The STM builds partnerships with private entreprise to develop its commercial potential

The STM builds partnerships with private entreprise
to develop its commercial potential

Montreal, 16 September 2004 –  The Chairman of the Board of Directors, Claude Dauphin, announced today that the STM had created Transgesco, a wholly-owned subsidiary company that will enable the transit corporation to form partnerships with private entreprise to ensure the strategic development of its full commercial potential. Moreover, "these agreements must benefit transit users inasmuch as they must lead to improvements to the quality of transit services and generate revenues that will be reinvested into service improvements", indicated Mr. Dauphin.

According to studies, five areas of activity have interesting commercial potential and are worth developing, including retail outlets in the métro, transit user information, smart cards, wireless communications and marketing its expertise.

So far, Transgesco has reached two agreements with partners who will be investing between $7 and $10 million in the STM’s network to carry out their projects.

Thus, Transgesco has entered into a limited partnership with Pierre B�land, Pierre Arcand and Andr� D�carie to create Montréal Super TV, which will operate under the trademark name métrovision. On September 27, métrovision will launch a new concept for transit user information in the métro.

Transgesco has also formed another limited partnership with Gestion Beaurival, presided by Jean Rizzuto, to create métrocom, whose mandate involves the development, management and leasing of commercial space inside Montréal’s métro. "métrocom must see to the cost-effective development of these spaces by upgrading them, making them more attractive, and ensuring that they exceed the expectations of transit users", added Mr. Dauphin.

Discussions and studies are also currently underway to assess the full potential of wireless communications and smart cards, which will be introduced by transit companies in the Greater Montréal and Québec City areas in 2006.

As for marketing its expertise, the STM also plans on creating a unit dedicated to this new field so that it may offer its expert advice to consultants who require the STM’s knowledge to carry out certain contracts. "The STM has technical skills relating to métro operations that are in demand, as well as a level of expertise with urban transit planning that is increasingly sought after abroad. Putting all this expertise to good use will create new synergies and encourage more knowledge-sharing," explained Mr. Dauphin.

The STCUM became the STM in January 2002 as a result of municipal mergers. Following that change, the Québec government modified the incorporating legislation of transit companies, making it possible for them to establish subsidiaries.

"In 2003, the STM developed a business plan for 2004-2008 entitled Investing in our future, in which the STM’s intentions are clearly spelled out. The plan focuses on six goals, such as improving customer satisfaction and increasing autonomous revenue. The creation of subsidiaries provides us with tangible means to improve the quality of services, develop new markets and increase commercial revenue by 50%, which will directly benefit transit users", concluded Mr. Dauphin.

With 7300 employees and an $811.3 M budget, the STM is ranked 18th among Québec’s major corporations. Its main revenue sources are from passengers (45.8%), the City of Montréal (32.4%) and the Québec government (9.8%). Autonomous revenue (other than from fares) represents 2% or some $16 M. In 2003, the STM network provided 364.6 million trips, over 218 million of them by métro.