Thredbo 9 9th International Conference on Competition and Ownership in Land Passenger Transport

1. Thredbo 9 9th International Conference on Competition and Ownership in Land Passenger Transport How will mobility providers evolve in face of a growing competitive environment J. Manuel Silva Rodrigues Lisbon, 5th September, 2005

2. General points about the transport system in Lisbon Metropolitan Area

3. Main features 2.7 million inhabitants 2,963 km2 area 18 councils 1.4 million daily commuting journeys Lisbon Source: AML, AMTL, INE, GEP-MOPTC

4. Transport system in "AML" (Lisbon Metropolitan Area) 16 operators, including 5 public companies (Carris, Metro, CP Lisboa, Transtejo e Soflusa) 5 modes (bus, tramway, subway, train and boat) Public operators (2004) Lisboa Supply: 14,731 million passenger places x km Demand: 3,151 million passengers x km Occupation rate: 21 % Annual revenues: 220 M€ Operational costs / revenues: 47 % Source: AML, AMTL, INE, GEP-MOPTC

5. Lisbon Metropolitan Area Commuting journeys Million / day 1,38 1,31 Public transport Percentage Private transport Million journeys / day 51 45 37 1991 2001 26 1991 2001 1991 2001 Public Transport use has decreased in favour of private car use.

6. Lisbon Metropolitan Area - Public Operators Average annual investment 266 (Year 2002) Year 2004 (E) 217 197 227 Average annual amortizations (-459) -478 (217) 223 88 2002 2003 2004 (E) (-242) -255 Revenues without compensatory subsidies Costs Results before compensatory subsidies Values in Million € Source: Companies

7. Lisbon Metropolitan Area - Public Operators 2002 2003 2004 Total financing needs 508 481 452 Attributed funds (compensatory subsidies, capital provison) 171 160 100 Uncovered needs (Additional indebtedness) 337 321 352 Covered ratio 34% 33% 22% Values: Million € Source: Companies

8. Lisbon Metropolitan Area - Public Operators 3.278 2.749 35% 2.422 2002 2003 2004 A growing indebtedness is noted… Values: Million € Source: Companies

9. Lisbon Metropolitan Area - Public Operators 162 2002 2003 2004 - 90 - 345 … with a resulting degradation in operators' equity capital. Values: Million € Source: Companies

10. The Public Transport system is facing 3 distinct issues, but are interdependent. Demand Efficiency Financing

11. Bus Efficiency London Rome Madrid Lisbon Barcelona Paris There is a clear efficiency deficit in public operators of the transport system. a) Operational cost / passenger x km, adjusted by Purchasing Power Parity (euro cents) In brackets, the occupation rate (%) Values: 2002; a) 2001 Source: Companies

12. Demand Demand has continuously decreased in recent years. Passenger journeys (million) Years Source: Carris, Metro

13. Financing The financing gap results from, either a smaller financial effort asked of passengers… London Paris Barcelona Average Lisbon Madrid Rome Average revenue / passenger x km, adjusted by PPP – 2002 (euros) Modes: Bus + Subway Source: Companies

14. Financing … or the reduced level of subsidies attributed to the operators Paris Rome Barcelona Average Madrid Lisbon London Average revenue / passenger x km, adjusted by PPP – 2002 (euros) Modes: Bus + Subway Source: Companies

15. Carris. Which strategy?

16. 89 lines (+ 8 Night Bus Network lines) 4 lines Route length (one way): 672 km Total lines extension: 2,113 km Number of routes: 106 Buses: 794 Tramways: 58 5 lines

17. Supply (million passenger place kilometres) 4,204 4,170 4,158 4,074 3,856 2001 2002 2003 2004 2000 - 8 % Demand (million passenger journeys) 357 312 300 277 257 2001 2002 2003 2004 2000 - 14 %

18. Carris – Restructuration program Mesures Description • • Incremental optimization of supply and redesigning of network, with a selective removal of duplicated supply; exchange of subway operation in its less efficient periods; more connections with subway lines and schedule synchronization, feeding subway stations with Carris lines. 1 Carris Supply • • Service and Image Real time information. Information through mobile phones messages. 2 Bus fleet renewal, with 408 new buses until 2006, decreasing the average bus age to 5.4 years. • • Issues depending exclusively on Carris 3 Fleet • • Maintenance Redesign maintenance procedures, more polyvalency and progressive autonomisation aiming at outsourcing of 1/3 of activities. 4 • • 5 Work rules Work schedules flexibility and measures aiming to reduce the level of absenteeism. • • Purchase and stocks management Renegociation of contracts, redesigning stocks management, electronic auctions. 6 • • Organisation Creation of business units, redesigning procedures, maintaining the reduction of staff, namely in central areas. 7 Current account • • 8 Fare system Redesigning the fare system and alignment with other european cities, resulting in a net increment of 11 %. Issues depending on articulation with other entities • • Carris-ML Supply – Removal of duplicated supply, more connections between modes. 9 • • 10 Carris-ML Cooperation – Searching for mutual opportunities. • • Commercial speed Reserved bus lanes increase, removal of gaps in existing bus lanes network (allowing continuity) and police enforcement on parking and circulation on the bus lanes. , 11 • • 12 Car dissuasion Restricting car circulation and optimisation of parking infrastructures. • • 13 Debt restructuring Alternative sources of financing with lower costs. Historic account • • 14 Assets Selling unnecessary assets. • Debt assumption Assumption of historic debt by shareholder. 15

19. The restructuring in progress has brought visible results

20. Redesign the network - Why?

21. Lisbon has undergone a structural evolution, in recent decades,with consequences in mobility, which justifies a redesigning of the network.

22. In recent decades, we observed a significant loss of resident population in the city, … Evolution of resident population (Percentage) 1991 - 2001 1981 - 1991 Lisbon City "AML" North "AML" South Total "AML" "AML" - Lisbon Metropolitan Area Source: TIS.pt

23. … the expansion to new areas, … Total journeys per area (origin or destination) Area Source: TIS.pt

24. … and the movement of jobs towards the surrounding councils. Evolution of employed population (%) Council Employment in 2000 1991 to 1995 1995 to 2000 Source: TIS.pt

25. The development of the road infrastructure also contributed to profound changes in the mobility, … Journeys to Lisbon made by car (%) Year 1991 Year 2001 Conclusion of motorway A5 “Vasco da Gama” bridge Source: TIS.pt

26. … as in the expansion of subway network. Today

27. Redesign the network - How?

28. COMPLEMENTARITY - with rail and subway networks SEGMENTATION - for those who prefer direct connections - for those who prefer speed and frequency SERVICES DIRECTED TO MODAL CHANGE - services to the residencial areas (Bairros)

29. 4 Hierarchical levels 1 – Rail and Subway 2 – Trunk network (Bus and Light Rail) complementary of 1st level network 3 – Intermediate network supply more service to the lesser supplied areas of the city CARRIS network 4 – Local Service network feed the 1st level network and serve the main services in each quarter

30. Models to reach: Frequency Distance between stops Desirable speed Links to 1st level network (trips/hour) (metre) (km / h) (number) Trunk network (Rapid) 10 / 6 600 21 1 / km Trunk network (Normal) 3 300 16 1 / km Intermediate network 8 / 3 400 18 1 / km Local Service network 6 / 2 300 16 2

31. REDESIGNING CARRIS NETWORK Network coverage Trunk Secondary Local