Competition in Public Short-distance and Regional Passenger Transport

Having reaped some success in liberalising telecommunications, electricity utilities and air transport, the European Commission is now taking market economy-focused steps in the sector of public short-distance and regional passenger transport services. In a current draft regulation, it proposes that licences be granted in a transparent public tender procedure. Through the use of "controlled competition" that encompasses exclusivity rights limited by geography and time, both the profitability and quality of public passenger transport are to be improved, which in turn heightens its attractiveness over private motorised transport and its attendant environmental problems. International precedents have shown that competitive bidding produces the best results when compared to full-scale market liberalisation or state provision of public passenger transport. All countries which have so far tendered transport services have seen cost cuts, improved services and a reduction of public subsidies. In Austria, however, the structural and legal prerequisites to ensure fair and non-discriminatory competitive tendering are not yet in place, in spite of the fact that a structural reform was launched in 1999.