Transport Infrastructure Investment Research Articles

Quality of institutions and private participation in transport infrastructure investment: Evidence from developing countries

In recent decades, owing to a series of public debt crises and constraints on government expenditure, infrastructure investment has dropped significantly in both developed and developing countries. To counterbalance this trend, Public–Private Partnerships (PPPs) schemes have been increasingly adopted. In this paper, we explore the determinants of the degree of private participation in transport infrastructure projects in a large sample of developing countries. By using a large sample of transport projects included in the World Bank Private Participation in Infrastructure Projects database, we document that greater participation by private parties in PPP contracts is associated with better institutions in terms of lower corruption, civil freedom, and a better regulatory framework.

Risk-adjusted long-term social rates of discount for transportation infrastructure investment

We modify a method recently suggested by Weitzman (2012, 2013) for determining a risk-adjusted social discount rate (SDR) term structure consistent with both the (augmented) Ramsey rule and the consumption-based CAPM. Using this approach we estimate SDR for transportation infrastructure investments based on an analysis of correlations between transportation, split between road and rail, and between passenger travel and freight transport, and GDP in Sweden 1950–2011. We show that this can be estimated from two time-series following a random walk with drift, even if the variables are not co-integrated. Based on current estimates of the risk-free rate and the equity risk premium, we estimate the relevant SDR to be 5–6 per cent, possibly somewhat lower for investment in railroads for passenger travel, and only slowly declining within the investment horizon. This is higher than the current rates used in, for instance, Sweden, Germany and the UK.

Integrating Network Analysis with the Production Function Approach to Study the Spillover Effects of Transport Infrastructure

Álvarez-Ayuso I. C., Condeço-Melhorado A. M., Gutiérrez J. and Zofío J. L. Integrating network analysis with the production function approach to study the spillover effects of transport infrastructure, Regional Studies. The production function approach is used to analyse the role of transport infrastructure on regional gross domestic product (GDP) using new definitions and measures of road network capital stock that represent the real benefit obtained by regions when accessing markets. Improving the existing methodologies, the infrastructure stock is weighted with trade data so as to estimate the direct effects on production of a region's own infrastructure (what is termed here ‘internal stock’), as well as the spillover effects that it receives from using that of neighbouring regions (imported stock). The methodology is illustrated by using Spanish data for the 1980–2007 period and these internal and imported infrastructure stocks are calculated using geographical information system (GIS) network analysis based on generalized transportations costs. With this new data set, successive regressions are performed controlling for endogeneity and the obtained results are compared with those of previous research. The validity of this methodology and the existence of significant and rather large spillover effects that even outweigh the effect of the internally endowed capital stock on aggregate production are confirmed. On average, the relative magnitude of the spillover effects to that of the internal (own) stock effect increases with the level of territorial disaggregation, i.e., it is larger for provincial data than for regional data. Unfortunately, it is also found that spillover effects are asymmetric, exhibiting negative values for poorer regions, as they do not profit from the capital stock existing in their neighbouring areas as do their richer counterparts, thereby casting doubts on the cohesion effects attributed to transport infrastructure investments.

Analysing the fiscal sustainability of transit investment projects: The case of the metropolitan railway of Brasília

This paper aims to analyze the fiscal sustainability (FS) of an infrastructure investment infrastructure project. This issue becomes progressively more relevant, as reinforced transport infrastructure investment, albeit being recognized as an important condition for economic growth, may drive public finance into dire straits. Therefore, after consolidating a concept of FS for infrastructure investment and its evaluation parameters (solvency, liquidity and robustness), they are tested in a case study (Metropolitan System in Brasília). The execution of this project and of the Águas Claras neighborhood took place simultaneously. The study shows that the potential revenue from real estate would be enough to cover the public expenditures for the rail project and for the urban infrastructures of the township, meeting the solvency condition. However, it could not comply with the liquidity and the robustness conditions, due to incidents and management problems in its execution, which suffered several interruptions. The paper finishes with some lessons for the policy, requiring the mandatory and thorough analysis of economic and fiscal impacts of infrastructure investment projects, but also suggesting that they should be put together with other private and public investment projects which foster directly growth, so that their joint effect would result fiscally sustainable.

Valuing environmental quality in actual travel time savings – The Haningeleden road project in Stockholm

Effects on the environment are rarely valued in planning infrastructure for different modes of transport. This can detract from optimal planning and fair competition, which might be better served by valuing environmental quality changes through actual travel time savings. New transport infrastructure often creates both positive and negative effects for the same groups of users, although to different degrees for different individuals. This paper illustrates a proposed methodology to investigate the effect of a planned transport infrastructure investment through a survey of potential users of the Haningeleden road project in Stockholm. Postal questionnaires were sent to a random sample of 2400 persons living in the affected area in May and June 2013, including detailed questions about their travel patterns and visiting frequencies, and whether, after reading a description of the proposed change, they would be in favour of the proposed change. The negative encroachment costs and the positive relief from traffic in other areas were estimated in travel time savings.

