Working papers in Transport Economics,
CTS - Centre for Transport Studies Stockholm (KTH and VTI)

Abstract: This is the first paper in the literature to formally study the cost impact of competitive tendering in rail maintenance. Sweden progressively opened up the market for rail maintenance services, starting in 2002. We study the cost impacts based on an unbalanced panel of thirty-nine contract areas between 1999 and 2011, using econometric techniques. We conclude that competitive tendering reduced costs by around 11 per cent. Importantly, this cost reduction was not associated with falling quality; quite the reverse. We thus conclude that the gradual exposure of rail maintenance to competitive tendering in Sweden has been a success.

Keywords: Railway; Infrastructure; Maintenance; Tendering; Contract; Cost

JEL-codes: H54; L92

20 pages, First version: September 4, 2014. Revised: May 22, 2015. Earlier revisions: May 22, 2015.

Note: Published in Journal of Transport Economics and Policy (JTEP), Volume 50, Number 1, January 2016, pp. 93-112.

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Kristofer Odolinski and Andrew S.J. Smith, (2016), 'Assessing the cost impact of competitive tendering in rail infrastructure maintenance services: evidence from the Swedish reforms (1999-2011)', Journal of Transport Economics and Policy, vol 50, pages 93-112

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