High quality public transport in the four major Norwegian cities

A high quality public transport system is characterised by high speed, superior reliability and high frequency. Moreover, it must have a competitive price level compared to its strongest rival, the private car. To establish such a system requires large investments in dedicated tracks or lanes and in rolling stock, as well as substantial subsidies to the operation. The subsidy share in Oslo, Bergen, Trondheim and Stavanger varies between 45 and 27 percent. This is significantly lower than in other Nordic cities and in many cities outside the region. On the basis of local reports, we have estimated the need for investment in new bus and rail systems in the four cities at nearly NOK 100 billion in coming years. In addition, the need for significant increases in operating subsidies at least if the aim is to achieve a welfare maximising subsidy share in excess of 50 percent. A large public transport subsidy is welfare maximizing due to its effect on road congestion, and on account of the virtuous circle known as the Mohring effect, by which each new public transport user provides additional revenue that can be used to further improve supply.