Direct management in public passenger transport networks

Definition of direct management

In matters of management of public services, local authorities and their groups have freedom of choice in application of the principle of free administration provided for in article 72 of the Constitution.

Applied to the field of transport and mobility, article 5 of European regulation n°1370/2007 of October 23, 2007 relating to public passenger transport services by rail and road (ROSP) explicitly provides for this freedom.

Thus, when a community decides to operate a public service itself for which it has competence, it chooses direct management with an internal operator and not outsourced management.

The particularities of direct management

  • No competition
    The community which wishes to entrust the operation of a public service to an internal operator is not subject to the advertising and competitive bidding obligations provided for by the public procurement code for the conclusion of public contracts and service delegations. public (DSP).
  • Conclusion of a contract between the community and the internal operator
    In the field of transport and mobility, the community allocates services to the internal operator through a contract called a “public service obligation contract”. As for a public market or a DSP contract, this determines the missions entrusted to the internal operator, its objectives and means, the control and monitoring by the organizing authority as well as its remuneration.
  • Contractual flexibility
    The modification regime provided for by the public procurement code, and in particular the threshold for amendments limited to 10%, does not apply to contracts concluded with internal operators. The contract can thus evolve throughout its duration of execution without limitation.

The different forms of direct management

When creating the internal operator, the community has the choice between several forms of structure, each with its own particularities:

  • The Régie with sole financial autonomy (RAF)
    The RAF does not have legal personality and has limited autonomy; it is a service integrated into the community which created it, governed by the general code of local authorities. The RAF carries out its activities on behalf of its local authority and it can intervene for third parties, on an ancillary basis.
  • The Régie created in the form of a public industrial and commercial establishment (EPIC)
    The EPIC management company has legal personality and financial autonomy. As a public establishment, it is governed by the general code of local authorities. The EPIC management company carries out its activities on behalf of its local authority and it can intervene on behalf of third parties, on an ancillary basis.
  • The local public company (SPL)
    The SPL is a limited company governed by the commercial code and the general code of local authorities. It carries out its activities exclusively on behalf of its shareholder communities and on their territory. At least two communities are needed to create an SPL, this can for example be between a region and an agglomeration, two agglomerations, an agglomeration and its central city, etc.

Skills entrusted to an internal operator

The missions of the internal operator can correspond to all the skills exercised by the organizing authorities:

  • The organization of public public transport services: regular transport, on-demand transport, school transport;
  • The organization or contribution to the development of other mobility services: active mobility (bicycles, walking), solidarity mobility, shared mobility (carpooling, car sharing);
  • Other missions: advice and support, transport of goods and reduction of urban congestion, planning and the fight against climate change and pollution.

Internal operators can also be entrusted by communities which are not organizing authorities with missions complementary to public transport, such as parking or even after-school transport.

It is therefore up to each community to define the scope of action of its internal operator. For example, an internal operator may be responsible for managing public transport, cycling and parking services.

Figures on direct management in the mobility sector

La gestion directe est le choix le plus répandu pour la gestion des transports publics urbains au niveau international : Amérique (Etats-Unis, Canada), Asie, Afrique et Europe (Allemagne, Belgique, Italie, Espagne, etc.).

Direct management is the most widespread choice for the management of urban public transport at the international level: America (United States, Canada), Asia, Africa and Europe (Germany, Belgium, Italy, Spain, etc.).

Indeed, between 2005 and 2023, apart from the particular case of the Ile-de-France Region, the share1 of the population served by an urban transport network operated by an internal operator increased from 11.6% to 27.5%, an increase by 137%.

Since 2005, 25 networks have moved from delegated management to direct management, including recently major mobility organizing authorities such as Avignon, Grenoble, Montpellier or Strasbourg, while in this period only 4 networks have moved from direct management to delegated management.

Not counting the authorities operating only school transport services, there are 45 internal urban public transport operators and 17 internal non-urban public transport operators in France, the list of which can be consulted in the appendix. These internal operators are distributed as follows:

14 Authorities with simple financial autonomy (RAF)

27 Public establishments of an industrial and commercial nature (EPIC)

21 Local public companies (SPL)

Why do elected officials choose direct management?

