OPERATIONAL ECONOMICS

Urbanization and the growth of cities have propelled specific transportation systems to become the core infrastructure for mobility. Rapid urbanism has led to a surge in city populations, making efficient transit systems the essential backbone for how people move around. This is also becoming more important in the age where addressing sustainability as defined under the UNSDG agenda, is paramount.

Traditionally transport and transit systems are considered to be a public service, not for profit. However, I view that in an ideal scenario, transportation systems should strive towards financial self-sufficiency, alleviating the strain on government budgets. Freeing up resources for crucial social services like education, healthcare, etc. fostering a more equitable social order.

It is important to understand the cost of transportation & the economy of the cities and country.  Richer countries could subsidise transport systems, whilst economically weaker countries and cities will find this to be challenging. Nevertheless, a well-designed transportation system is a perquisite for all urbanised cities / countries. Many Asian cities in Japan, Singapore & Hong Kong have very interesting business case for their transport systems. All of which are, in the motto of the Singapore SMRT, 'Kaizen', in a continuous improvement in state. Which needs to be the corner stone of transit systems - at least in commercial sense.

The two aspects of funding required, one for the capital cost and second for the operational cost. The capital cost will aways be a challenge for many countries. Even if you have a good GDP(PPP), you may not have the technology to deliver the works. An innovative mechanism such as PPP may be a suitable model? However, for the operational side, the system design needs to be robustly designed, such that system is able to pay for itself. 

This analysis of operational funding and design will inform the next section, which examines successful models from around the world. By understanding how different cities have achieved a balance between fare revenue, government support, and other funding sources, we can learn valuable lessons for creating efficient and sustainable public transit systems that embody the "Kaizen" principle of continuous improvement.