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The future of public transport

Posted: 6 December 2006 | ET | No comments yet

Amsterdam is growing and as the city increases in size, its public transport network, which has been run by the metropolitan public transport company GVB for years, will also expand. Gertjan Kroon, the Managing Director of GVB since 2002, gives his vision on the challenges public transport faces and how his company is building up the strength it will require to remain Amsterdam’s public transport services provider in the future.
What is the potential of Amsterdam for a public transport company?

Amsterdam has enormous potential. Public transport can flourish where there is no space for cars. Where there is space, public transport is a community service. Where there is no space, public transport is basic necessity for keeping society mobile. And that is the case in Amsterdam.

Amsterdam is growing and as the city increases in size, its public transport network, which has been run by the metropolitan public transport company GVB for years, will also expand. Gertjan Kroon, the Managing Director of GVB since 2002, gives his vision on the challenges public transport faces and how his company is building up the strength it will require to remain Amsterdam's public transport services provider in the future. What is the potential of Amsterdam for a public transport company? Amsterdam has enormous potential. Public transport can flourish where there is no space for cars. Where there is space, public transport is a community service. Where there is no space, public transport is basic necessity for keeping society mobile. And that is the case in Amsterdam.

Amsterdam is growing and as the city increases in size, its public transport network, which has been run by the metropolitan public transport company GVB for years, will also expand. Gertjan Kroon, the Managing Director of GVB since 2002, gives his vision on the challenges public transport faces and how his company is building up the strength it will require to remain Amsterdam’s public transport services provider in the future.

What is the potential of Amsterdam for a public transport company?

Amsterdam has enormous potential. Public transport can flourish where there is no space for cars. Where there is space, public transport is a community service. Where there is no space, public transport is basic necessity for keeping society mobile. And that is the case in Amsterdam.

Compared with other European cities, the disadvantage of Amsterdam for a public transport company is that it is not as densely built on. The area of Amsterdam within the outer ring is approximately the same size as the area of Paris within the Périphérique. However, much more goes on there: more people live and work in Paris and there are more shops. The more densely a conurbation is built on, the more efficient and more frequent public transport services can be for the same costs. The reason for this is that you have more customers per square kilometre. Amsterdam is more like Stockholm than London or Paris. This has a positive effect on the quality of life, but it puts public transport companies at a disadvantage.

Instead of ‘just’ Amsterdam, you have to look at the Northern Randstad: Amsterdam, Schiphol, Almere, IJmuiden & the North Sea Canal Industrial Zone and Zaanstad. The Northern Randstad is an economic unit. Because Schiphol Airport is a transfer hub connecting Amsterdam to every major city in the world, Amsterdam is an interesting place for public transport companies to operate.

Does Amsterdam present challenges for the GVB?

As long as the city grows, public transport will continue to expand. This year, we were surprised by the level of growth: the different modalities had growth rates of 3 to 8%. This is related to the economic recovery; there is more commuter traffic and more people are coming to the city to go shopping. The development of IJburg has also led to further growth in Amsterdam. Not much is being built in the area directly surrounding Amsterdam, but Almere is steadily expanding and, to all intents and purposes, has become East Amsterdam. There have to be good links between the economic core area of the Northern Randstad where people work and dormitory towns like Almere. This provides new opportunities for public transport companies to exploit.

But GVB is not the only public transport company in the region.

You have to look at the larger spatial planning and economic units. The Amsterdam underground railway network has the potential to expand further outside the city. Despite the fuss about improving the road link between Almere and Amsterdam, the A1 motorway is always heavily congested between Almere and Amersfoort. We have studied the feasibility of extending the underground line from Southeast Amsterdam to the railway station in Weesp. This would provide new and improved possibilities of travelling by public transport from Amersfoort, Almere and Lelystad to Southeast Amsterdam. After the city centre, Southeast Amsterdam has the highest concentration of employment. And despite the development of the Zuidas, it will probably stay this way for years to come. If you take things further, you could build a large car park at the A1/A6 junction. That would relieve the pressure on the road network around Amsterdam even more.

Is GVB the logical company to take the initiative in this respect?

We have researched the various possibilities for improving the utilisation of and expanding the underground network. Our studies showed that this idea should be given the highest priority. Where you have the most bottlenecks is also where you most need public transport. However, there are more places where you can improve the utilisation of our underground and tram networks by implementing an effective Park & Ride policy. We would, in fact, like to have car parks at the ends of all our rail links. In my opinion, this is not taken sufficiently into account in spatial planning.

These are all examples of what could be done, but why is it all so complex?

