Chapter 11 French multi-modal transport funds: issues of cross-financing and pricing

This paper assesses the efficiency of cross-financing new motorway or rail projects from established toll motorways as an alternative to direct public subsidies. For new motorway projects a combination of short-run marginal social cost pricing and cross-financing is the best of the alternative schemes tested for increasing overall welfare. Regarding the Lyon-Turin rail project, an alpine fund supplied by toll mark-ups on the Alpine motorways in combination with the same national transport fund as in the road case study, would eliminate the need for public subsidies and simultaneously improve the financial balances of the rail operator and manager.