A multi-unit tender award process: The case of Transantiago

The Transantiago public transit services were grouped into five trunk service units and 10 feeder units, and were awarded to private operators through a simultaneous tender. To avoid problems of ownership concentration, limits were placed on the maximum number of units per operator. This paper describes the issues involved in such simultaneous multi-unit tenders where various actors bid for different business units to be awarded in a single tender process. The general problem is formulated as a minimum cost network flow problem (MCNFP). Tie-breaking criteria are discussed and modeled. The problem is then solved for the Transantiago case. There follows a discussion of the utility of handling this tender using the tool developed here.