REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
REGULATORY FRAMEWORK FOR INTERURBAN
COACH TRANSPORT ACTIVITIES IN SPAIN
Workshop on long distance bus and coach lines in Europe
Brussels, 29th February 2012
Mr. Francisco Iglesias
ALSA – Managing Director
Intercity Transport Division
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
OBJECTIVE OF THIS PRESENTATION
1) To present the role intercity buses play in inland Spanish transport, and its
decisive contribution towards the achievement of a model for sustainable
mobility.
2) To examine the model of franchise contracts for the operation of public
services that governs the provision of regular services.
3) To identify the terms in which the Obligations of Public Service are defined in
our model of intercity mobility.
4) To analyse the opportunities and threats that our sector is going through, and
the perspectives for the continuity of our business.
Contact Details:
Francisco Iglesias Campos
C/ Alcalá, 478 – 28027 Madrid (Spain)
Mail: figlesias@alsa.es
Phone: 00-34-91-754-80-53
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
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Data for ALSA and the Spanish market
REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
1.- DATA ALSA / MARKET
ALSA Presentation
 Leading company in the provision of intercity passenger transport services by road in Spain.
 Integrated since 2005 in NATIONAL EXPRESS.
 Geographic implementation: Spain (only company present in the whole country), Morocco,
Continental Europe (international routes).
 Growing continuously.
 Transport activities:
• Intercity transport by coach (regular, occasional).
• Urban transport / metropolitan.
• Station management.
• Sightseeing transport.
• Licenced as a rail operator: licence and safety certification.
MAIN FIGURES:
- Turnover: €613m
- Employees: 6738 people
- Fleet: 2418 vehicles
- Km covered: 313m km
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
1.- DATA ALSA / MARKET
Current distribution of Trips by
collective forms of transport
(Spain):
4,9%
Intercity mobility in Spain
 80% of all transport is carried out using
private cars.
25,6%
38,8%
 Cars are easy used in every type of trip.
4,9%
 Taking into account only collective transport,
that by BUS/COACH is the form of transport
most used in Spain: 65% of the total number
of trips.
 Compared to the average figure for the
European Union, Spain has a higher
frequency of use of public transport, due
to the existence of a consolidated
transport network by bus/coach.
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25,6%
1,3%
2,0%
38,8%
1,3%
2,0%
27,4%
27,4%
Autocar - Tte. Regular
Autocar - Tte. Discrecional y Reg. Uso Especial
Aviación - Tte. interior regular
RENFE - AVE y Larga Distancia
RENFE - Cercanías y M edia Distancia
FEVE
Autocar - Tte. Regular
Aviación - Tte. interior regular
RENFE - Cercanías y M edia Distancia
In passenger transport, uncontrolled use of
the car and individual mobility are the
causes of the lack of sustainability of the
transport model
REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
1.- DATA ALSA / MARKET
Comparative positioning of intercity bus transport in
Spain and the European Union
USE OF PUBLIC TRANSPORT
DENSITY OF SERVICES OFFERED
The market of passenger transport by road in Spain is more important than in countries with a greater demographic
weight like the UK or France.
In Spain, as it is regulated, transport by bus is the form that guarantees mobility as a public service.
In other countries in which the market has been deregulated, the offer is much lower and has concentrated into
corridors or subsidised axes.
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
1.- DATA ALSA / MARKET
Comparative positioning of intercity bus transport in
Spain and the European Union
BUSINESS CONCENTRATION
The Spanish system of regulation, based on regulated
competition for the operation of services through the
open tender process, increases competitive rivalry
and the Concentration Rate is lower.
In Spain, ALSA’s market share (leading the sector) is
less than 10%.
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AVERAGE AGE OF THE FLEET
The bus fleet in Spain is more modern, as a
result of the demands of franchise contracts,
and of the higher investment effort made by
companies to improve the service to clients.
REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
1.- DATA ALSA / MARKET
Comparative positioning of intercity bus transport in
Spain and the European Union
PRICE LEVELS FOR PASSENGERS
In Spain, the prices of transport services by bus are lower than in other countries.
