Private sector involvement in urban rail: Experience and lessons from South East Asia

Various models for competition and ownership of urban rail systems have been used in South East Asia cities since the early 1990s. The paper reviews and classifies the approaches used in Bangkok, Kuala Lumpur, Manila and Singapore. The planning, financing, procurement, implementation and operation of these systems, and the institutional context for them, are examined. All of the systems that have used private sector finance for the development of the initial systems have faced financial problems. Optimism bias in demand forecasts and unrealistic expectations for cost recovery of capital intensive systems have been contributing factors. Lessons to be learned include the importance of clear government leadership and sound institutional arrangements, and the need for improved understanding of the best manner in which the private sector can be used to achieve efficient and effective rail projects.