Sao Paulo Tapping Private Finance to Develop Regional Transit Ticketing System

Per Business News Americas, Sao Paulo is tendering a 30-year concession to facilitate the expansion of the City’s transit ticketing system to dozens of other regional jurisdictions, the consolidation and integration of the system region-wide (an interjurisdictional shared service of sorts), and management of fare collection for the new system.

The tender to install an integrated public transport ticketing system (BIM) for the Sao Paulo metropolitan region will be launched on July 8, a Sao Paulo city metro company (CMSP) spokesperson told BNamericas.

The awardee will invest 310mn reais (US$149mn) to expand the already existing ticketing system (currently only in Sao Paulo city) to another 39 municipalities in the metropolitan region, while a total of 200mn reais will be paid to the Sao Paulo city hall, the report said.

The 30-year concession will be run under a public-private partnership (PPP) model and the concessionaire will receive a percentage of ticket sales. The concessionaire will manage fare collection for CMSP, the state’s metropolitan transport company (CPTM), the city’s public transport authority (SPTrans), which runs the capital’s buses, as well as transport systems in other cities to be incorporated into the system.

Proposals will be opened on August 31, the spokesperson said, and a contract should be signed by year-end. The system is expected to be ready 12 months after signing of the contract.

Annual revenue for CMSP, CPTM and SPtrans is around 4.6bn reais, and the fleet includes 14,788 buses, 118 subway trains, 110 CPTM trains and 14 new ones to be made for metro line 4. The network serves more than 4.1bn passengers/y.

U.S. transit operators should be watching deals like these closely, as they offer potential privatization models to help them deliver more efficient transit service at a lower cost.

Reason’s Transportation Research and Commentary