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Norwegian experiences with tendered buss services

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  • Bekken, Jon-Terje
  • Longva, Frode
  • Fearnley, Nils
  • Osland, Oddgeir

Abstract

Competitive tendering of local public transport services has been allowed in Norway since 1994. By 2005, 28 percent of all route production in Norway was procured on the basis of tendered contracts, covering around 40 percent of all passengers. The majority of the tendered contracts were gross cost contracts, whereas historically, most Norwegian contracts have been net cost contracts. This article analyses the effect of competitive tendering on operating cost and subsidies paid. It is found that competitive tendering reduces costs by 10 percent and that most of the cost reduction has been used to reduce subsidies for public transport by local authorities. The effects of competitive tendering in Norway are smaller compared to other countries. This can be attributed to the fact that the industry had improved efficiency over a long period before competitive tendering was introduced.

Suggested Citation

  • Bekken, Jon-Terje & Longva, Frode & Fearnley, Nils & Osland, Oddgeir, 2006. "Norwegian experiences with tendered buss services," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 33, pages 29-40.
    • Handle: RePEc:sot:journl:y:2006:i:33:p:29-40
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    File URL: http://hdl.handle.net/10077/5920
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    References listed on IDEAS

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    1. Hensher, David A. & Houghton, Erne, 2004. "Performance-based quality contracts for the bus sector: delivering social and commercial value for money," Transportation Research Part B: Methodological, Elsevier, vol. 38(2), pages 123-146, February.
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    Cited by:

    1. Wegelin, Philipp, 2018. "Is the mere threat enough? An empirical analysis about competitive tendering as a threat and cost efficiency in public bus transportation," Research in Transportation Economics, Elsevier, vol. 69(C), pages 245-253.
    2. Cinzia Daraio & Marco Diana & Flavia Di Costa & Claudio Leporelli & Giorgio Matteucci & Alberto Nastasi, 2014. "Efficiency and effectiveness in the urban public transport sector: a critical review with directions for future research," DIAG Technical Reports 2014-14, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    3. Filippini, M. & Koller, M. & Masiero, G., 2015. "Competitive tendering versus performance-based negotiation in Swiss public transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 82(C), pages 158-168.
    4. Aarhaug, Jørgen & Fearnley, Nils & Gregersen, Fredrik A. & Norseng, Robert Bjørnøy, 2018. "20 years of competitive tendering in the Norwegian bus industry – An analysis of bidders and winning bids," Research in Transportation Economics, Elsevier, vol. 69(C), pages 97-105.
    5. John Stanley, 2011. "Public Transport Liberalization: Achievements and Future Directions," Chapters, in: Matthias Finger & Rolf W. Künneke (ed.), International Handbook of Network Industries, chapter 16, Edward Elgar Publishing.
    6. Mathisen, Terje Andreas, 2016. "Competitive tendering and cross-shareholding in public passenger transport," Transport Policy, Elsevier, vol. 48(C), pages 45-48.
    7. Odeck, James, 2008. "The effect of mergers on efficiency and productivity of public transport services," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(4), pages 696-708, May.
    8. Hirschhorn, Fabio & van de Velde, Didier & Veeneman, Wijnand & ten Heuvelhof, Ernst, 2020. "The governance of attractive public transport: Informal institutions, institutional entrepreneurs, and problem-solving know-how in Oslo and Amsterdam," Research in Transportation Economics, Elsevier, vol. 83(C).
    9. Longva, Frode & Osland, Oddgeir, 2010. "Regulating the regulator: The impact of professional procuring bodies on local public transport policy and its effectiveness," Research in Transportation Economics, Elsevier, vol. 29(1), pages 118-123.

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