WIDER SOCIOECONOMIC EFFECTS OF INVESTMENTS IN MOTORWAYS
ASECAP -“47th ASECAP DAYS Study & Information Days”
29-31 May 2019|WestIn Business Hotel Costa Navarino, Messinia, Greece
Dimitrios J. DIMITRIOUPlanning, Management & Economics in Transport
Dr./Professor Assc, Dept. of Economics, DUTh, Greece
Copyrights © 2019 by Professor Assc. Dimitrios Dimitriou
Dimitrios J. DIMITRIOU - Profile
Dimitriou holds Doctorate in Transport demand forecasting; MSc in Infrastructures
Environmental Planning; MSc in Transport Planning & Management; and Diploma
(equivalent to 4 years BA & 1 year MSc) in Civil Engineering (sector of transportation).
He is Professor Associate in quantitative modelling for managing transport infrastructure in
Dept. of Economics, Democritus University of Thrace and he contributes in other
Universities in Greece and Europe. He provides dedicated courses and research in subjects
of transport economics, decision making and risk assessment.
He has published over 200 papers in referred journals, scientific and professional editions,
international conferences and he has elected in executive positions in professional
associations and committees of expert.
He has extended experience (25 years) in field of transportation, delivered many projects in
planning, operation, management, business development, investment appraisal and transport
economics. He is the Chairman of the BoD in Athens International Airport (since 2016). He
occupied many executive positions and he provided advisory in Transport Authorities,
Enterprises and Investors for investments in large projects.
In 2017/18 awarded for the Professional Achievements by the British Council and he has
elected in prestigious positions in professional associations and forums.
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 2
Outline
▪ Key variables of transport demand growth
▪ Transport trends and prospects
▪ Transport economic footprint and decision making
▪ Needs, objectives and methodology framework to estimate transport
infrastructure economic effects
▪ Types, outputs and mechanism of economic development impact
▪ Highlights on economic contribution of motorways in Greece
▪ Conclusions
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 3
Tran
spo
rt d
em
and
gro
wth
Increase FDI
Increase lab our market
Improve accessibility
Lead to economic development
Lead to Welfare
Interaction of economic growth and social development
Dimitriou 2107; INTECH: Mobility, Tourism & Travel Behavior
Transport services integration socioeconomic footprint
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 4
➢ Competitiveness
➢ Regulatory framework
➢ Monitoring/Review performance
➢ Analysis of the competition
➢ Provide information to users/market
➢ Innovation
➢ New Products - services
➢ IT – ITS – SMART Business
➢ Artificial Intelligence – machine learning
➢ Research (SU)
➢ Strategy
➢ New market development
➢ Regulation / protection vs deregulation
➢ Funding – capitals leverage
➢ Socioeconomic impact
➢ Planning
➢ New business (routes, destinations, etc)
➢ Business viability (risk sharing, incentives)
➢ Intellectual property (new business)
➢ Benefits return to society (CSR)
Dimitriou et al.2017, IJESRT, 6(1)
Dimitriou, 2016; Infrastructure Governance, OECD
Dimitriou, 2017; Mobility as a service, UNECE, Geneva
Dimitriou et al., 2018; Transportation proceedia
Dimitriou, 2018; New Skills, Economist, Athens
55# 5 #
Dimitriou, UNECE; 2018
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Dimitrios J. DIMITRIOUDr./Professor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 5
Transport sector key business planning variables
INPUT DECISION MAKING OUTPUT
Socio-economic
characteristics for
ORIGINs (pax)
Demand scaling
and morphing factors
Travel Demand
Generator
SET OF TRANSPORTATION NETWORK HUBS -
CONNECTIONS
OBSERVE
UPDATE
BELIEFS OBJECTIVES
DECIDE
ACT
TIP & Carriers
Performance
Regulatory and
Policy maker
framework
Network Evaluation
→ Competition (fares)
→ Robustness (seasonal vs
scheduled)
→ Saturation (new routes)
Business Sustainability
→ Carriers (load factors)
→ transport infra (profits)
→ Capacity / Efficiency
Economic Productivity
→ Demand volume ( total
expenditure)
→ Transfer pax
→ Spill over effects to regional
economy
DM TAXONOMY FOR TRANSPORT INFRA PERFORMANCE (TIP)
Authorities
Associations
Institutions
Suppliers
Network formulated
through interaction
between agents
AGENTS
Dimitriou D., (2017). Quantitative evaluation taxonomy for transport infrastructure projects, IJRSM, 4(3), 34-40.
