Public Service Obligations Research Articles

Why are the railways of Eastern Europe less efficient than those of the West?

We use a DEA analysis to compare the efficiency of the railways of Western and Eastern Europe and find while most railways of Western Europe are on the efficiency frontier, those of Eastern Europe are typically a long way from it. One explanation may be that the reform process only started much later in Eastern Europe than in the West, although it appears that Eastern Europe has largely caught up. Secondly, Eastern Europe suffered a significant loss of traffic after the end of the communist regime, and this may still be resulting in an excess of labour and assets. There is some evidence that this remains the case for labour and freight vehicles. Although the excess of freight vehicles may be largely vehicles out of service, they still contribute to the poor efficiency scores for Eastern Europe. It is also the case that the countries of Eastern Europe suffer some disadvantages in terms of population density. However, we believe that two aspects of policy play an important role in the poorer performance of Eastern European countries compared with Western. Firstly, is the poorer infrastructure quality associated with lower levels of investment. This shows up as less use of electric traction and slower train speeds, resulting in lower productivity of staff and assets. Despite the efforts of the European Commission to overcome this problem, there is still a long way to go. Secondly, is the strong use of public service obligations to maintain high levels of service with relatively low load factors. If it is desired to raise the efficiency of Eastern European railways, governments in Eastern Europe will need to consider whether they are specifying excessively high levels of service.

The Territorial Cohesion through Interisland Transport: An In-Depth Analysis of the Azores Autonomous Region

This study investigates inter-island accessibility in the Azores Islands (Portugal), a region marked by unique territorial fragmentation and significant distances between islands. Recognizing the pivotal role of sea and air transport in fostering the socioeconomic development of the archipelago by enhancing resident mobility and attracting tourism, we address the challenges posed by the region’s low demographic and economic influence and the pronounced imbalances among islands. The methodological approach involves the examination of various accessibility parameters, with a specific focus on hourly operations identified as presenting the most unfavorable ratios of time availability in the destinations. We analyze inter-island sea and air schedules during the winter season, emphasizing their relevance for residents engaged in travel for business, health, administration, and related purposes. We have mainly analyzed the air schedules since it was possible to make the round trip on the same day on only two maritime routes, although these have also been considered. Regarding the study outcomes, they reveal that despite positive efforts to implement air public service obligations (PSO), which mandate specific frequencies, seat allocations, and rate caps, among other examples, the limited attention given to adapting operating hours based on demand undermines the effectiveness of these measures. Contextually, this lack of adjustment results in substantial inconvenience for travelers, particularly those engaged in round-trip operations on the same day, a common scenario in inter-island mobility. In more than 70% of the operational routes, suitable travel times at the destination are significantly compromised.

Airline price responses in the face of demand shocks: European lessons from the COVID-19 pandemic

We exploit the exogenous demand shock in the aviation sector that resulted from the spread of the COVID-19 pandemic to investigate how airlines responded in terms of pricing strategies. By using monthly fare data for flights operated within the EU-27 member states over the period 2017–2022 and by quantifying the intensity of pandemic cycles through a stringency index, we estimate price regressions at the route–airline level. Our findings reveal that the demand drop has prompted lower fares and increased intertemporal price dispersion. Furthermore, we show that fare cuts are not explained by airlines operating fewer flights. By analyzing heterogeneous price responses to the demand shock as determined by various route and airline characteristics, we find a stronger reaction on international markets and greater resilience of low-cost airlines. We also show that the regulations in the form of public service obligations and state aid programs for airlines helped the beneficiaries but not travelers.

ANALYSIS OF FARES AND SUBSIDY NEEDS FOR PUBLIC TRANSPORTATION USING THE VEHICLE OPERATING COST APPROACH (CASE STUDY: CORRIDOR 2 TRANS CIREBON)

Public transportation subsidies or what is called the Public Service Obligation (PSO) is an important indicator in the public transport system to ensure the sustainability of the operation of the public transportation system. Subsidies are government interventions in controlling transportation fares so that people can use public transportation at affordable fares. This study aims to provide an overview of the determination of fares and the amount of subsidy needed in corridor 2 of Trans Cirebon. Fare analysis is determined using the vehicle operating cost and Willingness To Pay (WTP) approaches which will then form the basis for providing an overview of the subsidy that should be provided by the Government in an ideal Trans Cirebon operation. This research shows that: 1) the fare currently applied are still in accordance with the WTP value the people of Cirebon City; 2) for an ideal Trans Cirebon operation, a vehicle operating cost of Rp. 6,135,159,933.29/year is required; 3) the amount of subsidy required ranges from Rp. 5,705,919,933.29/year to Rp. 6,108,879,933.29/year depending on the achievement value of the load factor and the fare applied.