How fuel prices determine public transport infrastructure, modal shares and urban form

Urban form and transportation infrastructure mutually influence each other. For example, dense Hong Kong is served by a viable and efficient public transit network, whereas many sprawled US cities are best served with automobiles. Here we present a simple model of a mono-centric city with two modes, public transit and automobiles, and transport infrastructure investments. The contribution to the literature is two-fold. First, adding to urban economic theory, we analyze how public transport costs are endogenously determined by fuel price and urban form if an urban planner provides the infrastructure. But a private mass transport provider would underinvest into public transport infrastructure. Second, adding to the ongoing discussion on urban transport and energy use, this two-modal model can help to explain empirical observations on urban form, transport CO2 emissions and modal share, emphasizing the causal role of transport costs for urban form. The results encourage further research in the economics of sustainable and energy-efficient cities.

Gentrificación, movilidad y transporte: aproximaciones conceptuales y ejes de indagación

This paper aims to lay the groundwork for analysis of the relationships between the processes of gentrifi cation, transport and mobility, by identifying the limited development of this fi eld, particularly in Latin America. After the development of the concepts that organize the fi eld of inquiry (gentrifi cation, transport, mobility, accessibility, spatial capital), the article presents three axes of organization. The fi rst one attempts to analyze the role of investment in transport infrastructure and services as possible mechanisms of gentrifi cation. The second focuses on the differential attraction to accessibility in the deployment of gentrifi cation in different territorial contexts. The last axis seeks to examine the effects on daily mobility of the groups displaced by gentrifi cation. These axes open a research agenda that advances on the complexity of gentrifi cation, adding new dimensions.

Evaluating transport infrastructure decisions under uncertainty

This study uses a hybrid approach, combining cost–benefit analysis (CBA), multiple criteria decision analysis, and Dempster–Shafer Theory, to evaluate transport infrastructure decisions. This approach not only retains the advantages of CBA, but it also facilitates the incorporation of incomplete information into the evaluation process. A particular advantage of this hybrid approach is that it can synthesize evaluation results into an easily understood unit, namely utility. A case study of Taiwan's Tamsui-Taipei Riverside Highway Project is used to illustrate the evaluation method. The evaluation results show that, whereas government officials and city council members support the highway project, academic researchers oppose it. Overall, the decision group tends to positively approve this transport infrastructure investment. These results also reflect the actual situation in Taiwan as stakeholders grapple with the issues arising from the proposed Tamsui-Taipei Riverside Highway Project.

Connecting South Asia to Southeast Asia: Cross-Border Infrastructure Investments

Most of the trade between South Asia and Southeast Asia is by sea. However, with improved infrastructure and easier border crossing procedures, land traffic could grow to boost trade in goods, services, and tourism between the subregions. The purpose of the study is to analyze how to strengthen connectivity between the two subregions. Specifically, it is concerned with the role of cross-border transport infrastructure investments to improve connectivity. The author reviews all possible road and rail land corridors that would help create seamless transport connectivity. Missing gaps and corresponding transport infrastructure projects are identified, and projects are screened and prioritized. For the selected critical projects, the study recommends phased investments.

Transport Infrastructure Investment and Interindustry Spillovers: The Effects on the Cost Structure of Australian Industries

This paper examines the impact of the provision of public transport infrastructure on the cost structure of the Australian economy within a context that recognises industry agglomeration externalities. The paper extends the symmetric generalised quadratic cost function by incorporating public transportation capital as an external input and adapting the spatial econometric techniques to an industrial context to allow for industry spillovers in the cost analysis. Using industry level data over the period 1990-2010, the paper finds that while public transport has a productive effect in reducing the cost of production, neglecting inter-industry spillovers has noticeably overestimates this effect.

Value of Travel Time :Theoretical and Empirical Method

The value of travel time savings (VTTS) is the monetary value attached to save a determined amount of travel time. VTTS is also the most important benefit category aimed at justifying investments in transport infrastructures by public administrations. Hence VTTS played a significant role in various economic studies, both analytical and empirical (Zamparini & Reggiani, 2007). It is difficult to name a concept more widely used in transportation analysis than the value of travel time. Its theoretical meaning and its empirical measurement are fundamental to travel demand modeling, social cost analysis, pricing decisions, project evaluation, and the evaluation of many public policies.(small,2012) In developing countries the lack of data regarding the economic value of time savings cause that it often be omitted from appraisal or relied upon proportion of market wage rate (the wage rate method) or using values obtained from developed countries. of course the values obtained from developed countries have serious drawbacks because existing research suggest that value of time is highly affected by preference, physical characteristic of geographical area and habit of particular society ,thus different situation require different modeling and attempt to transfer result from one area to another are fraught of danger, on other hand empirical and theoretical research indicates that the value of time can be significantly higher or lower than the current wage rate, depending on many condition .This paper uses a revealed preference approach to estimate the VTTS for work and educational trips by collecting 480 questioners from individuals that trip in morning peak time in Isfahan city in 1392, and use of discrete choice model for modeling individuals' preferences. Estimated results show, the value of travel time in Isfahan city in morning peak time is 350.50 Rials for each minute and 21030 Rials for each hour in this year.

