Kyrgyz Republic: Bishkek Public Transport Project Extension

KYRGYZ REPUBLIC: BISHKEK PUBLIC TRANSPORT PROJECT EXTENSION

PUBLIC TRANSPORT DEVELOPMENT STRATEGY

TERMS OF REFERENCE

1.BACKGROUND

In November 2011 the European Bank for Reconstruction and Development (the “Bank” or “EBRD”) signed Bishkek Public Transport Project Phase 1, which focused on priority investments in Bishkek trolleybus infrastructure. At the same time feasibility study prepared by an independent consultant in 2011 confirmed that Bishkek (the “City”) needs much bigger investments. Based on the consultant’s recommendations the City currently plans to expand the trolleybus fleet in order to introduce additional trolleybus routes (incl. replacing minibuses).

Bishkek with a population of around 1.2 million is the capital and the largest city in the KyrgyzRepublic. The municipal transport sector in the City consists of a trolleybus and a bus company. In addition there are private mini bus companies operating in the City. The Bishkek Trolleybus Company (“BTC” or the “Company”) and Bishkek Passenger Transport Company (“BPTC”) are independent legal entities owned by the City with directors appointed by the Mayor of Bishkek.

BTCoperates a fleet of approximately 184 trolleybuses and carried 18 million passengers in 2014. BTC’s operational fleet has been partially renewed during the first phase of the Bank’s project with new 32 low-floor and 44 high-floor trolleybuses, but it is still for most parts dated and requires further renewal investment. The Company services 9 trolleybus lines.

The City has requested the Bank to finance the purchase of 49 trolleybuses.

Given successful cooperation between the Bank and the City on many municipal infrastructure projects (incl. water, solid waste and transport) it was agreed that the Bank would step up efforts to arrange a loan n the amount of up to EUR 5 million to the Kyrgyz Republic, to be on-lent to the City of Bishkek (the “City” or “Bishkek”) for the benefit of the trolleybus company (the “Project”). A further EUR 2.9 million grant to co-finance the Project is envisaged from an international donor. Loans and grants will be provided in two tranches. The Project will finance the acquisition of up to 49 new trolleybuses in line with conclusions of the feasibility study consultant and actual City needs. Developing Public Transport Development Strategy (the PTDS) will be part of the Project. Weak operators, fragmented sector and lack of integration of the services make the PTDS an important document for the Bishkek public transport system development.

2.OBJECTIVES

The objective is to assist the City of Bishkek (the City) in developing and adopting a comprehensive PTDS to achieve major change in overall quality of mobility in the City and to support implementation of Bishkek Master Plan and Urban Transport Master Planas well as mid-term road network development plans and to create a regulatory tool for gradual transformation of minibus services into services provided with larger capacity buses. PTDS will include (i) detailed analysis of current level of services and compilation of a data base on urban mobility, (ii) definition of the respective roles for various modes of public transport, (iii) development of the new route plan based on the updated demand survey, (iv) advice on the institutional and regulatory framework of Bishkek public transport sector, (iv) development of principles and strategy for an on-going route-tendering regime for private bus and minibus operators that ensures gradual integration of ticketing system, encourages competition for routes, while enabling the City to acquire acceptable safety and environmental standards, (v) preparation of full route tender document package including standard Public Service Contract (the PSC) for private operators. In addition, a parallel objective of this assignment is to assist the City in setting up robust system for monitoring of services provided under the PSC by trolleybus and bus operators.

3. SCOPE OF WORK

3.1Development of Public Transport Development Strategy

The Consultant will review and analyze all relevant documents related to the assignment, including Urban Transport Master Plan (UTMP) and Master Plan of the City, available documents and studies on transport development, legal and environmental framework. The Consultant will summarize and provide comments on the existing limitations as well as local particularities related to the scope of work under these terms of reference.

The Consultant will assess and prepare a ‘problem tree’ to indicate different issues and their interrelation to properly design and justify strategy, goals and measures in the action plan.

The Consultant will prepare a comprehensive Public Transport Development Strategy for Bishkek which, within the prevailing financial constraints, improves the accessibility to sustainable mobility services for the city's population and businesses, and is environmentally sound. The Consultant will use as much information and data as possible collected by previous studies.

PTDS will be based on:

• Information on current travel demands, including the identification of major bottlenecks;
• Identification of urgent transport infrastructure and operational needs, assuming that the current traffic development trend will prevail in the near future;
• Preparation of current accessibility indicators for different population groups and different areas of Bishkek; and
• At least two urban development scenario for the purpose of forecasting future travel demands in 5, 10 and 15 years. The scenario(s) will set out assumptions for the main drivers of development and travel demands, such as: population, employment, per capita income, urban sprawl, motorization and quality of public transport service.

