20 years of competitive tendering in the Norwegian bus industry – An analysis of bidders and winning bids

Our paper investigates the developments in the Norwegian bus industry following the ramp-up of competitive tendering since the early 2000s. The authors analyse a complete dataset of all 232 local bus contracts awarded through competitive tendering in Norway since 1995. The authors also utilize the Central Register of Establishments and Enterprises (CRE) for structural developments in the bus industry. The authors first present some overall tendencies, including developments in number of bids per tender, contract size and cost developments. They use the cost implied by the winning bid as our cost indicator. The average cost per kilometre in the winning bid has increased substantially more than the general rate of inflation. At the same time, the average number of bidders per contract has fallen. Second, the authors build regression models to identify key drivers of cost developments in the bids. Contract sizes, in terms of vehicle-kilometres are found on average to be on the low side and an increase would reduce unit prices. The authors find as expected a significant effect of the number of bidders on unit prices. This leads the authors to a further investigation of factors explaining the number of bids per tender. They find that larger contracts tend to attract more bids, as do repeated tenders in the same area.

Language

  • English

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Filing Info

  • Accession Number: 01676182
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jul 11 2018 3:16PM