To bid or not to bid, this is the question: the Italian experience in competitive tendering for local bus services

Competitive tendering is a popular mechanism for the provision of local bus services when a major objective is subsidy savings. Despite uncertainties in the legal framework some competitive tendering was implemented in Italy since 1998. The evidence so far is that participants were limited in number, the incumbents were almost everywhere able to gain the franchise, whilst subsidy savings were in many cases negligible. If some “political” conditions favouring more effective tendering procedures are not fulfilled, other regimes should be considered in order to obtain substantial subsidy savings.

[1]  Paul Klemperer,et al.  Auctions: Theory and Practice , 2004 .

[2]  Staffan Hultén,et al.  The Effects of Competition in Swedish Local Bus Services , 1998 .

[3]  I. Segal.  Monopoly and Soft Budget Constraint , 1998 .

[4]  Carlo Cambini,et al.  Il trasporto pubblico locale in Italia. Dopo la riforma i difficili albori di un mercato , 2002 .

[5]  José A. Gómez-Ibáñez,et al.  Regulating Infrastructure: Monopoly, Contracts, and Discretion , 2003 .

[6]  Scott E. Masten,et al.  Regulation and administered contracts revisited: Lessons from transaction-cost economics for public utility regulation , 1996 .

[7]  Victor P. Goldberg.  Regulation and Administered Contracts , 1976 .

[8]  Carlo Cambini,et al.  Competitive Tendering and Optimal Size in the Regional Bus Transportation Industry: An Example from Italy , 2003 .

[9]  Carlo Cambini,et al.  Le gare per i servizi di trasporto locale in Europa e in Italia: molto rumore per nulla? , 2004 .

[10]  Anne Yvrande-Billon,et al.  The Attribution Process of Delegation Contracts in the French Urban Public Transport Sector: Why Competitive Tendering is a Myth , 2006 .

[11]  Andrei Shleifer,et al.  A Theory of Privatisation , 1996 .

[12]  C. Cambini,et al.  How to Regulate an Unprofitable Utility: A Subsidy-Cap for the Urban Transport Industry , 2004 .

[13]  D. Hensher,et al.  Competitive Tendering as a Contracting Mechanism for Subsidising Transport: The Bus Experience , 2005 .

[14]  D. Kennedy.  London bus tendering: a welfare balance , 1995 .

[15]  C. Cambini,et al.  Restructuring Public Transit Systems : Evidence on Cost Properties and Optimal Network Configuration from Medium and Large-Sized Companies , 2006 .

[16]  David A. Hensher,et al.  Performance-based quality contracts for the bus sector: delivering social and commercial value for money , 2004 .

[17]  H. Demsetz,et al.  Why Regulate Utilities , 1968 .