Are we doing it wrong or do we expect too much? Forces that push authorities to become public transport designers

This paper presents a number of reasons that are responsible for the disappointment of authorities in their operators’ efforts to develop public transport (PT) to the advantage of their travellers. The lessons drawn in this paper are based upon the competitive tendering experience of the authors and upon the results of meetings organised with parties involved in competitive tendering and aimed at exchanging lessons. There appears to be three main causes: (1) there is freedom for the operator, but the contract is bad; (2) there is freedom for the operator, there is a good contract, but there is no market; and (3) there is freedom for the operator, but the operator is not able to use it. The paper concludes with a few perspectives for improvement.     

To competitively tender or to negotiate - Weighing up the choices in a mature market

A key attribute of competitive tendering for the periodic selection of operators of subsidised public transport services is to secure the provision of specified services at efficient cost levels. This has proved particularly effective where services were previously provided by an inefficient monopoly operator. The arguments for the adoption of competitive tendering in preference to negotiation with the incumbent operator may be less clear-cut in other cases.Consideration is given to both theoretical and practical insights into the relative merits of competitive tendering and negotiation approaches in such situations. The limited literature on the topic is reviewed and insights and lessons identified. Influencing issues include prior conditions, the nature of the supplier market, features of contracts, negotiating and competitive tendering strategies and practice, accountability and transparency, and long-term market implications. The evidence suggests that ‘one size does not fit all’, and the choice will depend on specific circumstances.The relative merits of the two approaches for renewal of bus contracts are considered with regard to Adelaide, for contracts which have previously been awarded through competitive tendering. The paper draws out the main factors that could influence the authority’s choice between the options, and discusses the relevance of the findings to other situations.     

Workshop report - Beyond competitive tendering

Most countries contemplating the introduction of competition-based organizational forms did not perceive the British deregulated bus regime to be the way forward. A deeper analysis of facts and an international coverage of the local successes of that regime remained marginal and, as a result, the reputation of deregulated regimes remained bad or - at best - a contentious issue. The rush for competitive tendering was further stimulated by the European Commission’s endeavour to enact a Regulation that put forward competitive tendering of exclusive contracts as the preferred way to organise local public transport markets. Yet, as discussed in this workshop, deregulation in various guises may well play a growing role in local and regional transport. This is already visible in long-distance coach transport and in (international) European railway markets as from 2010. The workshop paper discusses whether such competition-based institutional alternatives to competitive tendering can provide efficiency and service improvements, how such competition-based alternatives should be ‘regulated’ and, alternatively, how a non-competitive direct award could perhaps still guarantee good performance.     

Results so far and prospects of Kazakhstan passenger rail franchising

From 1991 till 2004 passenger rail transportation in Kazakhstan was organized by a public company without financial contribution from the state budget. As in any post-Soviet country losses from passenger sector in the integrated rail company were covered at the expense of the freight transportations. From 2005 the Government is trying to introduce competition in passenger rail industry by competitive tendering rights to operate on particular route and providing subsidies.This paper reviews the Kazakhstan passenger rail franchising policy from statement and implementation with analysis of results so far. To get sense about the current policy’s perception survey among managers of the government bodies and railway companies had been performed. It indicates respondents’ opinion about main concerns and suggestions for improvement in passenger rail industry. According to provided analysis there are opportunities for improvements in operation of public and private companies as well as in the Government policy.     

Changing public transport governance in Dutch metropoles: To tender or not to tender

With winds of change from the European Commission reaching the Netherlands, the national government altered the Law on Passenger Transport in 2000 to best reflect European demands. This new law meant competitive tendering became obligatory. At first, the metropolitan transport authorities in the three largest cities (Amsterdam, The Hague, and Rotterdam) were granted an extended deadline for tendering. However, due to shifting winds from Brussels, in 2007 the Dutch national government dropped the obligation to tender for the three cities. Suddenly the authorities had to decide for themselves whether or not to tender. This article describes the different routes and outcomes of the three metropolitan authorities. Where the metropolitan authority in Rotterdam aimed at conservation of their existing model, the authorities of Amsterdam and The Hague embraced change. In The Hague conformation to the letter of the law seemed an important driver, whereas confrontation between different interests in the region was the starting point for change in Amsterdam.     

Commercial public bus transport services in Germany: How a market in motion struggles with its regulatory framework

After decades of stagnation, the competitive market for commercial public bus transport services in Germany is beginning to move. Nevertheless, compared to the total market volume, the number of cases where competition is observable remains small. An empirical analysis of competition in the commercial services market as compared to competition in the non-commercial services market confirms that entry barriers do exist. These barriers clearly impede competitive developments in this embryonic market, which relies on the market initiatives of operators to develop. The paper identifies a key entry barrier in the institutional framework: for potential market entrants, the overall uncertainty regarding competitive procedures for commercial services is significantly higher than usual in tendering procedures. This high uncertainty poses the main disadvantage for newcomers as compared to incumbents.     

