How other countries see light rail and appraise light rail investments? From the Light Rail Transit Association



Article from the March 1999 edition of Tramways & Urban Transit

As anyone involved in a British light rail scheme knows, the appraisal system is rigorous and, many feel, fatally flawed, oriented as it is to short term and financial criteria rather than a properly broad social cost-benefit analysis. It is now also heavily influenced to favouring projects which are attractive to private companies under the Private Finance Initiative (PFI) and public-private partnership requirements which though they may well be the Nineties version of the Emperor’s new clothes, are certainly the the flavour of the decade in the U.K.

Tramways & Urban Transit is pleased to publish a summary of the report prepared by Prof. Carmen Hass-Klau and Dr. Graham Crampton of consultants ETP (Environmental and Transport Planning). This article is a for a DETR Project on the examination of the appraisal methods and financial support mechanism used for light rail outside Britain. The full report studied the appraisal methods in France, Germany, Netherlands, Sweden and the United States.


Advantages and disadvantages of Light Rail

Among the aspects discussed were the advantages and disadvantages of light rail in comparison to other public transport modes. The main disadvantage of light rail is that investment in light rail is more expensive than running buses along the same corridor because for buses the basic infrastructure – the roads – are already there. However there is quite a wide variation in the cost per km of light rail.

One of the advantages of light rail versus buses is that a typical light rail vehicle carries between 144-188 people (units with two or three carriages could carry 288-465 people) whereas an articulated or double-decker bus is only able to carry 80-160 people.

On the Continent, public transport experts believe that modern trams are perceived by the public to be a superior transport mode to buses. This appears to be in contrast to Britain where the run down trams of the 1950s and 60s left negative memories in the minds of many people.

Buses may have to use bus bays and make other sharp manoeuvres, as well as suffering engine vibration and road surface unevenness. Modern trams in contrast normally have a smoother and more comfortable ride.

As many trams have their own right of way, often established a long time ago, they are more protected from congestion and are normally faster than buses. Furthermore the same tram corridor can often also be used by buses. Even if bus lanes are available buses have problems with parked cars, which is not the case for trams as tram corridors are mostly in the middle of the carriageway. However at junctions delays can occur if cars are allowed to use the same right of way as trams.

Normally trams blend in better with the built environment of a city centre and other historic parts of the urban area. In practice the construction of a tram line can be used to redesign large parts of the city centre into a more pedestrian-friendly environment. With modern on-street running, there is no separation between the tram track and the rest of the carriageway. Pedestrians and trams mingle especially well together. Streets with trams can be designed much more attractively than streets with bus lanes. In Britain, the ugliness of overhead cabling is often an issue, whereas on the Continent, firstly people are used to it, and secondly it is normally designed to a high standard. Some tram routes have trees on both sides and/or lawn track beds. In the city centre similar pavement as in pedestrianised streets is used. Increasingly the traditional design of having tram beds looking like railway tracks has been abandoned.

Whereas underground rail is not visible to the public, surface trams have a strong marketing effect in favour of public transport. Zurich or Strasbourg trams have become a tourist attraction and are featured on public relations material for the cities, like the red buses in London. In contrast, elevated systems such as the VAL or the Docklands Light Rail are difficult to integrate into the urban environment; they are mostly too intrusive.

Environmentally, trams are much cleaner than normal diesel buses but increasingly local authorities are switching to earth-gas buses which have very low emission values. Trams are quieter than buses but this is not always the case.

Trams can be attractively designed, representing a futuristic image of a public transport mode as in Strasbourg. Buses have so far not been able to change their design significantly.


Conditions for successful running of light rail

The success of light rail is dependent on many factors, of which population and the employment density of the light rail corridors and the frequency of service seem to be the most important aspects. Trams which run at low headways (high frequency) can gain a significant number of passengers. The higher the frequency of a public transport mode the more passengers will use it (or the more additional passengers can be won). However, the operators have to weigh the higher operational cost against the advantages of a high frequency. In many cases there is not even a choice, because the capacity to increase the frequency is not available.

In the past transport experts believed that the speed of the public transport mode was one of the major features to attract passengers. Again, there is little established evidence of this. Today we know from surveys carried out that speed itself is not the crucial factor. Passengers prefer ‘seamless’ journeys or short interchange times with immediate connections.

Even so, speed is still important. Many light rail lines in Europe have priority at traffic lights which can increase average speed and therefore give trams an advantage over cars.

We know little about how other factors like design and the comfort of the vehicle generate passenger growth.

The success of light rail is also dependent on the administrative and operational structure of which light rail forms a part. Competition between public transport modes is not particularly helpful in creating a successful public transport infrastructure.

An overview of the operational structure of public transport in some of the European countries shows great differences in the ways in which public transport is organised, with the Netherlands having the most centralised approach and Britain having in most cases no transport authority at all.


The financing of light rail

Light rail investments have been funded by German governments since 1971. A specified percentage from national petrol tax revenues is awarded to urban public transport systems.

In previous years, up to 60% of the cost of urban rail investment has been paid by the Federal Government, up to 25% by the Länder and the rest by the local authorities. Since 1992, the Federal Government maximum funding percentage has been increased to 75% in West Germany and up to 90% in East Germany.

With the constitutional changes which introduced a new regional rail transport law in 1994 an amendment permits the Länder to receive even more petrol tax for those parts of the railway network which are defined as `regional’ rail transport (in practice the local rail network). This will also affect those light rail modes which run on traditional rail track like the ones in Saarbrücken and Karlsruhe.

