The nature of light rail

Light rail is a modern form of public transport that runs on rails. It shares many characteristics with heavy rail system such as metros and suburban rail, but has lower capacity. Its main advantage over these other systems is that it is cheaper and more flexible since it can be operated on the road in mixed traffic. Generally this is not advisable since it will suffer from the effects of congestion, but it can also be run at the margin or along the median of highways. Usually it has a much simpler signalling than heavier rail systems, often relying on the driver's judgement in a similar manner to the driver of a bus, particularly in mixed traffic conditions. When it is running along a highway it can be given priority at signalised junctions. Light rail can also be elevated or built in tunnel. Often a combination of these is used to match local circumstances, for example by using disused railway embankments to provide a fast interurban route with street running in town centres.

Light rail is nearly always powered by electricity which is usually supplied through overhead wires, but can be supplied through a third rail system. The latter can only be used when the system is completely segregated from the public except at stations. It is also possible to have driverless automatic systems which also have to be segregated.

Light rail has much in common with the tram. In some ways it is simply a modern version of the tram, but in some cities, such as Amsterdam and Melbourne where there are extensive tram systems, light rail lines are being built, often with some segregation, to provide high speed links to areas not previously served by trams. Generally, light rail is modern, has at least some segregation from other traffic, and is powered by electricity. New systems are usually the subject of extensive marketing campaigns, and branded with a suitable name such as 'Metrolink' or 'Supertram'.

The growth of light rail

Light rail has grown in popularity in recent years. Since 1970, 61 metros and 78 light rail systems have opened as Babalik (2000) has shown, using data from Taplin (1997, 2000). Given the complexity of definition it is difficult to be clear which was the first modern light rail system. Rogers (1975) recognises the system in Edmonton in Canada which opened in 1976 as the first, regarding all previous examples as extensions to, or rehabilitation of, existing tram systems. Number of light rail systems and metros opened since 1970 shows the distribution of new light rail systems around the World. It also shows the number of new metros for comparison.

Source: Babalik (2000) based on Taplin (1997, 2000).

It can be seen that in the 1970s (and in the preceding decades) the number of metros built outnumbered the number of light rail systems. Since then the picture has reversed completely, with 69 new light rail systems opened since 1980 compared with 38 new metros. North America led this trend in the 1980s, but since then most activity has been elsewhere. Now there are more light rail systems than metros in Western Europe and North America (Babalik, 2000).

The cost of light rail

Light rail is not cheap. Babalik (2000) has collected data on a number of systems around the World. The 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 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. Cost and revenue indicators for light rail (and metro) systems show 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.

The variation in capital costs arises because of the different types of structure required: tunnel, elevated or at grade, the existing infrastructure (often disused railway trackbeds can be reused) and the quantity of utilities (gas, electricity, water and telecommunications) that have to be moved (rail-based transport systems cannot run over utilities because if a utility pipe or cable has to be repaired, the transport system cannot function, unlike a bus which can be diverted to another route). A major expense, typically about one quarter of the total cost of systems built recently in Britain, is the movement of utilities from under the road. Another element of the cost is land acquisition. If land has to be acquired, this may be very expensive, particularly if it is currently occupied by housing or economic activity. Nevertheless, it can be seen that, in general, light rail systems are, despite being expensive, much cheaper to construct than metros, which partly explains their increasing popularity as was shown by number of light rail systems and metros opened since 1970. Putting it another way, the lower cost per km of light rail means that it may be regarded as feasible to develop a system in a city which is too small to support a metro. Additionally, because the capacity of light rail vehicles is high, it is possible to have low operating costs per member of staff, possibly lower than on buses. Operating costs can be high, but it does not necessarily matter if the revenue is also high. The relationship between these two figures is expressed as the farebox recovery ratio, which is the percentage of operating costs covered by fare revenue. It can be seen that only Manchester Metrolink covers its operating costs. It is run privately under a franchise agreement, and there is no subsidy to the operator. The private sector operator is only interested in operating the system if a profit can be made. The next nearest to making a profit is Tyne and Wear Metro in Britain in which 77% of the costs are covered. This is an older system which is still publicly owned. After that comes the San Diego Trolley, which covers 68% of its costs. The San Diego Trolley is interesting because it was initially built with no funding from the Federal Government, with funding coming from state petrol tax. This meant that construction could start sooner and that various regulations, for example, prohibiting the purchase of vehicles from overseas, regulations, such as prohibition of importing vehicles, could be avoided (Wolinsky, 1994). Sheffield Supertram was privatised in December 1997 and now receives no operating subsidy.

