Competitive tendering is a popular mechanism for the provision of local bus services when a major
objective is subsidy savings. Despite uncertainties in the legal framework some competitive tendering
was implemented in Italy since 1998. The evidence so far is that participants were limited in number, the
incumbents were almost everywhere able to gain the franchise, whilst subsidy savings were in many cases
negligible. If some “political” conditions favouring more effective tendering procedures are not fulfilled,
other regimes should be considered in order to obtain substantial subsidy savings.
