Entrepreneurial

 Rail  Model    

Understanding  Private  Sector    

Financing  Approach  to  Urban  Transit  

2018  
 Tradi@onal  Approach  
i.  Typically  public  sector  (government/municipality)  led  
ii.  Requires  financial  guarantee  from  public  sector  
iii.  Struggles  to  break  even  and  never  makes  a  profit  
iv.  LiLle  net  economic  or  financial  benefits  to  the  economy  
v.  Subsidized    
 Entrepreneurial  Rail  Model    

i.  This  model  assumes  unsolicited  bids  –  a  consor@um  of  land  developer,  train  builder,  
train  operator  and  financier,  provide  municipality/government  with  a  rail  project  bid  
that  proceeds  to  an  evalua@on  phase.  

ii.  With  a  private  capital  model,  government/municipality’s  role  is  in-­‐kind  ac@vity  to  
ensure  land  assembly  and  land  acquisi@on,  zoning  and  other  transport  planning  
integra@on  is  fully  covered.  This  would  depend  on  sufficient  land  being  available  to  
generate  the  capital  and  enabling  whatever  mechanisms  are  needed  to  generate  
private  investment.  It  would  mean  that  the  project  could  be  off  balance  sheet  and  
hence  would  help  with  state  government  credit  ra@ngs.