Case Studies: SEVICI

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Project Overview
Sevici1.png
Figure 1: The SEVICI Project
SEVICI, Spain
Project Type: Both
Contract duration: 20 Years
Budget: EUR 92,2 M (For the implementation, operation and maintenance over the entire period)
Project Time Line
Conception: 2004;
Contract Approved: July 2007;


Introduction

SEVICI concerns the development of a public bicycle rental scheme based on a public-private sector participation model. The project was implemented in the City of Seville in 2007. It included 2500 rental bicycles, 250 parking areas and 411 parking docks. The operation is performed at the docking station itself. Each docking station has an interactive information platform.

Cyclists can use a cycle-path track length of 120 km (not included in the tender). The service is considered to be part of the Seville pubic transport system. The concessionaire receives rental tariffs and also the right to use elements of the service and local area as advertising space.

The project is an innovative concept using PPP as a side business to support the core business, which is advertising.

The Contracting Authority (Public Party)

The Municipality of Seville awarded the contract under the auspices of articles 5.2b and 8 of the Revised Text of the Law on Public Sector Administrative Contracts, as passed through Royal Legislative Decree 2/2000, on 16th of June.

The Concessionaire (Private Party)

JCDecaux is the first advertising company to offer automatic bicycle rental schemes as part of their advertising contract for urban advertising spaces. JCDecaux developed the bicycle rental scheme. This is, however, a bundling with its core business, which is advertising. The concessionaire provided equity and loans.

Users

SEVICI forms part of the Seville urban transport system and is available to all public users. In 2011, almost 5 million trips were registered.

Key Purpose for PPP Model Selection

The City Council could not cover the cost of developing and operating a viable bicycle rental service. However, the advertising company by “bundling” advertisement and rental user tariffs could achieve feasibility. More specifically, while user tariffs correspond to approximately 50% of the project cost, revenue for the rest is generated by the advertising service.

Project Timing

Public bicycle rental schemes (SBP) have spread rapidly over Spain since 2004, following the success of the Vitoria-Gasteiz scheme, which allowed for a truly intermodal scheme to be established in the public transport system. Moreover, Seville is a prominent city in Andalusia, with significant tourism, which greatly benefits from adopting the SBP.

Project Locality and Market Geography

The bicycle rental scheme is part of the Seville public transport system. It is estimated that more than 5% of daily trips in the city are conducted by SEVICI.

Procurement & Contractual Structure

Tendering

Two bidders responded to the Expression of Interest issued by the Municipality of Seville. The final bid was submitted by JCDecaux. The legal basis of the contract is under the auspices of articles 5.2b and 8 of the Revised Text of the Law on Public Sector Administrative Contracts, as passed through Royal Legislative Decree 2/2000, on the 16th of June.

Contract Structure

The contract involves the installation, management and maintenance of the individual public transport system through the availability of public bicycles for short-term rental, as well as the development of docking stations where these can be parked.

Table 1: SERVICI tariffs
Card used Fee 30 minutes 1st Hour 2nd Hour
Short term 11 € Free 1 € 2 €
Long term 27.5 € Free 0.5 € 1 €

The contract was assigned for a period of 20 years to the French company JCDecaux. Revenues are generated through bicycle rentals (see fees below) and the use of elements of the service and local area as advertising space. More specifically, the concessionaire is given 500 advertisement spaces.

Users can pay an annual fee, which gives them the right to free journeys of up to half an hour between SEVICI points or through a weekly, short duration fee. Costs are deducted from the credit cards provided by the subscriber.

User tariffs are currently (2013) being re-negotiated due to the economic crisis, which also affects advertisement demand.

Risk Allocation

Evolution of demand, revenue from advertisement and cost of maintenance may be considered the key risks of SEVICI. In the contract risks are allocated as shown in figure 2.

Sevici2.png

Figure 2: Risk allocation

Performance

The ex-post overall assessment of the contract is very positive. Some problems exist with respect to:

  • Shortage of maintenance and lack of qualified staff to deal with unlawful actions and vandalism to cycles as well as docking stations;
  • Poor customer service (poor complaints line, expensive call number, no physical contract with the users possible);
  • No simple method to report a mechanical failure on a bike.

Performance indicators were foreseen in the contract, in accordance with the system’s basic RAM criteria (Reliability, Availability and Maintainability), and were as follows:

Table 2: Performance indicators
Figures
Initial number of bicycles 2.500
Temporary out of service (105)
Permanent out of service (690)
Number of bicycles in use (average) 1.705

However, no penalties were foreseen.

The SERVICI has approximately 5 million trips per year. Users are relatively satisfied with the system.

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Figure 3: Scoring of SEVICI by users (2011)

Source: Barómetro Socioeconómico de Sevilla

References

  • J. Sastre, 2013, SEVICI 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
  • Sastre, J. and Romero, A. (2012) Development of the Public Bicycle Rental Scheme based on a Public Private Sector Participation Model: The Seville case study (SEVICI), Latin Infrastructure Quarterly
  • Sastre, J. and Romero, A. (2012) Impact of bicycle sharing system in Spain. ALOMON, Consulting. Research Department