In Britain, successive governments have adopted a policy of competition without explicit subsidy for long distance transport systems (rail, air, coach, private car). Consistent with this policy, has been the successful transformation of InterCity into an identifiable business unit achieving a target profit return on assets and the user of financial appraisal to examine investment in the principal national rail network. The paper traces the reasoning behind this position and contrasts it with that adopted for road investment and with the recently announced DTP guideline that cost benefit techniques may be appropriate for investment in BR's other two passenger business sectors. The case of the Midland Main Line, subject of a major study by consultants on behalf of the local authorities due to be published in Spring 1990, is used to illustrate the wide divergence of results from financial and cost benefit approaches, contradicting earlier Department of Transport based research findings. With reference to the welfare economics second-best concept, it is shown that when major parts of the national transport network (motorways: airport flight paths) are congested, and that the marginal cost of increasing supply for these modes is very high, that use of financial appraisal techniques will suppress demand and hence economic activity levels if applied to investment in competing modes. Alternative approaches to the straightforward application of cost benefit principles are considered, with reference to the Section 56 Guidelines, which are interpreted as an explicit recognition of the role of transport in meeting broader planning objectives. Consideration is given to whether a consistent framework can be developed for criteria applicable to schemes of national importance embodying this principle, in which rather than a focus on user benefits, the derived nature of transport demand points to a need for a means of assessment based on a number of external measurable objectives.
Samenvatting