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Careful revenue management underpins investment programme

01 Jan 2001

INTRO: With patronage running at record levels, Moscow Metro needs to expand and modernise its network. A continuing fall in state investment is focusing attention on ways to increase revenue through automated fare collection

BYLINE: Dmitry Gaev

Head of Moscow Metro

LIFE HAS NOT been easy for Moscow Metro in the past few years. The widespread economic changes in Russia during the 1990s brought a massive increase in patronage, but financial difficulties prevented essential investment in modernisation or capacity expansion to handle the traffic. Despite the problems, work is continuing. New and refurbished rolling stock is appearing, new stations are opening, and next year should see the completion of another extension.

Since the first line was inaugurated on May 15 1935, the Moscow metro has grown to become one of the world's principal urban rapid transit systems, with a route length of 264 km and 162 stations. Now handling 56% of all public transport journeys in the Russian capital, the metro's average daily ridership of 8·77 million makes it the busiest underground railway in the world.

The vast social and demographic changes which have taken place in Moscow since 1993, together with a growing shortage of surface public transport services, saw metro patronage leap from 7·5 to 8·9 million customers a day in less than a year. Fortunately, the bulk of the growth fell in the off-peak hours when some spare capacity was available.

But as the 11-line network was only designed to carry 6·5 million passengers, it is now grossly overloaded. Each day around 10000 trains are operated, with minimum headways as low as 90s, but despite the pressure, between 99·92 and 99·95% of services run on schedule.

Fares and finances

In the new market conditions Moscow Metro was one of the first transport operators to introduce the principle of commercial tariffs. In 1992-93, Moscow City Government, as customer, and the metro, as operator, drew up a clearly-defined relationship on the basis of agreed operating costs and fares.

This 'chain of mutual liabilities' enabled the metro to move away from the old 'residual financing' principle, where the city simply covered any deficits at the end of each year. As a result, the company had a direct interest in tackling and resolving its own financing problems.

But in 1996 changes were introduced to Value Added Tax legislation, which resulted in a 20% increase in the metro's operational costs. It took until 1998-99 before the consequences of this increase could be overcome. At that time a programme was introduced to stabilise the capital's economics. This gave the city authorities and the city Duma (parliament) the opportunity to consider a draft Public Transport Law confirming the market nature of the relationship between customer and operator.

One ongoing financial problem has its roots in new social laws introduced by the federal government. Designed to support certain categories of citizens, these are not based on market economics. Large numbers of people in 'privileged' categories were given the right to free or heavily discounted travel, but no structure was put in place to compensate the metro for the resulting loss of revenue.

To give some idea of the scale of this problem, the proportion of passengers entitled to free travel rose from just 8% in 1990 to no less than 54% in 1998. In 1999 the value of non-compensated free travel amounted to 3·6bn roubles, which was 12 times the amount provided by the federal government for development, reconstruction and refurbishment of the whole network during 2000.

A related problem was the expansion of fraudulent travel made possible by the ruling. Free and discount rate passengers had to pass through manual barriers and show their identity cards or passes to access the network. As there were over 100 different types of pass in use, in practice it was impossible to control their authenticity. Random inspections discovered that some passengers were using counterfeit identity cards.

Coming on top of the gross underfunding of the metro for a number of years, this loss of income flagged up the need to make dramatic changes to our revenue collection system.

In 1997 we began to introduce an automatic fare collection system from ERG subsidiary AES Prodata, using both magnetic strip tickets and contactless smart cards. This allowed the introduction of differentiated tariffs depending on the number of prepaid trips, permitting frequent travellers to save money. Giving smart cards to those passengers entitled to discount or free travel meant we could close off the manual barriers and ensure everyone passed through the automated access controls - reducing at a stroke the opportunity for fraud. Today there are over 600000 smart cards in use.

When introducing AFC, Moscow Metro was able to benefit from the experience obtained by colleagues in London, Paris, and Hong Kong, amongst others, through the Comet group which benchmarks the performance of the world's largest and busiest metros. We were also able to draw on assistance from international bodies such as UITP. In its turn, Moscow Metro has been able to assist other Russian transport operators. These include RZD's Moscow Railway, which is introducing smart cards for its commuters. Compatible equipment means that rail passengers may use the same cards on the metro.

Introduction of AFC has already resulted in a 15% to 20% increase in revenues without any changes to the actual fare levels. In the future, we are planning to increase the number of different travel cards for segments of the market and gradually transfer to a zonal fare system.

By introducing smart cards for privileged passengers, we can now determine the actual volume of travel and the amount of revenue lost. It is our intention - in line with the metro's commercial remit - that the cost of handling privilege passengers will be charged back to the organisations which issue the passes.

