Tram rate of return is good enough for private capital ( in the right circumstances)

Trams have high capital costs but due to their long life times and the fact they are effectively a monopoly (like railways and water) they can borrow money at very low rates, and have  very low running costs.  This means they actually make a profit. Since typically 25% of the people in tram cities use them, compared to only 5% of people in Bath using the buses, this means the profit is substantially higher than the present bus companies make and this larger subsidy  can be used to subsidise both rural bus services and local feeder buses to a far greater extent than now.

We have had transport consultants make initial assessments of likely installation costs, passenger numbers and returns and for two sample routes the numbers look like this:

These rates of return are good enough for long term investors e.g.pension funds.