Milan metropolitan PTA launches €1.25bn 7-year bus concession tender under gross cost model

The public transport authority covering the wider Milan metropolitan area (including nearby cities as Lodi, Pavia, Monza) has launched a €1.25 billion tender for suburban, interurban and urban bus services.

The tender has been issued by the authority ‘Agenzia per il Trasporto Pubblico Locale del bacino della Città Metropolitana di Milano, Monza e Brianza, Lodi e Pavia’, therefore the public transport authority responsible for planning and contracting local transport services across the wider Milan metropolitan basin in northern Italy.

The tender, as mentioned on Italian trade magazine and our sister media Autobusweb, concerns interurban and suburban bus services as well as the urban network of Lodi, a medium-sized city located south-east of Milan in the Lombardy region. The authority’s jurisdiction also includes the province of Pavia, south of Milan, alongside the metropolitan area of Milan and the province of Monza and Brianza. It is not involving urban services in Milan.

The overall estimated value of the concession amounts to approximately €1.25 billion excluding VAT. Each contract will have a duration of seven years.

Public transport tender in Milan metropolitan area

The tender is divided into four territorial and operational lots designed to function independently.

Lot 1 covers the south-western area of the Milan basin, with a value of €179.8 million. Lot 2 concerns the north-western Milan area and western Brianza, with a value of €367.9 million. Lot 3 includes the north-eastern Milan area and central Brianza districts, amounting to €334.5 million. Lot 4 covers the south-eastern Milan corridor and the province of Lodi, with a value of €366 million.

The contracts will be awarded under a “gross cost incentivante” model, replacing the current net cost structure used in the area. Under the new framework, fare revenues will remain under the control of the public transport authority, while operators will receive remuneration through a compensation mechanism combining fixed and variable components linked to service performance.

The annual remuneration structure foresees a fixed component equal to 65% of the base compensation and a variable component accounting for the remaining 35%. The variable share will be linked to the number of paying passengers transported, according to the service contract scheme included in the tender documentation.

The planned service volume expressed in bus-kilometres will increase progressively during the first years of the concession before stabilising. The authority foresees an annual increase of nearly 9 million vehicle-kilometres, from 34.9 million to 44.4 million bus-kilometres per year, corresponding to approximately 25% additional service volume.

Fleet renewal funding included in procurement framework

The tender documentation also includes public financial contributions for fleet renewal activities and upgrades to passenger stop infrastructure. The procurement framework foresees investments aimed at supporting vehicle replacement programmes and infrastructure modernisation across the network.

The procedure is open to both individual operators and consortium structures. Operators will also be allowed to submit combined bids for pairs of adjacent lots in order to enable operational synergies and economies of scale. However, the tender establishes a maximum limit of two lots that can be awarded to the same operator, except in specific cases foreseen by the procurement rules.

Offers must be submitted through the Lombardy regional digital procurement platform by 30 September 2026.