Transition to “gross contract” system in public transport begins in Azerbaijan
The implementation of the “gross contract” model in Azerbaijan's public transport is being hailed as a new phase in the passenger transportation system.
Abdulrahman Sadikhli2 min read
The implementation of the “gross contract” model has begun in Azerbaijan's public transport sector. This system eliminates the direct dependency of carrier revenue on the number of passengers on buses. Under the new approach, payments to carrier companies will be based on pre-defined criteria such as route length, number of buses, movement intervals, and the quality of service provided, rather than passenger flow.
In the previous system, because carrier revenue was tied to passenger numbers, problems such as service degradation on low-passenger routes and extended intervals during evening hours were observed. In the “gross contract” model, carriers are obligated to adhere to established schedules and service standards regardless of passenger numbers. This allows for the maintenance of transport accessibility, particularly in suburban areas, and ensures the sustainability of less profitable routes.
The new model also expands the state's oversight capabilities. Paying subsidies based on the volume and quality of service requires rigorous assessment of indicators such as the technical condition of buses, cleanliness, driver behavior, and schedule compliance. In this regard, real-time monitoring of service quality and the financial consequences of failing to meet contractual obligations are noted as factors that increase the system's effectiveness.
At the same time, predictable revenue helps strengthen the financial stability of carriers. This creates a favorable environment for updating the bus fleet, improving technical maintenance, and preparing long-term investment plans. The success of the model will depend on the effectiveness of state oversight and the accurate calculation of subsidies in accordance with the services provided.
