Privately financing Intermodal Exchange Stations in Madrid.

Abstract

The City of Madrid is putting into operation Intermodal Exchange Stations (IESs) to make connections between urban and suburban transportation modes easier for users of public transport. We find that through the construction of an IES by a concessionaire it is indeed possible to arrive to solutions for the funding of urban transport infrastructure in which private profit and social benefit converge. Commuters save travel time and use better their transfer time. Bus companies diminish their costs of operation. The concessionaire receives revenues generated mainly by fees that urban buses (EMT), regional buses and interregional coaches—also privately operated—pay for using the IES, and by the commercial rents paid by shops and cafeterias inside the IES. The abutters gain in quality of life, society in general benefits from a reduction of emissions, and the government is able to promote these infrastructure facilities without recurring to its scarce budgetary resources.