Public Transport Infrastructure Funding

Public transportation infrastructure projects traditionally have been funded by the public sector, however,financial shortages and budget cuts are requiring the search for alternative ways to finance these investments. Although financing may be raised from a range of sources, public private partnerships (PPPs) are increasingly being used for public transportation infrastructure projects. PPP combines the responsibility of a public authority to establish public transportation infrastructure, integrated into urban development, with the innovation, efficiency and funding capacity of the private sector. Although PPPs spread the investment burden between public and private sectors, they do have some disadvantages. PPPs can add to costs in the form of additional legal burdens associated with complex contractual arrangements and of the necessity for profits to be earned by the contracting party. At least one public transportation authority has reduced reliance on outside contractors in order to reduce costs and to improve the quality of infrastructure work. However, a finely-balanced PPP can be an efficient way to fund public transportation infrastructure and the use of such arrangements is expected to continue in this sector.