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Cost Benefit Analysis and New Rail Lines

Geoff Riley

16th June 2009

It is refreshing to read of a possibility of an expansion of the UK rail network. This is not simply an emotional response to the beauty of steam, but because for decades now we have underestimated the economic and social benefits from a well integrated and efficient rail network. The Association of Train Operating Companies has released a report urging new investment in the UK rail network to include opening up perhaps fourteen new lines in the years ahead.

According to ATOC, today’s rail network carries 30% more passengers than it did 45 years ago on a network considerably smaller than it was then. Using their own cost benefit analysis - which gives great weight to possible agglomeration economies of scale, they estimate that in England alone there are 14 places where there could be a positive business case for a new line to provide access to communities each with a population of 15,000 or more but which are currently not served by rail.

Here is the link for colleagues who want to download the report and the accompanying cost benefit analysis. It could form the basis for an excellent case study.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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