6.4 Management decisions in support of regional transportation systems

The implementation of projects using the energy balance in St. Petersburg made it possible to project and implement quantitative management in the regional transportation system based on the regional transport and economic balance (TEB) model.

The transport and economic balance model is an interdependent system of indicators that comprehensively characterizes the functioning and development of the regional transportation system.

The methodology is intended for use by the public transport administration authorities of the region (municipality), interaction and coordination of the activities of carriers, public authorities, implementation of policies relevant to urban and suburban transport, external transport, as well as intercity and international passenger road transportation.

The methodology defines the requirements for the preparation and application of the TEB as a system of indicators that comprehensively characterizes the retrospective and prospective dynamics of the technical and economic state of the regional transportation system, providing public authorities, consumers, carriers, suppliers, and investors in the passenger transport sector with a unified tool for comprehensive accounting, analysis, forecasting, planning, and evaluation of projects of state and management decisions.

6.4.1 Transport balance goals

Below we set out the transport balance goals:

• unify and improve the KPI system, methods, and forms of integrated accounting, forecasting, goal setting, and planning in the industry of public transportation
  
• increase the effectiveness of government and management decisions that ensure the growth of accessibility, efficiency, reliability, and safety in the passenger transport sector, as well as the growth of the quality of life and the quality of the urban environment as a whole through the introduction of scientific and technological products, increased labor productivity, efficient use of material, energy resources, capital assets, and working capital, and the improved effectiveness of capital investments leading to cost reductions and growth in the level of profitability of transport services
  
• ensure a balance of interests of different groups of transport system users between themselves and objects of the transport infrastructure; a balance between meeting today’s needs and maintaining a reserve of resources to meet the needs of future generations, a balance between the internal and external functions of the transport system

6.4.2 Transport balance objectives

The objective of the transport balance is to define the following things:

• general principles of the transport balance preparation
  
• the system of indicators of the fuel and energy balance and methods of their determination (measurement, estimation)
  
• the order of formation of the actual (retrospective) transport balance
  
• the procedure for the formation of a predictive transport balance
  
• the procedure for applying the actual (historical) transport balance for the economic analysis of financial and economic activities in public transportation
  
• the procedure for applying the predictive transport balance to assess the effectiveness of projects based on government and management decisions
  
• the procedure for the formation of a planned transport balance in accordance with the approved state and management decisions

6.4.3 General principles of transport balance modeling

TEB is a way of generalizing, grouping, and comparing the volume of passenger traffic, transportation work performed, losses and costs of all types of resources (materials, energy, labor, production, finance, and time) needed for transportation, and the operation and development of rolling stock and transport infrastructure.

The TEB is presented in the form of input-output tables filled in by planning and economic departments of transport organizations and/or another authorized organization.

The input-output tables of the TEM have the following granularity levels:

• level 1 “Transport system as a whole” (in terms of Passenger transport)
  
• level 2 “Transport subsystem” (bus transport, trolleybus, tram, subway, taxi transport, and transport for individual use)
  
• level 3 “Transport organization,” filled in with the view of the technological process
  
• level 4 “Individual routes, objects and subjects of the transport system” (agent-based balance)

The TEB is formed in the following scenarios, depending on the time period considered:

• actual - is formed annually based on the actual values of production and economic indicators achieved in the reporting year preceding the current calendar year
  
• retrospective - updated annually by adding data on the actual balance sheet for the next reporting year
  
• forecasted - is formed annually on the basis of average, pre-existing relative coefficients of the retrospective balance, taking into account the forecast values for passenger traffic volumes, balance values for the main types of products, formed by the forecasted intersectoral balance of the region
  
• user scenario - formed based on the effectiveness of projects of government and management decisions considering the forecast balance, taking into account changes in relative coefficients achieved as a result of the timely implementation of the project of government and management decisions
  
• planned - is formed annually on the basis of the forecast balance, taking into account changes in relative coefficients and parameters of scenario conditions as a result of the timely implementation of a set of approved state and management decisions

TEB is implemented through economic and mathematical modeling. The economic and mathematical models of the TEB provide quantitative correlations between the values of TEB indicators, between the levels of granularity, between types of economic activities, between retrospective and forecasted values, and between the parameters of management decisions and scenario-planned values.

