BG Bus Prevoz seeking change of ten-year agreement after only 40 days – They require different billing and higher price

The members of the consortium BG Bus Prevoz, with which the city recently signed the agreement on the public-private partnership for the waiving of 84 public transport lines, which came into effect at the end of September, are now requesting the City of Belgrade for the manner of the billing of their services to be changed, eKapija learns at the Secretariat for Public Transport.

As a source from the secretariat says, several days ago, at the secretariat, a meeting was held at which the members of this consortium sought a change of the recently signed public agreement and for their operations to be billed not just per milage, but also for the time that the vehicles spend on the route.

– If the city acquiesced to this request of this private transporter, it would amount to a brutal violation of the Law on Public-Private Partnership and Concessions. Because, let me clarify, the annexes to the agreements that the city signs with the transporters allow for many items in those agreements to be changed, but there are several items which must not be changed at all, and one of them is the agreed manner of billing. When they agreed to the terms of this public-private partnership, this consortium also agreed for the price of their services to be calculated exclusively based on the milage. And that can no longer be changed under the law, because that’s what’s been agreed – clarified the source from the Secretariat for Public Transport.

As the source adds, the members of the BG Bus Prevoz consortium, whose operations are carried out by the transporter C&LC Group, with which the agreement came into effect at the end of September, realized after less than 40 days of operating the lines they had taken over that it was not profitable for them for their services to be billed exclusively based on the milage.

– Let me remind that, according to the agreement that, in the past ten years or so, the city had with the consortium of private transporters (Arriva, later Mobilitas), the services were billed based on both the milage and the time the vehicle spends on the route. For transporters, especially those who hold the lines which pass through the central part of the city, that is certainly more cost-effective, because traffic jams, gridlocks, hold-ups and collapses are frequent on those routes, which certainly affect the public transport lines. But as the members of the BG Bus Prevoz consortium agreed to billing per milage only, now that the agreement has been signed, that can no longer be changed. Otherwise, I repeat, if the city agreed to it, it would be an open violation of the law, because something like that mustn’t be changed by annexes – our source claims.

When asked why, the source says that it would change the agreed value of the job, and according to the estimates, if the city fulfilled this request of the transporter, the price of the agreement would grow around 5%. That would damage not only the city and the budget of the capital city, but also GSP Beograd, with which the city also signed an agreement according to which the price for the services is calculated only based on milage, because, as our interviewee says, GSP’s agreement would be made unequal.

Let us remind that only one consortium (BG Bus Prevoz, which consists of around twenty members) responded to the call for the public-private partnership for the bus routes 300, 400 and 500 and a part of the lines which pass through Savski Venac, about which certain trade unions of GSP Beograd had been pointing out for weeks prior that it would be the only one to respond and that the partnership was being prepared for it anyway. In early September, the Commission for Public Procurement Procedures of the Secretariat for Public Transport adopted the Decision on awarding the contract to this consortium, worth as much as RSD 156,916,013,628, with the VAT, that is, around EUR 1.34 billion.

This partnership, as the previous one for the routes 100 and 700, has also been questioned by the public because, by agreeing these jobs, numerous bus lines were taken away from GSP Beograd.

Four trade unions confirm eKapija’s findings

That eKapija’s findings about the request to change the agreement and the higher price, only 40 days after the agreement came into effect, are true has also been confirmed by four trade unions of GSP Beograd. According to the findings of the trade unions “Centar”, “Pravda”, “Sloga” and the trade union of the Belgrade public transport employees, at the meeting held at the Secretariat for Public Transport, the representatives of the private consortium BG Bus Prevoz did ask for a change of the public agreement on the public-private partnership, which would considerably change the terms of the agreement previously signed between the City of Belgrade and the private transporters.

– At the meeting, which was also attended by the mayor’s adviser, as well as the acting secretary for public transport, the private consortium asked for the City of Belgrade to pay this consortium, in addition to the milage, also the time that the buses spend on the routes during delays and traffic jams, regardless of whether the departure of that vehicle has been realized or not. That would mean that, only 40 days after the signing of the agreement which is supposed to be valid for 10 years, for as many as 84 bus lines of the public transport system on which this consortium operates, including the routes 300, 400 and 500, a change is being sought which would considerably change the price of their work, so that the private transporters realize a considerably higher profit from the budget of the City of Belgrade – the four trade unions say.

These trade unions, like our source, warn that such a change would run counter to the Law on Public-Private Partnership and Concessions, because the private transporters, even before signing the agreement with the city, knew in advance how the operations of their buses would be calculated and paid from the budget of the City of Belgrade.

– A potential conceding would violate the law at the expense of the public interest. We invite the City of Belgrade’s Public Attorney’s Office to act in line with the law and protect the interests of the City of Belgrade and all its citizens, in order to prevent this kind of a change of the agreement. By acting otherwise, the private transporters would also be paid for unrealized departures, empty bus rides without passengers, and that would additionally diminish the already low reliability of numerous public transport lines, which would be contrary to the announcements of mayor Aleksandar Sapic, who, several months ago, repeated several times that the City of Belgrade would pay only the realized milage on the lines, “which will save money for the City of Belgrade.” If the terms of the agreement that was signed 40 days ago were changed, the question is how it is possible that the City of Belgrade agrees to something that is more expensive for the city budget and whether the private transporters are using their dominant position within the public transport system to blackmail the City of Belgrade with the changes which exclusively benefit the owners of those private companies and their profit – the representatives of the four trade unions are asking.

They also remind that, for the first time in Belgrade’s history, GSP is no longer the principal public transporter, because the private transporters have taken over the majority of the lines from the public transporter by the city management’s decisions.

– Even so, vehicles of GSP Beograd are extraordinarily deployed on numerous lines as help to the private consortium BG Bus Prevoz, which has not yet secured a sufficient number of buses and drivers, which is a direct failure to comply with the obligations under the agreement and which affects the regularity and precision of the departures on numerous public transport lines – the four trade unions remind.

CLS: More than EUR 350 million for transporters per year, where does the money end up?

If the announcements of the new change of the manner of paying transporters in Belgrade come to be realized, the amount spent from the city budget on public transport will exceed EUR 350 million a year, which is a historical maximum and proof that something is seriously not right, stated Nikola Jovanovic, the director of the Center for Local Self-Government.

– That means that, under Aleksandar Sapic, the payments from the city budget for the transporters are higher by EUR 100 million than under Zoran Radojicic and by as much as 250 million than under Dragan Djilas, although the public transport system has essentially not been upgraded – emphasizes Jovanovic.

Jovanovic has publicly asked Aleksandar Sapic where the amount of EUR 350 million a year of the Belgrade citizens’ money ends up, knowing that only Turkish and Chinese buses are being bought, that GSP has record-high debts, that malfunctions are frequent with private transporters and that the citizens are dissatisfied with the overall service.

D. Aleksic

BG bus prevoz doo Beograd

Centar za lokalnu samoupravu Beograd

BG bus prevoz Beograd

Trade Union Centar

Trade Union Pravda

Trade Union Sloga

Trade Union of Belgrade public transport employees

Center for Local Self-Government

Nikola Jovanović

agreement on public private partnership for routes 300

400 and 500