In order to ensure that PTDS is realistic, the Consultant will first estimate overall cost of public transport system in the City and establish Bishkek's annual rate of investment in transport infrastructure and equipment (both municipal and private) over the past five years. Taking this as a benchmark and a reference point, the Consultant will set an indicative annual investment envelope for the forthcoming five years and ten year periods. PTDS should be developed within that budget constraint and feasible investment by the private sector.

The Consultant will scope the infrastructure and equipment theoretically required to meet demand, assess feasibility of specific at a conceptual level, propose an indicative investment plan, and set out associated policies. In case total demands cannot be met, the Consultant will assess the level of restraint likely to be required, identify the policy options available and describe the environmental consequences of the strategy to satisfy travel demands.

The Consultant should make a serious analytical appraisal of increased investment in a public-transport infrastructure and services. It should fully develop priorities for non-motorised travel and public transport, as well as road provision.

The Consultant will evaluate the approved/adoptedPTDS in terms of its effect on mobility, accessibility, economics and environment. This will include a Strategic Environmental Assessment to be developed in accordance with the Bank’s Environmental Policy and pertinent European norms. For the chosen strategy, the Consultants will identify and describe the: i) physical and organisational measures necessary; ii) investments required; and iii) accessibility indicators. It is required that PTDS will be discussed by the stakeholders interested in Bishkek’s public transport at open workshop to be organised by the consultant in close cooperation with the City.

3.2Institutional Framework Development for the Bishkek public transport sector

3.2.1 Public Transport Route Network and Operational Plans

Currently, the route system in Bishkek is met by a mixture of public and private operators, with some major overlap of services. Based on the results of demand projections by route and street network for public transport, the Consultant should develop a clearly defined public transport route network that is based on demand, cost of service of different mode and operational analyses. The aim of this component is to provide assistance in developing a public transport service concept, from market and financial perspectives, clearly indicating the optimal route structure for the various modes of public transport services (whether by trolleybuses, standard and articulated buses, midi-buses, or minibuses) that would be best offered to the users based on projected passenger demand levels. Furthermore, the Consultant will need to determine the optimal distribution of services on the basis of pre-identified criteria, to be agreed in advance in close consultation with the City (capacity, costs, efficiency, environment, quality, safety etc.). More specifically, the Consultant shall define a clear role, with an appropriate justification, for each of the transport modes and for the public and private sectors, and define service delivery quality standards for each transport mode and/or service (e.g. walking distance to stops, speed, frequency, minimum stop distance, capacity, etc.).

Given the necessity to design a more integrated public transport network for Bishkek, based on the principle of the defined concept, a new network plan with clearly defined roles of different modes should be established resulting in a match to between transport supply and demand at lowest possible costs.

In addition based on the forecasted demand and choice of a mode the Consultant will develop route passports including type and number of vehicles, number of drivers and shifts, vehicle kilometres, operational hours and plans, forecasted number of passengers and indicative cost of specified scope of services for each particular route.

The Consultant will also investigate concurrence of inter-city public transport routes with suburban public transport routes in so far as they duplicate each other in some areas.

The Consultant will (i) create new or adapt existing software for developing routes network, which would allow to take account of any changes in demand, operating expenses, prices, etc. and (i) hold relevant trainings.

3.2.2 New Regulatory Framework

One of the City’s priorities in development of urban transport system is to integrate operators into single ticketing system. The Consultant, among other activities, will design an institutional and regulatory framework (taking into account existing regulatory framework) for the introduction of competitive route tendering for bus/minibus services. The new framework and tenders will have the following multi-faceted objectives: (i)phased replacement of the competition ‘on the routes’ (i.e., in the market) with competition ‘for the routes’ (i.e., for the market); (ii) a gradual transformation of the sector toward public transport fleets with an appropriate passenger capacity linked to passenger demand along specific routes; (iii) improved emission standards for the new fleet appropriate and realistic for Bishkek; (iv) service quality as stipulated in the PSC to be signed with the winning bus companies under tender; (v) elimination of inefficient operational overlap between different operators, both public and privately owned; (vi) incentive-based integration into City’s single ticketing system; and (v) introduction of mechanisms aimed to control for public transport requirements.

Currently, the City grants basic operating contracts to minibus operators, with some basic operational and fleet requirements attached to these contracts. However, the City transport department is in need of establishing an on-going route-tendering regime that will encourage fair and effective competition (i.e., competition “for the market”) to generate acceptable health, safety and environmental standards, and better operational efficiency on the part of the private services to be provided in future by varying vehicle capacities to match demand needs along each route.

