September 14, 2009
The classifieds in this issue include two chief executive officer positions!
A Historic Partnership: Veolia and New Orleans RTA
By SUSAN BERLIN, Senior Editor
Many public transit agencies use an outside contractor to provide management services, but the “delegated management” contract between the New Orleans Regional Transit Authority (NORTA) and Veolia Transportation goes further, giving the contractor responsibility for all activities below the board level. The five-year contract, with a five-year option, began Sept. 1, although Veolia has had a management contract in New Orleans since October 2008.
“We have tried to be very careful about calling this arrangement unprecedented,” said Ruth Otte, executive vice president, marketing and communications, for Veolia Transportation, “but we have a lot of industry veterans in our company and spoke to several major figures in the industry, and no one knows about another case like this.”
For Justin Augustine, chief executive officer of the New Orleans operation, this contract means a return to NORTA, where he worked until 1994. “I always kept a home in New Orleans,” he explained. “After [Hurricane] Katrina, I came back to work on repairing homes. I saw the desperate state the city was in, and when I looked at the status of public transportation operations, I recognized that the agency needed help.”
Transportation Management of Southeast Louisiana (TMSEL), a company administered by NORTA, has formally employed the agency’s employees because of a state law that does not allow unionization by public employees. On Sept. 1, the former TMSEL employees became Veolia employees.
“The biggest change is that we have a fixed-fee contract,” said Dick Alexander, senior vice president of business development for Veolia. “NORTA knows what its costs are, so we’ll be paid on a per-hour-of-service contract. Our company will assume risks for the RTA—accident risk, operating risk, all those things.” He added that Veolia is negotiating contracts with the existing unions and will retain the same levels of pay.
NORTA was still struggling with the aftermath of the hurricane when Veolia came to town. “Three years after Katrina, NORTA was still operating out of trailers and had only recently gotten off emergency generator power,” Alexander said. “One of the motivations the NORTA board had was to bring in an outside company for leadership and resources to get things moving, which is our goal.”
He continued: “This contract was a way to put a leadership structure in place very quickly, to get all these initiatives moving.”
Veolia already is working to adapt the existing NORTA bus routes to the changing residential needs of post-Katrina New Orleans—for example, by introducing “Lil’ Easy” neighborhood circulators in areas that no longer need 40-foot buses.
The infrastructure rebuilding effort is also well underway. Augustine reported that NORTA plans to reopen its main facility on Canal Street in September, and that all 31 of the agency’s streetcars damaged by flood waters—24 that operated on the Canal Street Line and seven from the Waterfront Line—will be rebuilt by the end of the year. The Carrollton facility and the streetcars stored there were not affected.
“During the first eight months, Veolia implemented a service delivery plan, a facility improvement plan, a bus replacement plan, a financial stability plan, and a reorganization,” Augustine said. “We created a new vision for regionalization in the community and designed a plan to improve the authority’s credibility, not only with the riders but with all stakeholders—businesses, the general public.”
“Our philosophy,” Alexander added, “is to expand and improve mobility with a strong focus on designing service to meet where the population is living now, not the same pattern as before Katrina. We’re working for improved efficiency, making mobility better, and serving as a very important catalyst for ongoing renewal.”
Learning About the City
Augustine explained how Hurricane Katrina destroyed 80 percent of New Orleans, meaning that NORTA’s rebuilding effort was only part of a much larger city-wide program. “Every piece of infrastructure had to be rebuilt,” he said. “The city had to restore the basic public services: police, fire, electricity, running water, sewage, cable … Our top priority is to provide safe, efficient service back to the streets of New Orleans, based on the redistribution of the population.”
“We spent countless hours going to every corner of the city to understand the population we serve,” he continued. “Then we had to examine the infrastructure and determine the population’s needs.” NORTA operated a pre-Katrina fleet of 382 buses, according to Augustine, but currently has 93 in operation, half of them new and the other half rebuilt.
“Veolia has joined with the union and the NORTA board to create a united vision of
making mobility happen in a way that’s custom-designed to meet the specific needs of New Orleans,” Otte said. “We report directly to the board in a very close partnership, and we’re taking the momentum we have now and continuing to drive forward.”