1
SUMMARY
Syndicat mixte des transports urbains
du grand Nouméa (SMTU)
2018 - 2023
Reviewed by the Territorial Audit Office, 21st of November 2024
2
Warning
This summary is intended to facilitate the reading and use of the full report from the territorial
audit office. Only the full report engages the territorial audit office.
The answers, if expressed, of the administrations, organizations and local bodies concerned
are included after the full report.
3
TABLE OF CONTENTS
1
A SINGLE TRANSPORT AUTHORITY FOR THE GREATER NOUMEA
............
4
2
A STRATEGIC FRAMEWORK TO BE REDEFINED AND COMPETENCES TO
BE CLARIFIED
................................................................................................................
4
3
A
COMPLEX
CONTRACTUAL
FRAMEWORK
AND
CONTRACTUAL
STIPULATIONS THAT HAVE NOT ALL BEEN IMPLEMENTED
........................
5
4
A
NUMBER
OF
WEAKNESSES
REVEALED
IN
BUDGETARY
AND
ACCOUNTING MANAGEMENT
..................................................................................
6
5
EVEN BEFORE THE CRISIS LINKED TO EVENTS SINCE MAY 2024, A VERY
COMPROMISED FINANCIAL AND CASH POSITION
...........................................
7
6
A NETWORK SEVERELY AFFECTED BY THE SERIOUS PUBLIC ORDER
DISTURBANCES SINCE MAY 2024
.............................................................................
8
4
Until now, the Greater Noumea Joint Urban Transport Authority (SMTU) had never been
audited by the Territorial Audit Office of New Caledonia. It recently faced a legal challenge,
when two of its members lodged an appeal with the Nouméa administrative court against the
decision approving its initial budget for the 2022 financial year. Although the case is now
closed, it nevertheless reveals the financial tensions that the SMTU has been experiencing
for several years.
The Territorial Audit Office therefore decided to audit the SMTU in order to suggest ways of
improving its financial situation and to examine the quality of public transportation. In terms
of regularity, it examined the operation of the public-private partnership's governance and the
reliability of its accounts, and in terms of performance, its financial situation and the methods
used to operate the public transport service.
1
A SINGLE TRANSPORT AUTHORITY FOR THE GREATER
NOUMEA
Created on the 1
st
of September 2010, the Greater Noumea Urban Transport Joint Authority
(SMTU) has as its members local authorities: the South province and the municipalities of
Noumea, Dumbéa, Mont-Dore and Païta. According to its statutes, its purpose is to organize,
manage and operate regular public transport services by road, rail and sea and secondary
school transport within the territory of the aforementioned municipalities. With an operating
budget of 5.5 billion CFP in 2023, it has around twenty employees.
The SMTU was set up in application of the urban transport plan drawn up for the Nouméa
conurbation in 2010, with the aim of establishing a single transport organising authority for
the greater Nouméa area. Previously, two networks, one set up by the municipality of Nouméa
for urban routes, the other by the Southern Province for suburban routes, each with its own
fare system, coexisted in the conurbation. These two networks were brought together under
the SMTU, with the Tanéo network coming into being at the end of 2019.
2
A
STRATEGIC
FRAMEWORK
TO
BE
REDEFINED
AND
COMPETENCES TO BE CLARIFIED
The creation of the SMTU was intended to respond to the growing challenge of transport in the
Nouméa conurbation. Nouméa has become a multi-polar area, with strong demographic
growth in the cities on its outskirts.
The challenges of mobility had to be considered within a strategic framework that would enable
the development of urban transport and encourage modal shift. However, this framework is
currently lacking, as the review of the Greater Nouméa urban transport plan carried out
between 2017 and 2020 has not been completed, despite an expenditure of 23 million CFP.
The Territorial Audit Office invites the SMTU to propose the development of a new plan for the
conurbation, considering all mobility issues.
5
The legal framework within which the SMTU operates suffers from a degree of confusion.
Under the provisions of the Organic Law of 19
th
of March 1999 on New Caledonia,
responsibility for transport lies primarily with New Caledonia, but the latter does not participate
in the governance of the syndicate. On the other hand, the participation of the Southern
Province in the governance of the syndicate, in the absence of any delegation of powers by
New Caledonia, is legally fragile.