‘Regulated deregulation’ of local bus services—An appraisal of international developments

The deregulation of the British bus sector (outside London) in 1986 was the start of a debate on the merits of ‘deregulation’ and ‘competitive tendering’. The period that followed was rich in lessons. New Zealand was at the time the only other country engaging in a reform based upon market initiative (implemented in 1991). Other countries chose for a less extreme and more consensual way to introduce competitive incentives, choosing the fundamentally different competitive tendering (CT) path. As a result, the so-called ‘Scandinavian model’ developed, based upon the London example of route tendering. Later the Netherlands adopted a network tendering approach, resembling the French practice of network tendering though with more operator freedom.     

Small ports in Northern Ireland: A method of study

This paper discusses the strategies which might be adopted by port authorities, given that modern port technologies have considerably limited the scope for competition. It therefore analyses the several forms of competition relevant to ports, any or all of which may apply in any given instance.

It describes the 'minimalist strategy, which consists of recognizing that public sector bodies have many faults, may make many mistakes and that well-intentioned attempts to rectify faults in the private sector may make matters worse. Second, it describes the ‘pragmatic’ strategy, which involves establishing committees to examine problems and to recommend actions, if they can reach a consensus. Third, it describes the ‘public sector’ strategy, which involves the port authority taking over all port functions. Finally, it describes the ‘competitive’ strategy, which involves a careful reproduction of the circumstances of competition, even though there may be room for only one efficiently-sized operator at a time. Franchising, or short-term leasing on any of a variety of competitive bases, so as to produce serial competition is described. Each of these strategies is presented as having its own advantages and disadvantages, and each may be suitable to particular circumstances.     

Contracting regimes for bus services: What have we learnt after 20 years?

This paper reviews a number of themes that have played a crucial role in the debate on alternative contracting regimes for the provision of urban bus services. We have selected four crucial issues to reflect on: (i) contractual regimes (in particular competitive tendering as compared to negotiated performance-based contracts, as means to award the rights to provide service); (ii) contract completeness (focussing on ex ante and ex post elements); (iii) building trust through partnership; and (iv) tactical or system level planning for bus services. Experience in these areas suggests that competitive tendering has frequently not lived up to expectations and that negotiation is likely in many circumstances to deliver better value for money.     

The process of capital investment at US public portst

It is virtually impossible for a US public port authority to be totally proactive in its behaviour since there are too many major factors that affect its future that cannot be controlled or even anticipated by the port staff. Conversely, it is also virtually impossible for a public port authority to be totally reactive since the time window between decision and implementation often exceeds the time window of opportunity. For a public port authority to maintain long-term viability, it must constantly review the facilities it owns, the services it offers, and the source of the revenues it generates. This on-going review should determine how well the Port is adhering to its mission and accomplishing its goals and objectives as set out in the Port's strategic plan. Today, a major management challenge for any viable Port is prioritizing goals and maintaining a policy that ensures clear focus on the highest priority goals. Determining priorities amongst capital projects should be high on the list of any public port authority. This paper provides an overview of the decision-making processes used by American public port authorities in evaluating new capital projects and, we hope, an insight into processes for determining the desirability of expanding, contracting, or terminating present facilities and services.     

Operator changes through competitive tendering: Empirical evidence from German local bus transport

In this paper, we empirically investigate operator changes and the structural conditions in competitive tendering of bus services in Germany. We show that the focus has been on regional services, which has led to a loss in market share for the incumbent DB Stadtverkehr companies and gains for private companies, whereas municipal services have rarely been tendered out. The high average number of bidders (5.1) and the high probability of an operator change (58.2%) are positively influenced by tendering in larger volumes and longer contractual lengths. Tenders in early years have been more likely subject to an operator change. By contrast, complexity drivers such as the number of lines and mixed urban and regional transports exhibit a negative influence on competition.     

Competition in Brazilian bus and coach services - The results of recent competitive tendering processes

This paper analyses the terms and the results of a sample of some recent Brazilian bidding processes for the concession of public passenger transport services: namely, urban and metropolitan bus or regional coach services. The analysis is based on selected issues relating to competitiveness and upon the legal framework that applies in this sector. It was concluded that, given the lack of bidding processes for concessions in the bus and coach sector in Brazil, the fact that some bidding processes have been carried out should be considered a sign of progress. However, these auctions have not necessarily prioritised competitiveness, since many barriers to entry into the systems were imposed by the bidding terms. Future competitive tendering processes should seek to abide by stricter principles of competitiveness, if they wish to avoid the entire effort expended on conducting such processes serving only to mask nothing more than formal obedience to the law and to discredit the bidding process in the eyes of Brazilian citizens.     

Economic policies and seaports: Strategies for port authorities

This paper discusses the strategies which might be adopted by port authorities, given that modern port technologies have considerably limited the scope for competition. It therefore analyses the several forms of competition relevant to ports, any or all of which may apply in any given instance.

