1. Introduction

In the realm of urban mobility, public transport concessions emerge as an effective solution for the efficient and sustainable management of city transport services. This article delves into the economic-financial aspects of public transport concessions, focusing on cost and revenue analysis methodologies, and resources allocated to ensure the quality and sustainability of the service.

2. Contractual Typology and Conditions

Advantages of the Concession Contract 

The public transport concession contract offers numerous quantitative and qualitative advantages. Quantitative benefits include resource optimization by transferring investment and operation to the concessionaire, thereby reducing operational and maintenance costs. It also encourages innovation and service improvement, providing financial flexibility by distributing risk between the public and private sectors. Qualitative advantages encompass specialization in public transport management, ensuring professional and user-oriented operation. Long-term continuity and sustainability are also assured, with clear mechanisms of responsibility and transparency through performance indicators and periodic audits.

Quality Levels and Administrative Structure 

To ensure service quality, key performance indicators (KPIs) such as punctuality, service frequency, vehicle condition, and user satisfaction are established. Contract compliance is supervised by a regulatory body that conducts periodic audits and reviews. Additionally, technological systems for real-time service monitoring and a system of penalties and rewards are implemented.

Impact on Budgetary Stability 

The financial impact of the concession is reflected in the risk distribution between the public and private sectors, reducing the municipal burden. Revenue and expenses related to the concession are projected to ensure long-term sustainability, evaluating initial investments and their impact, along with analyzing the fare structure and potential subsidies needed.

3. Alternatives and Options for Payment or Compensation Mechanisms in Public Transport

In planning and managing public transport services, defining efficient and sustainable payment or compensation mechanisms is crucial for viability and continuous improvement. Below, various payment mechanism alternatives are analyzed, evaluating their advantages and disadvantages, and recommending the most suitable one according to the specific context.

Vehicle-Km Payments: Analysis and Evaluation 

The vehicle-km payment method compensates public transport operators based on the kilometers traveled by their vehicles. This approach has several advantages: it provides clear incentives to keep the fleet operational and facilitates route control and planning. However, it also has disadvantages, such as a possible mismatch with actual user demand and the risk of prioritizing distance traveled over service quality. For its implementation, routes and frequencies must be analyzed to determine feasibility and associated costs, ensuring a balance between operational efficiency and service quality.

Technical Fare per User: Analysis and Evaluation 

The technical fare per user payment method compensates operators based on the number of users transported, using a pre-established technical fare. This approach has several advantages: it incentivizes attracting more passengers, improving service quality, and directly reflects service demand. However, it also presents disadvantages, such as the need for advanced ticketing systems for implementation and the risk of fraud and data manipulation. For its implementation, the ticketing infrastructure must be studied, ensuring the system is efficient and secure.

Quality/Availability Payments: Analysis and Evaluation 

The quality/availability payment method compensates operators based on quality and service availability indicators such as punctuality, cleanliness, and user satisfaction. This approach has several advantages: it fosters continuous service improvement and is directly related to user satisfaction. However, it also has disadvantages, such as the need for continuous monitoring and evaluation systems and the possible complexity of establishing fair metrics and standards. For its implementation, existing quality standards must be studied and specific metrics proposed, ensuring the system is fair and effective.

Mixed Payments 

Mixed payments combine several compensation methods, adjusting payments per vehicle-km and technical fare per user, along with quality-based incentives. This approach offers greater flexibility and adaptation to the specific needs of the service, balancing incentives for operability, demand, and quality. However, it can be complex to administer and requires an integral monitoring system.

Management Contracts 

Management contracts are based on a fixed fee for managing the public transport service, regardless of the number of users or kilometers traveled. This method simplifies financial and administrative management, providing economic stability to the operator. However, it does not incentivize continuous improvement or operational efficiency and decouples compensation from service quality and demand. For implementation, viability must be analyzed, and clauses ensuring service quality must be included, thus guaranteeing a balance between administrative simplicity and high performance standards.