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 6
Government
Operators
Industry Associations
R & D Institutions
Transport authorities
Equity Funds
Retail Banks
Financial Associations
Investment Banks
Multinational Companies
Stakeholders for transport industry decision making
Government
Region Authorities
Social Institutions
NGOs
MSEs
Decisions heavily depended on Social Values Impact
Decisions heavily depended on Operational Performance
Decisions heavily depended on Financial Performance
Dimitriou 2018; Economist, AthensDimitriou; ICCBMDA 2017, Spain
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 7
Key question in TIP assessment Dimitriou 2017; IJRSM, 4(3)
Financial analysis
Added value to CAPEX
Equilibrium??
Economic effects
Interest - AttentionPublic
Private
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 8
Milestone 1
Macroeconomic features
Project characteristics
Milestone 2
•Sectors share affected
Transaction tables per activity
Milestone 3
• Construction period
• Operation period
Milestone 4
• Direct impact
• Indirect impact
• Multiplied impact
Private
DIRECT
Generated by firms which will construct and operate the transportation infrastructure
INDUCED
Recycling of Euros as a result of spending from direct and indirect
INDIRECT
Generated by wider supply-chain firms purchasing goods and services from nation-based suppliers, in turn generating output, profits and employment among suppliers
CATALYTIC IMPACT
Improvement of the accessibility of a given region by reducing travel time and the changes in the interregional trade
Types of Economic impact Dimitriou et al., 2018; Transportation proceedia, Elsevier
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 9
`
Direct Indirect
Induced
SectorMultiplie
Income per sector
SectorsTransaction tables
Wages per sector of activity
Macroeconomic features of the project
catchment area
Jobs per sector Catalytic
Direct
Multiplied impact
Indirect Induced Catalytic
New demand from additional capacity
Jobs distribution for each project phase
Project financial features and technical characteristics
New Jobs
New Income
Dimitriou et al.2015, IJAE,47(40)
Methodology framework
Dimitriou et al., 2018; Transportation proceedia
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 10
• What is the project about?
o New pipeline
o Connects Burgs – Alexandroupolis ports
• The scope of this project
o A new fast route for crude oil
o Delivery to the European and North Afriand
neighbour states
TRANS-EUROPEAN TRANSPORT NETWORK
➢ The motorways are part of the priority projects of the TEN-T network, which connect Greece to the rest of the EU.
CONCESSION MOTORWAYS Length to be constructed
Length to be upgraded
Length to be operated
M1:IONIA ODOS 196 172 360
Μ2:AEGEAN MOTORWAY 25 205 230
Μ3:OLYMPIA ODOS 284 82 366
Μ4:CENTRAL GREECE MOTORWAY(E65)
175 - 232
Dimitriou, 2019; submitted for publication
Concession motorways in Greece- Overview of the project
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 11
Motorway concessions Cost (Bio euro)
IONIA ODOS –M1 1.00
AEGEAN MOTORWAY-M2 0.95
OLYMPIA ODOS-M3 1.40
CENTRAL GREECE(E65)-M4 1.37
Total 4.71
26%
7%6%
11%7%
30%
0%
20%
40%
60%
80%
100%
SECTORS SHARE IN CONSTRUCTION PERIOD
WORK
OTHER TRANSPORT EQUIPMENT
MOTOR VEHICLES
CHEMICAL PRODUCTS
COKE AND REFINED PETROLEUM
BASIC METALS
PETROLEUM PRODUCTS
Motorway concessions Construction period (T1) (employees per year)
Direct Indirect IONIA ODOS –M1 3,500 2,500AEGEAN MOTORWAY-M2 3,500 2,500OLYMPIA ODOS-M3 5,000 3,000CENTRAL GREECE(E65)-M4
4,000 3,000
Total 16,000 11,000
1 CPA_A01
………………....................................................................................................................... .............................
