Transantiago: Financial Administration Service
The new system of public transport will require a financial administration service, providing integrated management of the collection, control, and distribution of revenue. Public transport fares in Santiago are worth an estimated US$ 700 million per year, equivalent to the revenue obtained from the more than five million journeys made daily in the city. The concession period for the Financial Administration Service will be twelve years.
The present analysis is based on an average fare per journey of 338 Chilean pesos (as compared with 341 pesos in December 2003), although the actual fare will be determined by the results of the tenders, reflecting the costs foreseen by each of the operators of axis and feeder routes. During the concession period, the fare will increase or decrease in line with the costs submitted periodically by the concession companies.
The Transantiago Financial Administration Service (AFT) do the following tasks:
Issue of a Universal Means of Payment:
This involves supplying and activating smart cards that passengers must acquire as their means of access to the transport system, including axis and feeder routes. The model to be adopted corresponds to that for the Multivía card, already in use in the Metro.
Sale and distribution of smart cards:
This requires setting up a distribution channel that allows passengers to acquire the Multivía card.
Charging and recharging facilities:
This requires establishing a network of points at which passengers can charge and recharge the Multivía card.
Administration of the system’s resources:
The AFT will be responsible for managing the different resources associated with the transport system. In order to fulfill this responsibility, it must maintain at least the following accounts:
Initial Technical Reserve:
This constitutes the system’s opening balance, designed to give it initial stability. The AFT must open this account with a deposit of 1,200,000 UF (The UF is an index-linked currency unit. As of the end of December 2003, it was worth 16,930 Chilean pesos).
Operating Technical Reserve:
This will be constituted with a provision for temporary shortfalls, built into the fare paid by passengers. In 2005, the provision will amount to 30 Chilean pesos, but will subsequently be determined on the basis ofthe balance in this account.
Passengers Account:
The revenue obtained from the sale and recharge of smart cards will be paid into this account, before being transferred to other accounts under procedures established in the terms of the tender.
Concession Companies Account:
Funds deposited in the Passengers Account will be transferred to this account once a journey has been made. The AFT will be responsible for distributing these funds among the sub-accounts corresponding to the axis and feeder route operators, and to providers of support services, prior to paying each concession company its share of the revenue.
Fines and Bonuses:
This account will be used for the deposit of funds from the Concession Companies Account that are held back as fines in order to pay those concession companies that are awarded bonuses, as instructed by the Ministry.
Provision of Credit:
The AFT must arrange the lines of credit that are necessary for the system’s correct functioning. Through the fiscal budget, the State will provide a guarantee for 2,000,000 UF of these credit lines.
The AFT must also provide the system directly with a line of credit for an overdraft of up to 2,000,000 UF, which will be used to cover temporary shortfalls that will be reimbursed through fare adjustments. The AFT must also have access, either directly or through third parties, to loans for up to 2,000,000 UF, with a duration of eighteen months, to meet unforeseen, and unlikely events, or acts of God, and to cover the average overdraft that it has run for eight months, and which the AFT and the Technical Inspection Service agree cannot be covered through fare adjustments.
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