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THE VIEW European Transport Financing Dr Andreas Kossak

What we need is education instead of concrete

Dr Andreas Kossak is Principal of AK Research & Consulting, based in Hamburg, Germany


n January 2012 the Conference of the Transport Ministers of the German Federal States appointed a

Commission “Future of Financing the Transport Infrastructure”. Its final report was published in December 2012. Te main result was the identification of a financing gap of €7.2m per year (in 2012 prices) compared to the actual budget and budget plans just for a qualified maintaining the existing roads, railways and inland waterways and for settling the effects of the since 20 years dynamically worsening maintenance crisis within 15 years. Te calculation is more conservative

than pessimistic. Te result complies with the findings of the High Commission “Financing the Transport infrastructure” published in 2000. Te recommendations of the Pällmann Commission had been welcomed by all political camps and all relevant lobbyist-groups in those days. As a reaction on the findings of the

Future-Commission a “Transport- Infrastructure Initiative: Keeping Germany in the lead” was initiated by the Association of Public Transport Operators. Meanwhile numerous articles on the respective topic have been published in various new media – addressing primarily the problem not appropriate solutions. Te respective activities have been supported by the result of a meeting of the Transport Ministers of the OECD in the frame of the conference of the International Transport Forum (ITF) in Leipzig, Germany in May this year. Te Ministers issued a joint declaration on sustainable transport funding,


stating that “Transport Infrastructure is much more than asphalt, concrete and steel; it is the backbone of national economies, providing connections for people and goods, access to jobs and services, and enabling trade and economic growth.” Tat sounds good, but it is not at all original.

FINANCING THE FUTURE Te importance of the transport infrastructure stated in context with the respective activities is mirrored only to a very limited extend in the programs of the various political parties for the election on Federal level in Germany in the third quarter of 2013 – not to mention ideas, proposals and statements regarding sustainable funding. Slogans like “Education instead

of Concrete”, “Lamenting on a high level” and “Tere is enough money in the system, it only must be used more effectively” are still frequently quoted. Others are calling for more money exclusively for the railway sector – at least as much as for the roads, ignoring the reality of an 85 per cent (passenger) and 70 per cent respectively share (freight) of the road sector in terms of transport performance, compared to 8 and 17 per cent of the rail sector. Without any doubt the need to use

the available money more efficiently is now urgent. Intensifying Public Private Partnerships (PPP) could be a part of the solution. However, proposals regarding an expansion of PPP in the transport sector are still running into stiff opposition from politicians (based on an ideological position) and public administrations

The key weakness of the

discussion is the lack of an appropriate and

consistent system of targets and efficient tools

(who fear losing staff and influence) in Germany. Te positions are claimed to be confirmed by reports of Federal and State Audit offices, stating frequently that PPP projects are more expensive for the public than “traditional” managed projects. However, these results are based on

comparisons of ideal-world-conditions regarding publicly managed projects with real-world-conditions of PPP- managed projects. An actual evaluation of 214 traditionally realized highways projects all over Germany with a calculated volume of €12.4ms came up with the result that the estimated costs have been exceeded in average by 37 per cent – not taking into account the PPP-typical life-cycle costs. Actual Mega-projects in the rail- and airport- sector in Germany are exceeding the original calculated costs by several hundred per cent. In the US PPP is actually discussed by experts as being the most promising means for compensating for the lack of Federal money for the transport infrastructure However, the key weakness of the

discussion on financing the transport infrastructure (at least in Germany) is the lack of an appropriate and consistent system of targets and efficient tools. What is the demand that needs to be met? How must the Transport System be designed in order to fully meet that demand? How must the political boundary conditions be organized, in order to realize the transport system meeting the stated demand? How must the organization, procedures and tools look like and be used, in order to gain an efficient and sustainable funding of the needed transport infrastructure? Tis might hold true not only for Germany but in Europe as a whole. Vol 8 No 3 Europe/Rest of the World

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