The
SMTU’s statutes
, which have been revised several times, set out precisely how its
governance is to be exercised. However, some provisions of the statutes have not been
implemented. The Territorial Audit Office also noted several contradictions between the
provisions of the articles of the statutes and those of the committee's rules of procedure.
However, the conditions under which governance operates are generally satisfactory, despite
some anomalies concerning the procedures for appointing bureau members and delegating
powers and signatures.
The administrative organization is understaffed in relation to its budget and the tasks assigned
to it. The SMTU has recently made the observation, shared by the Territorial Audit Office, that
it needs to structure and strengthen its organization more effectively.
3
A
COMPLEX
CONTRACTUAL
FRAMEWORK
AND
STIPULATIONS THAT HAVE NOT ALL BEEN IMPLEMENTED
The most significant action taken by the SMTU since its establishment has been the creation
of a dedicated public transport line, known as the Néobus, linking the towns of Noumea and
Dumbéa. This has made it possible to offer users a higher quality of service and a better
guarantee of regularity. However, the further roll-out of the exclusive right-of-way public
transport network to the commune of Le Mont-Dore did not take place due to budgetary
constraints.
The SMTU has also introduced a modern ticketing system in the form of a card that acts as an
electronic purse, the ‘Tanéo pass’. The network has a wide range of fares, with special fares
for young people, senior citizens and people with disabilities. Fares have not changed between
2019 and 2024. However, users make a significant contribution to financing the service, since
commercial revenue covers almost 40 % of operating costs.
The service is operated under a public service delegation contract, which has the unusual
feature of being split into two lots, each assigned to a different delegate. The latter are the
former operators of the transport networks set up by the city of Nouméa and the Southern
Province, which, despite the unification of the network under the name ‘Tanéo’, perpetuates a
form of fragmentation. This division into two lots, justified by questionable arguments during
the preparatory phase of the public service delegation, makes it more difficult for the SMTU to
exercise its prerogatives as delegating authority.
The Territorial Audit Office notes that the stipulations of the public service delegation contracts
are not rigorously applied. The example of the quality monitoring system illustrates this
particularly well. Although very comprehensive in theory, this system is only very partially
implemented, partly due to the failure of the public-private partnership itself. For example, the
bonus-malus clause linked to service quality has remained unimplemented since the start of
the contracts. The same is true of the incentive clause linked to ridership.
6
These clauses were intended to ensure that even a modest proportion of the remuneration
would be linked to performance, thereby tempering the essentially flat-rate nature of the
remuneration of the delegates, which is contrary to the principle of a public service delegation,
which must retain an element of risk based on operation.
Until the events that occurred on 13 May 2024, ridership on the transport network, although
lower than initially forecast, was clearly increasing, demonstrating that the public transport
service offered by the public-private partnership was meeting a real need among the
population.
Graph 1 Global ridership on the Taneo transport network
Source: territorial audit office / SMTU
The SMTU had also begun a review of the size of the network with a view to renewing the
public service delegation contracts, but this had not yet been completed.
4
A NUMBER OF WEAKNESSES REVEALED IN BUDGETARY AND
ACCOUNTING MANAGEMENT
The
SMTU’s
budgetary and accounting management suffers from a number of weaknesses.
Budgetary and accounting procedures are not formalized and are insufficiently mastered. This
is illustrated by a number of observations: ignorance of the balanced budget rule that applies
to industrial and commercial public services, inadequate management of program
authorizations, management of provisions based on budget availability rather than the risks,
and a lack of rigor in the management of year-end operations.
There are serious shortcomings in the way assets are accounted for: fixed assets do not reflect
the reality of the assets that should be included and, conversely, include assets that do not
belong to the SMTU; almost all assets are classified as assets under construction - even
8 877 369
7 752 268
8 631 261
8 704 066
10 083 365
11 795 993
6 000 000
7 000 000
8 000 000
9 000 000
10 000 000
11 000 000
12 000 000
13 000 000
2018
2019
2020
2021
2022
2023
7
though most of the assets have been commissioned or do not belong to the SMTU. This calls
into question the true and fair view of the accounts presented. The shortfall in depreciation is
a significant issue, both in terms of the failure to build up resources to renew the SMTU's fixed
assets and in terms of assessing the fairness of the budget.
