1

Monitoring Impacts of EU - Infrastructure Programmes

Werner Rothengatter

Universität Karlsruhe (TH)

2Monitoring Impacts of EU - Infrastructure Programmes

1 Introduction2 Transeuropean Networks3 Strategic Assessment4 Assessment with CBA and CGE/SDM5 Megaprojects and their Risks6 Financing Issues7 Monitoring and the Role of NGOs

31 Introduction

1 White Paper and the TEN Revision 20042 European Interest versus Country Interest3 Increasing Complexity: PPP and Concession

Finance4 Experience from Megaprojects5 Failures in Public and Private Regimes6 Necessity of an Independent Observatory7 Particular Role of NGOs

4

European Policy Guide:White Paper 2001: Time to Decide

1 Shifting the balance between modes of transport

2 Eliminating bottlenecks

3 Placing the users at the heart of transport policy

4 Managing the globalisation of transport

2 Transeuropean Networks

5

2 TEN

63 TEN Strategic AssessmentCriteria for Selecting the Corridors

1 Accessibility

2 Traffic Loads/Bottlenecks; Share of International Traffic

3 Economic Impacts (Generalised Cost , Time Savings and Cost Reductions)

4 Environmental Impacts

7

3 TEN

Assess

8

3 TENAssess

9

The costs caused by road congestion in a region j are estimated by following formula:Ź

,Ź

whereŹ

basic value of time from UNITE by trip purpose pŹ

CF C correction factor for country C the region j and the link i belongs toŹ

ts,i difference in travel time on road link i during time slice s compared to traveltime under free-flow condition

ds duration of time slice s within a whole yeartraffic volume on link i during time panel s, differentiated by

vehicle type vt

Ź

Road Road particulatesparticulates

3 TENAssess

10

1 Mandatory Impacts- Time Savings- Savings of Operation Costs- Change of Variable Infrastructure Cost- Change of Accident Costs

2 Discretionary Impacts- Environmental Impacts- Climate Change- Spatial Impacts

4 Assessment with CBA and CGE/SDM

Standard CBA - Benefits

11

1 Problem Area I- Country-based CBA not Comparable- Ex: Lyon - Turin High Speed Project

2 Problem Area II- European Value is not Equal to the Sum of

Country Values- National Companies don‘t Consider Inter-

national Benefits

3 Problem Area III- Scales are not Comparable with Private

Investments- Political Appraisal Bias

4 Assessment with CBA and CGE/SDMStandard CBA - Benefits

12

1 Computed General Equilibrium Models- Consideration of Horizontal

Interdependencies- Mainstream Economic Welfare Analysis

2 System Dynamic Modelling- Consideration of Horizontal and Vertical

Interdependencies- Modelling of Staged Policies

3 Most Important Issues- Identification of Overall Net Benefits

and their Spatial Distribution- Construction of Complete Scenarios

(Investment and Finance)

4 Assessment with CBA and CGE/SDMSGE/SDM

13

TEN investments in the TIPMAC BAU scenario[Mio*EURO/year]

0

2000

4000

6000

8000

10000

12000

14000

1995 1998 2001 2004 2007 2010 2013 2016 2019

Austria

Belgium+Luxemburg

Danmark

Spain

Finland

France

United Kingdom

Germany

Greece

Ireland

Italy

Netherlands

Portugal

Sweden

4 Assessment with CBA and CGE/SDMSDM

14

POP

MA C

F O T

R E M

T RA

WE M

E N V

VF T

Pot enti a l L abour For ce Popul a tion St ruc tur e

GD P , ( U n -)E mploym e nt, S ec tor a l Ou tput

Popul a tion C hang e

S ec tor a l Good s F lo w s

Fu e l Pri ce

GD P , P roduct ivity

Expo rts , Import s

T ran sport Exp e nditu re ,P e rform an ce, T im e

VA T R e v e nu eFu e l T ax R ev enu e

GD P , E m ploym e nt , ... .

T ran sport C ost , T im e OD

T ran sport De mand OD

P O P = P o pul at io n M od ul eMAC = Macro e co n om ics M od ul eRE M = Reg io n a l Eco n o m ic s Mo d u leF O T = F ore ig n T ra d e M od ul e

Abb rev ia ti ons :

TR A = T r an sp or t Mo dul eEN V = E n v iro nm en t Mo dul eV F T = V eh icl e Fl ee t Mo dul eWE M = We lf are Meas u re m e n t M od ul e

AS T RA M o du les a n d M ai n In ter face s

Ge ne raliz e d Co s t O D

Fl ee t S tru c tur e

4 Assessment with CBA and CGE/SDMSDM

15

Reactions of macroeconomic aggregates for EU15 (SMCP-Tolls scenario)

-4

-3

-2

-1

0

1

2

3

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Year

Cha

nge

to B

AU

sce

nario

[%] GDP

Employment

Consumption

Investment

Export

Government Consumption

Gross value added

Total factor productivity

4 Assessment with CBA and CGE/SDMSDM

164 Assessment with CBA and CGE/SDMSDM

175 Megaprojects and their RisksExamples

1 Channel Tunnel, Oeresund (in Operation)2 NEAT Tunnels (under Construction)3 Further Alpine Tunnel Projects4 Fehmarn-Belt5 Strait of Messina6 Spanish Rail Interoperability

18

1 The Megaproject Financial Rule(FBR):- Add 50% to Cost Figures- Subtract 30% from Estimated Demand

2 Procurement Including a Company outside thePublic Budget- Example of the Oeresund Project- 30% Rule of FBR- Clear Risk Allocation

6 Financing IssuesEuropean Assistance

19

3 Financial Volume for TENT:- 600 bill. € in total- 225 bill. € for the High Priority Projects- 140 bill. € in the Period 2007 - 2013- Presently available: 700 mill. € per year

4 Financial Contributions- 20 % EU Funding (for Cross Border or Cross

Natural Barrier Projects, up to 50% in Cross-border Sections)

- Private Contributions: 20%- Rest of Funding: Member States , EIB

6 Financing IssuesEuropean Assistance

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1 Process of Procurement- Lobby Groups; Projects and Political Career- State as a Promoter- Systematic Underestimation of Costs and

Overestimation of Benefits- No Interest in Ex-post Evaluation

2 Possible Change- Role of Coordinator and Protector of Social

Interest as well as of the Environment- Clear Set of Performance Specifications- Quality Control. Observatory of Progress

7 Monitoring, Role of NGOsGovernment Failures

21

1 Process of Procurement- Lobbying for Projects, Rent Seeking

Behavior- Partial Optimisation, Fragmentation of the

Networks- Reinvestment in Value Adding Segments- No Interest in Strict Auditing

2 Possible Change- Public Framework for Concession Finance- Shorter Life of Concessions, Tender- Benchmarking (Yardstick Competition)- Improved Contracts (No Cost-plus

Contracts)

7 Monitoring, Role of NGOsPrivate Failures

22

1 Participation in Project Procurement- Setting Performance Criteria (Economic,

Social, Environmental)- Representing the Stakes of Users and

Taxpayers- Protecting the Groups Exposed to Harmful

Impacts

2 Participation in Quality Control and Auditing- Observatory for Project Development- Construction and Operation Phase- Benchmarking- Control of Recontracting and Tendering

Processes

7 Monitoring, Role of NGOsRole of NGOs