HC Deb 03 July 1992 vol 210 cc729-30W
Mr. Booth

To ask the Secretary of State for Transport what steps are being taken to ensure that road and rail infrastructure investments are being appraised on a comparable basis.

Mr. Freeman

The Department of Transport published last January a paper on investment appraisal in road and rail transport, which attracted helpful comments from many quarters. Many of these comments expressed concern about the relative roles of cost-benefit analysis and of financial analysis, and in particular the view that cost-benefit analysis should be more widely used in the appraisal of all transport infrastructure.

Different forms of transport should be able to compete on fair terms. This should be reflected in the criteria for Government grants and investment rules. It also follows that users of transport should as far as possible pay the full cost of the services they use. Although it is efficient to allow road congestion relief and other external benefits to be taken into account in the pricing of urban public transport, the benefits to public transport users themselves should be met as far as possible through fares.

If a new public transport investment cannot pay its way after counting both revenues and external benefits, the case for it is generally very weak. The availability of finance will remain a major consideration for any transport investment, be it in road or rail. So I see no reason for any change to the current grant rules. But benefits to users which cannot be recovered in fares can be relevant in, for instance, considering relative priorities between competing projects. I have therefore asked officials to develop further guidance on the use of cost-benefit analysis in urban transport appraisal.