Gross-Cost Area-Contract
A gross-cost area-contract is a legally binding agreement between a transport authority and a bus operator whereby:

• The transport authority grants to the bus operator the exclusive right to provide bus services in one or more specified areas
• The transport authority undertakes to compensate the bus operator for the full cost of providing the bus services.

In return, the bus operator undertakes to hand over to the transport authority all revenue it receives for providing the bus services.

The two key elements which differentiate this bus contract from other types of bus contracts, such as: net-cost area-contracts, gross-cost route-contracts, and net-cost route-contracts, are:

• the type of network unit awarded to the bus operator (namely an area)
• the basis of payment for his services (namely by gross cost).

See also
General contract design
Allocating risks and responsibilities
Payments
Monitoring and enforcement
Resolving disputes
Duration
Legal aspects
Regulatory framework
Tendering documents