


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Table 2 (see next page) shows the typology ofurban transport authorities in a number ofEuropean and Asian cities. eir compositionand scope of functions are compared.

Transit authorities The US modelIn USA, the creation of transit authorities fol-lowed the transfer of public transport operationsto the public sector. is process took placequite quickly. In 1949, of the 117 largest Ameri-can cities 107 had privately owned transportsystems. By 1979 only eleven cities had a majorprivate sector operator.Both private and municipal operations wereconsolidated into transit authorities which were

constituted in a variety of ways: A separate transit authority established by leg-islation adopted by most American cities;

A municipal department funded from themunicipal budget, with ultimate authority forbudgets, routes and fares vested in the Mayor;

Regional transit authorities were created inthe larger cities, extending beyond the cityboundary into surrounding counties. Usuallythese bodies plan and regulate rail and roadmodes with the objective of achieving a high

degree of integration. ere are some inherentdisadvantages of regional authorities: ey make the transport system indepen-

dent of the local jurisdiction. ey act as an additional layer of

government.

Contracting out Not all services are operated by the transitauthority. Some retain authority for budgets,routes, fares and services but sub-contract oper-

ation to non-prot corporations or commercialorganisations. Many authorities employ contractexecutive management, selected competitively,thus introducing private sector incentives intosome areas of their activity.In 2002, only 9.2 percent of public transit busservices were competitively tendered in theUnited States. Most systems that are fully com-petitively tendered are in smaller areas, outsidemajor metropolitan areas. ere is no competi-tive tendering of metro or light rail service. In

addition, approximately 30 percent of dedicatedschool bus services in the US is operated by

comprehensive planning of the public trans-port network and schedules, including trans-port infrastructure and technical systemssuch as information and ticketing;

tendering and contracting public transportservices on behalf of the government: den-ing the routes and groups of routes to be ten-dered, preparing terms of reference, conduct-ing tenders and administering and enforcingcontracts;

integration of routes, fares and timetables,comprising both the public and privateoperators;

managing a revenue allocation system, basedon productivity and passengers carried;

maintaining a uniform tariff system that en-ables the use of an integrated ticket system;

management of transport infrastructure, suchas terminals and shelters;

maintenance of a public transport database.

4.2.2 Examples of transport authoritiesis section describes some examples of publictransport authorities:

Europe and the US: Transit Authorities the US model Transport for London the UK model for

London Passenger Transport Authorities the UK

model ex-London STIF the French model for the Paris Region Communauts urbaines the French provin-

cial model Verkehrsverbund the German model

Asia: Singapore Land Transport Authority Metro Manila Development Authority

Public transport systems administered by gov-ernment departments are also described. Hong Kong Singapore (prior to 1995) Bangkok

Finally, Bogot and Curitiba (Brazil) areincluded to provide an insight into the insti-

tutional bases of these widely-admired publictransport systems.

Tendering andcontracting steps

announcement of thetender,

the (pre)qualication ofbidders,

evaluation of proposals, contract negotiation and

award, contract management and

monitoring, evaluation of performance

of the contract.


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City Name of Authori ty Governing Body

ConstituentLocal

GovernmentUnits

Public Transport Functions

Planning Regulation Fares/ Marketing Infrastructure

S t r a

t e g

i c

P l a n n

i n g

S e r v

i c e

P l a n n

i n g ,

B u s

/ R a

i l ,

I n t e g r a

t i o n

P r o c u r i n g a n

d

R e g u

l a t i n g

S e r v

i c e s

F a r e

S e

t t i n g

M a n a g

i n g

F a r e

C o

l l e c

t i o n

S y s

t e m

M a r k e

t i n g

P T S e r v

i c e s

P l a n n

i n g

P T

I n f r a s

t r u c

t u r e

F u n

d i n g

P T

I n f r a s

t r u c

t u r e

M a n a g

i n g

C o n s

t r u c

t i o n o

f

P T I n f r a s

t r u c

t u r e

LondonTransportfor London

Appointed ExpertGoverning Board

Boroughs By Boroughs

Manchester(Modelfor 7 UKMetropolitanCounties)

GreaterManchesterPassengerTransport

Authority

ElectedRepresentatives ofconstituent Councils

10 District

Councils By District Councils

Paris regionSyndicat desTransportsd'Ile de France

Council ofrepresentatives ofcentral, departmentand region govt

Departmentsand Region

Lyon (Frenchprovincialmodel)