In practice, this is proving difficult, since many legislative and organisational hurdles remain to be overcome. Moscow City Government has decided to introduce a pilot billing scheme using groups of customers who are registered with the social security organisations or employed by various Moscow governmental and administrative bodies. We anticipate that once the pilot programme has been implemented in full there will be a further 10% increase in revenue based on the existing fare levels. This will enable us to pay off the cost of the AFC equipment within two years.

Network modernisation

Despite the financial problems of the past decade, work has continued on the implementation of new and modernised rolling stock. The metro now operates around 4200 cars, all motored, which were built by the Mytishchi (Moscow) and Yegorov (St Petersburg) works of Metrovagonmash. To renew and expand the fleet, we are budgeting to purchase around 200 new cars a year. Over the course of the past year, we have been able to replace 60% of the rolling stock on the Sokolnicheskaya line (Line 1) by new stock of the classic design.

A prototype trainset designated Yauza was put into revenue service on the Lyublinskaya line (10) during 1998. This has electronic traction controls, improved comfort and better safety standard; it also includes comprehensive diagnostics and condition monitoring, which allows maintenance to be carried out based on the actual condition rather than hours run.

A production version of the Yauza design is currently being developed; these will be fitted with asynchronous traction motors. The metro's design team is also working on vehicles for the light rail and light metro routes which are due to be built in Moscow over the next few years.

At the same time, the older metro cars are being refurbished, and fitted with a new diagnostics and fire protection system known as Igla. This controls all the equipment in each car, and provides real-time monitoring of key components - the most recent versions include axlebox temperatures. As each train passes the depot gates, to enter or finish service, the system automatically transmits key operating parameters to the central computer, which can later be used to programme technical maintenance. Around half of the fleet has now been equipped with a version of Igla.

To accommodate the higher train frequencies needed to carry the increased traffic, we have started to introduce automatic train control based on coded track circuits. This is fitted on two routes, and work is under way to extend it to the rest of the network. In the control centres, train dispatchers will be assisted by state-of-the-art computer systems and information will be displayed in a more clear and precise manner.

New radiating cables will improve the performance of the communications networks, and allow maintenance personnel to use radios in tunnels. We are also improving the capacity of the existing radio and telephone networks, modernising the tunnel and station ventilation plant, and adopting new designs of track to reduce noise and vibration.

But completion of these projects will inevitably depend upon the availability of sufficient finance. Since 1990-91 the level of state funding has fallen year on year, and today metro investment is around 50% below the level required to maintain the network in a 'steady state' condition. Compared to the amount required to modernise and develop the system, the figure is little more than 20%.

Targeted expansion

Balancing the shortage of investment against the pressure of increasing ridership has dictated a new approach to modernisation and upgrading. To enable the construction of new lines, resources are being concentrated on a few major projects.

The 1986-90 five-year plan envisaged the construction of 45 route-km, including a new Line 12 between Sportivnaya and Mitino in the western suburbs. Unfortunately, lack of finance meant that all work had to be suspended in September 1998.

Construction has now resumed on a 5 km southern extension to the Serpukhovskaya line (8), which is due to be completed in 2002. This will run from Prazhskaya to serve a large residential area at Butovo. The new terminus will also provide an interchange with a 4·7 km light rail line, which will connect the South Butovo residential area with the metro network. The first stage of the metro extension, as far as Ulitsa Akademika Yangel, opened on August 31 2000.

On the operating front, the acquisition of more cars and retraining of staff has allowed us to increase the level of off-peak services on six routes. We have also abandoned 'fork' working on the southern section of the Zamoskvoretskaya line (2), where trains used to run through alternately to Krasnogvardeiskaya and Kahovskaya. Now all services run to Krasnogvardeiskaya, and the branch from Kashirskaya to Kahovskaya has become an independent line (9). This has enabled us to increase the frequency of trains on both routes by 50%.

To boost the throughput of stations, particularly in the city centre, we have introduced a new strategy for the maintenance of the metro's 540 escalators. Technical improvements have boosted reliability, and restructuring of the workforce into teams has allowed us to shorten the period required for escalator replacement. Overhauls have recently been completed at Dynamo, Beloruskaya (Ring line), Novokuznetskaya, Avtozavodskaya, and Paveletskaya (Ring line) stations, enabling us to re-open ticket halls that had been taken out of public service.

CAPTION: The Yauza trainsets (right) present a much more modern image than the classic cars which dominate the 4 200 strong Moscow Metro fleet

CAPTION: A Yauza trainset in revenue service at Maryino, southern terminus of Line 10

CAPTION: Komsomolskaya (above) and Arbatskaya (below) stations reflect the sumptuous architectural heritage of the Moscow metro