In deregulated models the dominant operator tends to impose price increases and only in the case of the entry of
low-cost operators are there decreases in prices.
In terms of parity of purchasing power, prices in countries like the UK or Sweden are between 25 and 55% higher
than those in Spain.
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
1.- DATA ALSA / MARKET
Efficiency of the private initiative in the operation of a
public service regulated by the administration:
 Importance of the Private Initiative: 3,678 companies. In 1999: 4,742 companies.
 Franchise disaggregation: 1,448 franchises (of these, 108 national ownership).
 Generation of employment: 62,000 direct jobs.
 Mature Markets, and in Decline in numerous corridors.
 Very small companies: 10-11 employees and 9-10 vehicles per company, on average.
 Geographical Dispersion, that prevents in many cases the appearance of resource
savings and cost synergies.
 Very scarce Concentration of the Sector: the market share of the first 5 business
groups does not exceed 15%.
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
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Regulatory framework
REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
2.- REGULATORY FRAMEWORK
Legal regulations of intercity transport activities
 In Spain, the provision of intercity land transport services (road and rail) is governed by
standard base regulations: Law 16/1987 of the Land Transport Law (LOTT) and its 1990
Regulations (RD 1211/90).
 Complemented by laws in autonomous regions which have adapted the state regulations
to the peculiarities of each region, but maintaining a single market and common
regulatory principles for the whole State.
 Despite having a common legislative base, common regulatory bodies and serving a single
mobility market, transport by road and rail have had very different regulatory
developments:
 Transport by bus has consolidated a regulated management model, in which the services are
always carried out by private companies that act through public service contracts and
authorisations.
 Transport by rail (inland passengers) has not evolved in its operation, maintaining a rigid
monopoly regime, in every type of distance and trip. Operating these services are state and
regional state-owned companies, with no possibility for new entries.
 Contracts are at risk of the operator.
The Spanish model fully complies with EU Regulation 1370/2007 and
the Directives 2004/17 and 2004/18
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
2.- REGULATORY FRAMEWORK
Basic regimes for the provision of services with regard to
competition and market access
 In Spain, as opposed to other European countries, intercity transport by bus:
 Is extended to every type of trip and distance.
 Is not legally subordinated to rail transport.
 Regular services are considered Public Services.
 There is a regime of regulated competition, based on competitive Tenders which are
open and with no barriers to entry.
 Requires a high level of investment.
 Classification of transport activities by bus that our legislation establishes:
TYPE OF TRANSPORT
DESCRIPTION
RECRUITMENT AND MARKET ACCESS:
Regular services, led to a global audience, which are
Administrative
provided based on predetermined routes, prices and
REGULAR TRANSPORTATION, GENERAL UTILITY
contracts Public
schedules, according to the requirements established by
Service Management
Administrations holders of the service.
Competition for the market, with concessions managed
exclusively by certain time, according to the concession
contract is established.
REGULAR TRANSPORTATION, ESPECIAL UTILITY
Reiteration services that target specific groups (school
transport, production centers, etc.)
Administrative
authorizations
System is extremely flexible in that administrative
intervention is limited to ensure control over the
services are performed (in terms of empowerment,
business law, etc).
PRIVATE HIRE COACHES
Occasional services hired by public or private clients
Direct contracting of
services to be
performed.
Competition in the market without quota and total
freedom of negotiation between client and carrier.
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
2.- REGULATORY FRAMEWORK
Public Service Contracts for the operation of regular intercity
services: franchise system (II)
 Structure of a Public Service Contract for regular intercity coach transport (franchise):
 Current term for new Contracts: between 6 - 15 years (according to Regulation UE
1370).
 Exclusivity of Operations, through corridors, routes and stretches.
 Price regulation: maximum fares established in each contract, with a guaranteed
annual price review (consumer price index).
 Level of supply: is regulated by each contract. In term of services, frequency, timing
and schedules.
• Compulsory minimum fleet of vehicles, max. age and technical characteristics.
• Compulsory minimum discounts.
 Highly regulated..
 Our Transport Regulators: Ministerio Fomento (Ministry of Public Works) and 17 Regions.
