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Public Transport Funding Policy in Madrid: Is There Room for Improvement?

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Public transport policy in the Madrid Metropolitan Area is often deemed as a success. In 1985, an important reform was carried out in order to create a new administrative authority to coordinate all public transport modes and establish a single fare for all of them. This reform prompted a huge growth in public transport usage, even though it reduced the funding coverage ratio of the transport system. Since then, Madrid's public transport system has been undergoing an increasing level of subsidization, which might jeopardize the financial viability of the city public transport system in the future. In this paper, we present a detailed analysis of the evolution of the public transport funding policy in Madrid in recent years. We found that the increasing level of subsidy can hardly be explained on the basis of equity issues. Moreover, we claim that there is still room for a funding policy that makes the efficiency of the system compatible with its financial sustainability.

Document Type: Research Article


Affiliations: 1: Transport Research Centre (TRANSYT), Universidad Politecnica de Madrid, Madrid, Spain 2: Sustainable Development Department, Latin America and the Caribbean Region, Transport Cluster, The World Bank, Washington, DC, USA

Publication date: 2009-03-01

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