[sustran] Re: WB urban transport draft strategy ex.summ.1

[SUSTRAN Resource Centre]

At 18:03 9/11/00 +0300, Alan Howes wrote:
>Broadly I agree with what the WB are saying - and I am neither conservative
>nor an economist. Of course there is scope for some cross-subsidy within
>transit networks - but you have to be clear where and why. Who is
>subsidising whom in Toronto and Montreal? (And do any routes actually make a
>_profit_ that's available for cross-subsidy?) If it's low-income users on
>high-volume lines subsidising high-income users on low-volume lines, then I
>would venture to suggest that something is wrong - and this is what I read
>the WB as saying. If anyone should bear the cross-subsidy, it should be the
>car users in the high-income areas - especially commuters. But cross-subsidy
>is a very blunt instrument compared with a proper road user charging system
>that, as nearly as possible, reflects the true infrastructure, operational
>and social costs of transport use.

In fact, they ARE apparently advocating transfers between road and public
transport sectors, eg by talking about integrated finance for all modes of
urban transport. It will be interesting to see how strongly they are
committed to this. I am sure there may be some problems in the details -
which I have not yet examined carefully ... but personally I  support the
idea of integrated finance via an urban transport fund or such like.  

The following quotes are the most relevant ones from the exec summary of
the review document:

"xxxvii. Pricing principles for public transport modes should be determined
within an integrated urban strategy, and should then reflect the extent to
which road infrastructure is adequately charged. Given the high level of
interaction between modes, and the prevalent undercharging of road use, no
absolute value should be ascribed to covering all costs from fares, either
for public transport as a whole, or for individual modes. In particular,
transfers between roads and public transport services, and between modes of
public transport are potentially consistent with optimal pricing strategy.
However, in the interests of efficient service supply, transport operators
should operate competitively, with purely commercial objectives, financial
transfers being achieved through contracts between municipal authorities
and operators for the supply of services. Any non-commercial objectives
imposed on operators should be compensated directly and transparently,
where appropriate by non-transport line agencies in whose interests they
are imposed. Above all, In the absence of appropriate contracting or other
support mechanisms the sustainability of public transport service should be
paramount, and generally have precedence over traditional price regulation
arrangements.

xxxviii. Some urban transport financing principles follow. Given the
interaction between modes, there is a strong case for the pooling of urban
transport financial resources within an urban transport fund administered
by a strategic transport authority at the municipal or metropolitan level.
Inter-governmental transfers should normally be made to the fund, and
should be structured to avoid distorting the efficient allocation of
resources within the transport sector at the local level. Private sector
financing for transport infrastructure should be raised through competitive
tendering of concessions, which may be supported by public contributions,
so long as these have been subject to proper cost benefit analysis."

Paul


Paul BARTER
(a.k.a.  A. Rahman Paul Barter)
SUSTRAN Resource Centre
P.O. Box 11501,  50748 Kuala Lumpur, Malaysia
sustran at po.jaring.my

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