Many countries offer subsidies to their railways because of the social and economic benefits that it brings. The economic benefits can greatly assist in funding the rail network. Those countries usually also fund or subsidize road construction, and therefore effectively also subsidize road transport. Rail subsidies vary in both size and how they are distributed, with some countries funding the infrastructure and others funding trains and their operators, while others have a mixture of both. Subsidies can be used for either investment in upgrades and new lines, or to keep lines running that create economic growth. Rail subsidies are largest in China ($130 billion), Europe (€73 billion) and India ($35.8 billion), while the United States has relatively small subsidies for passenger rail with freight not subsidized.

Social and economic benefits of rail

Railways channel growth toward dense city agglomerations and along their arteries. These arrangements help to regenerate cities, increase revenue from local taxes, increase

housing Housing, or more generally, living spaces, refers to the construction and assigned usage of houses or buildings individually or collectively, for the purpose of shelter. Housing ensures that members of society have a place to live, whether ...

values, and encourage mixed use development. By contrast, a policy of

highway A highway is any public or private road or other public way on land. It is used for major roads, but also includes other public roads and public tracks. In some areas of the United States, it is used as an equivalent term to controlled-access ...

expansion, which is more typical in the U.S., promotes the development of suburbs at the periphery, contributing to increased vehicle miles traveled, carbon emissions, development of

greenfield Greenfield or Greenfields may refer to: Engineering and Business * Greenfield agreement, an employment agreement for a new organisation * Greenfield investment, the investment in a structure in an area where no previous facilities exist * Greenf ...

spaces, and depletion of natural reserves.

Modern rail as economic development indicator

European development economists have argued that the existence of modern rail infrastructure is a significant indicator of a country's economic advancement: this perspective is illustrated notably through the Basic Rail Transportation Infrastructure Index (known as BRTI Index).

Subsidies by country

Europe

Total EU rail subsidies amounted to €73 billion in 2005. Note that several operators that do not receive subsidies also exist, including virtually all long haul and high speed services in France and Germany.

China

In 2015, total domestic rail spending by

China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's List of countries and dependencies by population, most populous country, with a Population of China, population exceeding 1.4 billion, slig ...

was $128 billion and is likely to remain at a similar rate for the rest of the country's next Five Year Period (2016-2020). A planned 8,000 kilometres (about 5,000 miles) of track will be added domestically, with a goal of better connecting existing domestic track with other foreign railway systems.

India

The

India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area, the List of countries and dependencies by population, second-most populous ...

n railways are subsidised by around Rs 2.4trillion ($35.8 billion), of which around 60% goes to commuter rail and short-haul trips.

United States

Current subsidies for

Amtrak The National Railroad Passenger Corporation, doing business as Amtrak () , is the national passenger railroad company of the United States. It operates inter-city rail service in 46 of the 48 contiguous U.S. States and nine cities in Canada. ...

(passenger rail) are around $1.4 billion. The rail freight industry does not receive direct subsidies.

Russia

In total, Russian Railways receives 112 billion rubles (around US$1.5 billion) annually from the government.

Japan

The privatized rail network in Japan requires few subsidies. The three biggest companies, JR East, JR Central and JR-West (which account for 60% of the passenger market) receive no state subsidy.

References

External links

UK Rail Finance 2014-15
{{DEFAULTSORT:Rail subsidies Rail transport Subsidies