Public Service Obligation
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This article refers to Public Service Obligations in the field of Transportation.
A Public Service Obligation (PSO) can refer to the offer for tender of particular public transport routes which in a free market would not attract sufficient revenue to be viable, but would provide a socially desirable advantage. A disadvantaged, lightly populated area might have a route subsidised to a regional or national capital to facilitate industrial development.
It can also refer to a national obligation, where the Government would pay a subsidy to facilitate certain groups, such as senior citizens, to have subsidised travel and/or to have a carer travel with them.
A PSO may apply to any mode of transport: air, sea, road or rail.
In the European Union, route PSOs are governed by Council Regulation (EEC) No 2408/92. They must be offered for tender in the Official Journal of the European Union and be open to any transport operator registered in an EU member state. There are limitations in the number of passengers which can be carried where the route can remain eligible for PSO. The winning tenderer usually receives a monopoly on the route, but may have to conform to one or more conditions of service, such as the type and size of vehicle, the timing of services, the maximum fare paid for a portion or all of the seats offered, membership of a common reservation system, quality of service measured by a maximum percentage of cancelled services, etc.
Examples of air transport PSOs currently in operation in the EU are routes from Dublin to Knock, Galway, Kerry, Sligo, Donegal and City of Derry, routes between the Italian mainland and Sardinia, routes between the French mainland and Corsica, certain domestic routes within Norway, and routes to the Scottish Highlands and Islands.
