1 Methods for Allocating Contracts for the Provision of Regional and Local transportation Services 2013. The OECD Competition Committee debated Methods for Allocating Contracts for the Provision of Regional and Local transportation Services in February 2013. This document includes an executive summary of the debate and the documents from the meeting: written submissions from: Bulgaria, Colombia, France, Indonesia, Ireland, Italy, Japan, Latvia, Lithuania, Peru, Poland, Russia, Spain, Chinese Taipei, Turkey, Ukraine, United Kingdom, United States, and BIAC as well as two expert papers and a summary of the discussion. Many jurisdictions have introduced competition in the Provision local bus services, either by allowing competition in the market between providers or by tendering the right to be the sole provider of these services on a route, or a number of routes.
2 In some jurisdictions, however, these services are still provided by local authorities. The discussion reviewed recent country experiences and compared merits and limitations of different approaches, with a special focus on how to best structure and run tenders for these services so as to minimise costs, guarantee a good level of service and ensure that economies of scale are exploited. The discussion also examined a recent reform proposal in the state of Victoria (Australia) aimed at easing restrictions on the number of taxi licences, while minimising the impact on the value of existing licences, and at increasing the quality of the service. Taxi Services Regulation and Competition (2007). Regulating Market Activities by the Public Sector (2004). Access to Key Transport Facilities (2006). Concessions (2006). Structural Reform in the Rail Industry (2005). Unclassified DAF/COMP(2013)12.
3 Organisation de Coop ration et de D veloppement conomiques Organisation for Economic Co-operation and Development 05-Sep-2013. _____. English - Or. English DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS. COMPETITION COMMITTEE. Unclassified DAF/COMP(2013)12. Cancels & replaces the same document of 08 August 2013. Methods FOR Allocating Contracts FOR THE Provision OF REGIONAL AND LOCAL. transportation SERVICES. English - Or. English JT03344008. Complete document available on OLIS in its original format This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. DAF/COMP(2013)12. FOREWORD. This document comprises proceedings in the original languages of a Roundtable on Methods for Allocating Contracts for the Provision of Regional and Local transportation Services held by the Competition Committee (Working Party No.)
4 2 on Competition and Regulation) in February 2013. It is published under the responsibility of the Secretary General of the OECD to bring information on this topic to the attention of a wider audience. This compilation is one of a series of publications entitled "Competition Policy Roundtables". PR FACE. Ce document rassemble la documentation dans la langue d'origine dans laquelle elle a t . soumise, relative la table ronde sur les m thodes d'attribution de march s de services de transport r gionaux et locaux qui s'est tenue en f vrier 2013 dans le cadre du Comit de la concurrence (Groupe de Travail N 2 sur la concurrence et la r glementation). Il est publi sous la responsabilit du Secr taire g n ral de l'OCDE, afin de porter la connaissance d'un large public les l ments d'information qui ont t r unis cette occasion. Cette compilation fait partie de la s rie intitul e "Les tables rondes sur la politique de la concurrence".
5 Visit our Internet Site -- Consultez notre site Internet 2. DAF/COMP(2013)12. TABLE OF CONTENTS. PR FACE ..2. EXECUTIVE SUMMARY ..5. CALL FOR CONTRIBUTIONS ..9. CONTRIBUTIONS FROM DELEGATIONS. Bulgaria ..15. Colombia ..21. France (version fran aise)..29. France (English version) ..45. Indonesia ..61. Ireland ..65. Italy ..77. Latvia ..89. Lithuania ..97. Peru ..101. Russia ..113. Chinese Turkey ..143. Ukraine ..147. United Kingdom ..151. United States ..159. BIAC ..165. CONTRIBUTIONS FROM EXPERTS. Miguel Amaral, St phane Saussier and Anne Yvrande-Billon - Auction Procedures and Competition in Public Services: The Case of Urban Public transportation in France and London ..167. Allan Fels and Warwick Davis - A New Approach to Taxi Licence Reform: The Victorian Taxi Industry Inquiry Proposal ..187. SUMMARY OF DISCUSSION ..205. **. SYNTH COMPTE RENDU DE LA DISCUSSION.
