Under current and historic funding regimes, surface rail and all other forms of public mass transportation, are exclusively funded by governmental transportation agencies and authorities. Opportunities for private investment in rail transportation systems are generally confined to franchises and other such contracts with station and system operators, and occasional joint development agreements among redevelopment authorities, transportation agencies and private property developers. In most governmental jurisdictions, private ownership and operation of a public mass transit system is prohibited. If allowed by contract, fares and operational and maintenance requirements are specified and the possibility of a positive return on investment is prevented.
Private investment in, or ownership of transportation system components or property is very limited. Public transportation systems are, by their nature, considered public entities that are not open to private ownership or participation. Under this concept, there is no significant opportunity for private investment in mass transit in general and particularly in at grade mass transit using older technology.
In reality, opening of public transportation system ownership, operation and maintenance to private investment would add great vitality and incentives to streamlining and reform, in the delivery of quality transportation services.