Long-term public-private contracts need flexibility from the start, according to a new  Institute for Policy Research policy brief. Without it, public transport systems cannot survive crises.

No contract can anticipate every future disruption when it is first agreed, yet many agreements are drafted so rigidly that when crises emerge, public authorities have no way to adjust them.

The new policy brief, written by Miguel Díaz-Martínez (IPR Visiting Policy Fellow and Senior Advisor at Colombia's National Planning Department), explores this challenge through case studies of two cities’ transit systems in Colombia. Created under one national law, they experienced the same crisis but had opposite fates: that of Bogota was successfully restructured while Bucaramanga’s collapsed. Comparing the two, the research highlights what can be done to improve the robustness and longevity of public transit contracts and, as a result, the infrastructure itself.

Díaz-Martínez suggests that a key difference between a system succeeding or failing is whether a public authority can adapt a long-term contract when a crisis emerges, and sets out the five conditions that determine this. The author argues that building this flexibility into the next generation of transport contracts across the UK – from HS2 and the reform of the railways to the expansion of bus franchising beyond Manchester – will be essential.

On the findings, Díaz-Martínez said: “Bogotá and Bucaramanga had the same law and the same crisis, yet only one adapted – the difference was not money or legal room, but whether the authority had the capacity to act and the protection to sign. That is the lesson for the UK: as responsibility for rail and bus contracts is redrawn, the flexibility to adapt them under pressure has to be built into institutions in advance. It cannot be improvised once the crisis arrives.”