Privatizing bus service fuels savings

 

Michael Aubry Yesterday at 5:13 PM OC Transpo.

(DARREN BROWN/Sun Media)

 

Taxpayers would get more bang for their buck if OC Transpo contracted out its bus routes to the lowest bidder, a policy think-tank suggests. The move would open up competition to earn the rights to transit routes across the city, and could serve up savings in both the cost of operations and in capital spending that just aren’t there when it’s run by the municipality, a study by the C.D. Howe Institute shows. “The really important thing is to create an incentive to find those savings,” explained senior policy analyst Benjamin Dachis. “The way to create that incentive is through competition.”

 

By tendering out contracts say, every five years, there’s a push for the winning bidder to offer a more generous deal to the city, and likewise to the taxpayer. Yet the entire operation would still be managed and monitored by the Ottawa Transit Commission. It’s the same model that is used in London, England, for their transit service — as well as York Region’s Viva bus routes — and there have been significant savings without service quality taking a hit. In essence, competition breeds better performance.

 

Any contractors that fell behind on their maintenance or safety standards would have their rights revoked and a new bidder could be chosen during the next tendering process. “Ottawa is the most expensive transit service in Canada,” said Kevin MacDonald, president of the Ottawa Taxpayer Advocacy Group. He said residents shouldn’t be forced to pay for a monopoly transit system in the city, especially when other areas are already switching over. “The whole point is to embrace competition and to require less of a public subsidy in doing so,” he added.

 

And that doesn’t mean OC Transpo’s unionized workers would be tossed to the curb. In most cases, it is the public employees who get the winning bid for these types of contracts because of their breadth of experience. It’s also the most effective way of putting a stop to transit strikes like the one that paralyzed Ottawa in the winter of 2008. If workers go on strike, the city would have the option to turn to another transit service to pick up the slack. But MacDonald said the city seems unwilling to bring this concept onto the table. “Surely, this is something worth talking about,” he said. “City council doesn’t seem to want to at least sit down and talk about this and see if it’s even possible.”

 

Twitter: @ottawasunmaubry