Privatisation and Regulation of Urban Transit Systems

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Urban public transport services generally run at a large deficit. This has led public authorities to seek efficiencies, notably through private sector involvement. Support for the sector traditionally seeks to provide basic mobility services to all segments of society, including low-income users. Intervention is also required to manage the natural tendency towards concentration and market power in the provision of these transport services. Policy towards urban public transport is increasingly aimed at managing congestion on the roads and mitigating CO2 emissions by substituting for travel by car. 

Achieving coherent transport networks that are efficient and financially sustainable is a challenge for any public authority. This Round Table examines experience in integrating private management and capital with public transport policy objectives in a number of developed economies. For network operators, the Round Table concludes that innovation is the key to surviving the rapidly changing policy and regulatory environment.

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Summary of Discussions

International Transport Forum

The Round Table to assess reforms of urban transit systems, entitled “Privatisation and regulation of urban transport systems”, took place in Paris. It was chaired by Mr. Yves Crozet of the Laboratoire d’Economie des Transports (LET), based in Lyons (France). The background reports were by Dr. Rosário Macário (Instituto Superior Tecnic, Lisbon Technical University, Portugal), who focused primarily on the broad trends driven by urban transit reform; Mr. Matthew Karlaftis (National Technical University of Athens, Greece), who looked more closely at the cost implications of reform initiatives; Prof. Martin Wachs and his co-authors (Rand Corporation, Los Angeles and University of California, Berkeley, United States), who focused on changes in labour relations stemming from regime change in transit activities; and Mr. Rainald Borck (University of Munich and the Deutsches Institut fürWirtschaftsforschung, or DIW, Germany), who shed new light on how the relative importance of socio-economic categories shape the urban transit reform process at the local level.

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