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updated 20/4/03


Electric trolley vehicles, with their lighter infrastructure, are inherently cheaper to construct than equivalent light rail systems, with a carrying capacity that approaches parity. The recent expansion of light rail systems has a knock on effect for Trolleybuses, much of the electrical equipment is the same and standardisation will see lower costs. Compared to Diesel buses, which also share components with Trolleybuses, much depends on recent integration developments and sizeable production runs.

An example is a new Trolleybus propulsion system developed by Siemens that brings down the total cost of a complete Trolleybus to little more than 20 per cent more than the cost of a conventional diesel bus. The unit is called ELFA (Electric Low Floor Axle) designed to allow a low floor. Two small lightweight traction motors are fitted in a drop section, driving through a reduction gear train. The motor is rated at 105 kW, and is supplied with alternating current by two inverters. The motor and inverter are mass-produced for machine tools, industrial robots and battery vehicles so there are no development costs. Siemens has been talking to a body builder in the UK with a view to producing a complete Trolleybus.

note 1  

Because of the low volumes in which Trolleybuses have been produced for EU markets, Trolleybuses currently tend to cost around twice the price of equivalent diesel buses. In larger volumes, Trolleybus costs should tend towards parity with diesel.

note 2  

Assumes 'track' costs are substantially shared with other road users.

note 3  

Indicates relative primary energy consumption: actual relative costs may be very much affected e.g. by taxation policies.

note 4  

Includes all normal commercial costs, discounted to net present values. Does not include environmental costs.

note 5  

Converting primary fuels into useful energy can be done much more efficiently, hence minimising consumption, and much more cleanly in larger fixed plant [power stations] than in small mobile plant [bus engines]. Fixed plant can also use alternative, greener 'fuels' such as wind, wave, water, solar, biomass, etc., impractical in mobile plant. Opportunities for maximising efficiency by the use of waste heat [Combined Heat and Power, CHP], are much better with fixed plant. Using electricity in these ways considerably mitigates global climate change effects.

note 6  

Attempts to measure effects such as increased health and mortality costs due to poor air quality, and increasing storm and flood damage associated with global warming.

Generally the maintenance costs of a Trolleybus have been shown to be far below those of a diesel bus, because there is so much less that needs any kind of frequent attention. And electric braking dramatically reduces maintenance required on mechanical brakes - not a small item of expense on a diesel bus used on stop-start services.

Supplied with power from modern efficient, clean, green generating plant, Trolleybus energy costs should be less than diesel. On intensive urban services, a Trolleybus system should be able to finance its overhead power supply infrastructure from maintenance and energy cost savings.

Compared with tramway infrastructure [wires and rails] Trolleybus infrastructure [wires] can be put in at around 10% of the cost and disruption associated with tramways.

With effective traffic management to give buses sufficient priority, electric Trolleybuses could give the travelling public much the same experience as modern trams, but at a fraction of the capital cost.

Project funding
For Trolleybuses there are two possible structures: one is long-term, say a 20 year franchise with the operator investing in both wiring and vehicles. Another is for Transport for London (TfL) to pay for the wiring and the operator for the vehicles. The second structure could still be fully commercial if the operator were charged full "absorbtion costs" of the wiring over the life of the franchise. Then there could be all sorts of permutations such as only a 10 year franchise but a guaranteed buy-back of the Trolleybuses at market value by the operator for the second 10 years (if different).

Commercial finance should not be a problem with a long term franchise. In effect, the successful operator would be paying a licence for monopoly rights and would be able to forecast cashflows over 20 years quite accurately. Depending on the state of the company's Balance Sheet, share price and credit rating, a quoted company could borrow for a say �20m project quite easily at reasonable rates of interest. Even if the credit rating is downgraded (such as Stagecoach is currently), a group could still get Project Finance. This usually means setting up a separate company for the project. The loan is secured on the physical assets plus the predicted future cashflows of the project. This is more expensive in terms of interest rates (between 0.5% and 1% more) but has the advantage to the borrower of there being no recourse against group-wide assets. In other words, shareholders are insulated from the downside risks.

All the foregoing is predicated on the project being economically sensible in the first place: strict cost control on construction and Trolleybus costs; performance clauses that guarantee low maintenance costs; getting a short period between first spend and initial cashflow (eg open the route in sections to get at least some cash coming in); realistic prediction of passenger demand; positive marketing of the "sparks effect" on passenger growth.

If the above ingredients are there, there is no reason why a route like Shepherds Bush/Uxbridge couldn't be self financing; although any road alterations would have to be paid by TfL/ Highways Authority etc. There is unlikely to be any difficulty in getting funding from the City for a project that can normally guarantee a monopoly based cashflow for 20 years.

A R Bruce  Irvine Bell  Kevin Brown  M P Wright