Urban TransportPerimeter (PTU)

Association ofconstituent towncouncils

25 towncouncils

Frankfurt(German

Model)

Rhein-Main- Verkehrsverbund

GmbH

Supervisory BoardRepresentatives ofconstituent citiesdistricts and state

11 cities,15 districts,

State of Hessen

By Municipalities

SingaporeSingaporeLand Transport

Authority

Appointed Boardof Directors

No localgovernments

ByPTC

ByOpera-

tors

Metro ManilaMetro ManilaDevelopment

Authority

Metro Manila Councilof constituent Mayors

13 cities,4 municipalities

ByLTFRB

ByLTFRB

Oper-ators

Hong KongTransport Bureauand TransportDepartment

Appointed Transport Advisory Committee

No localgovernments

ByTAC

By Operators By Works Dept

TFRB Land Transpor tation Franchising and Regulatory Board

TC Public Transport CouncilAC Transport Advisor y Committee and Chief E xecutive-in- Council

able 2: Typology of metropolitan transport authorities

private companies, though not all are competi-tively tendered (Competitive Participation inU.S. Public Transport: Special Interests Versusthe Public Interest . Wendell Cox. Conference onCompetition and Ownership in Land PassengerTransport 2003).

Constitution

e constitution of US transit authorities varies.Some allow close political and bureaucratic con-

trol over policy and operations; others follow acorporate model with management autonomy.Typically the authority is governed by a boardof directors to which elected officials are ap-pointed to represent constituent municipalitiesin proportion to their population or contribu-tion to subsidy. ere is usually a professionalcoordinating agency.

e authority usually reects a central govern-ment policy to give social and network aspects


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of public transport priority over a commercialapproach. Authorities generally have low cost-recovery objectives in many cities half or less ofoperating costs is met from revenue. e balance

is provided by local and central governmentsubsidies and sometimes by specic transit taxes. With little competitive pressure on operators,surrogates have to be devised to provide incen-tives to efficiency.ere is growing political pressure in the USto curb the rate at which federal transit sub-sidies to municipal authorities are increasing.Recently political initiatives have been takento cut the federal subsidy, leaving municipalgovernments to nance a much larger shareof transit decits. is has put pressure onmunicipalities to reduce costs and services andto improve cost-effectiveness, though deregula-tion on the UK model is not proposed. SomeUS cities now achieve over 65% recovery ofoperating costs from fares.

Verkehrsverbund The German modelIn Germany, state governments make transportpolicy, while the largest cities and conurbationshave joint transport authorities(Verkehrsver-bund VVR) which plan and integrate services,and co-ordinate a common fare structure andinvestment programme on behalf of the partici-pating municipal operators. e introductionof the VVR model goes back as far as 1963. Avariety of formulae is used by the VVRs todistribute the revenue collected among opera-tors. ese are highly complex and secret.Examples of VVR include: e Rhein-Ruhr VVR co-ordinates the ser-

vices of 19 participating municipal operatorsand the national railway;

In Munich the MVV coordinates municipalbus, tram and metro services, the suburbanservices of DB the national railway and thesuburban bus services of about 50 operators;

Participants in the Rhein-Main VVR, basedon Frankfurt, are 11 cities, 15 districts andthe state of Hessen. Almost 150 operatorsprovide services under contracts. Rhein-Main

was one of the rst VVR to adopt competi-tive tenders for service contracts.

STIF The French model for the ParisregionFrom 1959 until 2000, the Syndicat des Trans- ports Parisiens (STP) was responsible for orga-

nizing public transport in the Paris TransportRegion. e STP management board comprised22 members, twelve state ministries and tenrepresentatives of local authorities representingcentral and local government. e board didnot include operators.In the Paris region, government provides about55% of services directly through state-ownedundertakings, including RATP and SNCF. eremaining services are provided by private op-erators under contracts. In the latter case, STPhas the option to take a capital shareholding inthe operating company.In December 2000 the important SRU law(Solidarit et Renouvellement Urbain) was passedconcerning transport, land use planning andhousing. It changed the transport authority forthe Paris Region from STP to STIF (Syndicatdes Transports d'Ile de France ). While STP com-prised representatives from central governmentand departmental councils, STIF introduced

several representatives from the Regional coun-cil. us the jurisdiction of STIF now extendsfar beyond the city of Paris, and includes the

wholeIle de FranceRegion.e ratio of passenger revenue to operating costin 2000 was 35% for Paris, and 32.5% averagefor other cities (Local public transport organisa-tion in France: A new deal? Presentation to the7th International Conference on Competitionand Ownership in Land Passenger Transport,

June 2001 by Benot om Certu, France).Responsibility for urban road planning (exceptnational roads), traffic management and park-ing in Paris is vested in departments of the citygovernment and the adjacentdepartments .

