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.     

‘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.     

Workshop 3B: Governance,ownership and competition issues in deregulated (free market) public transport: Lessons that can be learnt from developed and developing economies

The past emphasis in this conference series has been on the best ways to deregulate regulated public transport markets. This workshop reverses this process by examining the best ways to regulate deregulated public transport markets. A hierarchy of regulatory needs is identified and three hybrid models examined, based loosely on experience from Great Britain, New Zealand and Sweden. It is argued that deregulated public transport markets are a global phenomenon but regulatory measures should reflect local requirements. The resultant process of glocalisation might result in regulatory measures that focus on the rules of law and their enforcement in emerging public transport markets (such as urban transport in Sub Saharan Africa and for the soon to be competitive inter urban market in Germany) but that focus on guidance for network integration and incentivisation for welfare maximisation in more mature public transport markets (as in Great Britain, New Zealand and Sweden).     

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.     

A new regulation for the European public transport

Authority intervention in the public transport sector has a long history and has led to a growing corps of legal texts in European countries. These texts are often divergent, if not incompatible. This was no problem until the rather recent internationalization of the sector. With this internationalization, the European Commission decided to address this issue. This chapter describes what has led to the appearance of this new Regulation and the main steps on the 10-year long road that led to the adoption of the new Regulation. The chapter also formulates some comments on the results reached.     

Risk and reward in public transport contracting

This paper synthesizes evidence from the workshop on risk and reward in public transport contracting. It broadens the usual risk/reward framework to encompass strategic/tactical level issues, identifying high level community goals as the ultimate risk/reward pay-off. The evolution of tactical level public transport planning is reviewed, noting considerable change in functional roles between purchaser and provider in some jurisdictions. No single “best” approach is evident but an emerging interest in relational contracting founded on trust is apparent. Risk allocation between purchaser and provider is considered, a key debate concerning the extent to which providers should be exposed to revenue risk.     

Heterogeneous consumer preferences for alternative fuel cars in China

This paper models consumer preferences for alternative fuel cars and conventional, petrol fueled cars in China. It compares discrete choice model specifications where each specification reflects how consumers choose between alternative fuel cars and conventional types of cars. We find that, in China, consumers differentiate between the types of alternative fuel cars and are more likely to consider switching from petrol fuel vehicles to hybrid than to electric cars. Segmentation analysis is used to explore groups of consumers and their likelihood of adopting alternative fuel cars.