Report on Dublin Bikes Scheme Expansion

Report on the expansion of the dublinbikes scheme (May 2013)

Introduction

Dublin City Council’s dublinbikes scheme is one of the most successful public bike rental schemes worldwide. When first introduced it was anticipated that there would be five thousand subscribers after the first year of operation.  Currently the scheme has a total of 31,000 long term subscribers with the bikes being used on a daily basis anywhere between 5,000 – 7,000 times.  The scheme has been embraced with resounding enthusiasm by the people of Dublin city. Since its introduction, Dublin City Council has been inundated with expressions of interest to have this scheme expanded. The proposed arrangements as outlined in this report put in place the foundations for the realisation of the dublinbikes expansion in 2013.  Over the last 12 months Dublin City Council’s Planning Department has been engaged with JCDecaux in negotiating terms to provide for an expanded bike scheme. These negotiations have now concluded and the details of the terms are outlined below. In summary, the terms provide for 58 additional new stations, 950 additional new bikes and c2000 additional new stands to be sited to the west in the Heuston area and to the east in the Docklands area. Subject to contract the works will commence this October and be completed during July 2014. The expanded bike scheme will provide for improved linkages in the city, the generation of 29 new jobs, the delivery of Government policy in relation to public transport and will further enhance the reputation of Dublin as a forward thinking and innovative city.

Background

Initial Contract

In 2006 following a competitive tender competition, JCDecaux were awarded a concessionary contract with Dublin City Council for the delivery of a package of public amenities in return for outdoor advertising on the city’s streets. The contract awarded in 2006 was based on the erection of 120 advertising panels which provided for a package of public amenities at a value of €83.55 million to the City Council. Due primarily to planning restrictions this number (i.e. 120) of advertisement structures never materialised. Accordingly a revised agreement providing for the delivery of 72 advertising panels with a revised package of public amenities to the value of €54.36 million to the City Council was put in place.  This revised package of amenities over 15 years was valued as follows:

- The dublinbikes scheme:      €26,791,000

- Communications Network:   €23,464,000

- Way finding System:            €4,106,000

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€ 54,361,000

 

Amended Agreement

The dublinbikes scheme went live in September 2009 and consisted of 40 bike stations, 450 bikes and 795 stands. It had an immediate and dramatic impact, far exceeding all expectations regarding popularity and use. So popular was the scheme that the City Council within a very short period of time had to address issues arising from the unanticipated demand and popularity of the scheme. In early 2010, a further revision to the agreement was made which provided for an additional 4 new bike stations, 100 additional bikes and c300 additional stands. The overall value of this extension was set at €6.6 million over a 15 year period. The cost of delivering this extension was to be provided by an additional 10no.  advertisement structures, together with a payment of €300,000 per annum over a 3 year period. This €300,000 derived from the schemes subscriptions. It should be noted that of these 10 additional advertisement structures only 7 have been approved and constructed to date. The remaining 3 Metropole structures have yet to be approved as it has not been possible so far to identify suitable sites for same. This extension to the scheme increased the value of the bike scheme over a 15 year period from €26.791 million to €33.391 million.

Under the terms of the original contract signed with JCDecaux in 2006, the start date was triggered when 75% of the outdoor advertisement component as outlined in the original contract (i.e. 120) was realised. As stated above due to planning and site related difficulties, the required number of outdoor advertisement structures to trigger the start date of the contract was never realised. Under the terms of the contract if the 75% advertisement component had not been realised the commencement date could be agreed between both parties. In this regard, the official start date for the public amenities contract (i.e. all 3 elements: dublinbikes, communications network and wayfinding) was agreed to be September 2012 and the 15 year period will run from that date.

Expansion

Prior to negotiating expanded terms with JCDecaux the issue of procurement was assessed and fully considered with expert independent advice been provided on this matter. In expanding the bike scheme, 3 primary options were available to Dublin City Council and included the following:

1)    Engage in direct negotiations with JCDecaux.

2)    Buy-out the existing bike scheme from JCDecaux;

3)    Go out to public tender and potentially end up with another bike scheme in the city that was not integrated or interoperable with the existing bike scheme;

Having considered the above and based on procurement principles and legal advice, the only realistic option available to Dublin City Council was to negotiate a contract directly with JCDecaux. Following on from this, Dublin City Council engaged in direct negotiations with JCDecaux on the dublinbikes scheme expansion in July 2012.

New Contract

 

It is now proposed to expand the dublinbikes scheme. In doing so a new contract is required, which will be co-terminus (parallel) with the original and amended agreements. The new contract will run co-terminus with the existing contract but provision has been made for a review to take place after 10 years, which if required will allow for the retendering of the entire scheme, both existing and expanded. Unlike the original contract which was a concessionary contract, this contract will be a service level contract and will not involve the provision of any further outdoor advertising. The expansion of the dublinbikes scheme is a Dublin City Council initiative whereby JCDecaux will be providing this service on behalf of the City Council in return for financial remuneration.

dublinbikes Expansion

 

The existing dublinbikes scheme consists of 44 bike stations, 550 bikes, 1,087 stands and has an overall value of €33.391 million over a 15 year period. The proposed expansion is based on the provision of an additional 58 new stations, an extension to one of the existing stations, 950 new bikes and c2,000 additional cycle stands. The proposed expansion will result in the overall provision of 102 dublinbikes stations, 1,500 bikes and a total of c3,000 cycle stands. The expansion includes the Docklands area in the east and the Heuston/Kilmainham areas in the west of the city and these areas were identified in the strategy document which was approved by the City Council in 2010.

dublinbikes Data

The proposed expansion of the dublinbikes scheme provides for ‘Portal’ and ‘Gateway’ data access which will be available to Dublin City Council. This data portal will allow authorised users to capture real time data from the network of stations. The data portal will allow for the availability of the following:

-          Real time rental graphs

-          Real time station availability map

-          Daily rental report

The availability of this data will allow for authorised personnel to carry out research which will guide and inform future policy in relation to cycling in the city.  

