Abstract
The paper deals with the risks related to providing public passenger transport. The risks are divided into two groups: cost and revenue risks. The paper describes possibilities of risk allocation among contracting parties when providing transport services.
Highlights
Under current conditions in terms of general economic interest, the public passenger transport services cannot be provided on a commercial basis
The risk can have a negative impact on the result of concluding contracts and, the authority should consider several facts such as: increasing risk increases surcharge to reasonable profit; the high level of risk borne by operator can cause a risk of operator's insolvency; and the higher risk, the lower number of candidates are interested in realization of transport services
The reasonable profit for services which are provided in public interest must be based on the risk assumed by operator
Summary
Under current conditions in terms of general economic interest, the public passenger transport services cannot be provided on a commercial basis. The problem is the determination of financial compensation which includes a share of reasonable profit. The reasonable profit must depend on level of risk-taking. In practise, it is determined as a percentage of economically justified costs. It is determined as a percentage of economically justified costs This method is not correct because the operator who efficiently manages and achieves lower costs, achieves a lower level of reasonable profit in comparison with the operator who provides comparable performance but at higher costs. 1 the public service operator is considered to be a person who performs transportation, operates the means of transport; in some regulations the term “carrier” is used
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
