ABSTRACT
Components of the costs of public transport systems are reviewed, along with means of allocating costs within networks. The extent to which costs vary by time, peak vehicle requirement and distance operated is analysed. From this, variation in costs by time period and service type may be identified, especially the high marginal costs of peak-only operations. Treatment of interest and depreciation, and associated methods of calculating profitability, is emphasised. Issues specific to the rail industry are reviewed, especially those related to infrastructure costs and the concept of opportunity cost.