The metro systems do not perform any better financially than the light rail systems, with three of them covering about 30% of their costs through the farebox, and Los Angeles Metro only recovering 4%. In general, the light rail systems perform better than the metros. This may partly explain the growth in their popularity as discussed above: they are cheaper to build and they perform at least as well as a metro in financial terms.
It can be seen that some systems are nowhere near covering their operating costs, such as the light rail systems in Los Angeles, Portland and San Jose. This raises the question as to whether this was due to incompetence in the development and operation of the system or whether they were developed for non-financial objectives with the subsidy required regarded as a cost to be paid in order to meet the objectives. The issue of why light rail systems are built will be considered in the next section.

It is worth noting that a number of commentators, particularly in the US, have criticised the development of light rail schemes for being extravagant and inappropriate uses of resources, even going as far as claiming that deceit has been used, for example in Dallas (Kain, 1990). Part of the problem has been that for a number of years the US Federal Government provided some funding for new urban pubic transport systems, with the amount of funding provided a function of the predicted level of patronage. Hence there was an incentive for planners to be optimistic in their forecasts of patronage. Pickrell (1992) demonstrated that there were significant differences between the forecast levels of patronage and those subsequently observed. A related concern is that money invested in light rail has not been well spent. Gomez-Ibanez (1985) examined the light rail systems in San Diego, Calgary and Edmonton. He found that not only were rail-based systems more expensive to construct than bus-based systems, but that the operating costs were higher. The systems did increase public transport patronage, but only modestly and at a high cost. He concluded that investment in bus-based systems would have been more cost-effective. Kain (1988) came to similar conclusions about the Los Angeles and Dallas systems.

Light rail as an instrument of policy

Before considering the impact of light rail as a policy instrument it is very important to consider why such systems are developed. It is not reasonable to criticise systems for not achieving certain objectives if such objectives were not amongst the objectives the systems were designed to meet.

A study of the decision process underlying the choice of technology (metro, light rail, guided bus or conventional bus) for a number of systems around the World was carried out in the Centre for Transport Studies at University College London in 1991-1994 under the UTOPIA project. As part of that work interviews were held with a number of experts involved in the development of some systems to collect information on various aspects of the decision-making process including discussion on why the systems were developed. A postal survey was carried out on other systems. The status of systems examined for their objectives are shown, as are the objectives for developing the systems cited by the experts.

Source: Mackett and Edwards (1998).
Note: The surveys upon which these data were based were carried out in 1992-1994. The status information has been updated.

An example that relates development to travel demand was Dallas where the new system was designed to enable companies to choose locations that would enable them to meet their legal obligations to reduce the number of cars being used by their employees.

Clearly, it is believed that light rail systems can help to stimulate development. It is not clear what the mechanism is that underlies this process. Some experts suggested that the mechanisms are related to 'image', 'confidence' and so on. The only evidence cited was in the case of Leeds (Pope, 1994) where a survey of businessmen showed that many of them would support the investment in a new public transport system. Apparently some of the major store chains would be more likely to expand their shops in Leeds if such a system were developed.

Source: Mackett and Edwards (1998).
Note: The information in this table is based upon interviews and postal surveys of experts involved in the development of the systems. For the list of experts see Mackett and Edwards (1998). The surveys upon which these data were based were carried out in 1995-1996.

The objectives of developing light rail systems indicate that the most popular reason for developing the systems was to stimulate development. In three cases, Brisbane, Copenhagen and London Docklands, the light rail system was an integral part of the redevelopment of a large area. For the Calgary, Croydon, Leeds and Dallas systems, the objective was to help stimulate development in the city centre by providing easier access to the economic activities there. General promotion of economic development in the urban area was cited for Nottingham, Baltimore and Kansas City. It was the only major objective in the case of Kansas City.

The second most common objective cited was 'to improve public transport'. It might be argued that this is axiomatic, but usually it was linked to a social objective, for example, providing better access for those without a car. A related issue is that of serving the city centre, because segregated public transport is very good at this, as it can serve efficiently the main corridors which focus on the city centre where most economic activity takes place and interchange is easier. An interesting variant on this is to provide transport from the inner city where there is often high unemployment outwards to newer employment centres. This was mentioned for the Croydon, Tyne and Wear and West Midlands systems.

'To reduce traffic congestion' was cited in 10 cases, implying that a significant transfer of trips from car to the new system was anticipated. In five cases, 'To improve the environment' was cited. Generally this means reducing atmospheric emissions from cars and so is related to reducing car use. These two reasons imply that some planners believe that developing new light rail schemes can reduce car use significantly.
The 'other' reasons include a variety of factors. For example, the Manchester and Tyne and Wear systems were developed as ways of dealing with heavy rail lines in need of renewal. Replacing heavy rail by light rail meant that the system could be brought into the city centre to improve access there. In Dallas, a prime motivating factor was to help to promote Dallas as a 'World city'. The logic was that all 'World cities' have a modern public transport system so Dallas had to have one.

It has been shown that a number of policy initiatives underlie the development of new light rail systems. These relate to improving public transport, reducing car use, improving city centre access and stimulating development. In the next section the theoretical concepts underlying these ideas will be examined.