Webinar: Cost Efficiency under Negotiated Performance-Based Contracts and Benchmarking – Are there gains through Competitive Tendering in the absence of an Incumbent Public Monopolist? 24.05.2013

The Across Latitudes and Cultures BRT Centre of Excellence is pleased to announce a monthly webinar series to share timely public transit research and encourage ongoing collaboration. The series is open to anyone and will address issues relevant to researchers and practitioners. Please share this announcement with your extended network.

The last webinar was:

Cost Efficiency under Negotiated Performance-Based Contracts and Benchmarking – Are there gains through Competitive Tendering in the absence of an Incumbent Public Monopolist?
Friday, May 24th at 4pm Sydney, Australia time (UTC+10)
Check www.timeanddate.com to figure out what time this is for you.
Presented by David Hensher, professor of the Institute of Transport and Logistics Studies, The University of Sydney.
Register here.
See summary and presentation below.

Please email Laurel at lpaget@uc.cl with any questions or future topic suggestions.

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Cost Efficiency under Negotiated Performance-Based Contracts and Benchmarking – Are there gains through Competitive Tendering in the absence of an Incumbent Public Monopolist?

A lot is happening in bus contracting in Australia. Metropolitan Sydney has moved, unexpectedly, in late 2012 from negotiated performance based contracts (NPBCs) with some exceptions, to competitive tendering (CT); tendered contracts in Adelaide are showing serious signs of patronage decline and media criticism, and bus services in the central areas of Melbourne are going through a consolidation of contracts into one competitively tendered contract and away from the current NPBC. Perth remains committed to CT whilst Brisbane is staying at present with NPBCs. This paper uses data obtained from numerous official and unofficial sources to assess the extent to which a NPBC with actionable benchmarking can achieve as good as, or better, improvement in cost efficiency (without the potential risk of service loss attributable to repeated rounds of CT) when incumbents are not public operators. Using data that enables us to link CT bid prices of successful bids to NPBC outcomes if benchmarking is actioned, and normalising the data to enable meaningful comparisons, the evidence suggests that financial gains from CT (unless an incumbent public operator is present) are either negligible or absent; indeed the effect of such a procurement model is tending towards a neutral financial outcome. Stakeholders who promote the position that Government should choose to test the market for value for money through CT, especially where incumbent operators demonstrate benchmarked cost efficiency, given the primary responsibility to the taxpayer, appear to be inappropriately claiming noticeable benefits to society.

Photo: article.wn.com

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