Transforming the PT Sector into a Competitive Market

ADALYA'S economic department has vast experience and is familiar with the various players and stakeholders involved in the operation of public transportation. Our work requires sensitivity to their limitations, and an understanding of their interests and level of flexibility.

We bear in mind that we cannot afford to fail. Public transportation is an essential service, and it cannot stop. Even during the transition from one operator to another, continuity must be ensured and service to the public must not be compromised.

Our view is that no two processes are the same. Every place and every condition bring its own constraints and requires specific adjustments. We support the creation of regulatory and contractual mechanisms that fit the situation, provide ongoing guidance throughout the operational period, and manage the sensitive transition phase between operators - a stage that often causes temporary disruptions across service areas.

Use Cases

Privatization of the Bus Market and Introduction of Competition

Historically, public transportation in Israel was operated by a duopoly of two companies, each serving different regions.

The lack of competition led to suboptimal service levels for passengers. ADALYA led the process of designing a competitive industry structure and developing a sector-wide competition strategy, including the creation of supporting frameworks such as new contractual agreements and tendering mechanisms needed to open the market to competition.

Introduction of New Operators

Introducing a new operator is a sensitive process. Mechanisms such as "infant industry protection" and staggered entry phases are essential to ensuring a smooth transition between operators without causing significant disruption to service.

Building Sophisticated Tender Mechanisms

To maintain market competitiveness and enable performance-based compensation, we introduced a system of service indices, incentives, and penalties into the government’s operating tenders. This ensures that even when an operator remains in a given area for an extended period, service quality is continuously monitored and does not decline over time.

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