Authority Operating Costs
The financial model should also contain a worksheet for the operating costs of the transport authority.

The cost items included in authority operating costs are similar to the management and administrative costs of the bus operator. But they are modified to reflect the authority’s responsibility to monitor and regulate bus operations.

The authority’s operating costs will increase as its role shifts from public owner to regulator of private contracts used for bus operations. It will require additional staff resources and external consulting assistance to tender, evaluate and monitor private contracts.

An important additional authority operating cost item is the expenditure required to maintain its infrastructure investments. The authority may pass on infrastructure maintenance and operating costs to the bus system operator.

It may also decide to pass on its own administrative and management costs to the bus operator, especially in the public monopoly with management contract reform option. The financial model can analyze the impact on fare levels if it’s decided to pass on authority costs to the bus operator.

See also
Capital costs
Operating costs