Targeted Competitive Tendering of Passenger Transport

This report provides international experiences of the effects of different forms of competitive tendering in three subareas of transport policy: Local public transport, rail and domestic aviation. A general conclusion is that competitive tendering is associated with increased cost efficiency. The effects on market efficiency varies, depending on whether public authorities use the gains of reduced costs to improve the level of services in public transport, as well as on how the "surplus" is used, e.g. whether incentives for improved market efficiency are imposed on operators. When it comes to general economic efficiency, there is a lack of systematic research and documentation. In general, no form of competitive tendering is superior to another in all cases or in relation to all types of effects. Moreover, sector and country specific characteristics of the environment creates challenges when it comes to the application of experiences in a Norwegian context. Despite these challenges, the report concludes with "rules of thumb" for the use of competitive tendering i local public transport.