Objectives of Private Bus Operators in Evaluating Transit Investments in Developing Countries: Conceptual Framework

This paper discusses appropriate evaluation techniques for assessing transit proposals in developing countries. With the shift of ownership models in past decades from fully public to fully private and eventually to consolidated franchising models, successful transit projects require the analysis of several indirect costs associated with changing ownership. These indirect costs include (a) the potential loss of personal income for local bus operators if the new investment precludes their continued operation, (b) negative personal impacts on self-worth and changing business dynamics, and (c) long-term impacts on the ability of the government to implement future projects as a result of obstacles that may result from the first two costs. In the proposed methodology these costs are explicitly considered in the evaluation process. The way that various ownership models in current use influence—either positively or negatively—such indirect costs is assessed. The paper concludes that full involvement of local bus operators typically minimizes these indirect costs but may be difficult to achieve, depending on the number and characteristics of the operators in the corridor for which the development is proposed. The paper presents a detailed assessment of the conditions under which full involvement is possible and suggests alternative techniques to advance the idea of local operator involvement.