 High concurrence in tenders.
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
2.- REGULATORY FRAMEWORK
Matters to be solved in the Spanish regulation model
 Lack of a common set of regulations for intercity transport by road and rail, that
solve the significant distortions in intermodal competition which are currently
taking place:
 Great imbalance in the policies of investment in infrastructure, with fairly irrational dedication in
the last few years to high-speed train services and airports, without real justification of demand.
 Unequal opportunities to access the markets: rail monopoly
 Unequal allocation of subsidies and state aid. Not based on real sustainability criteria.
 Overlap of supply and situations of irrational competition between public transports.
 Imbalances in the taxation of each form of transport.
 Different management capacities for the provision of transport.
 Without clear policies for intermodality and co-modality in existing networks.
 Need for more flexible mechanisms for operating companies.
 Clear and agile instruments to guarantee the economic equilibrium of contracts.
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
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Competing for the market: exclusive rights
granted through open tenders
REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
3.- COMPETING FOR THE MARKET
Accessing services on a competitive basis
 The tender process is currently underway, through open tenders, for the
renewal of the transport service network belonging to the Ministry of Public
Works.
The process started in 2007.
Without benefits of a territorial nature.
The bidding specifications conditions establish a very wide definition of
Public Service transport, encouraging the IMPROVEMENT and TAKING ON
OF COMMITMENTS in key matters like safety, comfort and customer
service, conditions for company personnel, energy and environmental
efficiency, the improvement of intermodality, etc.
Required strong investment.
High competitive rivalry, with a very significant improvement in the services.
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
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Advantages of the Spanish franchise model
REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
4.- ADVANTAGES OF THE SPANISH FRANCHISE MODEL
Adapting the franchise system to EU Regulation
1370/07 and procurement directives
 Length of the contracts: according to Spanish legislation, a maximum length of 10 years,
extendable only to another 5 due to exceptional investment needs.
 Clear definition of public service Contracts, in terms of Obligations taken on and
mechanisms (if applicable) for compensation, as well as the rules for its awarding. Spanish
transport legislation defines in detail the content of the franchise licenses, and the terms of
tenders.
 All the contracts, whether they are deficient or not, are granted through open processes.
Spanish contract legislation is even stricter than EU Regulations, preventing situations of
direct awarding of contracts which European Regulations allow.
 The obligatory subrogation of employees assigned to contracts is already a reality, in the
case of a change in operator.
The Spanish franchise system currently complies with all the contracting
terms of EU Regulation 1370/2007 and Directives 2004/17 and 2005/17.
Even working ahead of the transition period until 03/12/19 in the
compliance of article 5 (awarding of public service contracts).
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
4.- ADVANTAGES OF THE SPANISH FRANCHISE MODEL
Control and protective mechanisms which the Administration
has available for public transport systems
 The operation of intercity transport services by bus is carried out 100% by private
companies, there are no public operating companies.
 Despite this, the Administration maintains the administrative ownership of the
services it contracts, and has mechanisms to safeguard compliance with the
entrusted Public Service Obligations:
 The services are operated within the contractual provisions of the ‘Management Contract for
Public Services’, clearly specified in Spanish contract legislation, and according to the EU
Directives regarding contracting.
 The offers presented for the operation of services are binding, and once the contract for
operation has been signed, these go on to form part of the essential obligations of the contract.
 Any modification in the contract, once awarded, must be made through predetermined legal
procedures. There is no place for tacit agreements or negotiations that do not strictly follow the
legal procedures for changes in operation.
 Important work is carried out in Inspection and Vigilance by all the Administrations involved,
with specific bodies dedicated to this.
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
4.- ADVANTAGES OF THE SPANISH FRANCHISE MODEL
Environmental sustainability of coach transport (reducing
externalities)
ESTIMACIÓN DE COSTES EXTERNOS EVITADOS POR EL TTE.
POR AUTOCAR EN ESPAÑA (2008)
Externalidades evitadas por sustitución modal (MM €)
Componente de coste
Accidentes
Ruido
Polución atmosférica
Cambio climático (escen. sup.)