Communauts urbaines The Frenchmodel for provincial citiesIn France, the decentralisation (LOTI) lawof 1982 dened a local government structurecomprising three levels. Responsibilities for

organising public transport were assigned asfollows:


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Central government is responsible for na-tional trunk roads and railways, for deningurban transport policies including methodsof nancing and technical and nancial assis-

tance. 26 regional councils participate to theorganisation of the regional rail services; 100 departmental councils are non-urban

transport authorities (except for nationalroutes and railways);

36,700 town or village councils (communes ),alone or in association with several others, areurban transport authorities.

us, the LOTI law decentralised the or-ganisation of public transport by devolving theresponsibilities of public transport authority,and the budget, down to the lowest level ofcommune , eighty-ve percent of which have lessthan 2,000 population.Under the decentralisation law, eachcommune council must: dene its transport policy through a transport

mobility plan; design the services (routes, timetables, quality); determine the fares; create and manage transport infrastructure; choose one or more operators and award con-

tracts through competitive tender. A 1999 law encourages thecommune councilsto group into local associations (communautsurbaines ) in order to manage their responsibili-ties in land use planning, transport and severalother elds. By 2001 about 90 local associationshad been formed.e local transport authorities can choose twodifferent ways of providing transport services:

provide the services themselves directly via apublic company (regie );

contract operation one or more private ormixed economy companies.

By 2001, more than 90% of authorities hadopted to contract the provision of services to theprivate sector. A strict tendering procedure isdened by law.e contract denes the services to be operated,the quality standards and the penalties if these

standards are not maintained, and the way theoperators are remunerated. e contract is for

a xed period which varies according to thesize of the investment required and the level ofoperating risk.Local authorities fund passenger transport

services from a tax levied on employers theversement transport .

Transport for London UK model for theLondon areahttp://www.t.gov.uk/t/useful_links.shtml andhttp://www.t.gov.uk/t/

Public ownership of London bus services startedin 1933 when the London Passenger TransportBoard, a public authority, acquired control of11 municipal bus and tram undertakings. Sincethen the transport authority in London has

taken several different forms.In the 1970s, metropolitan government, includ-ing the London Transport Executive, was placeddirectly under the central government.In 2002 responsibility for urban transport man-agement was returned to the city government asTransport for London (TfL).TfL is directed by a management board, chairedby the Mayor. Members are appointed by theMayor for their understanding of transport

matters. In 2001 the Mayor's Transport Strat-egy was published which set out a package ofpolicies and proposals designed to improvetransport in London.TfL is responsible for both the planning anddelivery of transport facilities, and manages: London Buses London Underground Docklands Light Railway London Trams

London River Services Victoria Coach Station London Transport Museum Taxis and private hire vehicles Dial-a-Ride scheme e network of 580 km of main roads, in-

cluding 4,600 traffic lightsTfL works with: the boroughs, which implement the Mayor'sTransport Strategy on local roads;

the Strategic Rail Authority (overseers of na-tional rail services into London);
http://www.tfl.gov.uk/tfl/useful_links.shtmlhttp://www.tfl.gov.uk/tfl/http://www.tfl.gov.uk/tfl/http://www.tfl.gov.uk/tfl/useful_links.shtml


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the Police; other stakeholder groups, communities and

businesses.e organisation of public transport in London

has some similarities to the German VVR.Responsibility for bus and underground railwayoperations is devolved to numerous operatingcompanies, who operate the route network andfare structure determined by London Transport.Most bus operating franchises are awarded bytender for 3-year tenure. Many bus services aresubsidised by local government, so the success-ful tenderer may be the one offering to providethe service at the lowest subsidy.

