Public transport: privatization and investment

Abstract

Recent British experience in privatization and investment within the public transport sector is considered. Alternative approaches to rail privatization (to be introduced from April 1994) are examined, with particular reference to the track costs issue. Privatization within the bus industry is reviewed, with stress on the danger of high prices secured for some companies placing subsequent pressure on profits and the ability to finance investment. Criteria for investment appraisal in public transport infrastructure are examined, stressing the need for a more comprehensive approach. While not rejecting privatization, it is suggested that this process has not, in itself, improved ridership or revenue trends within the bus industry, and that many issues remain to be resolved in the rail sector.