The Dual Processes of Fragmentation and Integration in Transport Tendering: Understanding Transport Integration in a Unitary National Government

Abstract

A high level of integration of public transport services in terms of scheduling, ticketing, and cross-operator data provision and others is crucial to provide a high level of service to potential users. Transport integration issues are a growing need as transport providers consider low cost ways of increasing ridership following the travel pattern disruptions exacerbated by the recent pandemic.

Particularly in Europe, there has been increasing privatization of services, which are tendered to private operators that bid in a competitive process, though public authorities often retain the power to define such services (Pettersson and Hrelja, 2020).  This has created operator fragmentation (Pettersson & Hrelja, 2020), and requires further research on cross-operator service integration.  Previous scholarship has found that larger tenders and more integrated tenders should, over time, facilitate further cooperation (Veeneman & van de Velde, 2014), but more research is needed on the process for developing such tenders, how its ability to overcome transport fragmentation is influenced by the centralization of the process and the centralization of government decision making (Veeneman and Mulley, 2018).  Israel presents a case with a highly centralized transport decision making process that will add to existing literature on tendering and transport fragmentation.

The challenge of delivering an integrated system has increased over the past decades, due to the (gradual) privatization of public transport services over multiple private public transport providers in many countries. Israel is one of the countries that have followed this path since the early 2000s, with the public tendering process resulting in the fragmentation of services from merely 2 into 17 bus operators.

In this paper, we use document analysis as well as interviews with key members of the national government, private consultants, private operators and municipalities, to understand how the Israeli tendering process fragmented services into 17 operators, but also developed ways to integrate them. The study uses this information to understand the role of formal institutions in coordinating schedules, integration of fares and fare cards, shared use of terminals, and cross-operator data sharing across the country. We identify a number of ways integration was enhanced in each category, with the national government making use of its strong leverage over private operators. We also highlight the limitations of this approach due to the separate management of bus and rail services within the national government. The study closes with findings that Israel has achieved coordination despite a large amount of private ownership and fragmentation across operators.  Flexibility over time has helped to refine this coordination with each new tender.  However the results have been confined to the bus system, with poor coordination across modes (bus/rail), and results that are unsatisfactory to local municipalities, which are often not included in the decision making process.  In this case, the use of a higher level of government to effect coordination has been effective, though it has also impeded their ability to adapt to local needs.