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In this paper, the combination of a Thyristor Switched shunt Reactor (TSR) and a Current Source Converter (CSC) based Active Power Filter (APF) has been proposed for mitigation of power quality problems of Light Rail public Transportation Systems (LRTS) fed by long medium voltage underground cables. A case study has been carried out on a typical LRTS to assess the performance of the proposed solution for both capacitive reactive power compensation of underground cables and harmonic filtering of 12-pulse catenary rectifiers. It has been shown by extensive field tests carried out that this solution meets the requirements satisfactorily, thus constituting a complete solution to the power quality problems of LRTS. Conventional power quality solutions have also been assessed, and the corresponding theoretical results are given in comparison with the proposed system.