Substituting a tramway to a bus line in Paris: Costs and benefits

In Paris, an old bus line on the Maréchaux Boulevards has been replaced by a modern tramway. Simultaneously, the road-space has been narrowed by about a third. A survey of 1000 users of the tramway shows that the tramway hardly generated any shift from private cars towards public transit mode. However, it did generate important intra-mode transfers: from bus and subway towards tramway, and from Maréchaux boulevards towards the Périphérique (the Paris ring road) for cars. The various benefits and costs of these changes are evaluated. The welfare gains made by public transport users are more than compensated by the time losses of the motorists, and in particular, by the additional cost of road congestion on the Périphérique. The same conclusion applies with regard to CO2 emissions: the reductions caused by the replacement of buses and the elimination of a few cars trips are less important than the increased pollution caused by the lengthening of the automobile trips and increased congestion on the ring road. Even if one ignores the initial investment of 350 M€, the social impact of the project, as measured by its net present value is negative. This is especially true for suburbanites. The inhabitants (and electors) of Paris pocket the main part of the benefits while supporting a fraction of the costs.

Research highlights
► We calculate the Net Present Value (NPV) of a tramway line opened in 2006 in Paris.
► Welfare gains of public transport users are lower than losses of motorists.
► This is particularly due to additional congestion on the adjacent Paris Ring-Road.
► The environmental balance is also negative because car speeds decreased.
► The NPV ranges from −860 to −160 M euros, depending on cost estimates.