Competitive integrated airline schedule design and fleet assignment

Airline profits are significantly influenced by competitive timetables that match passenger demand to fleet resources. In this research, we develop an integrated, mixed-integer optimization model to derive a comprehensive flight schedule, fleet assignment, and average airfares jointly. Passenger choice behavior is incorporated through a prospect theory-adjusted, nested, multinomial logit model which estimates market share. The competitive fleet assignment and schedule design (CFSD) formulation is embedded in a differentiated Bertrand game, such that each transport operator optimizes their best response function connected through the market share model. To solve the integrated optimization problem efficiently, a hybrid algorithm is developed that combines stabilized column generation with a large neighborhood search algorithm.The game-theoretic framework is applied to a case study in China involving legacy airlines, a low-cost carrier, and a high-speed rail (HSR) operator. The equilibrium outcomes suggest that the low-cost carrier is likely to stimulate demand and improve the level of service through secondary airports. The further development of high-speed rail service is expected to intensify competition among airlines and reduce the overall fare level. The low-cost carriers and HSR are able to significantly increase overall consumer surplus, providing insights into the potential for low-cost service in the Chinese aviation markets and the entrance of the public service obligation program at minimum cost.

Assessing the performance of Public Service Obligations air routes in Greece: A two-stage DEA approach

This study aims at evaluating the performance of the Public Service Obligation (PSO) routes by selecting Greece as a case study since this country makes extensive use of the PSO program mainly due to the geographic discontinuity and remoteness of the islands. The research methodology engaged a two-stage approach. First, DEA models were applied to assess the technical efficiency of the Greek PSO routes. Subsequently, regression analysis was applied to the DEA scores to define the performance determinants. The analysis of the high-performance routes revealed that they either connect densely populated islands to major Greek cities or serve mainland points that are far apart. On the other hand, routes that recorded the lowest scores are those originating from secondary hubs, connecting small islands and/or serving multiple destinations. The regression results point towards more competition. It seems that open routes perform better than restricted ones and subsidies do not have a significant contribution to PSO efficiency. The results of this study may offer useful insights to the academic and aviation community, as well as practical implications to a broader spectrum of stakeholders interested in the evaluation of the EU air transport policies.

Application of Sea Toll as a Means to Maintain the Availability of Goods in the 3T Area (Lagging, Frontier and Outermost)

Public Service Obligation (PSO) is the implementation of public services used by each country to mandate operators regarding minimum service standards, especially for remote areas where the output is expected to be increased and developed every year. Indonesia as an archipelagic country builds connectivity that can be adequate and can improve economic balance and welfare for the surrounding ecological community. The Sea Toll Program is designed so that each region can be connected between regions in Indonesia with adequate schedules and infrastructure, especially in areas that are still 3 T (Lagging, Frontier and Outermost). This study aims to describe the role of the Sea Toll from the government in designing and maintaining the availability of goods in the 3T area. The research method used is qualitative with a descriptive research approach, which is to say solving the current problems based on data that occurs in the field. So the implementation of sea tolls starting from 2015 to 2022 experiences a positive trend because from year to year it is seen that Indonesia has made a policy to realize an even logistics system by developing shipping networks to the periphery.

The changing role of a video-on-demand service in the strategies of public service media: A production study of Danish TV 2 Play and its impact on the production culture of the schedulers, 2016–2022

Abstract This article highlights and discusses the main findings from three different media production studies (2016, 2019, and 2022) investigating the changing production culture of the schedulers in public service media. The inclusion of a broadcaster video-on-demand (BVoD) service in the broadcaster's portfolio affected the production culture. First, the article argues that profound changes happened to the organisational framing of the BVoD service's status and its impact on the production practices. Second, the article shows the BVoD service's impact on the content priorities among the schedulers at TV 2 in Denmark and third, how the public service branding of TV 2 became more explicit in the production culture. However, across these three points of impact and the shifts in the strategic focus at TV 2, the business model at TV 2 and its interplay with the public service obligations runs as an undercurrent.

