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UTILITIES POLICY


Auction procedures and competition in public services: The case of urban public transport in France and London

Miguel Amaral, Stéphane Saussier, Anne Yvrande-Billon

Utilities Policy, Volume 17, 2009

Abstract

In many countries, governments are pushing for the introduction of competition in the organization of public services and more broadly in public procurement. The development of public–private partnerships throughout the world is a good illustration of this trend. In order to foster competition, competitive tendering through the use of auctions is now common. Nevertheless, competition for the field must be organized. Depending on the rules of the game chosen, introducing competition for the field may or may not be successful. In this paper we investigate two alternative models for organizing local public services, namely the French and the London models of urban public transport. Few competitors and collusive behaviours, with increasing costs, characterize the French model, while the London model, as far as we have seen, exhibits better results, by using the transparency of auction procedures and the discretionary power of the regulator as two complementary instruments to foster competition and prevent anti-competitive behaviours.

Article Outline

1. Introduction
2. Transparency, discretion and degree of competitiveness: a brief survey
2.1. Transparency of the procedure
2.2. Discretionary power of public bodies
2.3. Degree of competitiveness of the environment
3. The bus tendering models of London and France—what are the differences?
3.1. The London model
3.1.1. The 1984 reform
3.1.2. The tendering process and the auction format
3.1.3. The role of the regulator
3.2. The French model
3.2.1. A decentralized model
3.2.2. The 1993 Law against corruption
3.2.3. The French auction procedure
4. The London and French bus tendering models—what are the results?
4.1. Auction procedures and the number of competitors
4.2. Auction procedures and anti-competitive behaviours
4.3. Auction procedures and operating costs
4.4. Contractual design and quality
5. Conclusion
Acknowledgements
References

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