Based on various feedback, AGIR Transport noted through surveys carried out among elected officials that the choice of direct management could result from different motivations:

  • Cost control, thanks to transparent management, without private shareholders to pay or commercial interests to satisfy.
  • A desire by the organizing authorities to be able to rely on a trusted technical partner, complementary to the community’s services.
  • Choose a local public company, anchored in the territory in a sustainable way, close to users.
  • Flexibility with the possibility of changing the network according to projects without being constrained by the rules provided for by the public procurement code, in particular the threshold of amendments limited to 10%.
  • Act on the lack of competition in a territory. The community creates an internal operator to challenge the response of one or more candidates when renewing a DSP contract and entrusts it with operation if it judges that the offer of the candidate(s) is not satisfactory.
  • For the sake of decentralization and independence from the State, the desire not to enter into contracts with a transport group majority owned by the State which owns all or part of the shares of the 3 large groups present on the territory
    • Keolis: 70% French National Railway Company (SNCF) and 30% Caisse de dépôt et placement du Québec
    • RATP: 100% French State
    • Transdev: 66% Caisse des Dépôts and 34% RETHMANN Group

What are the phases of creating an internal operator?

The creation of an internal operator requires following different stages which must be adapted according to the local context and the project envisaged by the community.

The main steps are as follows:

  • Study on the choice of management mode
    Audit of the existing management of the public service (audit of the contract, personnel, equipment, operating and commercial data as well as financial/accounting/tax data)
  • Preparing to create the internal operator

    Drafting of the draft statutes of the internal operator and the future OSP contract.

    Preparation of the initial allocation allocated to the internal operator and intended to enable its operational functioning.
    Development of a business plan.

  • Creation of the internal operator

    Deliberation of the local authority confirming the choice of direct management and the form of the internal operator

    Deliberation of the local authority creating the internal operator

How do networks operated under direct management work?

In the same way as the subsidiaries of a transport group, internal operators benefit from internal expertise allowing them to manage the network on a daily basis.

Through their “business” expertise, internal operators have the capacity to respond to the wishes of the organizing authorities and to all the projects that they could entrust to them, such as carrying out comparative studies, benchmarks or even preliminary experiments. in terms of energy transition, new mobility, MaaS system, etc.

If necessary and on an ad hoc basis, internal operators can rely on the expertise of AGIR Transport and that of design offices.

AGIR Transport and internal operators

AGIR Transport includes in its corporate purpose the defense of the principles of free administration of local authorities and free choice of management method. In this sense, the Association does not favor a particular management method, the choice of direct or delegated management resulting from each local context.

However, for this freedom to be effective and for elected officials, in the event of choosing direct management, to truly be able to create an internal operator and run it on a daily basis, they must be able to benefit from technical assistance.

This is why elected officials created AGIR Transport in order to provide independent expertise allowing them to support and advise member operators on all questions related to the management of a company. The Association provides them with support in legal, technical, financial, tax, social matters, innovations and new technologies, etc.

Beyond the expertise offered, AGIR Transport runs a professional exchange network organized into professional communities: directors, HR, marketing, operations, maintenance, quality, safety, etc. This dynamic network allows operators to be connected with each other.

To limit “economic isolation”, AGIR Transport created, in 2011, the Public Transport Purchasing Center (CATP) which allows all public buyers and in particular internal operators to dispense with implementation procedures. competition for their purchases and benefit from competitive prices by pooling volumes.

Beyond the recurring needs linked to the renewal of equipment, CATP also supports communities on an ad hoc basis, such as when starting the activity of an internal operator by equipping the structure so that it can operate. Thus, when creating SPLs and management companies, CATP was able to take on the insurance, spare parts, fuel, software, accounting, cleaning, etc. markets on behalf of these operators.

Finally, AGIR Transport represents internal operators at the national level by participating in the public debate, particularly when issues related to management methods are addressed.

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