The Eno Center for Transportation in Washington DC published a report touting the benefits of contracting out as a way to improve transit service. “A Bid for Better Transit: Improving Transit Service with Contracted Operations” looks at a number of examples of contracted operations in three European cities (London, Stockholm, Oslo) and three North American ones (New Orleans, Vancouver, Los Angeles). The discussion is not a “privatisation will solve all our problems” that, once implemented, can be left to run its course.The report contends that contracting out is a tool available to transit agencies that is more complex than straight out privatisation and requires agency commitment, negotiation and monitoring.
The authors state 3 key issues must be part of any contracting out considerations – the public interest cannot be contracted out and only government can protect the public interest; contracts must clearly align agency goals with a contractor’s profit motive; and agencies and contractors must work together to innovate and improve system operations.
The paper provides an overview of TransLink’s contracting out activities (or lack thereof) emphasizing that changes in provincial political priorities led to the current situation whereby BC Rapid Transit Company (BCRTC) and Coast Mountain Bus Company (CMBC) are wholly owned subsidiaries rather than contracted service providers. It does point out that the potential threat of contracting out may be enough to incentivise the subsidiaries to improve efficiency, increase productivity and control costs. That being said, TransLink does contract out some niche services.
However, the Canada Line P3 contract is looked at critically be the authors . They argue that the political motivations to get the line opened for the 2010 Olympics led to a P3 contract that over emphasised construction speed at the expense of long-term operational flexibility. TransLink is left with a 35 year contract under which it must negotiate service changes with the concessionaire.