Quality Contracts - Discussion of output-based subsidy contracts

This report evaluates alternative contracts for the public transport company in Kristiansand. One of the main conclusions is a recommendation of output-based contracts with more focus on the social benefits of the subsidies transferred to the companies. The development of output-based contracts depend on a more clarified division of responsibility between the authorities and the companies, were the County take more responsibility on strategic level and the company at the planning and operational level. The analysis in this report estimates that in the long run the effect of an output-based contract will give a social benefit of approximately 30 mill NOK and 30 per cent passenger increase, but also increased subsidies for the city.