Good practice:

Bus loans in the Amsterdam Region

The Amsterdam Transport Authority (Vervoerregio Amsterdam) is the public transport authority in the Amsterdam area. They have several operating contracts (concessions) with transport operators. In these contracts, the operator is responsible for procuring and maintaining the buses, as is common in the Netherlands. In order to maximize the number of e-buses, the Amsterdam Transport Authority offers a bus loan to the transport operators, thus arranging the financing of newly bought buses for the operators. Because the Amsterdam Transport Authority is a public organization, it can arrange financing with lower interest rates than the operators can do themselves. By using the bus loan, the operator can decrease the costs of financing, and will thus be able to procure more e-buses within a given budget, as e-buses require a substantially higher investment than diesel buses.

In order to minimize the risks for the Amsterdam Transport Authority, and to guarantee that the e-buses remain available for public transport regardless of the circumstances, the operators have to set up a dedicated company with the sole purpose of owning the e-buses bought with the bus loans. They have to agree that the buses in this dedicated company remain available for public transport use, even if the operator were to go bankrupt, or if the transport operating contract were to expire prematurely.

The Amsterdam Transport Region allocated 100 million euros as bus loans for contract Amstelland-Meerlanden. For the Zaanstreek-Waterland contract, which still has to be tendered, 150 mln euros will be allocated. As these are loans, this is not an expenditure for the Amsterdam Transport Region.

The most obvious success is visible in the Amsterdam Meerlanden operating contract, where 100 e-buses (the largest e-bus fleet in Europe at that time) was introduced in April 2018. Additionally and 10 e-buses were introduced in the ongoing Waterland operating contract.

Although the arrangement is perceived as successful by the Amsterdam Transport Authority, there are other arrangements possible, like a multi-party agreement between operator, authority and an extertal financing company. An evaluation is underway to assess which arrangement is the most attractive.

This practice can be easily adopted by other transport authorities. If the authority does not have enough funds itself for the bus loan, it could acquire these funds on the financial market, making use of the fact that public bodies can usually arrange lower interest rates than private operators would – so even in that situation the arrangement could still lead to financial benefits, thus enabling more e-buses with the same budget. The arrangement also guarantees that the buses remain available for operation, even if the operator were to go bankrupt or if the operating contract expires. The arrangement only makes sense in areas where it is common practice to have the operators procure the buses.