The effects on supply and demand

A new light rail scheme will have both direct impacts as a new mode, and indirect impacts as an alternative to existing modes. The table below shows the likely short-term impacts.

Demand Responses

Response	Reduction in road traffic	Expected in situations
		Transfer to light rail from other mode may involve change in departure time
		Infrastructure may reduce capacity for other vehicles causing diversion on to other roads. Alternatively transfer to light rail may free up road capacity again leading to changes in route.
		As a result of transfer to light rail.
	?	Improved public transport supply may lead to more trips overall. Possible reduced road space for other vehicles due to light rail infrastructure may reduce car trips.
		Possible transfer from car to light rail.
		Improved public transport supply may encourage reduced car-ownership
		A possibility - especially if in rented accommodation.

	= Weakest possible response,		= strongest possible positive response
	= Weakest possible negative response,		= strongest possible negative response

= No response

Short and long run demand responses

The table below indicates the potential magnitude of expected responses in the short and long-term.

Response	-	1st year	2-4 years	5-10 years	10+ years
	-
	-
	Change job location
-	Shop elsewhere
	-
	to light rail
	-
	-

	= Weakest possible response,		= strongest possible positive response
	= Weakest possible negative response,		= strongest possible negative response

= No response

Finance

The cost of light rail

Light rail is not cheap. Babalik (2000) has collected data on a number of systems around the World. The table ‘cost of light rail systems (and metros)’ shows data for 23 light rail systems, plus four metros for comparison.

Source: Babalik (2000)
Note: N/A indicates that data were not available.
Capital costs represent the value of the investment in the year 1998.

All costs and revenues are in UK Sterling at 1998 prices with currency conversions made using the purchasing power parity index provided by OECD (obtainable from http://www.oecd.org/std/nadata.htm).

The figure below shows that in the US average operating costs per passenger mile tend to be higher for light rail than heavy-rail and commuter rail but lower than the equivalent figure for bus. It is likely that if the analysis were performed on a per trip basis light rail would perform less favourably when compared to bus but more favourably in comparison with other rail systems.

Average operating cost by mode and city category in the US (APTA, 2002)

The cost of a system is influenced by many factors including its size. It is also useful to consider costs in terms of patronage, and to compare operating costs and revenue to see how close to profitability the system is. The table below shows the capital cost per kilometre of route, the annualised capital cost per passenger, the operating cost per passenger, the fare revenue per passenger, and the farebox recovery ratio, which is the ratio of revenue to operating costs. For comparison, the five metros are also included.

Source: Babalik (2000).

Note: N/A indicates that data were not available.
All costs are in UK Sterling at 1998 prices.
The capital cost has been annualised by discounting the capital cost in the year 1998 over 30 years at 8%. This has been done for all systems to allow comparisons. It is not necessarily how it was originally done for economic evaluation of the scheme.

Supply impacts

Light rail systems are likely to have the effect of reallocating road space from general traffic to light rail. The system may reduce the vehicle carrying capacity of a road that is certain to increase the person carrying capacity. Where modal shift occurs from car, road capacity may be freed up, encouraging people who were deterred by congestion to drive (Mogridge, 1997).

Light rail transit often represents a significant improvement in quality of service from that which can be provided by bus - particularly if there are insufficient bus priority measures. Ride quality, capacity, speed, access for disabled, and reliability are all likely to be improved.

Impact on the supply of other public transport may depend on the level of regulation. In a regulated bus market bus services are likely to be rearranged to complement the light rail system with feeder services. In a deregulated market, in the short term at least, there is likely to be significant competition from bus operators on the same corridor.

If the system is not carefully designed the rails can represent a significant danger to cyclists (McLintock, 2003) e.g. Sheffield Supertram

Anticipated impacts on policy objectives

Objective	Scale of contribution	Comment
	/	By reducing overall disutility of travel for those travelling by LRT. If there are significant transfers from car then reduced congestion will improve transport efficiency. On the other hand, reduced road space dedicated to private car may increase congestion in the short run at least.
		Any transfers from car will reduce the adverse impacts of traffic allowing development of more attractive urban areas. In residential areas, the light rail layout often leads to pieces of land left unused. These can be turned into linear parks or play areas (e.g. Sheffield). Overall, a new light rail system is likely to make cities more pleasant to live in, partly because of the opportunity for complementary development that it offers.
		By reducing air and noise pollution and pressures on green space and environmentally sensitive sites. Light rail systems are invariably electrically powered avoiding all omissions locally but probably requiring fossil fuel consumption for the production of that electricity. In the longer term, environmental benefits are likely to be greater if the scheme reduces road capacity for private vehicles.
		A light rail system does offer a high-quality alternative to the car although not necessarily in areas where the socially excluded live. Modern light rail offers level boarding which is helpful for the mobility-impaired - especially those in wheelchairs.
		Light rail is safe compared with car and even bus, both because the technology is intrinsically safe and because operating regimes tend to place heavy emphasis on safety. If there is a net transfer from car to light rail with little induced road traffic, then it should lead to an increase in safety. With on-street running systems the main danger is likely to be a lot of cyclists slipping on or getting stuck in the tracks. Careful design can mitigate these risks.
	/	By offering a stimulus to economic development; by enhancing the economic potential of existing economic centres and possibly encouraging investment through improved image of an area. On the other hand, the major investment required and the implied increase in taxation may stifle economic growth. It is sometimes argued that light rail (and other major transport investments) redistribute economic growth but do not lead to a net increase in growth. The same may be true or increases in property prices. On the other hand, it could be argued that light rail can encourage centralised high-density development which is more sustainable economically and environmentally than out-of-town developments that can only be accessed efficiently by private car.
		High capital costs with the majority of systems not even covering operating costs with fares, and none covering capital costs.

