Public–private partnerships: a review of economic considerations with particular reference to transportation projects

The paper sets in context some of the more recent work that has been conducted on public–private partnerships (PPPs) in the provision and operation of infrastructure. PPPs essentially involve a government or its agent signing an agreement with a private company or consortium to supply it with services with the private sector actor involved in major elements of designing, building, temporarily ‘owning’, and running the physical assets; basically they are long-term development and service contracts between government and a private partner. The paper outlines the development of economic thinking regarding the rationale behind PPPs, the extent to which unbundling is optimal and the forms that it may take, the nature of the contracts that are enacted and their renegotiation, the awarding of contracts, and matters of possible corruption. By way of focus, it also provides some indication of what empirical studies in the transportation have thrown up regarding the outcomes of PPPs.     

Regulation,trust and contractual incentives around transport contracts – Is there anything bus operators can learn from public air service contracts?

This paper compares recent experiences in contract negotiation and subsequent commitment in public air services with the bus industry. The heart of the paper is a survey of European and Australian regional airlines, which we mirror with revealed experiences of bus operators. We aim to identify a number of elements in the contracting regimes that have exposed ambiguity and significant gaps in what the principal (e.g., transport department) expected, and what the agent (airline or bus operator) believed they were obliged to deliver. Ultimately airline and bus services are similar in that public authorities procure transport services that are desirable for the society but would be unprofitable without government involvement. In both sectors (theoretically fairly similar) public transport contracts are used, and those usually include obligations and performance measurements. In terms of similarities, one of the surveyed contract details that had a perceived high clarity in both industries was “payment procedures” and amongst those with rather poor clarity was also in both industries “incentives to improve performance and grow patronage”. We also show differences between regional air services and bus operations with regard to performance measurement and pre-specified obligations. Because of the strong safety culture around air services we find that regulation and trusting partnerships are even more important to aviation than to the bus sector. Because of the high level of trust but also because of simpler and more complete contracts in aviation, there is much less (re-)negotiation going on compared to the bus operations.     

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.     

Incentives in Bus Concession Contracts: A Review of Several Experiences in Latin America

Abstract

This paper reviews the incentive structure of concession contracts in several Latin American transit reforms. It also presents a conceptual analysis of the optimal design of concession contracts. The conceptual discussion and case studies reviewed indicate that payment to operators should be linked to operational variables and that some demand risk should optimally be transferred to operators. Performance standards linked to fines and penalties are not sufficient to guarantee good quality of service, particularly in citywide reforms and where institutional capacity ― in terms of size, experience and expertise of staff ― is lacking and regulatory processes are slow, bureaucratic and cumbersome. This review may be useful for policy-makers designing transit reforms in other countries. The policy lessons of the paper are particularly relevant to cities in the developing world but they are also important for reforms in other countries.     

Airport–Airline interaction: some food for thought

Abstract

We provide an interpretive analysis of vertical relations between airports and carriers, while assessing the way in which deregulation of the airline market and the privatization of airports have created incentives for airport–airline interaction. In particular, if the vertical structure approach has become the standard approach in air transport research, we add to the literature by discussing three issues that we believe need further understanding. The three issues that we think should be the focus of future research on airport–airline interaction are (i) incomplete contracts and asymmetric information structure; (ii) upstream horizontal complementarities; and (iii) airports as two-sided platforms.     

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.     

Overview of public transport policy developments in South Africa

In South Africa, a restructuring of the public transport system is currently under way. In the bus industry the tender for contract system is being implemented, the commuter rail sector is being recapitalised and the minibus taxi industry recapitalization programme is in its early stages. Progress with policy implementation across the modes of transport, modal split trends and issues that hamper the full development of the public transport industry are discussed in this paper. Medium to long term policy and strategy initiatives that will further inform the development of the industry are also highlighted in this chapter.     

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.     

海峡两岸海上货物运输合同立法之比较——兼论《中华人民共和国海商法》第4章的修改

通过比较海峡两岸海上货物运输合同立法,对两岸立法的异同加以分析,提出我国在修改《中华人民共和国海商法》第4章的过程中,可在租船合同、运费等方面借鉴台湾地区的相关立法,以期完善我国《海商法》,促进两岸经贸往来。     

E-Supply Chain Incentive and Coordination Based on Revenue Sharing Contract

This paper took the buyer-biased electronic market as an example, where multiple suppliers selling short-life-cycle products are bidding for an order from a powerful buyer with stochastic customer demand. It used a single period newsvendor model to analyze the decision of supplied and buyers to do or not do business online.The results suggest that lack of Incentive is the key factor of B2B electronic markets failure. At the same time, it designed a revenue sharing contract to coordinate the E-supply chain in order to nrevent failuro cf E-rnarket.