A Scheme to Improve the Effectiveness of the Bus Services in Lombardy Through Tenders

Abstract

In Lombardy public subsidies to bus companies have increased in the last ten years, while market share and quality of public transport have declined. In 1996, the Lombardy Region began a reform of public local transport. In line with EU regulations, the regional transport acts 13/1995 and 22/1998 aim to improve the effectiveness of the public transport through competition and economic incentives. This paper describes the scheme developed for the tenders. In the present concession system, the routes and the schedules for each service are decided by the Region. The reform calls for tenders for a network divided into areas. The areas must be homogeneous in terms of transport demand and attractive for the tenderisers. Their size is chosen to make the management of the services affordable for sufficient competitors. A methodology has been developed to support the grantor in setting the following service requirements for each area: the links to be included in the network and the minimum number of seats to be assured by each route. Further requirements concerning fares, environmental and quality standards, and the information provided to users and to the transport authority are also set. The effectiveness of the planned services is encouraged by economic incentives: part of the subsidy is paid only if specific objectives set by the public authorities are met. The criteria to compare the offers are complex, because of the need to evaluate not only the tendered price, but also the effectiveness of the network and schedule proposals, as well as the usefulness of the additional routes and seats served or the improved quality. A Decision Support System (DSS) software application based on multi-criteria analysis automatically chooses the best project, ensuring a transparent procedure. The reliability of this evaluation system has been tested in simulated tender involving representatives of Lombardy bus companies.