Aware of this situation, the SMTU recently initiated a process aimed at making its assets more
reliable and carrying out the necessary depreciation. The Territorial Audit Office stresses the
need to complete this process.
In spite of the extensive nature of the budget reports, the quality of the financial information
can still be improved. The SMTU must also ensure that it is accessible to the public.
The SMTU has set up a revenue office to collect commercial revenue from the Tanéo network.
This is linked to the role of the public service delegates, who collect part of the revenue directly
from users. In addition to the complexities inherent in its operation, this system, with its high
financial stakes, had significant weaknesses.
5
EVEN BEFORE THE CRISIS LINKED TO EVENTS SINCE MAY
2024, A VERY COMPROMISED FINANCIAL AND CASH POSITION
An analysis of the budgetary and financial accounts, including the 2023 financial year for which
the accounts were approved at the end of June 2024, shows that the
SMTU’
s financial situation
was worrying even before the crisis of May 2024.
Firstly, this state of affairs is the result of insufficient revenue, which did not reach the forecasts
that had been used to design the segregated-lane public transport project. The shortfall in
revenue stems firstly from an overestimate of commercial revenue, both in terms of volume
and with regard to the fares applied, which have not changed despite the assumptions made.
Another explanation for the lack of revenue is the participation of the SMTU's members, due
to a distribution key with imprecise contours until 2023, leading to stable and insufficient
contributions despite the increase anticipated in the dimensioning studies.
Secondly, the SMTU's expenses, consisting mainly of the remuneration of the public service
delegates (recorded under ‘external services’), have been determined on a flat
-rate basis, as
the contractual clauses introducing a performance-based remuneration component have not
been applied to date. This calls into question the classification of the contracts as public service
delegations, which implies a risk linked to the operation, and constitutes a handicap for the
SMTU, which has to bear significant expenses without having any leeway to restrict them, with
the exception of occasional negotiations with the delegates. Staff costs, on the other hand,
included in ‘other costs’, represent only a small proportion of expenditure and have been kept
under control.
8
Graph 2 Typology of operating expenses
Source: territorial audit office / SMTU
The SMTU is heavily indebted, with outstanding debt reaching 16.6 billion CFP at the end of
2023. Financial charges, another significant item of expenditure, also represent a difficulty for
the SMTU's cash flow, firstly because of the upward trend in the interest rate applied by one
of the lenders. In addition, the SMTU has to bear the financial charges and capital repayments
relating to a large debt that does not concern it in its entirety. The loans taken out financed
both assets belonging to the SMTU and assets allocated
in fine
to its members.
Although the SMTU had restructured its debt in order to improve its cash position, even before
the crisis caused by the events of May 2024, its budget and cash position were very
compromised.
6
A NETWORK SEVERELY AFFECTED BY THE SERIOUS PUBLIC
ORDER DISTURBANCES SINCE MAY 2024
The audit of the territorial office was largely carried out before the serious public order
disturbances that occurred in the Noumea urban area from 13 May 2024 onwards.
Roads were the target of major damage, and network furniture and equipment were
vandalized, preventing the resumption of operations. The SMTU has indicated that an
inventory will be undertaken, in conjunction with the public service delegates, to assess the
damage and schedule repairs. An initial, provisional estimate of one billion francs worth of
damage was announced on 5 June 2024. The SMTU's premises were also set on fire on the
8
th
of July 2024.
The above events are likely to have a profound and lasting effect on the financial situation of
the SMTU and the operating conditions of its urban transport network. The Territorial audit
office was unable to assess these effects. Nevertheless, in formulating its observations, it has
considered, as far as possible, the new situation created by these events.
