Innovative Funding Solutions for Public Transport: Survey Results

An increase during the last decade in demand for transportation services, in terms of ridership, coverage and quality expectations, has caused a subsequent increase in operation costs. Traditionally, Public Transport Operators (PTAs) rely on local or national government support in the form of subsidies to cover operational deficits. However, this reliance places PTAs in a risky situation, as budget cuts reduce funding needed to provide sufficient and high-standard public transportation services.

Against this background, EMTA Workgroup Funding and Regeneration is dedicated to tackling this issue. An investigative survey was carried out by RebelGroup advisors to uncover the innovative funding sources used to cover recurring costs of operating and maintaining public transportation services and assets by EMTA’s member PTAs.

Survey questions revolved around five key areas:

1. Inventory of the current state of PTA funding structure and sources,
2. inventory of innovative models already experimented with/implemented by PTAs,
3. inventory of plans under consideration/development by PTAs,
4. enabling conditions and mechanisms and
5. open inventory and document additions.

15 of 26 member PTAs responded to this survey.

Key learnings

Results showed an increasing trend in indirect revenue streams as a proportion of total revenues received by PTAs (7% increase in a 4-year period). Coincidentally, there was an equivalent increasing trend in the proportion of subsidies/grants received by PTAs (7% over the same 4-year period)

The solutions that were identified have been grouped into four key themes:

1. Generic value capture (Solutions capturing (part of) the economic benefits of improved public transport services accruing to the broader urban economy.
2. Targeted value capture (Solutions very specifically capturing (part of) economic value generated by the realisation of new residential areas, shopping malls, other commercial properties, etc)
3. Private-to-public value capture (Solutions typically aimed at discouraging private car use in order to reduce congestion and/or environmental impact, with the incidental additional benefit of capturing (part of those) funds to cover public transport expenditure.
4. Other innovative solutions (solutions exploring new economic opportunities, general tax charges, etc)