Passenger transport authorities UKprovincial modelPrior to 1968, many large towns and cities inUK had municipal bus undertakings, oftenheavily subsidised. In 1968, municipal busoperations in the seven large UK conurbations,excluding London, were consolidated and trans-ferred to Passenger Transport Executives (PTE)

which were supervised by Passenger Transport Authorities (PTAs).e 1985 Transport Act deregulated the UKbus industry and provided that any person mayoperate a non-subsidised bus route subject onlyto registration. e Act required all municipalbus enterprises, and those operated by the PTEsin the major conurbations, to be incorporatedas companies and sold to the private sector.ere is now no operation of public transport bymunicipal government departments in UK.Since deregulation, public transport throughoutGreat Britain, except in Greater London, hasbeen operated by commercial companies whodecide what services to run and what fares tocharge. In the seven large conurbations thePTAs are responsible for providing the servicesand facilities which the market does not pro-vide. In subsidising routes, the PTE is boundto secure the best value for money. Operatorscompete by tender on the basis of the lowestlevel of subsidy.PTEs also have a power to secure passenger railservices in their areas, contracting with the local

franchised passenger train operators to providethese additional services.

PTEs are responsible for day-to-day administra-tion and are controlled by their respective Pas-senger Transport Authority (PTA). Each districtcouncil in the PTA area contributes nance

from local taxes and appoints elected council-lors to the PTA to represent their district. e Authority decides on public transport policyand expenditure plans for the county and pro-vides the funds to carry out these policies.e specic functions of PTEs are as follows: planning and investing in the development

and integration of bus and rail networks tomeet future demand;

maintaining a network of subsidised bus ser-vices on routes not commercially viable andsecuring schools service contracts;

nancing local rail services; ensuring that information is available about

local transport services; funding the concessionary fares scheme for

the elderly, children and disabled; providing special-needs transport services for

people with disabilities; providing investment to build and maintain

local transport infrastructure such as bus and

rail stations, bus stops shelters and light railsystems; and offering assistance to Passenger Transport Associations and partners on the best way toprovide, plan and pay for local public trans-port services.

4.3 Transport authorities in developingcities

e rationale for establishing dedicated publictransport authorities in developed cities is basedon two main factors:1. e management of public funds to procure

transport services, distribute subsidy, and tosecure the best value for money.

2. To plan and manage bus and rail networks ona conurbation basis, with full service and fareintegration between modes. e authoritymay be the revenue collection agency.

In developing cities a third rationale is evident.Planning transport on a conurbation-wide scale,

with fare and network integration requiresskilled professional staff, a sound legal basis and

PTA and PTEPTAs and PTEsoperate in the sevenmain metropolitanareas outside London:

Centro covering theWest Midlands, centredon Birmingham; GreaterManchester PTEcovering the GreaterManchester area;Merseytravel operatingthroughout Merseysidecentred on Liverpool;Metro covering WestYorkshire; Nexus servingTyne & Wear, includingNewcastle; SouthYorkshire PTE coveringBarnsley, Doncaster andShefeld; Strathclyde PTEcentred on Glasgow.


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nancial resources that are often not available within government. e creation of an author-ity has the advantage of isolating the authorityfrom the resource constraints and short-term

political pressures of government. An authorityhas dened objectives, usually set out in itsstatute, and dedicated resources. Its autonomyusually confers some freedom to manage thoseresources in a way that most effectively achievesthe objectives. us, for example, an authoritymay hire qualied staff free of the salary andterms of service constraints that prevail in thecivil service. is is particularly important indeveloping countries where civil service salariesare very low, motivation is low, and it is verydifficult to attract professional staff with thespecialised qualications and experience neededto tackle complex transport problems.

Where public transport does not require subsidyand resource constraints are not severe, the ad-ministration of public transport by a governmentdepartment may be as efficient as administrationby an authority. Of course, the achievement of

inter-modal route and fare integration will beconstrained, but this may be compensated bythe fact that each operator is self-accounting andmust recover full costs from fares, thus market

forces act as an incentive to efficiency.It is interesting to note that transport in Singa-pore was administered by a government depart-ment until the formation of LTA in 1995. HongKong continues to plan and regulate publictransport through government departments.Integration of the fare collection system isoccurring at the initiative of the operators, butservice integration is constrained.It might be said that the establishment of atransport authority, with the objective of achiev-ing efficiency through a high degree of inter-modal network and fare integration, marks thethreshold of transition from developing trans-port system to developed transport system.e progressive consolidation of Singaporestransport agencies into a Land Transport Au-thority is an illustration.