Direct Subsidies 

Direct subsidies are government payments intended to cover specific operational deficits, ensuring the sustainability of the public transport service. This method guarantees the financial sustainability of the service and can focus on specific needs, such as social inclusion or environmental sustainability. However, it implies dependence on public funds, which can vary according to government policies, and may lack incentives for operational efficiency. The structure and conditions of subsidies must be evaluated, ensuring alignment with long-term efficiency and sustainability objectives, thus balancing financial stability and continuous service improvement.

4. Price Review Formula

The price review formula ensures that economic variations are fairly reflected in contractual prices, avoiding financial imbalances for both the administration and the service operator. This formula is adaptable to different economic scenarios, allowing adjustments based on the evolution of specific service costs and guaranteeing compliance with current regulations on economic deindexation. This approach not only protects the economic interests of the involved parties but also ensures the sustainability and efficiency of the public transport service. Through this mechanism, prices are adjusted fairly, promoting a quality and financially sustainable service.

5. Operating Costs Analysis

Cost Structure The analysis of operating costs is essential to determine the economic and financial viability of the service. This includes the acquisition and amortization of buses/rolling stock, personnel costs, energy and fuel consumption, maintenance, Intelligent Transport Systems (ITS), insurance, and other operating costs.

1. Acquisition and Amortization of buses/rolling stock: Evaluation of the initial cost of new buses and calculation of amortization over their useful life.
2. Personnel Costs: Salaries, benefits, and associated costs for operational personnel, including continuous training.
3. Energy and Fuel Consumption: Breakdown of the cost of traditional and alternative fuels, and evaluation of the cost of electricity consumption for electric vehicles.
4. Maintenance: Preventive and corrective maintenance costs, including workshops and garages.
5. ITS Systems: Implementation and maintenance costs of operational support systems and ticketing.
6. Insurance: Insurance costs for the bus fleet and other buildings used in operation.
7. Other Operating Costs: General administrative expenses, communication, and associated financial costs.

6. Revenue Structure

Revenue analysis is fundamental to assess the economic viability of the service. It considers the revenue structure based on fares, ticket subsidies, and additional non-fare-related revenues.

1. Fare Revenue: Analysis of basic, reduced, and special fares, and their impact on service demand.
2. Ticket Subsidies: Evaluation of subsidies provided by different levels of government and their efficiency.
3. Additional Non-Fare-Related Revenue: Revenue generated from advertising space sales, additional services, and other external subsidies.

7. Economic Equilibrium Study

The economic equilibrium study ensures the financial sustainability and operational efficiency of the service. Costs and revenues are evaluated, sizing payments or compensations according to different scenarios during the concession period. This includes the collection and analysis of financial data, the evaluation of economic equilibrium, and demand scenario analysis and their impact on profitability.

Gross Profitability Level and Operating Margin Evaluating the gross profitability and operating margin of the service is crucial to determine its economic viability.

Evaluation Methodology

1. Data Collection: Historical and current data on revenues and expenses.
2. Gross Profitability Evaluation: Calculation of gross revenues and direct operating costs.
3. Operating Margin Determination: Subtracting direct operating costs from gross revenues.
4. Demand Analysis: Evaluating the impact of demand on profitability and necessary adjustments.

8. Economic-Financial Valuation of Assets to be Reverted

Finally, the economic-financial valuation of assets to be reverted is a crucial process in the finalization of the concession contract and the preparation for a new contract. This analysis is based on the provisions of the Particular Administrative Clauses Specification (PCAP) of the current concession contract. 

The valuation methodology includes data collection through detailed inventories and review of accounting documentation, followed by financial analysis using standard valuation methods (cost, market, income) and residual value calculations. Results are presented in a detailed report with conclusions and recommendations for future asset management. Additionally, contractual, legal, and regulatory aspects are considered to ensure compliance, and a transparent and audited process is implemented for valuation, involving all relevant stakeholders.