The rise and fall of public-private-partnerships: how should LRT/Metro transport infrastructure be funded in the United Kingdom?


M Gannon
N Smith

Document Type

Conference Paper

Publication Date


Subject Area

mode - subway/metro


Even though a Light Rapid Transit (LRT) or Metro scheme might have a robust economic business case and surpasses the investment decision, it is unlikely to progress to the transaction stage until the project’s funding has been identified and agreed between Local Government promoter and Central Government. In the United Kingdom (UK) since the early nineties Public-Private-Partnerships (PPP) have been used as a means of funding LRT and Metro projects that has accounted for nearly £20bn. This funding mechanism has been utilised to deliver seven LRTs and major upgrades to London Underground Limited’s (LUL) transport system. Significant problems have existed with this form of funding despite the UK government’s political and economic motivations for this initiative. Possibly the demise of PPP as applied to rail transport in the UK, was marked in time by two significant events. In July 2004 when the Secretary of state for Transport revoked three LRTs (Manchester Phase 3, Leeds SuperTram and South Hampshire Rapid Transit) due to bid prices exceeding estimated target prices; and in 2007 with the partial collapse of the government’s controversial London Underground Limited PPP. The aim of the paper is review the evolution of PPP funding models used by the UK Government since the early nineties and examine possible explanations as to why this form of financing has not been suitable for LRT and Metro schemes; and then to re-examine the fundamental question, ‘How should public sector rail transport infrastructure be funded in the UK?’.


Permission to publish abstract given by AET.