Below is an analysis by metro specialists (data as of the beginning of 2014) with calculations of the cost of operating the metro!
ABOUT ENTERPRISE
The metro was built and developed to achieve its main goal: transporting large passenger flows (up to 45 thousand passengers per hour on each line in each direction). No other mode of transport can compare to the metro's productivity (especially not Kyiv's so-called "high-speed tram," which carried passengers to Borshahivka until the early 90s, then fell into disrepair and ceased operation. After 2005, hundreds of millions of hryvnias were invested to restore its operation; the name "high-speed" remained, but the essence is entirely different. In Troyeshchyna, the tram is also far from meeting the requirements of a high-speed tram. A high-speed tram is a dedicated, fenced line, capable of speeds up to 80 km/h, with an automatic speed control system, track and car condition, and the entire operation and maintenance system are designed to ensure the safety of travel at higher speeds. All of this existed before the 90s, but today it's nowhere to be found. Kyiv, in fact, has long since lost its high-speed tram system!) The entire metro infrastructure is designed for mass transit and passenger safety. Metro safety has always been a key focus, with many requirements far higher than those for railways. Any malfunction in the metro has the potential to have more serious consequences than on the railway. The metro has significantly more technical equipment to ensure passenger safety and well-being than the railway. Therefore, higher demands are placed not only on the equipment but also on personnel, especially management. These include training and proper placement of personnel. Management positions require relevant education, experience, in-depth knowledge of the metro system, a clear understanding of the operating principles of all its components, leadership skills, and much more.
Today, the Kyiv Metro is a complex, multifaceted system, with 7,700 employees, 52 stations, approximately 70 kilometers of lines, 820 passenger cars, and transporting up to two million passengers on weekdays. The metro has fifty high-power power substations (which operate autonomously under control of a dispatcher), 122 escalators (a tunnel escalator with a 65-meter rise is significantly more complex and dangerous than, say, a supermarket escalator), 150 kilometers of tunnels with all their infrastructure, approximately one hundred large ventilation units for tunnel ventilation, numerous water pumping units, communication systems, telemetry systems, train traffic management and safety systems, turnstiles, token and contactless card vending machines, dispatch control systems, and much more.
To organize its work, the metro has ten different types of communication, including telephone and radio communication with trains.
Structurally, the metro consists of the metro administration and 16 structural divisions, including three electric depots and a car repair plant.
The metro is an important civil defense facility; it has facilities that are sufficiently powerful to carry out tasks during special periods, and they must be maintained in good working order!
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The metro's responsibility for passenger safety and its complexity impose special demands on its operation and management. From workers, foremen, and so on, to the metro director, they must thoroughly understand their area of operation and, most importantly, ensure the safe transportation of passengers. The entire metro management structure is built on the principle of unity of command, a principle proven by many years of experience. Each director is solely responsible for the assigned area and is accountable for it. The role of the metro director is crucial, as they not only manage financial, economic, and personnel matters, but are also responsible for the technical management of the metro. According to the Metro Technical Operation Rules, the metro director reviews and approves the most important regulatory documents governing metro operations and may amend technical documentation, tolerances, and wear and tear standards. They also bear personal responsibility for this should an emergency occur in the metro and result in injury. When the head of the metro doesn't have control over what he's given to sign, or delegates the task of sorting things out and making decisions to his deputies (even if he then approves the decision himself, it's still not his decision), then experience has shown that trouble will come sooner or later.
RELATIVELY TO THE TARIFF
Claiming a catastrophic shortage of funds, the Metropolitan, from August 2014 to December 2014, hired approximately 50 new managers for leadership positions without operational necessity, conducting a structural reorganization, replacing existing departments with new directorates and departments, and so on, with the goal of creating new positions. These positions are filled by former employees of Ukrposhta or Naftogaz Ukrainy, who have neither the relevant education nor the slightest understanding of the Metro. (Kyiv residents will soon experience the consequences of this.)
It is more convenient to evaluate the economic activity of the metro using a monthly example.
Monthly cash income amounts to approximately 75 million UAH. This consists of:
— collection of revenue from transportation 62-63 million UAH.
- income that the metro earns by performing work and providing services to other legal entities - 1,7 million UAH.
- rental income - 1,5 million UAH.
— funding from the state budget for beneficiaries — on average 7 million UAH.
- funding from the Kyiv budget for beneficiaries, on average - 2,5 million UAH.
