Investing in higher capacity transport

In high density areas of a city where large numbers of commuters need to get to and from, investing in higher capacity transport systems plays a vital role in reducing congestion. Broadly speaking, there are four types of higher capacity transport system:

  • High-capacity buses
  • Bus Rapid Transit (BRT) systems where buses have priority or sole use on dedicated lanes
  • Light Rail Transit (LRT) systems where trains run over-ground on an exclusive-dedicated line. This is distinct from tram systems which operate on roads.
  • Metro or mass rapid transit (MRT) systems where high-capacity trains travel either above or underneath the ground.


Due to the limited impact of buses on already congested lanes, and the prohibitive cost of metro systems, policymakers often face a choice between investing in BRT or LRT systems.

Transjakarta BRT system in Jakarta

Addis Ababa’s Light Rail system

These systems have a wide range of carrying capacities and costs. BRT systems can range from being able to transport around 2,500 people/hour/lane to over 20,000 passengers/hour/lane in more sophisticated systems such as Bogota’s high capacity TransMilenio BRT15. LRT systems can have higher capacities but generally fall somewhere in this range. The two-line 34km LRT system opened in Addis Ababa in 2015, for example, is estimated to have a carrying capacity of 15,000 passengers/hour/line16.

LRT systems are generally more expensive to construct and operate for the same carrying capacity. For example, in Lagos, the 22km BRT system cost just USD$1.7 million per kilometer to build, including the cost of stations, road partitions and 220 buses17. This works out to less than 2 million per kilometer – over 8 times cheaper per kilometer and per passenger than the LRT system in Addis Ababa.

LRT systems are generally more expensive to construct and operate for the same carrying capacity.

Economic analysis suggests that BRTs are likely to be the most cost-effective option in terms of capital, operating and delay costs18. This only changes in very high-density areas where hourly passenger volumes are in excess of 30,000, where a bus-based system could result in significant and costly delays. The higher construction and operation costs associated with rail-based systems, as well as the likely need for higher public subsidies, may instead be justified on the basis of other benefits, including environmental sustainability and relative land requirements.

The importance of urban density

One vital factor that can help in determining appropriate investments for a city is levels of urban density. The higher the urban density, more people who benefit from a given station being built – and relatedly, the lower the cost per person of connecting people to the system. This means that the costs of building and operating these transport systems can be more easily recouped from users through fares. Urban density is therefore a crucial determinant of financial viability. It is estimated that BRT systems, for example, can only remain financially viable if there are at least 10 passengers boarding per kilometer per day per bus19.

It is important to note that because of the significant public benefits of public transport services, governments should not necessarily expect them to recover costs purely through fares. An additional source of revenues could be the urban land value appreciation created by the transport project; Hong Kong, for example, was able to finance its entire mass rapid transit system by selling off high-value retail spaces created in properties built on top of stations.

Furthermore, in many cases, subsidies on high capacity transport implemented in an effort to reduce congestion can allow for a positive cycle of financial sustainability. With higher investment, better and more frequent public services are provided. This can increase ridership which in turn increases revenues from fares.

As they grow, cities can incrementally develop transport systems appropriate to rising density. With very high levels of urban density, it can become necessary to invest in even higher capacity mass rapid metro systems, with trains that run over- or underground in a city. These systems, such as the New York City subway and the Shanghai Metro, have much higher carrying capacities and significantly higher costs.









  • 15 World Bank, ‘**Bus Rapid Transit for Greater Kampala Final Report’ (World Bank, 2014); Robert Cervero, ‘Bus Rapid Transit (BRT): An Efficient and Competitive Mode of Public Transport (Working Paper)’ (Berkeley Institute of Urban and Regional Development, 2013).
  • 16 Leyland Hazlewood, Doing Business in Africa: Nuts and Bolts of Succeeding in Business (Motivational Press, 2016).
  • 17 Cervero, ‘Bus Rapid Transit (BRT): An Efficient and Competitive Mode of Public Transport (Working Paper)’; David O. Omole and Julius M. Ndambuki, ‘Sustainable Living in Africa: Case of Water, Sanitation, Air Pollution and Energy’, Sustainability 6, no. 8 (12 August 2014): 5187–5202,
  • 18 John Robert Meyer, John F. Kain, and Martin Wohl, The Urban Transportation Problem (Harvard University Press, 1965); Kenneth A. Small and Erik T. Verhoef, The Economics of Urban Transportation (Routledge, 2007); Arthur O’Sullivan, Urban Economics, 8 edition (New York, NY: McGraw-Hill Education, 2011); Jose A. Gomez-Ibanez, William B. Tye, and Clifford Winston, Essays in Transportation Economics and Policy: A Handbook in Honor of John R. Meyer (Brookings Institution Press, 2011).
  • 19 Adam Greenfield, ‘Buses Are the Future of Urban Transport. No, Really’, The Guardian, 27 August 2014, sec. Cities,