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Guidance on the Application of Regulation 1370/2007 on Passenger Transport Services* Main points Public service obligations may only be imposed where the market does not provide adequate services in terms of price and/or quality. The selection of service providers must respect the principles of openness, transparency and non-discrimination, even when public procurement procedures may not apply. Compensation must be based on contracts which contain a precise definition of the public service and parameters on how the compensation is to be calculated. Changes in the conditions of a public service after a contract is awarded are likely to require a new procurement procedure. Costs and revenues must be allocated between eligible and non-eligible activities, according to an established

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