Indicator 13: Transport infrastructure investment

Policy and targets

The TEN investment plan (estimated to exceed EUR 400 bn up to 2010) is intended to have a 60 % rail, 30 % motorway and 10 % other split, with rail investment mainly for the high-speed network (CEC, 1998).

Financing from national budgets accounts for the majority of TEN investments. However, EU financial contributions to projects of common interest in the framework of TEN are important stimulants. The Commission also encourages Public Private Partnerships in these projects.

The European Investment Bank (EIB) is an important financier of transport infrastructure. In 1997; it borrowed EUR 6 879 m for projects in the transport sector alone. Roads and motorways received 43 % of the investments, while 28 % were allocated to the railway network and 29 % to air transport and shipping (Eurostat, 1999).

Findings

Transport infrastructure investment increased steadily from 1985 to 1992, but fell by 3 % per year from 1993 to 1995. Although subsequent data is not available, there are indications of a modest increase in recent years.

The rise from 1985 to 1992 resulted from a number of major developments, including:

• the British Channel Tunnel;
• high-speed rail programmes in France, Germany and Spain;
• accession of Spain and Portugal to the Community (both countries launching major infrastructure programmes);

The decline from 1993 was for several reasons:

• economic growth slowed after 1990, which affected all investments;
• increasing concern for environmental impact led to higher costs which in turn led to a switch of expenditure from investment to non-investment projects (ECMT 1999);
• the completion of some major projects;
• the impact of the Maastricht criteria and the accompanying pressure on deficits and public spending.

Investment trends in infrastructure after 1993 varied across the Member States. There was a severe decline in Finland, Germany, Italy and the UK, but an increase in Belgium, Sweden and Portugal. Belgium’s investment was dominated by construction of the high-speed railway, and Portugal’s by investment projects associated with the universal exhibition in 1998.

In 1995 investment in transport infrastructure (road, rail, inland waterway, airports and maritime ports) was around EUR 69 bn. The modal shares were 62 % roads, 28 % rail, airports 5.4 %, 3.6 % maritime and 1.6 % inland waterways. The proportions of road and rail investment have not changed significantly since 1987.

Figure 4.5: Infrastructure investment trends, EU,1987-1995

Source: European Conference of Ministers of Transport (1999)

Road investment in 1992 was 40 % higher than in 1987 – thereafter it declined. By 1995 it was just 27 % above the 1987 figure. The allocation of investment to transport modes reflects road transport’s dominant share of demand. In 1997, road transport accounted for more than 80 % of passenger demand and 45 % of freight demand.

In 1995 rail investment was also 27 % higher than in 1987, but in the intervening years investment levels were consistently lower than those for road. Much of the rail investment programme was devoted to HSR construction in France, Germany, and Spain.

Although maritime ports play an important role, investment declined through the 1970s and 1980s. However, since 1990 investment has grown, and by 1995 was 39 % higher than in 1987. Nevertheless, investment in ports remains low compared with that in other transport modes.

Airport investment shows the highest increase over the period 1987-1995 (57 %). This increase reflects the rapid growth in air traffic.

Comparing transport investment with GDP and population (in 1995):

• Sweden had the highest at 1.5 % of GDP with Portugal second at 1.4 % of GDP;
• Austria and Denmark had the lowest at 0.6 % of GDP each;
• per capita, the highest levels were found in Luxembourg, Germany and Sweden.

Future work

• Infrastructure investment data should include both publicly and privately financed projects. However, investments by local authorities are often excluded from public investment figures, as are some private investment projects. Investment data is therefore not comparable between countries.
• More work is needed at the EU level to ensure standardisation and reliability.
• No reliable data is available on investment in coastal shipping, urban public transport infrastructure or combined transport.

Sources: ECMT (investments) and Eurostat (population)