Regulatory Reform Of The Urban Bus System In Recife (Brazil): Stakeholders And The Constituency-Building Process

Abstract

The integrated metropolitan administration of the bus system in Recife is almost thirty years old and has survived a number of different perils. Even the most recent municipal administration of the city of Recife has dropped its plan to bring back the management of the municipal lines under its roof and has accepted cooperating with the State Government of Pernambuco, provided that a new cooperation contract basis is adopted. This paper begins with an explanation of the administrative and operator structure of the Metropolitan Recife bus system, which has been run by the Metropolitan Urban Transportation Company of Recife (EMTU - Empresa Metropolitana de Transportes Urbanos do Recife), a public corporation owned by the state of Pernambuco, but actually an administrative autarchy. Despite its success in ensuring coordination on the entire metropolitan level, which is still a rare example in Brazil, the EMTU has not been able to ensure a competitive environment in the bus industry under its control and the sector has been following a continuous path in direction of area-based monopolies. This paper describes this process as well as the different attempts by the EMTU to introduce benchmark regulation and the reaction of the operators against such attempts. In spite of these efforts, the legal expiration of the contracts and the organization of the legally required tendering procedure have been subsequently postponed. Different tender studies have been prepared and have been subsequently dropped. When the current municipal administration of the City of Recife came to power, a tender procedure was promised and expected, but the city government only managed to regulate (actually repress and substantially quell) the local informal operators. Most recently, the state attorney has pressed the state and municipal authorities to organize the procedure, but response is still slow. This paper describes these studies and the reactions of different stakeholders (operators, public servants, politicians, consultants, attorneys, press and the population) throughout this long process towards the tender procedure and also outlines the recent negotiations for reforming the EMTU.