6 223. 3. DAF/COMP(2013)12. 4. DAF/COMP(2013)12. EXECUTIVE SUMMARY. By the Secretariat Considering the discussion at the roundtable, the delegates' submissions, as well as the panellists'. presentations and papers, several points emerge: (1) Restrictions on the number of licences in taxi markets are a key impediment to competition and to the delivery of its benefits to consumers. Current reform proposals in the state of Victoria (Australia) aim to gradually increase competition in taxi markets by increasing the number of licences through the issue of an unlimited number of licences at a fixed price whose real costs will decline over time. This novel approach is likely to be politically acceptable, as the costs imposed on existing licence owners by the reform are relatively small and spread over time, while benefits will accrue more swiftly. Recent reform proposals in the state of Victoria (Australia) aim to solve competition problems caused by quantity restrictions in taxi markets in a novel way.
7 The proposed changes to the licensing regime would induce a relatively slow, but full market opening. The slowness of the reform would avoid a sudden drop in the value of existing licenses and, thus, potentially costly compensations to current licence owners by the government. Barriers to entry would be gradually reduced by issuing an unlimited number of additional licenses at a fixed nominal fee. At the start this would be very close to the current value at which licences are sold on the market, but its value would decline in real terms over time. The discounted total value of existing licences would consequently be reduced relative to today's level, but this would happen slowly avoiding the steep drop that would result from an immediate full market opening. As a consequence the costs of the reform to existing licence holders and the government would be limited, while benefits are expected to materialize fast enough to create sufficient political momentum for the reform to receive support from the public.
8 (2) Price regulation is seen as necessary, but more competition on tariffs could be allowed. The proposed reform suggests that taxi fares should be deregulated in market segments where competition is likely to emerge without damaging the users, where taxis are pre-booked, while in areas where some form of price regulation remains necessary prices should not be fixed but only set as a maximum ceiling. The introduction of a more efficient and flexible price structure would allow prices to decline at non-peak time and may increase the willingness of taxis to perform short trips by allowing for higher fees for such trips. (3) Local bus transport services have features that render, in most cases, competition for the market more appropriate than competition in the market. Competition for the market is the most common and, in many cases, the most appropriate form of competition in this sector, though some countries have chosen to allow competition in the market, in general on commercial viable routes.
9 The reasons why competition is more effective when it focuses on obtaining the licences to provide the services, rather than directly on the users themselves are many-fold. Some the reasons that have mentioned are that passengers are mostly interested in the timing of service rather than in the nature of the provider, this creates strong 5. DAF/COMP(2013)12. incentives for opportunistic behaviour by bus operators, to steal customers by changing their timetable at the last minute and arriving just before their rivals. Further, a number of routes are not commercially viable, but providing services on them may be important for social reasons. Subsidies are thus necessary. Tenders, if well designed, permit to determine whether subsidies are really necessary and at which level. (4) To ensure all benefits of competition the tender procedure for the licences to provide bus services has to be carefully designed so as to guarantee a number of effective bidders.
10 There is a strong consensus among the delegates that tenders do not automatically bring about the benefits of competition, but that a satisfactory outcome depends on their careful design. In particular barriers to bidding and entry need to be low, because effective tenders require that a sufficient number of bidders participate. Barriers to bidding can generally be kept low through a transparent and non-discriminatory award procedure. The award criteria have to be clearly defined in advance and bidders must be well informed. Reduction in uncertainty from tender participation increases the incentives to submit a bid. There is also some evidence that complex tender procedures deter bidders, in particular smaller ones, because they impose a high participation cost. If smaller bidders are to be effective competitors, tender procedures should be kept as simple as possible.