Select Committee on Transport Written Evidence

Supplementary memorandum by Professor David Newbery, University of Cambridge (FOR 78A)


  1.  The tables and graphs attached compare infrastructure investment in road and rail from 1990-91 to 2000-01 at constant prices, using data from the Department for Transport Transport Statistics 2002. The volume of traffic on each mode is a value weighted sum of passenger km and tonne km, where the weights are the relative revenues (pre-subsidy) per passenger km to revenue per tonne km for railways in 2001. To be precise, the volume of road (and rail) traffic is billions of passenger km + billions of tonne km/2.75, as the average revenue (before subsidy) per passenger km is 2.75 that of freight tonne km. The bottom panel gives the share of rail in total traffic, showing it to be about 6% in total, and about 10% of tonne-km (which overstates the value of the freight km carried).

  2.  The first graph shows the evolution of infrastructure investment (on the left-hand scale) and the volume of traffic in billions of passenger km equivalents (on the right-hand scale). Road investment steadily falls while rail investment steadily rises.

  3.  The second graph shows the ratio of infrastructure investment per unit of traffic carried on rail versus road. From 1990-91 to 2000-01 the unweighted ratio grew from 2.5 to 10.4 while the weighted ratio grew from 2.8. to 11.5. In other words the relative rate of investment compared to traffic carried in rail compared to road rose by a factor of four over the decade. More important, the rate of investment per unit of traffic carried at the end of the decade was over ten times as high in rail than road.

  4.  It is difficult to see how this can represent a rational allocation of scarce investment funds under an integrated transport policy. Until the SRA produces convincing cost-benefit defences of its investment programme one should assume that reallocating resources to roads would increase value for money.

October 2003

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