ABSTRACT
The costs that an operator has to meet from passenger revenue will depend upon conditions already described in Chapter 7. In addition to current operating costs, depreciation will have to be covered (historic, or preferably replacement), and interest charges (dependent very much upon the historic capital structure). Taxes and subsidies will also affect the ‘total costs’ as perceived by the operator. For example, in Britain local bus services receive a rebate of most fuel duty, but in other countries fuel may carry a high rate of tax. Where capital grants are given for new rolling stock (as in light rail systems in Britain), this may avoid the need to fund it from operating revenue.
