A review was undertaken in 1994 of the regulatory system for local public passenger transport services in New Zealand. It had a particular focus on the procedures developed by Transit New Zealand to procure subsidised services operated under contract to regional councils: these comprise the majority of local passenger services in New Zealand. The review arose in resonse to concerns raised by some groups in the passenger transport industry about the effectiveness of the prcedures.
Through a consultation process with passenger transport operators, regional councils and other parties, a wide range of concerns with the present procedures were identified. These concerns were appraised as to their validity, their causes and tehir importance and possible procedural changes to ameliorate the concerns were identified and assessed.
Recommendations were put forward in three main areas. First, a number of detailed recommendations were made for changes to the present competitive pricing procedures of Transit New Zealand. Second, recommendations were made relating to other policy and funding issues affecting passenger transport in New Zealand. These two groups of recommendations together were expected to overcome many of the concerns expressed. Third, recommendations were made for further investigation of alternative economic regulatory systems, to assess whether any fundamental changes in the regulatory system and associated service procurement procedures would be warranted.
Keywords: Public passenger transport procurement, New Zealand, bus, competitive tendering, contracting, procurement, economic regulation