This arrangement has reduced the previously high level of ticketless travel. Other contracted services in Pakistan include luggage handling and parcel service. In several U.S. railways, locomotives are maintained by private contractors at a lower cost than by the railway itself. The arrangement in Senegal, although said to be relatively expensive, has been so successful in raising reliability and availability of locomotives that the government is considering extending it to the entire national fleet. The contractor assumes responsibility for operations and maintenance of a particular activity, or even an entire railway.
Competition arises from the possibility of several firms bidding for the contract.
One drawback is that although it is often an explicit goal to turn over management to local staff at the end of the contract, it has proven difficult to incorporate incentives and mechanisms for local staff development. Several U.S. companies provide short line railway management services for industrial clients or local governments. Amtrak provides commuter services in Boston, Los Angeles and elsewhere, under contracts that provide for full cost reimbursement plus profit. The lease contractor assumes more risk than a management contractor because it must typically finance working capital and replacement of some assets while the owner may remain responsible for a share of investment and debt service. In return for assuming more risk, the lease contractor has more autonomy, in particular, control over working capital and all aspects of staffing and management.