Trade Integration, Market Size, and Industrialization: Evidence from China's National Trunk Highway System

Large-scale transport infrastructure investments connect both large metropolitan centres of production as well as small peripheral regions. Are the resulting trade cost reductions a force for the diffusion of industrial and total economic activity to peripheral regions, or do they reinforce the concentration of production in space? This article exploits China's National Trunk Highway System as a large-scale natural experiment to contribute to our understanding of this question. The network was designed to connect provincial capitals and cities with an urban population above 500,000. As a side effect, a large number of small peripheral counties were connected to large metropolitan agglomerations. To address non-random route placements on the way between targeted city nodes, I propose an instrumental variable strategy based on the construction of least cost path spanning tree networks. The estimation results suggest that network connections have led to a reduction in GDP growth among non-targeted peripheral counties. This effect appears to be driven by a significant reduction in industrial output growth. Additional results present evidence in support of a trade-based channel in the light of falling trade costs between peripheral and metropolitan regions.

Evaluation of Different Transportation Solutions with the Application of Macro Simulation tools and Multiple Criteria Group Decision Making/Aiding Methodology

This article presents a multiple criteria evaluation of different redevelopment variants of a certain section of a major street in a medium – sized metropolitan area. Each of the variants comprises different transportation solutions and concepts as well as distinct investments in transportation infrastructure. The variants have been designed heuristically with the application of PTV VISUM 11.0 computer traffic simulation system and evaluated according to the principles of Multiple Criteria Decision Making/Aiding (MCDM/A) and Group Decision-Making (GDM) methodologies. Traffic simulation for all variants considered has been carried out and different parameters distinctive of particular variants have been generated. A consistent family of criteria has been defined to evaluate the proposed transportation variants. In the set of criteria interests of the group decision maker (Municipal authorities) and three major stakeholders, including: passengers, investor, public transport operator, and municipal authorities have been taken into consideration. Computational experiments have been carried out with the use of ELECTRE III and AHP methods.

The Impact of Transport Investments on Competitiveness

At different policy levels, from local to European, the concept of competitiveness is used to stimulate or promote a region. Often it is assumed that regions can compete with each other on aspects such as labour market, education, investments or human capital. This is also true for investments in transport infrastructure. Investments in transport infrastructure are assumed to have a positive impact on the competitiveness of regions. The question is whether this assumption is true and how it can be measured.This article starts discussing the concept of spatial competitiveness and the way it can be measured using indicators. Improving the accessibility of a region by means of investments is often seen as a precondition to improve the competitiveness of a region. We therefore describe both the transport system and the use of accessibility as one of the supporting indicators. Finally, we consider the link between investments in the transport system and competitiveness.We conclude that competitiveness is a vague term that is hard to operationalise and to measure. It is often used as a marketing concept for regions. Comparison of regions is the goal of using the concept. In that sense, attention must be paid to use the right indicators. Accessibility is one of these indicators. Accessibility can be linked to improvements in transport infrastructure. There is evidence that transport infrastructure investments improve accessibility of regions and cities, but how this affects competitiveness remains unclear. Attempts have been made to quantify the wider economic impacts, which also needs to be included when considering competitiveness. Research into indicators that support competitiveness is therefore recommended.

Potential Impacts on Accessibility and Consumer Surplus of Improvements of the European Railway System

It is widely accepted that “transport infrastructure endowment influences competiveness of a Region; the provision of investment in transport infrastructure entails positive effects on productivity and growth, even if on the other side, heavy infrastructures (as railway lines) could affect negatively on the environment” (5th Cohesion Report, 2010). This article aims to explore the potential impact of improvements of the passenger rail network in order to evaluate how these could potentially increase accessibility and consumer surplus in EU regions; it summarizes the results of the model simulations carried out with a combination of the TRANSTOOLS rail network and the assignment module of Traffic Analyst.Three different scenarios have been tested by changing speeds on the whole network. The post-processing analysis has been carried out with utilities developed in Matlab, while the results for each zone (at NUTS3 level) have also been reported in easy-to-read ArcGIS maps. The outcomes provide insight into how the demand for passenger rail transport would react and where the highest benefits and costs, in terms of accessibility and consumer surplus gains, can be expected. This information, in turn, can be useful for the prioritization of investment needs and the identification of parts of the rail passenger market where new demand may be generated.

