Case Studies: Metro Sul do Tejo

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Project Overview
Mst1.png
Photo Courtesy of Attica Tollway
Figure 1: Overview of Attica Tollway (detail)
The MST Project, Portugal
Project Type: Both
Contract duration: 30 Years
Budget:

EUR 339M (Values refer to investment in the first phase of the project: Corroios – Cacilhas; Corroios – Pragal;

Cacilhas – Universidade)
Project Time Line
Tender: September 1999;
Contract Negotiations: May 2001 – February 2002;
Financial Close: March 2002;
Contract Signed: July 2002;
Contract Start: Dec. 2002;
Contract Re-negotiations: December 2011

Introduction

This Light Rail Tram service is known as the “Metro Sul do Tejo” (MST). It is a public transportation system supplied by surface light rail, in the municipalities of Almada and Seixal in Portugal, with growth projected for the neighboring municipalities of Barreiro and Moita. Its mission is to provide an adequate transport service on the south side of the Tagus River. The MST has three commercial links in a Y-shaped network extending south (Corroios), west (Caparica), and Northeast (Cacilhas). Each line uses fully or partially two of the three links of this topology. The network has a total of 19 stops and a length of 22 km (see figure 1).

The first sections were opened in 2007. The Corroios and Cova da Piedade section was inaugurated on 30 April 2007 and put in service on 1 May 2007, whilst the section between Cova da Piedade and University was inaugurated on 15 December 2007. The current network has been in operation since late 2008, with the section to Cacilhas opening to service on 26 November 2008.

There are plans to extend to all three sections of the network to reach Costa da Caparica / Trafaria, Setúbal, Barreiro, Moita, Montijo, and even Lisbon. The MST project also included the complete renovation of roads and public spaces (bus and private vehicle corridors, widening of pavements, sufficient parking lots and new drainage).

Fares are set out in the concession with a margin of variation for inflation.

The Contracting Authority (Public Party)

The project was sponsored by the Minister of Finance and Public Procurement and Public Works (IMTT) along with the local municipalities of Almada, Seixal and Barreiro.

Procurement was conducted following EU procurement directives, which have been included in the new Public Contracts Code, which also applies to PPP projects. This Code also introduces electronic tendering.

The Concessionaire (Private Party)

The concession for the MST was awarded to Metro Transportes do Sul S.A. (MTS). This company is composed of the following enterprises: Grupo Barraqueiro / Arriva; SIEMENS, A.G. (Germany); ENSULMECI, S.A.; SOPOL, S.A.; Teixeira Duarte – Engenharia e Construções, S.A.; ASCENDI, S.A. (Mota-Engil, S.A.).

Grupo Barraqueiro is a Portuguese company providing transportation services for passengers, with extensive experience at the national level. Barraqueiro has a partnership with Arriva, which is a British multinational company, which operates bus, coach, train, tram and waterbus services in 12 countries across Europe. SIEMENS, A.G. is a German multinational engineering and electronics conglomerate. It is organized into five main divisions: Industry, Energy, Healthcare, Infrastructure & Cities, and Siemens Financial Services. ENSULMECI, S.A. is a Portuguese construction company. Its principal activities include civil engineering and the construction of infrastructure. SOPOL, S.A. is a Portuguese construction company. Its principal activities include civil engineering and the construction of infrastructure. Teixeira Duarte is one of the largest construction companies in Portugal. ASCENDI, S.A. (Mota-Engil, S.A.) is a Portuguese industrial conglomerate. Its principal activities include civil engineering and construction of infrastructure including bridges, dams, industrial buildings, schools, and roads; energy and steel works (including steel structures, energy equipment and electricity); transport concessions and environmental services (waste water treatment and multi services). It also deals with logistics, retail and warehousing. The company has operations in Europe, Africa and America.

Users

The MST addresses transport and mobility needs for the municipalities of Almada, Barreiro and Seixal and supports travel to the University.

Key Purpose for PPP Model Selection

The concession model approved for this project included, in a single contract, all the foreseen investments. Therefore, contracting was simplified.

Project Timing

The contract was tendered in September 1999, and signed in July 2001. It was re-negotiated in December 2011.

Project Locality and Market Geography

The development of this project has been very important for the region, as it has significantly changed passenger behavior. Prior to the MST, available mobility options were the bus service network of TST (Transportes Sul do Tejo) and the private car. In addition, MST is linked to the train station, FERTAGUS service, and the Almada / Cacilhas river boat station (with links to Lisbon).

Procurement & Contractual Structure

Tendering

An international open call with a pre-evaluation stage was issued. Two consortia (MTS – Metro Transportes do Sul and MAR – Metropolitano do Arco Ribeirinho) expressed interest in the pre-evaluation stage and both were invited to negotiations.

Contract Structure

The concession was for the design, construction, equipment & rolling stock supply, financing, operation, maintenance and conservation of the MST.

The public authority co-financed the greater part of the project. In addition, the public authority, in its capacity as regulator, determines transport policy and the level of service (conditions of organization and functioning of public service, pricing policy etc.)

The Concessionaire is entitled to all revenues generated by the operation of service (passenger fares) as well as revenues from advertising and the exploitation of commercial areas and car parks included in the MST. The Public Party guarantees a minimum revenue to the private party through a subsidy.

Renegotiation clauses are included in the contract.

Risk Allocation

Risk is allocated as depicted in figure 2.

Performance

There were no specific clauses relating to performance in the contract. However, performance is considered with respect to number of passengers; traffic risk and operational performance.

Actual traffic has been well below forecasts (see table 1). In effect actual traffic in 2009 and 2010 represented 28.1% and 33.2% respectively of the minimum reference traffic.

In 2010 revenues from the sale of tickets amounted to EUR 3.28M, representing 33% of operating revenues. Tickets for occasional transport (single tickets and pre-purchased tickets) represent 52% of sales.

Mst2.png

Figure 2: Risk allocation

Table 1: Forecast vs actual passenger kilometers

Sources: MTS, S.A. , GMST – Gabinete do Metro Sul do Tejo (Office of Metro Sul do Tejo), Tribunal de Contas
Passenger-km (M) 2008 2009 2010 2011
Expected 16,14 88,06 88,23 88,68
Actual 1,89 24,73 29,33 32,26

In 2010 there were 9,16M passengers travelling an average distance of 3.2 km. With respect to operations, there were 209.462 services in 2010 corresponding to 1.37 million vehicle-km. This reflects an annual reliability of above 98%, when taking into account services unrealized or delayed for more than five minutes.

References

  • R. Macário, J. Ribeiro, R. Couchinho, 2013, Metro Sul do Tejo In Roumboutsos, A., Farrell, S., Liyanage, C. L. and Macário, R, COST Action TU1001 Public Private Partnerships in Transport: Trends & Theory P3T3, 2013 Discussion Papers Part II Case Studies, ΙSBN 978-88-97781-61-5, COST Office, Brussels available at http://www.ppptransport.eu
  • www.MTS.pt
  • www.tcontas.pt/pt/actos/rel_auditoria/2011/2s/audit-dgtc-rel022-2011-2s_1.shtm
  • www.fenix.ist.utl.pt/publico/showDegreeTheses.do?method=showThesisDetails&degreeID=null&thesisID=320444&contentContextPath_PATH=/cursos/mec/dissertacoes&_request_checksum_=32283f1c2f0e77610cbce75c7664441231bfabc7