RTVE’s transmedia strategy aimed at young audiences: the case of Playz (2017-2020)

Generally speaking, audio-visual consumption is changing. More specifically, in recent years young people have increased their viewing of content through the Internet, which is often supplied through online platforms. This article focuses on one the Playz platform, which is one of the key strategies being used by Spanish public television (RTVE), as it aims to reconnect with the new generations through transmedia narratives. Based on studies undertaken by Costa Sánchez (2013) and Cascajosa-Virino (2018), a content analysis of the series broadcast on Playz between 2017 and 2020 has been carried out, taking into account the duration, year of release, and number of episodes or seasons for each of them. This study confirms a clear interest by this platform in generating products that are innovative from their very conception. In fact, a large number of transmedia strategies have been identified, such as episodes turned into films, a high degree of interactivity with the audience, original music videos, promotional events and more, which is in line with Playz’s public service obligation to reach out to all types of audiences through all the platforms available to them.

Implementation of Sea Highway Policy

The concept of the sea toll program as the transportation of marine logistics with the aim of connecting major ports in the archipelago so that it is hoped that the existence of this sea toll will be able to connect ports to remote areas. This study examines the implementation of the policy of the Minister of Transportation of the Republic of Indonesia Number PM 23 of 2019 concerning Tariffs for Transporting Goods at Sea to Carry out Public Service Obligations carried out by the Tanjung Perak Main Port Authority. This study aims to describe and analyze the implementation of the sea toll policy at the Tanjung Perak Surabaya Main Port Authority Office along with the inhibiting and supporting factors. This research uses qualitative research methods with a case study approach with data collection techniques through interviews, observations, and documentation. This research uses qualitative research methods with a case study approach with data collection techniques through interviews, observations, and documentation. The results of the study using George Edward III's theory of public policy implementation show that the implementation of the Sea Toll Policy has been carried out well by the Tanjung Perak Surabaya Main Port Authority Office. The supporting factors are resources, bureaucratic structure and SOPs at the Tanjung Perak Main Port Authority Office which are already good to ensure the smooth operation of the sea toll, while the inhibiting factor is the imbalance of backloads on the sea toll route at the main port of Tanjung Perak, Surabaya.

Pencabutan Public Service Obligation pada Kereta Rail Listrik dan Kinerja Finansial Operator

The issue of Public Service Obligation for Jabodetabek Commuter Line is indicated off-target due to 60% of its users are considered employed or have income. However, the Obligation is one of the revenue sources for railway operators. The retraction of the Obligation could reduce the railway operators’ overall revenue. This study analyzes the effect of the retraction of Public Service Obligation to the financial of Jabodetabek commuter line operators. The method used in the study was by simulating the passengers’ volume and income based on the elasticity of passengers to the fare changes. The results show that the volume of Jabodetabek Commuter Line users of the employed or have income groups will not be significantly affected by the retraction of Public Service Obligation due to their ability in paying and their inelasticity commuter line trip. The simulation also shows that the revenue from other tariff aside from the Public Service Obligation is the largest compared to other revenue sources with a fairly high elasticity value (-0.6). The result indicates that other tariffs aside from Public Service Obligation are potential to be the commuter line operators’ major revenue.

Coastal shipping during the pandemic: Spatial assessment of the demand for passenger maritime transport

Coastal shipping plays a key role in insular regions, ensuring economic, territorial and societal cohesion at national and regional level and supporting the transport of passengers, vehicles and goods. For Greece, passenger maritime transport is essential, considering its lengthy coastline (about 15,000 km) and its numerous islands, scattered within its territorial waters. This paper investigates demand for passenger maritime transport of the Greek coastal shipping before and during the pandemic through a spatial assessment based mainly on primary data provided by the responsible National Authority, thus highlighting issues to be addressed through policy and decision making. Considering that Covid-19 led to significant disruption of transport services, especially in ferry operations, demand for passenger maritime transport was almost halved during 2020. However, the supply services provided are mostly determined by the terms of the public service obligations (PSOs) that are announced by the responsible National Authority and which had to be further enhanced during the pandemic for sufficiently covering the corresponding demand. As such, the paper aims to support policy and decision making, and the implementation of relevant strategies and measures so as to maintain the proper level of services provided in the sector during emergencies.