In this regard, and based on the results of the route structuring exercise, the Consultant shall:

• Develop a Consultation Strategy for relevant stakeholders and organise information sessions to inform the current minibus operators and other stakeholders of the objectives of the City as Regulator and the rationale for the regulatory changes. The consultation process should ensure sufficient transparency and disclosure of the main issues considered by the Regulator, the feedback of the stakeholders and the responses to this feedback. Furthermore, the process should be duly publicised on the website of the City administration and in other relevant local media.
• Develop a framework to operationalise the ‘competition for the market’ concept, through procedures and award criteria that provide for the proper incentives embedded into the tendering process to create a tender that can generate effective competition and lead to improvements in the standards of service and compliance with higher health and safety and environmental standards. These incentives should manifest themselves in tender selection criteria, such as:

legal formation of the bidding company;

the percentage of owner’s equity;

the number of units to be brought into operation under the new contract;

previous operational experience;

offer of price per km operated and/or subsidy per vehicle kilometer/or other service unit price;

share of new bidder company to be held by former small minibus operators in Bishkek;

level of air emissions and noise of the new fleet.

• Structure the standard conditions for route tendering. Multi-year PSC duration, and size of the contract, minimum service standards, safety requirements, sanctions and penalties to be contained within the new contracts.
• Ensure that health, safety and environmental standards are met and in compliance with Kyrgyz Republic and where feasible European legislation.
• Prepare a set of guidelines for the tendering procedure and a full set of tender documents for competitive route tendering.
• Advise the City on the most efficient timetable for the tendering process, any phasing of the processes, as well as on the optimal staffing for tender management and contract/license monitoring.
• Select a number of bus routes for pilot tender and assist the City in running tendering and awarding the contract to a private operator.
• Prepare regulatory capacity and monitoring training modules for the City Regulator once the new private bus services are in place.

The Consultant in a Final Report will summarise the entire work programme described above, including a comprehensive analysis and evaluation of the work process and the outcome of each stage. The report should include ‘lessons to be learned’ concerning the full contracting process, and conclusions and recommendations for contracting out transport services in the future.

3.2.3 New Institutional Set up

Responsibly over transport planning, organisation, supervision and control is currently distributed between different departments within the municipality of Bishkek and municipal operators.

In order to assist the City to define the regulatory and organisational role of the municipality and related tasks, the Consultant shall:

• analyse the current institutional, legal, organisational and contractual relations between the City and transport operators (public and private) in Bishkek and present recommendations to improve the organisational and institutional set up within the applicable regulatory framework as well as day-to-day relationship;
• advise on the need, including advantages and disadvantages, for the introduction of a transport authority in Bishkek and set out the responsibilities of such an authority, outline the organisational structure and business procedures, staffing requirements and budget implications. Special attention shall be given to organisation of ticket sales, fare revenue collection, ticket inspection and the monitoring of contracts;
• review an alternative to the transport authority option with a strengthened transport department within the organisational structure of municipality. This new department should focus exceptionally on urban transport planning, organisation, supervision and control, whilst leaving all other activities (such as tram operations) to be either corporatized or outsourced. Set out the responsibilities of such an authority, outline the organisational structure, staffing requirements and budget implications.
• advise on the co-ordination of public transport services in the City of Bishkek;
• prepare any changes that will be needed in municipal legislation for the restructuring to take place.

3.3Draft Urban Public Transport Restructuring Policy Paper

Based on the output outlined above, and following comments received from the City, the Consultant will prepare a summary policy paper, suitable for review and approval by the City council. This document shall contain the main transport restructuring policy that sets out, in a concise form, the direction in which the City should proceed in the future (no more than 10 pages). Consultant will also develop a detailed plan for implementation of the policy paper as an Annex to the policy paper.

3.4Regulatory Monitoring under the Public Service Contract regime

Technical Cooperation assistance was provided by the Bank to assess legal feasibility of introduction of incentive based gross-cost Public Services Contracts. The first PSC in Bishkek was signed between the City and the municipal trolleybus company. It may be later adopted and replicated to municipal bus and to the extent to private bus and minibus operators. The PSCs to be instituted in Bishkek will incorporate the basic principles that ensure that the City and inhabitant receive an adequate quality, efficient service provision by operators who have the proper performance-based incentives and operational controls in place to deliver the public transport services.

Moreover, this technical assistance has to assist the City in incorporation of fare revenue distribution scheme for implementation of sector-wide automated fare collection system. This system once it is fully operational will allow gradually introducing PSCs with private operators and will ensure fair and transparent redistribution of fare revenue between different service providers.

The Consultant should work with the City to develop the capacity and technical know-how to be able to monitor effectively the new PSCs to be signed. This monitoring ability should include, inter alia:

i)Develop the design of a public transport regulatory unit to specialize in the monitoring role of the PSCs and the new competitively tendered bus contracts that will also be based on the PSC approach;

ii)Developing a concrete set of staff assignment, roles, and tasks for each person assigned to the new unit;