Tendering and governance in the Norwegian bus industry

The post-pandemic period has posed challenges for the bus industry. This report examines issues related to 1) capital costs and interest rates, 2) the number of operators in the market, and 3) governance structures. The conclusions are that 1) bus operators face interest rates depending on their economic history and ownership structure. Across the board interest rates have increased, as has the proportion of total costs attributable to capital expenses - more money is needed and the price of money has increased. 2) the number of market actors remains stable. However, the number of bids submitted has declined. Bus companies attribute this to factors including low profitability, lack of financing, and increased risk. 3) The relationship between organisational form and governance is complex. There is no Norwegian example of a transition from tender-based operations to public provision. However, experiences from Örebro suggest that this may be a viable alternative if tenders fail to deliver desired quality.