LIABILITY OF STATE-OWNED HOLDING COMPANY IN FACING THE IMPACT OF COVID-19 PANDEMIC

Covid-19 is declared as World Pandemic by WHO and non-natural disaster by Indonesia. Indonesia has reached 333,000 Covid-19 cases per 11 October 2020. The increasing number of Covid-19 cases is resulting in exhaustion of patient shelters. Physical distancing is resulting in economic aftermath. Handling the impact of Covid-19 is implemented under Presidential Decree number 11 and 12 of 2020. State-Owned Holding Company (SOHC) established to manifest the mandate of Article 33 of the Indonesian Constitution has a moral obligation to handle the Covid-19 impact. Various attempts are made in response to people suffering from the pandemic. The purpose of this research is to see if SOHC has functioned as a Public Service Obligation (PSO) or a profit-oriented entity. Normative-empirical legal research was used by collecting literature, regulations, and updated news online and printed to answer how SOHC assists in handling the Covid-19 impact. The research shows that SOHC maintains health, social safety, and purchasing power or anything related to business. Each sector of SOHC is functioned as (PSO) in handling the Covid-19 impact. Indonesia must create decent legal construction in SOHC looking at the attempts made to manifest the mandate of Article 33 in handling the impact of Covid-19.

LIABILITY OF STATE-OWNED HOLDING COMPANY IN FACING THE IMPACT OF COVID-19 PANDEMIC

Covid-19 is declared as World Pandemic by WHO and non-natural disaster by Indonesia. Indonesia has reached 333,000 Covid-19 cases per 11 October 2020. The increasing number of Covid-19 cases is resulting in exhaustion of patient shelters. Physical distancing is resulting in economic aftermath. Handling the impact of Covid-19 is implemented under Presidential Decree number 11 and 12 of 2020. State-Owned Holding Company (SOHC) established to manifest the mandate of Article 33 of the Indonesian Constitution has a moral obligation to handle the Covid-19 impact. Various attempts are made in response to people suffering from the pandemic. The purpose of this research is to see if SOHC has functioned as a Public Service Obligation (PSO) or a profit-oriented entity. Normative-empirical legal research was used by collecting literature, regulations, and updated news online and printed to answer how SOHC assists in handling the Covid-19 impact. The research shows that SOHC maintains health, social safety, and purchasing power or anything related to business. Each sector of SOHC is functioned as (PSO) in handling the Covid-19 impact. Indonesia must create decent legal construction in SOHC looking at the attempts made to manifest the mandate of Article 33 in handling the impact of Covid-19.

Debt crisis in the electricity market: causes and threats to the economic security of electricity companies

The article states that one of the main sector conditions for Ukraine's accession to the European Union is the launch of a full-fledged energy market, for which purpose a number of institutional, economic and regulatory reforms have been implemented since 2015. It is proved that despite the government’s conscientious efforts to make a transition to the European model of energy markets, Ukraine has failed to do so due to a large number of regulatory restrictions on wholesale prices (price caps), an unbalanced policy of supporting renewable energy industry, the absence of market prices for households and the existing mechanisms for imposing special obligations, which together have led to the formation of a chain of debts “all to all” in the electricity market. It is substantiated that the debt crisis currently observed in the energy sector of Ukraine requires urgent measures. Further ignoring it is unacceptable, as it poses significant threats to both the country’s energy security and the financial viability of electricity companies. The article considers the chain of debts of electric power enterprises formed through the Public Service Obligations (PSO) model. The causes of the debt crisis in the Ukrainian electricity market are identified, including: incorrect operation of the PSO mechanism; significant underfunding of tariffs for households, as well as tariffs for electricity transmission services via the high-voltage trunk network and power system management (dispatching); granting debtors a preference - depriving them of "punishment" for late payment of the cost of consumed services. The author analyses the proposed measures to mitigate the crisis by: compensation of debts at the expense of the State budget; attraction of loans from State and international banks; cancellation of price restrictions established by the National Commission for State Regulation of Energy and Public Utilities (NCSREPU), the so-called price caps; allocation of part of the excise tax revenues to repay the debts incurred in the electricity market; increasing the volume of clean electricity exports to the EU; introduction of a market for guarantees of origin, under which each renewable energy producer will receive guarantees, i.e. an asset that can be sold. The advantages and disadvantages of each of the proposed measures are indicated.

The Role of Logistics in the Management of the Railway Rolling Stock Life Cycle

Abstract Every undertaking providing transport services in passenger rail transport must currently prepare for the liberalization of transport services operating under a public service obligation. Competition in the mentioned segment is expected to intensify. Rolling stock represents a significant cost item for railway operators. The management of the life cycle of railway rolling stock is a way to efficiently manage vehicles. Adequately chosen parameters that are monitored and evaluated during the life cycle of railway rolling stock are crucial to successful management. Logistics plays an important role in the railway vehicle life cycle management, which, when properly set up, represents a significant competitive advantage. All railway undertakings are facing challenging times due to the consequences of the COVID-19 pandemic and the energy crisis. Proper and effective railway rolling stock life cycle management will help them overcome current and future challenges.

