Scandinavian Working Papers in Economics

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

No 2014:17: Assessing the cost impact of competitive tendering in rail infrastructure maintenance services: evidence from the Swedish reforms (1999-2011)

Kristofer Odolinski () and Andrew S.J. Smith ()
Additional contact information
Kristofer Odolinski: VTI, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden
Andrew S.J. Smith: University of Leeds, UK, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden

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 contract areas between 1999 and 2011, using econometric techniques. We conclude that competitive tendering reduced costs by around 12%. This cost reduction was not associated with falling quality as measured by track quality class, track geometry or train derailments. We conclude that the gradual exposure of rail maintenance to competitive tendering in Sweden has been beneficial.

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

JEL-codes: H54; L92

17 pages, September 4, 2014

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CTS2014-17.pdf PDF-file 

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