Designing contracts for chaos
Think tank: Institute for Policy Research
Author(s): Miguel Díaz-Martínez
July 6, 2026
This report from UK think tank the Institute for Policy Research explores why two Colombian transit systems diverged, and what it means for UK infrastructure.
No long-term private-public contract can anticipate every future disruption when it is first agreed, yet many agreements are drafted so rigidly that when crises emerge, public authorities have no way to adjust them.
The new policy brief, written by Miguel Díaz-Martínez (IPR Visiting Fellow and Senior Advisor at Colombia’s National Planning Department), explores this challenge through case studies of two cities’ transit systems in Colombia.
Created under one national law, they experienced the same crisis but had opposite fates: that of Bogota was successfully restructured while Bucaramanga’s collapsed. Comparing the two, the research highlights what can be done to improve the robustness and longevity of public transit contracts and, as a result, the infrastructure itself.
Díaz-Martínez suggests that a key difference between a system succeeding or failing is whether a public authority can adapt a long-term contract when a crisis emerges, and sets out the five conditions that determine this.
The author argues that building this flexibility into the next generation of transport contracts across the UK – from HS2 and the reform of the railways to the expansion of bus franchising beyond Manchester – will be essential.
