Analysis of Light Rail Systems in Spain According to Their Type of Funding

Abstract

Since the year 1994, when the city of Valencia reintroduced the tramway (more specifically, the second generation of trams, known as Light Rail System), this means of transport has been introduced in many urban areas in Spain. It is an innovative transport system that substantially improves the features of the old trams that crossed Spanish cities until 1976.The technical characteristics of this means of transport make it a sustainable alternative for urban settings, as it produces less acoustic and environmental pollution, and it is safer than other modes of transport. In comparison with the underground and the bus, the Light rail offers an intermediate transport capacity, which makes it adequate for medium-sized cities or certain zones within large metropolitan areas. Finally, the modern design of these modern trams, together with the urban regeneration of the zone where it circulates, is frequently used to improve the image of a city. In 2012 there were 16 Light Rail Systems in 13 Spanish cities (Valencia, Alicante, Madrid, Barcelona, Parla, Sevilla, Vitoria, Bilbao, Murcia, Tenerife, Zaragoza, Jaén, and Vélez-Málaga).However, in some cases these Light Rail Systems have involved high costs of implementation and operation that the respective financing entities (Public Administration and/or private enterprise) can hardly face. Moreover, they are functioning at a much lower level of demand than their capacity, meaning they could be considered an economic and social failure.At this point in time, two decades after the introduction of Light Rails in Spain, there is a need to analyse the factors that may have influenced the success or failure of this novel type of transport. Although such an analysis should be approached from diverse perspectives, the present contribution focuses on the influence of private financing in these projects. More specifically, a qualitative and quantitative analysis is carried out to determine if there is a significant relationship between the percentage of private participation in financing this transport system and a series of relevant variables: total investment, cost per unit of length, operating and maintenance costs, percentage of length underground, passengers’ demand, investment per passenger, fares and subventions, etc. In view of the results, it will be assessed whether the private funding behind the Light Rail Systems in Spain has proven efficient for society.