Naturaleza y paisaje
Aguas arriba y abajo
Efectos urbanos
EXTERNALIDADES EVITADAS POR EL AUTOCAR
Coste evitado
1.957,2
284,8
-699,6
796,9
152,3
75,1
85,7
2.652,4
Comparación:
EXTERNALIDADES EVITADAS POR RENFE (VIAJEROS) 2008
Dato tomado
de la Memoria
AmbientalMobility.
de Renfe 2008
Taking
into account
only Intercity
Estimation carried out using the methodology and unit
costs of the INFRAS Study “External Costs of
Transport” (2004), updating data to 2007.
1.631,5
In Spain, coaches are the
form of transport that
currently most contribute
towards the saving of
externalities and emissions
on a national level
(external costs avoided).
Additionally, coaches
channel Public Service
Mobility, whose only other
transport alternative is the
private car.
EXTERNALITIES AVOIDED BY COACHES equal to EXTERNAL COSTS
SUBSTITUTION MODES (if coaches didn’t exist*) Minus CURRENT
EXTERNAL COSTS OF COACHES
* Assuming current Market Share Quotas from the Ministry of Public
Works
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
4.- ADVANTAGES OF THE SPANISH FRANCHISE MODEL
The existence of a network of regular services by bus, with an adequate
level of service, is a necessary condition for the effective transfer of car
users, and to advance towards sustainable mobility.
Example: New product BUS+FLY.
ECONOMIC
To efficiently satisfy the needs of
mobility, promoting development and
competitiveness
ENVIRONMENTAL
SOCIAL
To contribute towards the protection of
To
provide
adequate
conditions of
the environment and health, reducing
accessibility,
favoring
social and
environmental impact, greenhouse gas
territorial equality and the
emissions and optimizing non-renewable
healthiest modes of transport
resources, especially energy
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Single ticket, no transfers, facilities for the customer.
REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
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Conclusions
REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
Opportunities to improve the mode
 Solidity of the franchise regulatory model, which
contributes value to transport companies and allows
us to design growth strategies.
 Public policies that really encourage greater use of
regular intercity buses, as a fundamental element to
achieve patterns of sustainability mobility, attracting
private car users:
• Investments in own infrastructures for public transport (stations, BRT,
traffic light priority, etc).
• Safety, quality, energy efficiency.
• Changing the habits of people towards collective transport.
 Capacity to innovate in the improvement of the
service for our passengers: comfort, accessibility,
information, marketing, etc.
 Integration of networks and public transport
services: intermodality, co-modality.
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
Threats to avoid
 Deregulatory processes that question the current
condition of public services on regular intercity routes,
disregarding their fundamental positive contribution
towards sustainable development.
 Adverse economic-financial situation of Public Administrations, especially at
regional and local levels:
•
•
•
•
Cutbacks in the provision of public services, among them land transport.
Lack of liquidity, problems to pay supplying companies.
Shortage of resources to face the economic rebalance of deficient transport contracts.
Bad situation of infrastructures and basic complementary services to transport, like
passenger stations or information systems.
• Difficulty in implementing mid- and long-term strategies.
 Deviations in basic costs that are fundamental for our operations, without the
possibility of passing them on to fares or compensating for them quickly: fare
deficit, loss of profitability.
 Rigidity of the regulatory model to adapt the transport offer to the needs of the
market.
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
Conclusions
1) The Spanish regulatory model for the operation of intercity services by road, based on
management contracts for public services operated by private companies, has a solid legal.
2) Public transport by road, urban and intercity, Spain has better productivity rates in most EU
countries.
3) Attracting demand to public transport is a fundamental issue, which can only be achieved
with aligned policies from all Administrations linked to mobility.
4) Public transport by road needs actions of modernization, implementing more efficient
transport solutions, of higher quality, with an ever increasing service coverage.
5) Keep public transport as a service of general interest private management is the most
efficient in both the bus and train.
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REGULATORY FRAMEWORK FOR INTERURBAN COACH TRANSPORT ACTIVITIES IN SPAIN
THANK YOU FOR YOUR ATTENTION
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