Adapting Procurement Models for Electric Buses in Latin America

Abstract

Bus services are a fundamental component of transportation networks in Latin America, but buses often account for a disproportionately large number of environmental externalities. Electric buses (e-buses) are emerging as an effective and pragmatic option for reducing greenhouse gas emissions and local pollutants. However, e-buses are difficult to procure in Latin America because of existing procurement challenges in the region, especially as those challenges relate to forming contracts to deal with high upfront costs and unknown risks. To overcome these procurement issues, this paper presents a new contractual model, based on literature and case study research. This new model suggests the separation of bus service responsibilities into three separate actors: multiple bus procurement companies, one or multiple bus depots and charging infrastructure companies, and multiple bus operating companies. By separating bus service responsibilities, the proposed model would bring about three concrete improvements: lower costs to the transit system, better quality of service, and lower-emission fleet deployment.