As stated above, while private and public bus companies coexist,
many people claim that public bus operators are less efficient than
privately owned ones. What reduces the performance of the public operators? De Borger and Kerstens (2000); De Borger et al. (2002)
list the factors which cause variations in productivity and inefficiency
among public transport operators: ownership and size of
operators, network characteristics and environmental factors
outside the control of bus operation, subsidies and contractual
arrangements, and competition policy and regulation. Among these
factors, this study will focus particularly on subsidies and
contractual arrangements. Hereinafter, we will examine the
management situation of a public bus operator, focusing on the
concept of subsidies and contractual arrangement that aimed at the
reconstruction of management. Data is obtained from the ‘Annual
Financial Report of Regional Publicly-Owned Enterprise’ (chiho
kouei kigyo nenkan) published by the Ministry of Internal Affairs
and Communications and data from the Ministry of Land,
Infrastructure and Transport (2009). In our analysis, we excluded
small public operators, such as town-owned and village-owned
ones. Moreover, to ensure efficient adjustment with future econometric
analyses, the present analysis is limited to 31 city-based
operators who have been in business since 2006