A Wide Array of Contracts

Local authorities can manage and operate their public transit systems by providing the services themselves, using their own resources in an operation owned by the municipality, a group of districts or an administrative department (France), or they can outsource the performance of transit services to a contractor, usually a specialized private company.

In the latter case, they are outsourcing the delivery of public services through a public-private contract, a model created in France that subsequently rolled out successfully across the world.

Public services are outsourced when a legal person established in the public interest delegates the management and/or operation of a public-interest service under its responsibility to a private, public or semi-public outsourcee, which is compensated based largely on the financial performance of the service operated.

Following a competitive tender involving several applicants, the outsourcee is then entrusted, on behalf of and under the supervision of the transit authority, with performing a public service mission under a contract with specifications, for a set period of time.

Public service outsourcing is a novel way to manage transit systems.

• It is not privatization, which involves the acquisition of all of the public company's assets by the private sector.

• It is not deregulation, which entails the public authority playing a limited role as a market regulator.

Changes in public transit contracts illustrate the gradual integration of environmental issues into the operator job. Indeed, over the last several years, transit authorities have been steadily increasing the number of responsibilities they entrust to Veolia Transport. We are no longer compensated based solely on kilometers traveled.

Through incentive-laden contracts that often include bonuses-penalties, our customers ask us to commit to ridership, service quality, on-time performance, reliability, cleanliness, safety and other results. In the medium term we, like the other Veolia Environnement divisions, plan to focus on our operations' environmental performance, on resource conservation and on reducing pollutant and carbon emissions.

Veolia Transport has assimilated the new environmental expectations and is well-equipped to respond to them. We are already directing our departments to focus on achieving sustainable development targets, while providing quality services to our riders and contract customers alike.