I am interested in tendering for local bus contracts – what is the difference between minimum cost and minimum subsidy contracts?
A. A minimum cost contract is one where you work out all the costs of operating the service and that is the price that you tender – you will then be paid the tender price less the revenue from fares. A minimum subsidy contract is one where you work out all your costs of operating the service, subtract your estimate of fares revenue, and tender the net cost – this is the price you will be paid.