It describes the 'minimalist strategy, which consists of recognizing that public sector bodies have many faults, may make many mistakes and that well-intentioned attempts to rectify faults in the private sector may make matters worse. Second, it describes the 'pragmatic' strategy, which involves establishing committees to examine problems and to recommend actions, if they can reach a consensus. Third, it describes the 'public sector' strategy, which involves the port authority taking over all port functions. Finally, it describes the 'competitive' strategy, which involves a careful reproduction of the circumstances of competition, even though there may be room for only one efficiently-sized operator at a time. Franchising, or short-term leasing on any of a variety of competitive bases, so as to produce serial competition is described. Each of these strategies is presented as having its own advantages and disadvantages, and each may be suitable to particular circumstances.     

Risk and reward in rail contracting

This workshop considered the role of risks and rewards in rail transport by considering evidence on the impacts of industry structure, franchising and infrastructure charges. A schema for the allocation of risks and rewards was developed, which indicated that strategic risks should be borne by authorities and operational risks by operators, but that tactical risks were more difficult to allocate and appropriate reward mechanisms more difficult to design. The extent to which these difficulties can be addressed by competitive tendering and alternatives such as trusting partnerships and negotiated performance based contracts was considered.     

Is the bus transport contracting system in South Africa leading to trusting relationships between contracted parties? An analysis of funding issues and the impact on relations between government and operators

The 1996 South African White Paper on National Transport policy provided the guidelines for the restructuring of the commuter bus industry. The restructuring objectives were based on improving the competitiveness of and service levels within the industry through a competitive tendering regime, the selective implementation of negotiated contracts and the general transformation of the industry to also include improved transparency in the funding arrangements between government and operators.In order to set the context of the paper, a brief overview is provided of the progress made with policy implementation and the background to funding issues that are experienced in the bus transport sector. To gauge the impact of the funding issues on the relationship between government and operators, a survey of the largest contracted operators was undertaken to determine, amongst other, how these funding issues have potentially impacted on trusting relationships between contracted parties.     

价值管理在建设工程投标中的应用

价值管理是一种以价值为导向的有组织的创造性活动,在施工投标阶段中价值管理方法全面考虑投标单位的情况,分析市场情形,在降低工程项目成本和增强项目功能方面具有显著的效果。一般总承包项目投标阶段既包括了施工图设计阶段,也包括了施工实践阶段,在这一阶段,运用价值管理手段所带来的节约潜力是巨大的。     

Towards a simplified performance-linked value for money model as a reference point for bus contract payments

The burgeoning commitment to contracting the delivery of bus services through competitive tendering or negotiated performance-based contracts has been accompanied by as many contract payments schemes as there are contracts. We are now well placed to design a simplified performance-linked payment (SPLP) model that can be used as a reference point to ensure value for money, given the accumulation of experiences throughout the world which have revealed substantive common elements in contracts. Whether the payment to the operator is framed as a payment per passenger or as a payment per service kilometre, the SPLP identifies efficient subsidy outcomes that are linked to a proxy indicator of net social benefit per dollar of subsidy. We illustrate how the SPLP model can be applied to obtain the gross (subsidy) cost per passenger (or per passenger km) from measures of gross cost efficiency and network effectiveness. This model can then be used as part of a benchmarking activity to identify reference value of money prospects in respect of passengers per $ subsidy outlay by adjusting for influences not under the control of the service provider. A single framework to identify contract payments to operators, and to assess (i.e., benchmark) operator performance on critical KPIs, is provided by internalising critical key performance indicators (KPIs) in the design of the SPLP. The proposed SPLP model is sufficiently general to be independent of the procurement method (competitive tendered or negotiated, for example) and of the treatment of revenue allocation (net or gross based contracts), with the additional advantage of being able to assess value for money for government.     

Risk and reward in public transportation contracting

The workshop discusses and documents a number of countries’ experiences regarding risk and reward in the delivery of public transport and determines the way in which competitive pressures actually work (or not) to deliver efficient and effective services. Papers are grouped into three main themes, i.e., public versus private management; negotiated versus competitively tendered contracts; and measures to improve performance. This chapter begins with a brief overview of each of the eight papers. This is followed by a section that out the discussions that emanated from the papers. Finally, the main policy and research recommendations are presented.     

Public vs private management of public utilities - The case of urban public transport in Europe

This paper analyses the determinants of the performance differential between the private and public management of urban public transport in Europe. Our analysis supports the view that private management is associated with a lower operating cost. We show, however, that the size of the costs' differential can depend on the interaction of the local authorities' capacity for expertise and the private operators' autonomy margin. In particular, we show that, in certain situations, there might be little difference in operating costs. Thus, in terms of total costs (production and transaction costs), no systematic advantages should be expected from private management.     

招投标中最低价中标法分析

如何使招投标既客观、公平、公正，最终达到有效控制工程造价、确保工程质量的目的，已经成为当前高速公路招投标工作中的一大难题。通过对辽宁省沈大高速公路改、扩建工程招投标中，采取目前国际上通用的最低标法，这一评标方法进行相关资料的分析，探讨研究最低投标价在国内建筑招投标市场上的规范运作。