A combination of too much bureaucracy and efforts made by private individuals to obstruct the progress (lengthy objection procedures, etc.) of infrastructure projects. For example: three years ago, the Amstelveen Line was extended one and a half kilometres to the edge of the town. To improve the flow of traffic and air quality, and from an economic perspective, cars should be left as much as possible at the end of the line outside the built-up area. This is what was planned and also what the Greater Amsterdam Authority wanted. However, the sad truth of the matter is that the area around the end of the Amstelveen Line had already been designated as urban green space in the local zoning plan. This means that a car park cannot be built there and that people will have to park outside somebody else’s house in a residential area three sets of traffic lights further away and therefore creating three times as much pollution. In this case, the result of bureaucracy is that national policy, which is endorsed by the regional government, cannot be implemented because of local decision-making.

Would your colleagues in other countries be able to identify with these problems?

We have certainly made things really complicated in the Netherlands. Officially, we have three layers of government: national, provincial and municipal. After plans to make Greater Amsterdam a separate urban province were shelved a few years ago, the city was divided into a central and urban districts and we now have additional layers of government in the form of the Greater Amsterdam Authority and urban district councils. Because Amsterdam was not transformed into an urban province, we now have five layers of government instead of three, but the population of the region has stayed the same. In the Netherlands, we have the same level of bureaucracy as much larger countries that are more decentralised and have higher populations. There are cities in the world with more than 16 million inhabitants: all of the Netherlands would fit in Peking where they only have one layer of government.

Another factor in our case is that even if a higher government authority has the power to push its policy through, it will not do so because officials are afraid of conflicting with the wishes of lower government authorities.

What opportunities have there been for GVB over the past five years?

We have participated intensively in a large number of expansion plans, for example, to extend tram and underground lines and to build a new tram line to IJburg.

What was GVB’s contribution to these projects?

Before the Passenger Transport Act of 2000, there was no clear distinction between government policymakers and operating companies. Before 2000, GVB had a large strategic planning department of its own. Since 2002, this has changed radically. Strategy has been transferred to the commissioning authorities. We are now more an operating company that contributes to the planning process on the basis of experience.

Is that a satisfactory way of working?

It is a huge challenge to keep a complex system like a metropolitan public transport company running day in and day out. Attempting to maximise the efficiency of our operation is more than enough for most people. Winning over policymakers to your ideas is also a challenge. For example, we had to take our idea for extending the underground to Weesp on the road and presented it to the municipal executive, the local chamber of commerce and the municipal officers concerned.

The fact that you only have to deal with one commissioning authority does not mean that you no longer take the initiative.

That is correct! If someone comes up with an idea like building a bridge over the IJmeer to solve the traffic congestion between Almere and Amsterdam, we ask the critical questions. We come up with our own ideas, but if they come from somewhere else, we examine them critically from a public transport company perspective to see whether they are sound and will work.

In addition, we do not always look at things from a purely business point of view of obtaining the most transport with the least amount of atmospheric pollution and for the lowest costs: cars and public transport are viewed as opposites. You have to think in terms of combinations of modes of transport and link them together effectively, for example, by not building railway stations and car parks in city centres, but in between towns and cities.

To what extent is GVB listened to. Is GVB regarded as a partner in discussions?

It mainly depends on the quality of your arguments. If, similarly to GVB, you have been operating a monopoly in a city for more than a hundred years, you tend to think conservatively. Competing or seeking cooperation with other companies is good for us. For example, new carriages had to be ordered for the new North/South railway line; GVB also needed new carriages for the Amsterdam Underground. We talked to the parties involved and drew up a joint Strategic Plan of Requirements.

How can you best illustrate GVB’s developments over the past few years?

GVB has been operating public transport services for more than a hundred years as a state-run monopoly. This type of situation creates a unique culture in which work methods become set in concrete. We saw urban and regional public transport services become more expensive and inefficient throughout the country. The Brokx Committee was set up to improve public transport and make it cheaper. There was no client/contractor relationship and public transport companies faced too little competition. The Brokx Committee developed the outline of the Passenger Transport Act.

The national problem was even worse in Amsterdam. GVB was out of control: there were problems with integrity and its administration was not in order. Van der Zwan was brought in to investigate the company. We were in the middle of a major crisis; something had to be done. Politicians were forced to act. If a crisis is serious enough, a large number of preconceptions start to dissolve. And that is what happened to GVB: all our old work methods and ideas were abandoned.

Can you give some examples of ‘the Great Leap Forward’?