2018
2019
2020
2021
2022
2023
External services
1 873,0
4 549,5
4 525,5
3 488,6
4 919,2
4 369,4
Financial expenses
236,4
289,0
142,8
470,9
90,0
246,3
Other expenses
1 156,5
392,1
345,1
367,6
589,4
424,0
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
MF CFP
9
These events initially led the SMTU to suspend performance of the public service delegation
contract for an estimated period of four months, i.e. until September 2024. At its meeting on
30 July 2024, it finally decided to terminate the public service delegation contract for reasons
of general interest, with effect from the 7
th
of
February 2025, on the grounds that ‘
the financial
conditions for the performance of the public service delegation contract are no longer met’
in
view of the situation created by the ‘
serious disturbances underway since 13 May 2024’
. The
school transport contract was also terminated with effect from the 13
rd
of May 2024.
On the 25
th
of September 2024, the SMTU approved amendments to the public service
delegation contract aimed at reducing the commercial offer from the 14
th
of September 2024
to the 7
th
of February 2025. At the same time, it approved a new range of fares, consisting of
a single fare that represents a significant increase on the previous range of fares. Operation
of the Tanéo network resumed on the1
st
of October 2024 under these new conditions.
The particularly difficult situation currently facing the SMTU makes it all the more essential,
according to the Territorial Audit Office, to define a new strategic framework and to draw up a
multi-year investment program backed by a realistic financing plan. This calls for a review, to
be carried out in consultation with all the local authorities responsible for mobility, of the size
and operating methods of the public transport network, at a time when the problem of travel
within the Greater Nouméa conurbation is still a major one. The new size of the network will
have to be adapted to the public authorities' ability to contribute, while considering the needs
of users in Greater Nouméa.
In order to improve the syndicate's management and remedy the shortcomings observed, the
Territorial Audit Office has formulated eight performance recommendations and nine legal
reminders.
10
PRESS RELEASE
The syndicat mixte des transports urbains du grand Nouméa (SMTU)
was in a very compromised financial situation, even before the crisis
of May 2024, calling for a review of the financing and operating mode
of the Taneo network as part of an updated mobility strategy for the
greater Noumea area.
A very compromised financial and cash position, even before the crisis caused by the
events since May 2024
The Syndicat Mixte des Transports Urbains du Grand Nouméa (SMTU) was created in
2010 as the sole transport organizing authority for the conurbation. Under the name Tanéo, a
unified and modernized public transport network has been set up, with an innovative ticketing
system and a segregated-lane public transport line. Although lower than initially forecast,
ridership on the network had grown significantly up to May 2024. However, despite a
significant contribution from users covering 40 % of operating costs, which mainly consisted
of the remuneration of the operators, operating revenue did not reach the level hoped for.
The investments linked to this operation have nevertheless led to a sharp increase in the
SMTU’s
debt, which reached 16.6 billion CFP at the end of 2023.
The SMTU's cash position is
deteriorating and can only be resolved by a new agreement between the member local
authorities on their contributions and a renewed contractual operating framework, as the
syndicate is committed by the loans it has taken out.
Clauses from the public service delegation contracts haven’t been applied
The contractual framework for the operation of the Tanéo network is marked by a
certain complexity, given the decision to split the public service delegation into two lots and
the method of calculation, which was poorly defined when the contracts were signed and has
never been updated since, of the clauses for monitoring the performance of the delegates.
These clauses were not implemented, calling into question the legal basis of the contracts. In
fact, a public service delegation contract must include an element of risk based on operations,
which was not the case in this instance, as the remuneration was a lump sum.
The strategic framework for mobility in the greater Noumea area must be redefined
The challenges of mobility in Greater Nouméa area remain significant. They need to be
considered within a strategic framework that defines the outlook for the development of
urban transport and measures to encourage modal shift. However, this framework is currently
lacking, as the Greater Noumea urban transport plan review, which was carried out between
2017 and 2020, has not been completed, despite an expenditure of 23 million CFP. A review
of the size and operating methods of the public transport network, to be carried out with all
the local authorities responsible for mobility, is all the more necessary as the serious public
order disturbances that have occurred since May 2024 have had a major impact on the
network, leading in particular to a significant increase in fares to be paid by users and a
significant reduction in the service on offer.
Read our full report