6.4.4 The TEB indicators

There are 3 groups of TEB KPIs:

• technical and economic indicators characterize the material and production base and the integrated use of resources of regulated business activities
  
• relative coefficients reflect specific characteristics and proportions of technical and economic indicators of regulated activities
  
• integrated performance indicators reflect the level of efficiency of the activities of regulated organizations at a given level of quality

6.4.5 Basic technical and economic indicators

The following are TEB indicators:

• labor market
  
• revenue, including revenue from the transportation of passengers, profit from unregulated activities carried out by the transport organization
  
• regional budget subsidies for public transport
  
• other budget subsidies
  
• volumes of consumption of transport services
  
• volumes of transport work in physical terms
  
• production capacity, determined by the maximum total transport capacity, and the capacity of the transport infrastructure
• remaining useful life of capital assets
  
• losses in transportation, rolling stock, and transport infrastructure costs in terms of volume and value
  
• variable costs of materials, energy resources, labor costs, and insurance premiums; obligatory insurance (contributions to social funds), driver wages, wages of conductors and transport repair workers; expenses for lubricants and other operating materials for vehicles and other transport infrastructure, materials and spare parts for maintenance and repair of transport infrastructure, expenses for maintenance and operational repairs, depreciation, and overhaul of transport infrastructure alongside other operational costs
  
• fixed costs for material, communal, and energy resources in kind, the cost of maintaining a contact-cable network, as well as traction substations (expenses for maintaining energy facilities), the cost of maintaining and repairing tram tracks, the cost of maintaining traffic services, overhead costs, including expenses for the maintenance of the automation and communication service, management expenses, commercial expenses, expenses for electricity, heat, gas, cold and hot water, and wastewater for other activities
  
• current year’s capital investments, including from own funds, depreciation, regional budgetary funds, and other sources
  • non-operating expenses, including social expenses and other non-operating expenses
    
  • non-operating income
    
  • the average annual cost of capital assets and the amount of working capital required
    
• capital and reserves
  
• borrowed funds
  
• accounts payable
  
• accounts receivable
  
• financial results, excluding received subsidies, taking into account received subsidies

6.4.6 Relative coefficients

There are the following relative coefficients in TEB:

• specific consumption of transport services per transport activity
  
• direct production coefficients
  
• specific costs of acquired material, communal and energy resources for transport activities, and operation of transport infrastructure
  
• the price of acquired conditionally variable and conditionally fixed material, communal, and energy resources
  
• specific fixed costs
  
• depreciation rate for rolling stock and transport infrastructure
  
• the equilibrium cost of the transport service
  
• the rate of capital investment in the transport fleet and infrastructure

6.4.7 Integrated efficiency indicators

TEB has the following efficiency indicators:

• economic efficiency of passenger transportation:
  • specific reduced costs per capita
    
  • specific reduced costs per transported passenger
    
  • profitability
    
  • transport network accessibility
• efficiency of use of capital assets, working capital, and capital investments:
  • return on assets
    
  • turnover of working capital
    
  • efficiency of capital investments
    
  • specific capital investments per unit of input power
    
• efficiency of labor use:
  • labor productivity relative to capacity
    
  • labor productivity relative to consumption
    
• efficient use of material resources
  
• energy efficiency
  
• the quality of public transportation services, including:
  • territorial accessibility of stopping points
    
  • availability of stopping points, bus terminals, and bus stations for people with limited mobility
    
  • availability of vehicles for people with limited mobility
    
  • the affordability of trips on regular transportation routes
    
• equipment of bus terminals, bus stations, and stopping points
  
• the share of stopping points serviced with a minimum standard frequency
  
• compliance with the schedule of regular transportation routes
  
• equipment fitted in vehicles to communicate information to passengers
  
• the proportion of vehicles with a standard noise level in the cabin
  
• the share of bus routes with a standardized temperature in the vehicle cabin
  
• compliance with capacity standards
  
• compliance with the norms for the number of transfers
• the share of vehicles of high ecological classes

6.4.8 Non-published sections of the methodology

• List of required initial data
  
• Methodology for the formation of the actual balance
  
• Methodology for compiling the forecasted balance
  
• Methodology for the formation of a planned balance
  
• Estimation methodology
  
• Methodology for assessing the effectiveness of management decisions