We have seen passenger appreciation steadily increase. The transportation systems are cleaner; we have invested a great deal of money in new equipment and I receive feedback that shows that our employees are friendlier and more polite. Social safety has been improved. We now have a contract with the commissioning authority which contains clearly defined quality requirements. Penalties are imposed if targets are not met and bonuses are awarded if they are. The requirements have now been made even stricter. We may take a while to achieve our targets, but this has forced us to increase quality and reduce costs.

What are you most proud of?

The tripartite agreement we concluded with the municipal executive and the works council in 2001. GVB had to reduce costs by ?32 million. In return the municipal authority would attempt to put out the public transport concession for Amsterdam as a single tender. This would enable GVB to continue operating as one company. We achieved the cost reductions a year ahead of schedule even though the government slashed its subsidies for public transport at the same time. Because of our cost reductions, we were able to absorb the loss of subsidies without having to cut into our services. Something that colleagues in Rotterdam did have to do!

I am also proud of the fact that we were awarded the present concession on the basis of a point system. We were able to make a good deal, without having to go through a complicated tendering process.

The next step is privatisation. What could GVB do as an independent company that it cannot do at the moment?

GVB has to be run more commercially and to do that it has to be privatised. In recent years, we have been operating like a limited company, but we do not have the same legal basis. By actually becoming a limited company, we would acquire the legal framework we need.

Would that increase the scope of GVB?

Yes. The Supervisory Board would be allowed to decide on matters that we currently have to take to the municipal authority. Incidentally, the municipal authority would still be a shareholder. Municipalities and government bodies are there to make policy, the production of goods and the delivery of services should be left to organisations that are equipped for the task.

What technical innovations is GVB introducing?

We are working on a vehicle tracking system that is designed to provide up-to-date passenger information at bus and tram-stops. My dream is to install flat-screens at all the stops to show up-to-date arrival times. And if something happens, passengers will be able to see what is going on and how long delays will last. We already have PIDs (Passenger Information Displays) in a number of places in the city. However, we cannot use them to provide detailed information and they are not everywhere. Providing passenger information would vastly improve our services.

We have run trials with fuel-cell buses (with an electromotor that runs on hydrogen). It is not yet commercially feasible to operate these buses, but they remain an attractive future prospect. The electromotors can dramatically reduce nuisance levels: less noise, no CO2 emissions. The buses are really comfortable for the driver and the passengers. I believe that, in ten years time, hybrid buses will be operating all over the city. They will have an electromotor and a small combustion engine to load the batteries. This is a fantastic way of improving quality with the added incentive of reducing our environmental impact.

We also want to introduce a public transport smart card. Firstly, this card would make travelling by public transport easier for passengers. Secondly, it would provide the company with information about how many people we carry and where they get on and off. This would enable us to improve the network even more. It would also allow us to introduce price differentiation so that we could encourage more passengers to use our services outside the rush hour. We could also make personal offers to people. This is all theoretically possible.

Are Amsterdam and GVB condemned to living together or is it a match made in heaven? To what extent can GVB withstand competition from a new player on the market from another country with a substantial amount of financial backing who says that he can do it all faster and better?

If someone claims that he can do things better and has enough financial resources to buy the concession that is obviously what will happen. But we will not go down without a fight! To the best of our knowledge, our competitors in other countries are not altruists and also want to make money from the services they provide. But then again, anyone can make mistakes. We are continually working on improving quality and reducing costs. In 2008, we will have the same volume but run at 73% of the costs that we had in 2000. And we are looking into a large number of possibilities to reduce costs even further.

And what will happen if a foreign company wants to take over GVB?

The Amsterdam concession is an attractive proposition for our foreign competitors, but Amsterdam does not want to sell GVB. Furthermore, the amount GVB is worth depends largely on how many years the concession still has to run.

GVB has come a long way from being a state-owned company, but has it come far enough?

Not yet; I think we are about halfway there. The next concession will start on 1 January 2012 and the tendering process in 2010. We therefore still have four years to become better, faster and cheaper.

What will be left over from the old GVB in the new GVB?

The things we did well have stayed the same and plenty of new things have been added. GVB means something to Amsterdam. The tram has a high symbolic value for both the inhabitants of the city and our employees. The trams have always been here – through thick and thin. The GVB may have been an awful mess, but it was always our awful GVB. People still have nostalgic sentiments about GVB. It would be counterproductive to place business choices before people’s feelings. You also have to bear in mind that non-business choices also have to be made in the same context that do not have a negative impact. For example, we have always placed the line number above the windscreens of trams. We looked into whether we could digitise the number, but discovered that, in the beginning of the twentieth century, each tram line had its own coloured symbol because many of the city’s inhabitants were illiterate at that time. The Passengers Advice Council (RAR) told us to keep the old colours and we have.