Chapter 31: Negotiated and Competitively Tendered Performance-Based Contracts

The ongoing institutional reform of the transport sector has led to the accumulation of a great deal of experience on the performance of ownership and competitive structures implemented across different modes. A central feature of many of the reforms has been the specification of a contract regime for both procurement and payment established under competitive regulation. The most widely used instruments for achieving this have been competitive tendering for services and competitive franchising for infrastructure and operations. Preston (see Chapter 5) provides an overview of the relevant literature and some evidence (see Preston 2001, 2003). In this chapter we focus on competitive tendering with particular reference to public transport; although the experiences have implications for the entire transport sector.