Since 1992 all French transport regions with more than 20,000 inhabitants have the right to demand a public transport tax which can only be used for public transport investment but also helps to pay operational costs. Every employer with more than 9 employees who is located inside a transport authority may be asked to pay between 0.55 – 1.05% of its total payroll as Versement Transport to the authority.

The local transport authority can decide, following agreement within the Communes, how they want to spend the money, as long it is on public transport. However the upper limit can be increased if new public transport investment is built, and since 1990 this upper limit in provincial France can be 1.75%. In the Paris region the variation lies between 1.3 – 2.2%. However, there the employers also pay half of the cost of travel cards for their employees. This is in addition to the Versement Transport.

At the beginning of 1995, of 190 transport regions about 90%, which had the right to collect this tax, actually used this opportunity.

The Federal Government of the United States spent about $18.5 billion over 1980-95 on discretionary grants for new rail starts and extensions, contributing between 50-80% of the construction costs for these projects. This funding made it easier to initiate projects, and often made up funding shortfalls when projects ran over budget. Critics have argued that the whole capital grants program is discredited and the Federal Government has no business in funding new rail public transit systems at the local level at all. Others conclude that the main focus of any reform of the process should be to remove discretionary control of the funding, which has proved to be an easy target of misuse. The 1991 Intermodal Surface Transportation Efficiency Act (ISTEA) launched the first major re-structuring of the US’s surface transportation programs since Interstate Highway construction began in 1956. It embodied a Surface Transportation Fund, which includes roads amounting to $120.8 billion over 6 years. Within this was included a Mass Transportation Fund amounting to a $31.5 billion mass transit program over 6 years, with its 80% Federal share for capital programs and 50% for operating expenses.


The evaluation of light rail investments

When studying the financing and evaluation methods in the various European countries and the United States, the political dimension of any method to justify light rail investment becomes apparent. Generally speaking, investing in light rail is seen by most politicians as being a good cause.

In Germany a traditional cost benefit analysis is used to justify the funds which come from the Federal Government. (This method is also applied in Switzerland, Austria and parts of Italy). One of the most important factors is the time savings to the public transport customer if a new line is installed. It is normally assumed that with each 1% time saving, additional demand of 0.75% for light rail service is created. It is further assumed that the transfer is made by the car users and not from any other mode. In reality, there is little evidence on how many people actually switch from car to public transport. Neither the public transport operators nor the Federal Government seemed to be interested in this question.

Although comprehensive traffic studies are normally carried out by the French transport authorities, no cost benefit analysis is demanded by the Central State. The British reader may find this surprising but this was also the case in Germany until 1982. Most major investment decisions regarding German light rail and underground were all made before this date. One of the reasons why the French may not require such an evaluation method may lie in the relatively low financial participation of the State in providing funds for light rail (only a maximum of 30% is funded). Funding of the rolling stock is not included in France but is in Germany. But the Versement Transport provides a significant proportion of the funds needed for light rail investment.

A very different approach is carried out in the Netherlands. Here the integration between land use and transport appears to be a very important factor. A traditional cost benefit analysis is combined with a multi-criteria approach, consisting of 20 different criteria. They include hard and soft measures and each of them is valued and weighted. This creates a balance sheet where the cost side is financial and the benefit side non-monetary. The results are provided as a benefit-cost ratio. Yet, independent of these calculations a high quality factor seemed to be decisive.

The Swedish studies allowed relatively little insight into their procedures but in the past a more traditional cost benefit analysis has been applied. This approach is questioned and new methods are being discussed that are similar to the Dutch appraisals.

The Federal U.S. Government does not seem to work with a cost benefit analysis as a decision device for the funding of light rail projects. But this does not imply that for an individual State that wants to obtain funding, cost benefit analysis is not carried out. In the past the decision making was highly political and more based on an equal distribution between the States than on a strict evaluation method. This may have been a deliberate choice because if such a method had been used the eastern States with their higher population and employment densities might have got most of the funding.


Complementary measures

Apart from the operational and technical aspects and the location of the lines the role of complementary measures may be decisive for the degree of success of light rail investment. Whether a system is characterised as successful or not depends on the indicators used. If the success of light rail is measured in passenger growth since the start of operations then most newly built light rail lines are thriving. There are only very few exceptions known among experts, though unfortunately Sheffield’s tram is one of them. However, if success is measured by the extent to which car drivers are lured out of their cars, then most light rail lines are not as successful as they could be, possibly because there is a lack of policy measures that could be used to strengthen the role of light rail.

Complementary measures are defined as all those measures which are not connected directly to the operation of light rail for instance restraint policies (pedestrianisation, closure of town centres to through traffic), ticketing and marketing. Complementary measures can be divided into hard and soft. Measures which support light rail in order to ‘force’ a transfer from car to tram are called hard measures. Some authors prefer the word ‘stick’ instead of hard. In contrast, all those methods which primarily try to persuade car drivers to use light rail are soft measures such as marketing or comfort improvements. Ideally a combination of soft and hard measures should be used. Hard measures have to be sold well politically, otherwise people may not be willing to accept them.

The full report can be purchased from ETP, 9 South Road, Brighton BN1 6SB, Tel. 1273-540955, Fax 1273-508791, E-mail:



Prof. Carmen Hass-Klau has a Professorship in Engineering and European Public Transport at the University of Wuppertal, Germany, and has also set up and directed Environmental and Transport Planning, a consultancy based in Brighton, England. She was also a member of the DETR Expert Committee advising on the preparation of the 1998 Transport White Paper.

Dr. Graham Crampton is a Lecturer in Economics at Reading University, England, and works for Environmental and Transport Planning on transport policy research projects.


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