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“A railway achieves financial sustainability when it has sufficient longer term financial resources to cover operational costs, to invest, and to meet debt service and other financing”
Introduction This section will explain the fundamental drivers of railway financial sustainability and the tools used to analyze it. A railway achieves financial sustainability when it has sufficient longer-term financial resources to cover operational costs, to invest, and to meet debt service and other financing requirements. The concepts of financial sustainability explained here apply to all types of railway operations. Where appropriate, the particular features of passenger, freight, infrastructure on integrated railway operations are discussed. Drivers of Financial Sustainability explains the main forces that drive financial sustainability, organized around the topics of revenue structure, cost structure, investment needs, and capital structure. Determining Financial Sustainability explains how these factors interact and how financial sustainability is determined and measured. Financial Analysis Tools explains financial analysis tools—financial modeling, benchmarking, and cost analysis. Segments titled Financial Model, Benchmarking and Costing provide more information on these tools. Drivers of Financial Sustainability The four main elements of railway financial sustainability are revenue structure, cost structure, investment requirements, and capital structure. To evaluate the longer-term financial viability of a railway system and identify risks, it is essential to explore the underlying political and economic forces that shape these four elements. This includes identifying potential barriers to sustainability and suggesting possible solutions. << Previous | Next >> |
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