Employment, Transport Infrastructure, and Rural Depopulation: A New Spatial Equilibrium Model

In this paper we propose a new spatial equilibrium model, and use it to discuss issues related to rural depopulation. The discussion focuses on how investments in transport infrastructure and the spatial distribution of basic-sector jobs can promote a relatively balanced growth of peripheral and central areas of a region. Through interdependencies in individual migration decisions and an economic base multiplier mechanism, negative exogenous shocks may take a peripheral zone beyond a bifurcation point, into an equilibrium of dramatically lower population and employment. We study how the location of bifurcation points depend on spatial interaction behavioural parameters and variables subject to regional policy. We also discuss the issue of the timing of interventions intended to prevent a process of rural depopulation.

What determines international tourist arrivals to Peru? A gravity approach

Using the gravity model, this study examines Peru’s tourism patterns by analyzing a panel dataset of the country’s international tourism flows from 59 countries over 22 years (1990–2011). The empirical results for the entire dataset are consistent with the general prediction of the gravity model (positive coefficients for economic size and negative coefficients for distance). Peru mainly has potential to expand tourism flows from European countries like Portugal, Belgium, Russia, Norway, Sweden, Switzerland, Italy, Germany and France. Although Peru offers no visa requirements for such countries, this policy seems to not be sufficient to increase tourism flows from them. Further collaboration between Peru and its neighboring countries in providing coordinated investment in transport infrastructure is necessary to create economies of scale that allow benefits from the cluster effect.

Public Finance and Transport

The common market is considered to be one of the greatest benefits of European integration. The single European transport area with optimal modal split is a basic precondition for a common market in goods and the required high mobility of passengers. To assure smooth traffic flow, with the minimum of traffic accidents, and to be more environmentally friendly and energy efficient necessitates the maximum utilization of all current transport facilities that are available. However this shall not be enough. Regarding the delay in adapting the transport infrastructure to the enormous growth of traffic, it is necessary to increase investments into bottleneck removal and add new links according to new requirements. Some prioritization of investment in transport infrastructure is connected with the broad effort of public authorities to increase growth and employment in order to facilitate solutions to end the current crisis and assure the further development of the economy; the contribution of public funding is considered to be an important incentive for private capital inflow.

Analyzing Inter-modal Competition between High Speed Rail and Conventional Transport Systems: A Game Theoretic Approach

A methodology is developed in order to assess the viability of transport infrastructure investment in the form of High Speed Rail (HSR). Public transportation mode operators such as HSR, conventional trains and buses, maximize their profits by varying prices and frequency for a given demand and infrastructure cost. In this study, the price competition between different operators is taken into consideration and the change in the existing market equilibrium due to the entry of the new mode is studied using the game theoretic approach. Hypothetical data for a particular route is used for game-based analysis. In this multiplayer game, the effect of introducing the new mode of transport on the Nash equilibrium is studied taking into account the competition between the other modes of transportation. The analysis of market share for the modes has been carried out using heterogeneity of the passengers based on the concept of Value-of-Time (VOT). The passengers are assumed to be intelligent and rational in choosing the mode that minimizes their generalized travel cost, which is a function of travel time weighted by the individual VOT and the monetary cost associated with the mode of travel. Thus, different combinations of entry and response strategies are studied for HSR and existing modes, and the impact of introduction of HSR is assessed in terms of profit, thus, reflecting on the sustainability and financial viability of the transport infrastructure investment.

Effects of rail network enhancement on port hinterland container activity: a United Kingdom case study

Transport infrastructure investment is an important element in the creation of an efficient and sustainable transport sector. Intermodal flows are seen as critical to rail freight’s future success and feature strongly in contemporary transport policy. This paper investigates a practical rail network enhancement scheme from the United Kingdom (UK) designed to achieve a shift of containers from road to rail. The paper’s aim is to determine the effects on rail freight efficiency of a loading gauge increase in April 2011 which allowed 9′ 6″ high containers to be transported on standard wagons on the corridor from the port of Southampton to the West Midlands. The study is based on a “before and after” survey of container train capacity provision and load factors, with the “before” survey taking place in 2007 and the “after” survey in 2012. A consistent approach to data collection in both surveys allows detailed analysis of original survey data to be carried out. It is clear that there have been considerable improvements in both on-train capacity and train loads between 2007 and 2012, and that these improvements have been greatest on routes that have benefited from the gauge enhancement. Rail’s mode share of container throughput at Southampton has increased. There have also been wider benefits to off-corridor locations served from Southampton and elsewhere across the network. Overall, the impacts on rail freight efficiency of the gauge enhancement have been substantial, with efficiency improvements evident even at a time of economic stagnation.