A FRAMEWORK APPROACH TO DEVELOPING PUBLIC TRANSPORT CONTRACTING REGIMES

As part of the Land Transport New Zealand review, L.E.K. Consulting was commissioned to undertake a review of international developments in public transport contracting. Whilst local circumstances differ, both in terms of industry structure, regulatory environment, and Government policy objectives, there are a large number of similarities between public transport procurement regimes in different jurisdictions. These similarities were analysed and summarised as global learnings, which could be thoughtfully applied in the design of a new procurement regime. This paper describes the global learnings identified during the review of the NZ procurement regime along key contract parameters such as contract size and duration, risk allocation, KPIs and asset ownership and their impact on competitive pressure pre- contracting and performance throughout the life of the contract. A particularly important factor in the successful design of procurement regimes is the achievement of a balance between competitive contract prices, the preservation of service quality and the spirit of partnership and trust between operator and procuring agency, which is discussed in latter stages of the paper.