Comparison of Transport Services Plan on the Line Košice – Prešov – Plaveč – (Muszyna)

Abstract The operation of railway passenger transport is characterized by high economic costs and also high requirements for personnel and vehicle means. Existing rail transport operators aim to provide transport services as modern, efficient and cost-effective as possible, while meeting all safety and quality standards. In the case of public service obligations, they must also respect the requirements of the contracts. Currently, a significant transformation of the railway passenger transport operation throughout Slovakia is being prepared in order to increase its efficiency, sustainability and quality. This primarily concerns public service obligations. The line Košice - Prešov - Lipany - Plaveč - (Muszyna) (line No 188) will also be affected. Transport services on this line will be significantly modified and intensified, inter alia, because of the introduction of an integrated transport system in the relevant region. The Route 188 service plans were prepared in two different Transport Service Plans (TSPs). The first one was prepared by the Prešov and Košice Regions. In parallel with the first TSP, a second TSP was prepared by the Ministry of Transport and Construction of the Slovak Republic (MT&C SR) for the entire Slovak railway network, which also includes line No 188. There are several differences in the proposlas included in TSPs for the line in question. The main objective of this paper is to compare the traffic service proposals in the individual TSPs developed for Line No. 188 based on a comparison with the status quo and a comparison of selected operational indicators, as well as to determine the basic advantages and disadvantages.

A Critical Assessment of The Public Service Obligations (PSO) in European Air Routes

The deregulation of air transport created the need to safeguard an acceptable level of air connectivity between urban centres and remote European regions. To this end, several protection schemes have been developed around the world, including the imposition of Public Service Obligations (PSOs) in a few European air routes. Thirty years after the establishment of PSOs in Europe, the debate over their efficiency and effectiveness is still active. This paper offers an overview of the European PSO program along with a review of the academic literature exploring the main issues that accompany the PSO scheme. The main findings that call for consideration from both scholars and policymakers are the need to strengthen the competition in these non-commercially attracting routes, the necessity for central network design and coordination and the requirement for transparency and open dissemination of information regarding the PSO routes.

Evaluation of Penataran Train Fares During The Covid-19 Pandemic Using ATP-WTP Methods

Indonesian Railways Company must increase the fare for the Penataran Train due to additional operational costs in providing the COVID-19 health protocol. On the other hand, people experience a reduction in monthly income due to the lack of activities outside the home. Ticket prices must be adjusted to determine the number of subsidies borne by the government. This study aims to evaluate the fare of the Penataran Train using the Ability To Pay (ATP) and Willingness To Pay (WTP) methods. Questionnaires have been distributed to 417 respondents using the Google Form application. The results showed that the ATP was higher than the WTP 1 without passenger expectations, and the ATP was lower than the WTP 2 with passenger expectations. Restriction of seating capacity is the most expected service by respondents. The recommended fare is IDR 33,478.00/trip, and the public service obligation is IDR 54,816.00/trip.

Competition on the Railway Market in a Segment of Public Service Obligations in Terms of Effectiveness: Study in V4 Countries

Since the introduction of new European Union legislation seeking to establish a single European railway area and increase the railway sector’s competitiveness, competition has also become a reality in this, until then, monopoly market. In addition to allowing open access to the railway market with freight and passenger services, competition in the regulated part of the market has been increasing, specifically in the segment of public passenger transport services. Public tendering for providing public services has increased the quality of services for passengers and contracting authorities; however, the question remains whether this model of awarding these services is also effective from a socioeconomic viewpoint. This study focused on evaluating contracting authorities of public services in the Visegrád-4 countries regarding public spending effectiveness. Based on the chosen model inputs and outputs related to performance and value indicators of public service contracts, we calculate individual contracting authorities’ relative effectiveness using nonparametric data envelopment analysis (DEA) models. We subsequently tested assumptions of the difference in effectiveness according to awarding services, individual countries or ownership of railway undertakings. We came to the conclusion that it is not possible to confirm that public tenders in V4 countries significantly increased the effectiveness of public spending in comparison with direct awards or other ways of awarding PSO. Discussions on the main results and research limitations are also part of this paper.