Abstract
In South Africa, like many countries internationally, public transport contracting costs are
continuously being scrutinised in the light of tight economic circumstances. In designing public
transport contracts it is important that an appropriate risk-share dispensation be considered to
ensure that the relevant entity (the authority and/or operator) carries the risk that it is best
suited to manage. Inappropriate risk-sharing arrangements can result in additional costs being
factored into contract bids by operators thus increasing the overall cost of public transport for
the authority. In addition, the design of the contract e.g. net cost versus gross cost (and
associated risk apportionment) could have a bearing on the ultimate cost of the contract.
This paper explores the risk views of 15 contracted bus operators representing 4950 buses in
South Africa, based on their experiences of such contracts over several years of public
transport contracting. The lessons learned from this research will assist contracting authorities
in understanding how operators respond and view risks associated with various controllable
and uncontrollable risks related to public transport contracting as it is the South African
government’s intention to embark on the next round of public transport contracting in 2018.