Contracts (public service)
Didier van de Velde (TU Delft - Technology, Policy and Management)
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Abstract
A Public Service Contract (PSC) in passenger transport is a legal agreement where a transport authority assigns an operator to provide services under Public Service Obligations (PSOs), often with financial compensation. PSOs ensure socially desirable services that may not be viable without public funding. The shift towards formal contracting of public transport services began in the late 1980s, influenced by New Public Management (NPM). Contracts can be net or gross cost types, affecting risk and service flexibility. Effective contracting requires clear procedures addressing evolving public needs, asset management, service and quality monitoring.