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Recife Case Study
Title: Study of Public Passenger Transport Conditions in Recife, Brazil
Author: Public Private Infrastructure Advisory Facility K. Gwilliam and G. Correa
Date: February 2005
Download the case study (MS Word 778KB)


Structure and organization of urban public transport
Facilities and equipment
Financial environment
Perceived problems and their causes
Proposed reforms

The metropolitan region of Recife (RMR) is located on the north eastern coast of Brazil. Its population in 2000 was approximately 3.4 million.

Structure and organization of urban public transport
Gas, electricity and telecommunication services have already been privatized in Brazil, subject to the general supervision of a regulatory body. The only remaining public sector enterprise is the urban rail network. Bus services in Recife have long been provided by the private sector.

The formal public transport system of the Recife Metropolitan Region (STPP/RMR) has two elements.

The Estrutural Integrado Sistema (SEI) consists of a network of services, integrated both physically and in terms of a through ticketing system, which allows interchange in closed terminals without payment of a second fare. The metro is included in some of the interchange points so that the system is also a multi-modal system.

The Sistema Complementar is composed of conventional lines operated by conventional buses and, to a decreasing extent, by small vans, or vehiculos do pequeno porte (VPP).

There are at present 17 separate private operators of bus services under the auspices of Empresa Metropolitana de Transportes Urbanos (EMTU), with fleet sizes ranging from 33 to 413 in September 2004. Most of these are family owned businesses based in Pernambuco, often associated with other non-transport businesses. Of a total fleet within the Camara do Compensacao Tarifaria (CCT) at the end of 2004 of 2,650 vehicles, 754 were medium sized, 1,698 heavy and 60 articulated.

In 2000 there were about 6,000 VPP vehicles operating in RMR, over 60% of which operated under permissions granting them the right to carry passengers for payment, but 40% of which had no such legal permission. During 2003 the kombis were denied access first within the inner ring road of the city and later from a much wider area. In some areas where kombis remain, they are prevented from using the major roads.

Responsibility for urban public transport in RMR is divided between the state of Pernambuco (generally responsible for inter-municipal transport) and the constituent municipalities (generally responsible for intra-municipal transport). The governments of the state and the largest of the municipalities, Recife, have already committed themselves to work together in a consortium to address the problems of urban transport.

Bus services are provided under permissions granted by the EMTU, with each operator working in a pre-defined area. Their routes, frequencies and fares are determined by EMTU, and they exercise no formal strategic control over the system. In principle their services are self financing, though because not all routes or segments of the region are equally profitable the revenues are redistributed to a certain extent through the CCT clearing house.

The permissions have not been competitively tendered, but a system of compensation between routes, and hence between operators, has been developed to allow the continued operation of some unremunerative routes.

Bus routing and scheduling is undertaken by the responsible authorities (mainly the EMTU), both for the SEI and the System Complementar. The authorities also issue permissions for the operation of kombis on a route-by-route basis. Until recently, most of the kombi services duplicated the route structure of the formal sector. However, since 2003, the kombis have been reorganized to operate as a complementary system providing feeder services to the formal system, particularly where travel volumes are relatively low.

Fares are determined by EMTU, usually on an annual basis. The basis of the annual adjustment is a cost calculation undertaken by EMTU, using a standard cost structure and evidence on changes in specific input costs collected from the major suppliers.

The issue of the affordability of essential transport to the poor is dealt with directly by the vale transporte (VT) system which effectively ensures that poorer employees in formal employment pay no more than 6% of their income for travel on journeys to work. This does not apply to informal sector workers who are not in receipt of the VT.

Over a long period the number of trips carried by the formal public transport system has been declining, despite fleet size and bus kilometers having increased. The decline in patronage can be attributed to the growth in car ownership, as well as the growth of the informal sector, while the perverse growth in service can be largely attributed to the pressure of local politicians — supported by the operators — to increase service as the region expands physically.

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Facilities and equipment
Garage and maintenance facilities are provided exclusively by the private sector for their own company operations. In one case, that of the concession of the RCT services by Metropolitana, the vehicle maintenance is performed under contract by another operator.

Interchange terminals in the SEI system are separately provided. In most cases they are owned and managed by EMTU. However, some interchanges with the metro system are owned by the metro company and operated by EMTU. Also, in one case where there is only one bus operator in the terminal (Metropolitana) the interchange terminal is managed by the bus company. Some consideration has been given to the concessioning of terminal operations to the private sector in future.

return to top Financial environment
Although the bus system is in principal self financing, in practice the CCT has been in serious deficit for some years. While revenues are determined by the level of fares and vale transport and student compensations, the basis for allocation of these revenues is the calculated costs of the various operators in providing the services allocated to them. While there is no doubt that the bus sector has been in some difficulty, the real size of the deficit is not entirely clear as there is substantial incentive to, and scope for, the padding out of costs in the procedure.

To limit this deficit, the operation of kombis has been banned within the inner areas of the RMR. This has already yielded a significant improvement in the finances of the CCT. It is also proposed to introduce a system of competitively tendered franchising of bus services that should be able to further reduce the costs of bus operations.

return to top Perceived problems and their causes
Many issues which have appeared important elsewhere are not problems in Recife. These include technical competence in the public transport operating sector, vehicle condition, on-the-road operational-behavior of the formal public transport enterprises and responsiveness of the formal public transport network to new demands.

Congestion in the central areas has been increasing, and has appeared to require increased efficiency in the use of space by public transport vehicles. EMTU reported that the elimination of the kombis from the central area of Recife had reduced travel times by 10%.

Decreasing demand for formal public transport has adversely affected their financial viability, and threatened the continuation of the high quality of service which had traditionally been offered by the sector. Again, however, the elimination of the kombis, with the associated increase of 18 bus lines and around 400 buses operated has been claimed to generate an increase of 250,000 passengers per working day.

While good relationships between the central municipality, Recife, and the state have been exemplified by the delegation of the public transport management responsibilities of the municipality to the state EMTU, fragmentation of responsibility between jurisdictions has sometimes led to inconsistent policies. The creation of a transport consortium, jointly owned by the state and all the municipalities, is intended to overcome this problem.

return to top Proposed reforms
The state and the municipalities intend to establish a consortium to manage and develop all public transport modes. Further steps will include joint action by the state and municipalities to seek investment funds for the development of the road based system, and design and implementation of a tendering system for the bus lines.

Some potential obstacles to reform can be foreseen in further analysis of the nature of the drivers of reform hitherto. The driving out of the kombis, and the conversion of the VT into electronic form has put the operators in a much more favorable financial position which some of them at least may not wish to jeopardize by the introduction of competitive tendering of services. By taking these steps in advance of the rest of the reform package, EMTU may find that it has lost its leverage over the operators who may now resist further changes.


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