Alternative Tendering Systems and Deregulation in Britain

Peter R. White · Stephen Tough

36 citations0/0 files storedJournal of Transport Economics and Policy

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Transport and Economic Policies Public Procurement and Policy Public-Private Partnership Projects

Abstract

When UK bus services were deregulated in 1985 a system of competitive tendering was introduced for the provision of socially necessary services. Payment to the operator can be either the net difference between cost and revenue or the gross (total) cost of the service. While the former is attractive, a comparison of both methods indicates the overall cost to the contracting authority is generally lower under the gross cost method, due to the reduced risk perceived by the operator.

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