Expansion Costs

Capital Costs

The overall cost of the proposed expansion will be in the order of €35 million over the lifetime of the contract. This cost can be categorised as follows:

 

Capital Costs € (Millions)
Ground-works (estimate)* 1.2
Street furniture (terminals and stands) 3.0
Street furniture (bike & vehicle fleet) 1.96
Total Capital Costs (Ex VAT) 6.16

 

*Please note that the ground-works element of the capital costs will be subject to a tender process.

The infrastructural costs associated with the schemes expansion have been independently verified and assurances have been provided that these costs represent reasonable value for money.

Operational Costs

The other main cost associated with the expansion of the dublinbikes scheme relates to the scheme’s operation and management. The proposed operational costs provide for an interoperable bike scheme, complete with service level commitments which will ensure that the dublinbikes expansion scheme is managed, maintained and operated to the same specification as the existing highly successful scheme.  The exceptional high levels of usage coupled with the 31,000 long term subscribers are indicative of the high level of specification associated with the current management and maintenance regime implemented by JCDecaux.

 

Operational Costs Per Year € (Millions)
Management/Maintenance 1 1.925

 

The proposed operational costs are based on a co-terminus contract. Provision has also being made in the new contract for a break clause after a period of 10 years which will allow for a review of both the existing and expansion contracts and their retender as one overall scheme, should circumstances dictate.

Expansion Funding

Capital Costs

The capital costs are made up of civil works, infrastructural costs and the first tranche of bikes and maintenance vehicles. The civil works associated with the expansion of the bike scheme will be the subject of a tender process. The NTA have committed to providing a contribution of €5.2 million towards the capital costs of the proposed dublinbikes expansion. Of this €5.2 million, €2.6 million has been allocated by the NTA for capital works expenditure in 2013 with a further capital contribution of €2.6 million in 2014.  With a total capital cost anticipated of circa €6.1 million and an allocation from the NTA of €5.2 million, the capital shortfall will be met by Dublin City Council funding from annual capital budgets. Having regard to the existing economic climate, it is critical that the project commences well in advance of year end, in order to draw down the allocated NTA funding as a delay could put this funding at risk.

Operational Costs

As part of the expansion it is proposed to increase the subscription fee from €10 to €20 for long-term subscribers and from €2 to €5 for short-term subscribers (i.e. 3 day subscribers). The current tariffs which include the first 30 minute free period will remain unchanged. The Business Plan for the dublinbikes expansion projects that the existing subscriber base will increase by approx 108%, with the number of long-term subscribers increasing from the current level of 31,000 to 66,000 and the existing number of short-term subscribers increasing from 10,000 to 25,000. This increase in subscription rates and numbers will result in revenues to the order of €1.434 million per annum. The shortfall in the operational costs of €500,000 must then be provided for as part of the annual budget.

Sponsorship Opportunity

As part of the negotiation process it has been proposed that an opportunity exists for the City Council to obtain further funding from the sponsorship of the expanded dublinbikes scheme. This could have the potential to generate additional net income to the City Council on an annual basis after taking account of the sponsorship marketing management costs. The advertisement market will dictate the market and value of such a sponsorship.

Any potential sponsorship revenue would reduce the overall shortfall considerably from the projected €500,000 thus reducing the burden on the annual budget.

Construction Programme

It is anticipated that construction work on the expansion of the dublinbikes scheme will commence in October 2013. The agreement provides for bike stations becoming operational in batches of 5 from October 2013 onwards. It is expected that the construction programme will be completed during July 2014 whereby all of the 58 new stations will be delivered and in use. The construction programme will initially focus on augmenting the existing scheme by adding to capacity within the existing network. The second phase of the construction programme will be concentrated in the Dublin Docklands area, closely followed by the construction of the stations moving westwards towards Kilmainham and Heuston station. The attached map outlines the existing scheme’s station locations together with the proposed new stations and there locations.

A project team has been in place which was responsible for producing the strategy document in 2010 and completing the detailed design and layout of this two-phase expansion to Docklands and Heuston. Over the past two year the project team had extensive consultation with key stakeholders and sectoral groups and have taken on board the numerous representations received from members of the public, business interests and elected members in identifying bike station sites.   It should be noted that in identifying the 58 new stations a significant number of sites were assessed and evaluated. The selection criteria followed the same principles as the original scheme: (a) Stations to be within 400m of each other; (b) as close as possible to places of employment; (c) public transport nodes (d) residential areas; and (e) cultural destinations. The detailed site selection was governed by the following criteria: suitability in terms of station size and capacity; absence of underground services; suitability to provide access for service vehicles; future traffic management plans; and health and safety requirements.

Briefing Meeting

On the 29th of April 2013 the Contracts Committee of the City Council were given a briefing of the proposed dublinbikes expansion. A separate briefing meeting took place on the 2nd May 2013, convened by the Lord Mayor, this meeting included the Group Leaders, members of the CPG and members of the Contracts Committee. The meeting agreed that in this report to City Council that it be recorded that they recommend to the City Council members that the dublinbikes scheme be expanded in accordance with the details as outlined.

Conclusion

The terms are considered reasonable and value for money and will provide for the much anticipated and expected expansion of the dublinbikes scheme without impacting adversely on annual revenue budgets. Heads of agreement providing for the terms outlined above are in place with JCDecaux and following the City Council meeting it is proposed to complete the contract with JCDecaux to provide the expanded service so as to enable the expanded scheme to be fully operational by Summer 2014.