4 CPA_B Coke and refined petroleum products
5 CPA_C10-C12 Chemicals and chemical products
8 CPA_C17 Other non-metallic mineral products
9 CPA_C18 Basic metals
…………………………………………………………………………………………………………………….
14 CPA_C23 Motor vehicles, trailers and semi-trailers
15 CPA_C24 Other transport equipment
………………………………………………………………………………………………………………………
21 CPA_C30 Constructions and construction works
………………………………………………………………………………………………………………….
35 CPA_H53 Financial services, except insurance and pension funding
41 CPA_K64
Architectural and engineering services; technical testing and analysis services
………………………………………………………………………………………………………………………….
65 CPA_U
Budget Profile Sectors share
Construction period shared in 3 different periods
Dimitriou, 2019; submitted for publication
Copyrights © 2019 by Professor Assc. Dimitrios Dimitriou
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 12
113,000 Jobs Μultiplied & Spill over:
1128.7 Mio incomeDirect and indirect
1231.6 Mio income
Cumulative (3 years) socioeconomic footprint
9,600 JobsΜultiplied: 102.4 Mio incomeDirect and indirect
116 Mio income
Spill over: 1,030.5 Mio income
Dimitriou, 2019; submitted for publication
Copyrights © 2019 by Professor Assc. Dimitrios Dimitriou
Construction (last 3 years)
Operation (last 3 years)
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 13
0 2 4 6 8 10 12 14
Austria
Belgium
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Malta
Montenegro, Republic of
Netherlands
Poland
Portugal
Romania
Slovak Republic
Slovenia
Sweden
Turkey
United Kingdom
2015 2010
GVA of the transport sector as a share of GDP OECD, ITF, Report 2018
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 14
Port Infrastructure Railroad Infrastructure
Airport Infrastructure Road Infrastructure
Completion of TEN-T Road Core Network
Quality Infrastructure Index Eurostat (2018)
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 15
16
Investments in new transport infrastructure Typical operation
Transport infrastructure /GDP
Typical variation for different phases of Mega Transport Infrastructure development
New transport infrastructure
Capacity expansion Demand increase
Demand decrease
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 16
❖ The results indicate that for the motorways concession project the economic
impacts are highly cyclical with significant short-term employment during
construction phases that disappears once the project is in operation.
❖ The results suggest that investment in large transportation infrastructure
spurs economic growth and generates employment directly through the
actual construction, operation and maintenance of the project but also
through indirect and induced multiplier effects across the economy
❖ The results show a strong relationship between economic infrastructure
investment and sectors of construction, industries including energy and trade
❖ The estimated results provide a strong evidence of the existence of long run
cointegrating relationship among infrastructure investment ,economic growth,
and unemployment reduction
Concluding remarks
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 17
➢ Why to estimate impacts in national/regional economy?
✓ Estimate the overall contribution in an economic system (regional – national
scale)
✓ Estimate the economic impacts on other economic sectors
✓ Provide essential economic and social outputs for a variety of stakeholders
involved in decision process (such as Government; authorities; NGOs, etc.)
✓ Monitoring the productivity and the efficiency of air transports in economies
➢ How significant are the transport industry impacts in Greek economy?
✓ Quick and HIGH impacts in unemployment and business growth
✓ Income multiplier ÷ 4 (construction period) ÷ 2 (operation period)
✓ Act as un FDI providing additional impact to the poorest region of the country
✓ GDP contribution very high
Concluding remarks
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Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece
ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 18
Thank you
ASECAP -“47th ASECAP DAYS Study & Information Days”
29-31 May 2019|WestIn Business Hotel Costa Navarino, Messinia, Greece
Dimitrios J. DIMITRIOUPlanning, Management & Economics in Transport
Dr./Professor Assc, Dept. of Economics, DUTh, Greece
Copyrights © 2019 by Professor Assc. Dimitrios Dimitriou
WIDER SOCIOECONOMIC EFFECTS OF INVESTMENTS IN MOTORWAYS
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