How Much Do We Save On Competitive Tendering? Quantitative Study of Polish Cities’ Experience

Abstract

Demonopolization of urban transport in Poland has been lasting for almost two decades, whereas 17 years have passed since first Public Transport Authorities (PTAs) were established in 1992. At the same time Polish towns have independently looked for ways of efficient public transport organisation, reaching out for many methods inspired by solutions used worldwide but at the same time taking into account domestic restrictions. It has resulted in a wide variety of experiences – starting with Elbląg, which divided and privatised the public bus operator and now all services are tendered by a PTA, and finishing with Zielona Góra, where the operator continues to function as a budget entity (a public sector entity without separate legal personality that covers its costs directly from the city budget) and manages the transport system on his own within a ‘German’ model. There are numerous other solutions in between – among others private-public companies in Tczew (with a private partner as a majority stock holder) and in Kalisz (with a public partner as a majority stock holder), competition between private and public operators in Gdynia, or separating a part of the market for free competition while preserving the dominant role of a public operator in Warsaw. The discussed cases were in detail presented in the paper at the European Transport Conference (Wolański, 2007). Such a wide variety creates possibilities of comparing efficiency of particular urban transport organisation systems implemented in similar realities, which was the subject of the author’s doctoral dissertation entitled “Economic efficiency of urban transport demonopolization in Poland”. This paper presents a part of econometric modelling results, created for the needs of that thesis with the help of Stochastic Frontier Analysis – the state-of-the-art method of efficiency measurement.