4.3.1 Singapore and Hong Kong

Restraint of private vehicles and integratedpublic transporte most successful cities in the developing

world in managing a balance between publicand private transport were Singapore and HongKong. In both cities the shortage of developableland dictated a policy of maintaining a highproportion of trips by public transport.Both are city-states in which a single-tier gov-ernment enjoyed a long period of continuityand authority.Both cities have been able to pursue consistenttransport policies over several decades whichrest on three principles:1. development of transport infrastructure;2. improvement of the public transport system;3. managing the demand for road use.Strong economic growth and high populationdensity has enabled substantial investment inrail mass transit networks, supported by highquality, privately-owned bus systems run bylarge companies. Public transport in both cities

is run on commercial principles, supported byrestraints on the ownership and use of private

Regional autonomy in IndonesiaThis dramatic change was brought about by the

enactment of Law No. 22 of 1999 on RegionalGovernment Administration and Law No. 25 of1999 on the Fiscal Balance between the Centraland Regional Governments. Indonesias localgovernments (approximately 370 regencies and55 city governments) can function autonomouslyexcept for defence and security, foreign policy,monetary and scal policies, judicial affairs,and religious affairs. Elected members of thelocal Representative Assembly and the districtexecutive (the Regent for rural areas or Mayorfor urban areas) they democratically appoint isresponsible for a wide range of developmentpolicies, plans and activities for their region.

Responsibilities of cities and regencies extendto most aspects of urban transport, with theexception of most forms of taxation (includingvehicle taxation), fuel pricing and specication,and type approvals. In practice, even the largestcities after Jakarta, such as Surabaya, do nothave the institutional capacity to develop theirown inspection & maintenance regimes, pub-lic transport regulation and licensing systems,ambient air quality standards, or even parkingpolicies. While formally achieving greater inde-pendence from the central government, citiesgenerally still look to the central government forpolicy guidance on urban transport.

omprehensive transportesponsibilitiesome authorities haveesponsibility for bothublic transport and

management of the roadetwork (for example,ransport for London andingapore Land Transportuthority). In theseases there is scope for

managing public andrivate transport as angle system and, forxample, roads andublic transport cane seen as competingor available resources,location being made

ccording to policyriorities. In bothondon and Singapore,

evenue generatedom private car usersused for expenditure

n developing publicansport.


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vehicles. In both Hong Kong and Singapore,rail mass transit was vested in autonomous pub-lic corporations, structured with a longer-termview of sale to the private sector. Hong Kong

has successfully sold a proportion of the sharesof its Mass Transit Railway Corporation.

Neither government [Singapore orHong Kong] is directly engaged intransport operations.

e institutions responsible for implementingthe transport management policies of bothHong Kong and Singapore (until 1995) weregovernment departments in Singapore the

Registry of Vehicles and the Road and Trans-port Division of the Public Works Department,and in Hong Kong the Transport Department.ere were appointed boards of experts andlaymen (the Public Transport Council in Singa-pore and the Transport Advisory Committee inHong Kong) but these were advisory only. egovernment departments and operating corpo-rations were well coordinated at policy level bycentral government in Singapore by the LandTransport Division of the Ministry of Commu-

nications and in Hong Kong by the TransportBureau of the Government Secretariat, throughcoordinating committees.e examples of Hong Kong and Singaporedemonstrate that integrated transport policiesand programmes can be successfully imple-mented by government departments, even

where the public transport sector comprises amix of public corporations and privately ownedcompanies. Keys to success are: the continuity of governments policies both

Singapore and Hong Kong have consistentlymaintained their basic urban transport poli-cies for nearly thirty years);

adequate professional expertise, supplemented where necessary by contracted specialists andconsultants;

nancial discipline; effective regulatory and co-ordination mecha-

nisms that subjugate all agencies and trans-port operators to basic policy objectives.

While Singapore increased the degree of integra-tion by merging governments transport institu-

tions into a single Land Transport Authority, inHong Kong, the institutions remain separate,and the co-ordination of different agencies andoperators is the responsibility of a central trans-

port policy bureau.Constitution of Singapore Land TransportAuthorityhttp://www.lta.gov.sg

Singapore Land Transport Authority (LTA) isan integrated authority with wide functionalscope which was formed by merger of fourgovernment agencies: the Registry of Vehicles,the Road Transport Division of Public WorksDepartment, the Land Division Ministry ofCommunications, the Mass

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GTZ - Urban Transport Institutions 2004

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