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Transport and Regional Integration: European Experience Stephen Perkins 20 October 2011, Tokyo

Transport and Regional Integration: European Experience Stephen Perkins 20 October 2011, Tokyo. Three Transformative Regional Projects. Oresund Road / Rail Sea crossing 4 m people € 3 bn July 2000. Crossrail Rail 13 m people € 15 bn 2017. Metro du Grand Paris Express metro

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Transport and Regional Integration: European Experience Stephen Perkins 20 October 2011, Tokyo

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  1. Transport and Regional Integration: European ExperienceStephen Perkins20 October 2011, Tokyo

  2. Three Transformative Regional Projects Oresund Road / Rail Sea crossing 4 m people € 3 bn July 2000 Crossrail Rail 13 m people € 15 bn 2017 Metro du Grand Paris Express metro 12 m people € 20 bn + € 12 bn upgrades 2025

  3. 3.6 million people 40km

  4. Metro Grand Paris 40km 40km

  5. Do we know how to Measure the Impact of Transformative Projects on Jobs and Growth? • CBA traditionally captures all impacts as users are willing to pay the full economic value of transport services used • Are there GDP / productivity impacts not captured in direct user benefits? • Time savings • Congestion relief • Macro studies find an infrastructure/growth link • If increased infrastructure investment accelerates growth, this needs to be reflected in demand forecasts

  6. Some factors • Oil crises • Downturns • - Price competition Forecasting is Difficult 1999 1967 1978 1987 1991 Source: Tom Petersen 2011

  7. Induced Traffic • Failure to anticipate it can result in project making congestion worse not better • Over-estimating it results in optimism bias

  8. Two Key Potential Effects • Competition and returns to economic density • Non marginal nature of projects creates transport user behaviour change not captured in the model

  9. Competition • New link in a network unlikely to affect competition in industrial or service industry markets • New regional network or high quality link between regions can increase competition • Poor transport can be a shield to competition • Prices fall but peripheral or weaker end can suffer Agglomeration • Inter regional link: similar 2 way impact • Intra-regional enhancement: reinforce agglomeration

  10. Agglomeration Studies • Need a lot of data at a detailed level to make the transport productivity/economic output link • Most look at industry, but service sector more important to many economies and shows bigger agglomeration impacts • Impacts may be 10 to 20% on top of CBA, Dan Graham’s survery • Plus Agglomeration -> productivity -> higher VoT for business travel and commuting

  11. Can we add a general multiplier? • Transformative projects most likely to show agglomeration benefits • Big projects can carry costs of agglomeration studies, and input/output modelling: LUTI and CGE • But size is not everything • Small “unlocking projects” can have disproportionately large impacts • Some large projects have little impact on key effects, and just result in large direct user benefits • Infrastructure reaching service sector centres will have more agglomeration benefits than linking industrial centres • Case by case according to nature of project

  12. Understand the nature of the project • Point to point high speed rail ≠ Crossrail or SGP • Oresund designed not to link two cities but create a region • Evidence from French TGV studies not very conclusive • Smaller changes than expected, especially in feeder areas • Major regional centres gain at expense of weaker ones • Transfer from air • Project boundaries • Relocation of benefits • Tax revenues • Transfers : Lyon to Paris ≠ New York to London?

  13. CBA+ or Alternative Model? • Crossrail: CBA+ (incremental improvement on present network) • SGP: model new network mobility pattern • HSR: simple financial appraisal if majority of benefits users an no congestion relief • Other issues: • Jobs in the crisis, • growth but when, • post crisis demand different? • Unlocking growth

  14. References • The Wider Economic Benefits of Transport, ITF 2008 • Roger Vickerman, Dan Graham • The Future for Interurban Passenger Transport, ITF 2009 • Jacques Thisse, How Transport Costs Shape Economic Activity • Crossrail Business Case, UK Department for Transport • http://www.dft.gov.uk/topics/crossrail/ • Oresund Fixed Link Evaluation, TRANSTALK • Oresund Before and After Study, Tom Petersen, KTH • Oresund Evaluations, VINNOVA • Major Transport Infrastructure Projects and Regional Economic Development, Roundtable 1-2 Dec 2011, Paris • Les impacts Economiques et Sociaux du TGV, Yves Crozet • EC EVATREN Evaluating the State of the Art in Investment for Transport and Energy Networks

  15. Thank you Stephen Perkins T +33 (0)1 45 24 94 96E stephen.perkins@oecd.org Postal address 2 rue Andre Pascal75775 Paris Cedex 16

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