Jablonecky deník: Public transport is hot ground, says managing director of transport company

From February, Umbrella Coach & Buses will take over the operation of public transport in Jablonec nad Nisou and surrounding municipalities for the next two years. Read the interview with its managing director Pavel Steiner published in Jablonecky deník.

Tým Umbrella City Lines   |   13. 07. 2024

The company is known for its close cooperation with the multinational transport coordinator FlixBus, but it is entering the public transport market in the Czech Republic for the first time. The company has already gained experience in Germany, operating several lines in Hamburg. “As far as public transport for cities and regions in the Czech Republic is concerned, this is the first step, but it is certainly not the last,” says the company’s managing director, former professional footballer Pavel Steiner.

When and how did you decide to enter public transport in the Czech Republic? And why in Jablonec, do you want to experience the Czech environment?
It was the city councillors who decided to submit our bid in the first place by repeatedly rejecting BusLine’s offer. And then subsequently our drivers from the “north”, who convinced us in the company that we should respond to the new public call for bids, that the game will definitely be fair in Jablonec. There can be no question of a test on our part, because if we decide to do something, we will do it to the fullest and we will want to do it responsibly in the future. If the environment is transparent and fair, then Umbrella must be taken into account in future tenders.

Is there a difference in similar tenders for transport services in Germany and the Czech Republic? In the Czech Republic, there is often talk of clientelism, bribes and other illegal pressures. Did you feel something similar in Jablonec?
I wouldn’t say that the content of the tenders is diametrically opposed, but the culture of the environment in which everything takes place is certainly different. What is often going on behind the scenes in the Czech Republic and what those who submit bids are capable of – and unfortunately, some of those in charge from the cities and regions help them to do so – simply has to change. Otherwise, we will continue to see incredible stories and results that have nothing to do with fair competition. In Germany, it does not matter whether you know this or that person, whether you are a friend or whether you do not need to be, the conditions of the procedure are clearly stated for everyone, and it is not just the price that counts. A lot of emphasis is placed on the quality and age of the fleet, you must also state the total monthly cost of the buses and you must also state the hourly wages of the drivers, which must not be lower than the relevant tariffs in the area. Everything is completely transparent, there is no room for any speculation or backroom machinations. This is more or less exactly how it was in Jablonec – the terms of reference were clearly stated, the timetable was clearly stated, there was a commonly accessible space for additional questions, and there was no question mark in the air.

You also criticized the mood and circumstances of the former Jablonec tenders for a new carrier. What bothered you the most?

All one has to do is open the internet, type in the appropriate words and names and an uninformed person may not even be able to wonder what has happened historically around public sector tenders and transport not only in Jablonec… Public transport in the Jablonec and Liberec region has historically been more than just a hot ground, but if in the future fair rules of the game will be respected by the contracting authority, as they were in this last Jablonec case, we can perhaps believe that the environment will gradually clear up in the future.

Is this the first participation of Umbrella in public transport in the Czech Republic, or the last?

As far as public transport for cities and regions in the Czech Republic is concerned, this is a first step, but it is certainly not the last. Of course, the question remains whether and to what extent we will be successful in future tenders in the Czech Republic, but as I said, when we do something, we go all out and try to do it properly.

However, Umbrella did not apply for the first competition, which was announced by the town of Jablonec for ten years. Why?

As I have said several times before, looking at the history and the old public transport arrangements in Jablonec and Liberec, it would be a waste of time and a waste of money if we did so. The result of the first tender unfortunately proves us right. At the time the first tender was announced, it was not publicly declared anywhere that the councillors and representatives of Jablonec wanted to change anything. This only happened after the existing carrier was fundamentally rejected by the town councillors and councillors in an additional procedure, in which – as far as I am aware – only BusLine was dealt with. This is not just and only about Umbrella, no other carrier even bothered to try… And now you may ask yourself – why? There are more or less two options – either it was agreed between certain carriers that the offer to Jablonec is simply not made, the other option is that it’s not worth making anyway, it’s just pointless… It was like in my football era, when we were supposed to play at Sparta. It was more or less useless to go there with Dukla at all, because we were already losing 2: 0… It’s probably not entirely normal that de facto different tenders for bus transport in different parts of the country are automatically challenged, more or less by one and the same company or its allied entities, and then the Office for the Protection of Competition decides more or less with certainty against the contracting authority, and then situations like the one in Jablonec logically arise.

