Project Information - Completed Study

Title: Assessment of Bus Transport Operator Consolidation along EDSA as a Regulatory Strategy: Benefits, Costs, and Implications for Market Competition
Description: This paper looked at options for consolidating bus operators along EDSA as a way to address road congestion. Based on the review of country experiences, one way of addressing congestion and other market failures is to shift the competition framework for bus transport services towards competition "for the market" from the current "in the market (status quo)." Consolidation can be attained in a "competition in the market" framework by making bus franchises more valuable that it acts as a more stringent market entry regulation. However, the gains are likely to be limited as there is little difference in the way services are going to be provided i.e. buses still compete for passengers or on the street and hold decisions on bus service frequencies, among others. The alternative "competition for the framework" provides a stronger incentive for existing numerous operators to consolidate as the tendering mechanism is used to select only the optimum number of efficient, formal operators that will serve the market. Government also takes more control of critical aspects of bus services (design of the bus network, quality standards, frequency, among others), providing an opportunity to address the market failures that are inherent in liberalized urban bus markets. The Philippine Government via its pipeline of BRT projects - including one being prepared for EDSA - is testing this framework. To be effective and encourage its application also to non-BRT corridors, complementary reforms would still need to be implemented in parallel and capacity of institutions strengthened particularly in procurement and contract monitoring and management.
Investigator: Gerochi, Hope A.
Publications: PN 2016-14: Competition for the Market: A Policy Framework for Improving Bus Operation along EDSA,