	= Weakest possible positive contribution,		= strongest possible positive contribution
	= Weakest possible negative contribution		= strongest possible negative contribution

= No contribution

Anticipated impacts on problems

Problem	Scale of contribution	Comment
Congestion-related delay		Reduce delay due to transfer from car. In the shorter-term disruption associated with construction may increase traffic congestion, whilst reduced road space once the system is operational may increase congestion on certain corridors.
Congestion-related unreliability	/	See explanation above.
Community severance		A segregated system could actually sever a community but careful design can avoid this. The most likely impact is a positive one due to reduced road traffic levels associated with transfer from car on certain corridors.
Visual intrusion		Due to reduced road traffic levels associated with transfer from car, although associated infrastructure may cause some slight visual intrusion.
Lack of amenity		Due to reduced road traffic levels associated with transfer from car.
Global warming		Due to reduced road traffic levels associated with transfer from car.
Local air pollution		Due to reduced road traffic levels associated with transfer from car.
Noise		Due to reduced road traffic levels associated with transfer from car.
Reduction of green space		Reduced road traffic levels associated with transfer from car may reduce pressure for further road construction.
Damage to environmentally sensitive sites		Due to reduced road traffic levels associated with transfer from car
Poor accessibility for those without a car and those with mobility impairments		A high-quality alternative to the car although not necessarily in areas where the socially excluded live. Modern light rail offers level boarding which is helpful for the mobility-impaired - especially those in wheelchairs.
Disproportionate disadvantaging of particular social or geographic groups	/	Tends to serve high volume corridors that are likely to already be well served by public transport.
Number, severity and risk of accidents		Providing the system is designed in a manner that considers cyclists’ safety.
Suppression of the potential for economic activity in the area		By offering a stimulus to economic development; by enhancing the economic potential of existing economic centres and possibly encouraging investment through improved image of an area.

	= Weakest possible positive contribution,		= strongest possible positive contribution
	= Weakest possible negative contribution		= strongest possible negative contribution

= No contribution

Expected winners and losers

We would not necessarily expect everyone to directly benefit from the introduction of a light rail system. The table below highlights the main groups of people who could be expected to be direct beneficiaries, as well as those who could be expected, in the first instance at least, to lose out. It should be remembered, however, that this only relates to the direct, immediate impacts; mitigating measures could be put in place to help those who lose out. It should also be noted that impacts are focused on the routes served by the light rail system, and that long term impacts as a result of potential changes in surrounding land use and consequently that further a field could be different.

Expected winners and losers

Group	Winners / losers	Comment
Large scale freight and commercial traffic		High value journeys – because less car traffic, therefore less time spent in congestion the greater the vehicle utilization – relatively small proportion of journey distance in urban conditions.
Small businesses		In areas served by light rail.
High income car-users		New alternative mode, fewer cars on the road.
People with a low income		They will benefit if they live in an area served by light rail, but if this is not the case and there is less funding for other alternatives to the car, they are likely to disbenefit.
People with poor access to public transport		They will benefit if they live in an area served by light rail, but if this is not the case and there is less funding for other alternatives to the car, they are likely to disbenefit.
All existing public transport users		New public transport alternative – mainly benefits those living near route.
People living adjacent to the area targeted		They may benefit from reduced congestion and improved or increased public transport supply.
People making high value, important journeys		A new efficient alternative is available.
The average car user		Where they are able to travel more efficiently, saving time and money.

	= Weakest possible positive contribution,		= strongest possible positive contribution
	= Weakest possible negative contribution		= strongest possible negative contribution

= No contribution

Barriers to implementation

As the decision to implement a light rail system can be largely political, there may well be problems associated with this, not least justifying the substantial expenditure. However, further, factors will be the way in which the policy is presented to the public, the public acceptability of the policy and whether the necessary legal powers are in place. The scale of barriers is indicated in the table below.

Barriers to Implementation

Barrier	Scale	Comment
Legal		The extent of legal barriers varies greatly according to the legislative framework. Integration of a light rail system with local bus in particular but also rail networks is important to its success. In the UK outside of London it is at the time of writing (July 2006) very difficult to force cooperation from local operators. In countries where local transport is government-controlled (as is the case in much of continental Europe) this is much less of an issue.
Finance		Even if a business case can be demonstrated, the size of the sums involved for construction means that in many countries implementation plans are dictated by the finances of regional and/or national government.
Political		The political situation often relates to the question of financing. However, there are also local issues associated with construction itself such as the forced purchase of land and the removal of parking and delivery access for business premises.
Feasibility		Technical feasibility varies greatly according to physical and human geography of the area. Most technical difficulties are not insurmountable in themselves but may push costs to an unacceptable level.

	= Weakest possible positive contribution,		= strongest possible positive contribution
	= Weakest possible negative contribution		= strongest possible negative contribution

= No contribution