Sector funding and cost recovery

Political decisions about the funding of the urban passenger transport sector, and the degree to which passengers and other stakeholders contribute to the costs of service provision, have a major influence on both the quality and the price of those services.

The key decisions to be taken with regard to fare collection relate to the extent that service costs are borne directly by their users, the setting of standards for those services, and the actions that may be required when and/or where direct cost recovery is impractical – together with the source of supporting funds to meet the resultant deficit.

Relevant factors are as follow:

  • Cost recovery from route operations
  • Service standards
  • Public service obligations (PSO)
  • PSO reimbursement
  • Capital expenditure
  • Maintenance expenditure
  • External funding sources
  • Addressing funding deficits
  • Application of subsidies