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[quote]QUOTE: Originally posted by Tulyar15 [quote]QUOTE: Originally posted by Lotus098 Getting back to economics and transport, if you go back to Adam Smith, you will find that he accepts that roads (and hence transport infrastructure) are a legitimate responsibility of government. As for the issue of susbidy, it has been shown time and time again that unprofiitable does not mean uneconomic as non users benefit from rail services. Then of course there;s also the issue of climate change which even President Bush is finallly waking up to.[/quote] I think this is a very interesting point, would you care to expand on it? [/quote] Certainly. [quote]QUOTE: One of the most quoted studies is that which the Greater London Council did in the 1960's when it was deciding whether or not to build the Victoria line. The results of the study suggested that on a pure profit and loss basis the line would loose money but the wider benefits such as reduced journey times, reduced congestion on other subway lines and also the road, greater property values would outweigh this. So the GLC went ahead and buitl the Victoria line, which opened in 1967. Within 10 years of opening it had paid for itself several times over as a result of the greater property values (and hence tax revenue - in Britain most local authorities are funded by property taxes). So a scheme which would not have been attractive to private investors was nonetheless affordable and financially worthwhile to local government. Since the 1960's the UK Government has developed a method of assessing whether public sector projects represent good value or not by attempting to quantify the economic benefits of the project. For a project to be viable the ratio of benefits to cost must be at least 1.15 to 1 ie $1.15 of benefits for every $1.00 spent. In the case of the Waverley line from Edinburgh to Galashiels which the Scottish Parliament has just voted to re-open, the ratio is 2:1 which is regarded as very good. Benefits are likely to include giving greater mobility to people in an area of high unemployment, reduced unemployment as a result and as a consequence of this greater wealth to that area. At the same time it will also make it easier for day trippers to visit the area, bringing more money. Finally I'd like to quote another example of non-users benefiting from the existence of a rail line. For several years I used to go up to Scotland to work on the Strathspey Railway, a preserved line which runs from Aviemore to Boat of Garten. Boat of Garten is a small village with just one shop and a pub. The guy who runs the shop told me that without the trade the railway brought him, he wouldn't survivie in business. As a result the villagers of Boat of Garten benefit by having a shop they would not have if the railway were not there.[/quote] As you have pointed out this made the line economically feasible. I would not be totally against it in such a case, but one must be careful. Even if the government funds it, running it would still be a serious problem. If it works so well, what is keeping investors from it? Also does anyone think there are any economically feasible lines here in the US?
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