Private sector involvement in urban rail: Experience and lessons from South East Asia

Various models for competition and ownership of urban rail systems have been used in South East Asia cities since the early 1990s. The paper reviews and classifies the approaches used in Bangkok, Kuala Lumpur, Manila and Singapore. The planning, financing, procurement, implementation and operation of these systems, and the institutional context for them, are examined. All of the systems that have used private sector finance for the development of the initial systems have faced financial problems. Optimism bias in demand forecasts and unrealistic expectations for cost recovery of capital intensive systems have been contributing factors. Lessons to be learned include the importance of clear government leadership and sound institutional arrangements, and the need for improved understanding of the best manner in which the private sector can be used to achieve efficient and effective rail projects.     

Adelaide bus service reform: Impacts, achievements and lessons

Adelaide's bus system has been transformed from a government monopoly operation to a competitively tendered system with services provided by private operators under contract. The ‘Adelaide model’ has unique features, and has been considered in several international reviews of urban bus service procurement. The paper reviews the experience in Adelaide up to 2006/07. It updates previous evidence that focused on technical efficiency impacts. It particularly examines the development of the system to address allocative efficiency, in terms of the quantity, quality and market orientation of the services provided, and the consequent effects on patronage.     

Workshop 4: Designing contracts/concessions: What has worked and what has not and why?: 12th International Conference Series on Competition and Ownership in Land Passenger Transport

A contract establishes a mutual relationship between an authority and an operator. From the point of view of the authority, it is a tactical level mechanism to achieve the strategic objectives of government. Management of contractors translate the requirements of contracts into operational practices to guide the day-to-day work of staff for the delivery of services. Much can go wrong with contracts for the provision of public transport services. Workshop participants identified and ranked 25 potential risk factors. The five most important factors, which relate to objectives, tender assessment, allocation of risks, financial viability and dispute management, were examined drawing on the 11 papers presented to the workshop. Matters that work, that do not and would make the most difference to the success of contracts were identified.     

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.