You personally declared at a meeting of Jablonec councillors that if Umbrella won the tender for the ten-year operation of public transport, it would deploy brand new machines. Is that true? And what kind of machines will be running in the streets of Jablonec from February next year?
Yes, if the contract was for 10 years, we would definitely deploy new Mercedes Benz Citaro Hybrids. However, for a two-year contract, even with the best possible will, this is not possible for financial reasons. We managed to put together 26 Mercedes Benz Citaro buses and 4 Mercedes Benz Sprinter buses from 2013 with emission standard 5 EEV and which more than meet the tender conditions. Since we still have some time before the planned start of the contract, I am currently trying to put together even newer vehicles as much as possible. Today I dare say that it will still be Mercedes Benz cars, but that at least half of them will be newer than 2013 and will also meet the strictest Euro 6 emission standard.

These days Jablonec is starting to discuss public transport options between 2023 and 2033. In the game is again a public tender for an external carrier, the launch of its own carrier and the return to a joint transport company with Liberec. Are you following these options?
Of course, I follow these considerations and the discussions about them, and even though I know that this will be a political decision that we cannot influence anyway, I have to smile at the consideration of the city’s own transport operator. Not arrogantly, but from experience, because no urban carrier that is set up for the sole purpose of a specific contract can ever compete financially – taking into account all the necessary input costs and investments – with a carrier that provides services, say, globally and that has a number of shared costs that logically reduce its price per kilometre. Yes, the city does not have to count on a profit as an external carrier, but on the other hand, the reasonable profit calculated by us is so low that the difference will certainly not be there.

What in particular increases costs?

If the city actually counts everything the way it should, and even though it will receive rent from its own carrier for the use of the city facility just as it would from any other user, the city carrier will get substantially higher numbers than we do just on driver numbers and vacation and sick leave coverage. Add to that the back up that you desperately need and that comes at a huge cost. If we were to build transport for Jablonec alone and for Liberec alone, and if we were to drive only about five million paid kilometres a year, we would never get to the low price we were able to offer Jablonec now. It’s not that someone buys a couple of buses and thinks it’s fun and that if this or that can do it, so can he. You see, it would have been enough if there had been fair and transparent competition for transport contracts, and the result would have been the same as it is now in the case of Jablonec. The savings of the city compared to the current situation are enormous and we as an external transport operator are also OK with the expected economic result. As I said, however, the political decision is not ours to make, that has to be made by someone else, but financially the result is more or less already known.

You’re a former professional football goalkeeper. Did you gain contacts during your football career in Germany that you still maintain today?
Of course, I have met a lot of interesting and important people all over the world in my almost 15 years of professional career, and some of them have helped me in one business move or another. I have lived abroad for almost twelve years, and six and a half of those years in Germany, so of course I have many contacts and opportunities there, which I am now using to Umbrella’s advantage. However, they will only help me in opening one or another important door, but beyond that, football or any other contacts will not help you in any way. If you don’t know your business thoroughly and don’t have a good track record, then you have no chance of succeeding in Germany.

How did you get into transport, specifically bus transport?

The funny thing is that I played my very last pro game with Bohemka against Jablonec during the winter tournament 2003/04 and in that game I blew out my knee again on the artificial turf so that it was de facto the end for me. Since it was confirmed that I couldn’t continue playing professional football for health reasons, I had to look for another form of employment and livelihood. I probably wouldn’t have made a living as a former driver, I didn’t finish college so I could teach, I didn’t want to work in football in any capacity, so I bought a limo and started offering personal transportation for companies as a personal driver. I had plenty of the aforementioned contacts, could speak two world languages, offered a superior car, added superior service and attitude, all for a reasonable and fair fee. I worked hard every day, and then it was like firing a rocket, because within three years I was running a company that was delivering over eight thousand jobs a month for huge multinationals. Limousines were gradually joined by buses, and in 2008 we started providing bus services internationally.

Is it possible to be sporty in business? In German and Czech business?

Of course, albeit in a completely different environment and from a different point of view. In Germany, I dare say that a sporting approach is literally welcome and the business environment there is very similar to sport. In the Czech Republic, the situation has also changed considerably over the last ten years, and once it is even more eradicated that this or that ‘referee’ is favouring someone and ‘cutting’ another, we will be able to talk about much more pleasant things next time than just problematic public transport contracts.

Where in Germany does your company operate in public transport and in what volume? Is it anywhere comparable to Jablonec?
We operate in classic urban transport on a long-term contract in Hamburg, Germany’s second largest city. We are also providing urban transport in Karlsruhe and are currently awaiting the results of tenders in two northern German cities. The performance and financial volume is only for the public transport work in Hamburg at roughly double the amount of the Jablonec public transport contract. We also provide replacement bus services throughout northern Germany and, of course, our main business is providing domestic and international routes for FlixBus. In total, we covered 30 million kilometres in 2019 without a couple of kilometres, which is the equivalent of circling the globe twice around the equator every day, and the entire Umbrella Mobility Group exceeded CZK 1.3 billion in turnover.

Autor: Jan Sedlák

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