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The required monthly cash expenditure of the metro, which will ensure the normal operation of the metro (in the reports on metro expenses, large amounts of expenses do not reflect the real financial needs of the metro, for example, depreciation of freely received assets, tens of millions of hryvnias of depreciation of sections of metro lines that were built 1-5 years ago and do not require large expenses, therefore, to understand the real cash needs of the metro, it is advisable to operate with real cash flows) - about 88 million UAH.
Main cost items:
— staff salaries with taxes — 63 million UAH.
-payment for electricity, heat (on average), water - 9 million UAH.
— taxes (the metro does not pay VAT on its core activities) - 1 million UAH.
— funds required for the purchase of spare parts, materials for repairs and maintenance - 13 million UAH.
- other mandatory payments (payment for mine rescue services, medical insurance, labor protection, uniforms, etc.) - 2 million UAH.
The metro is short about 13 million UAH monthly.
Solution ways:
1. Grant the metro the right to independently place advertising at market prices – additional income of at least 10 million UAH per month.
2. Force the Kyiv city budget and the state budget to fulfill their obligations to pay the metro for transporting beneficiaries (excuses about the metro not being able to document how many beneficiaries it transports are aimed at finding a reason not to pay for beneficiaries) additional income of 11 million UAH per month.
3. Not to confiscate 50% of the money received from leasing space from the metro, as a social mode of transport, to the Kyiv city budget, and to ensure that space is leased at market prices - an additional income of at least 1,5 million UAH.
4. Force the metro to earn more by providing work and services to other legal entities – an additional income of 1 million UAH per month.
And in reality, the metro will receive an additional 23 million UAH per month.
These revenues will allow the metro to ensure normal operation without increasing fares. Additionally, approximately 10 million UAH per month will be allocated for renovations, modernization, and debt repayment (of which the metro doesn't have much—around 40 million UAH. Debts for the construction of new sections should be financed from budgets, not from revenues from metro operations!). In today's difficult times, the metro can easily survive for a year or a year and a half.
CONCLUSIONS
Metro management announced in the media that the current cost of transporting one passenger is UAH 16. And this appears to be true. At the same time, the public should demand that the Metro publish a calculation of the cost of transporting passengers. If it is made public in full and without falsifications, the public will see, in addition to all the Metro's necessary expenses, that the costs of purchasing materials and spare parts are included in the standards and provide for an increase of 8-9 times compared to what the Metro has purchased for repairs and maintenance in recent years. This is correct, as it will improve transportation safety. The public will also see in these calculations the costs of the Investment Program, amounting to approximately UAH 240 million per year, aimed at modernizing the Metro's infrastructure. And this can be accepted, for example. The Metro has been underfunded for a long time, and there is much to update and modernize. Although, given that the state couldn't afford this in the best of times, and in fact, in those better times, no more than 20 million UAH per year was allocated for these purposes, today, in such difficult times, they've decided to allocate 240 million UAH. Well, let's assume the public agrees with this. And taking all this into account, the cost of transporting one passenger is 3 UAH 16.
The Kyiv mayor's draft regulation, officially published, sets the price for a single ride at 4 UAH. The discount for the number of pre-paid rides is very small. Even purchasing the maximum number of rides—50—passengers will pay 3 UAH 50 per ride, higher than the cost of one!
Monthly passes cost 300 UAH (currently, a pass costs 95 UAH).
A monthly pass with a 46-trip limit is proposed for 150 UAH (one trip costs 26 UAH—more than the cost). And so on! They plan to sell a monthly pass for all types of public transport for 550 UAH. That's almost half the minimum wage! And this is public transport!
At the same time, the statements of those officials who claim the cost of a single metro ride is 4 UAH, 48 kopecks, 5 UAH, 8 UAH, 15 UAH, and so on, are completely incomprehensible! These officials have either never seen the calculations and are pursuing some other goal, or they want to complete the Podilskyi Bridge and build a metro to Troyeshchyna using passenger fares! Even the richest countries in the world can't afford such a thing!
Throughout the rest of the world, metros are considered a social mode of transport and, in fact, provide a colossal economic benefit to countries by reducing the time citizens waste on commuting, which they can use for productive work or personal development (rather than sitting in traffic jams in overcrowded minibuses and arriving at work in the morning tired from transportation) and by reducing environmental pollution. All over the world, metros are subsidized by the state as long as they operate well, and the country reaps a positive economic benefit from this.
Singapore's metro system alone is considered profitable due to the vast commercial infrastructure around its stations, which is dedicated to the metro (as long as it works well!). After the aforementioned decree is implemented, Kyiv will be the second most profitable metro system in the world.
Source
https://divannaya-sotnya.com.ua/
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