Effect of transportation infrastructure on economic growth in India: The VECM approach

This paper examines the effect of transportation (road and rail) infrastructure on economic growth in India over the period 1970–2010. Using Vector Error Correction Model (VECM), the paper finds bidirectional causality between road transportation and economic growth. It also finds bidirectional causality between road transportation and capital formation, bidirectional causality between gross domestic capital formation and economic growth, unidirectional causality from rail transportation to economic growth and unidirectional causality from rail transportation to gross capital formation. The paper suggests that expansion of transport infrastructure (both road and rail) along with gross capital formation will lead to substantial growth of the Indian economy. Therefore, within its stated scope, this study suggests that a suitable transport policy should be retained to boost transportation infrastructure and hence sustainable economic growth in India.     

Incentives to reduce port inefficiency: a theoretical approach

Over the last decades, the European Union (EU) has devoted a large amount of effort and money to projects aimed at boosting some of its maritime corridors as a modal alternative to road or rail freight transport. However, the overall design of most of these programmes has ex post revealed as very ineffective. This paper suggests that promoting port efficiency might be a more suitable target to increase the modal split of Short Sea Shipping (SSS) than subsidizing firms to transfer cargo from road to sea. But defining ‘port efficiency’ is a complex task and, therefore, granting money directly to port authorities could also generate perverse moral hazard effects, particularly when the improvements are difficult to monitor and many investments are non-refundable. The European Court of Auditors points out that millions of EU public port finance was wasted on empty terminal and other unused infrastructure. The objective of this paper is to design a proper subsidy to promote SSS by encouraging port improvements through a proper system of incentives. As a policy recommendation, in this paper we propose the development of a subsidy per inefficiency-reduction unit.     

Risk and reward in rail contracting

This workshop considered the role of risks and rewards in rail transport by considering evidence on the impacts of industry structure, franchising and infrastructure charges. A schema for the allocation of risks and rewards was developed, which indicated that strategic risks should be borne by authorities and operational risks by operators, but that tactical risks were more difficult to allocate and appropriate reward mechanisms more difficult to design. The extent to which these difficulties can be addressed by competitive tendering and alternatives such as trusting partnerships and negotiated performance based contracts was considered.     

Changes in the external costs of freight surface transport In Spain

This paper studies the external costs of surface freight transport in Spain and finds that a reduction occurred over the past15 years. The analysis yields two conclusions: trucks have experienced a reduction in external costs, and rail has lower externalities. The external costs of road freight transport decrease between 1993 and 2007 (44%). The external costs of rail freight increase by 12%. During this period, the external costs of road freight related to climate increase by 16%, oppositely than those from air pollution and accidents (51 and 44%). The external costs of rail related to pollutant emissions and climate increase by 4% and 43%. Oppositely, the external costs related to accidents decrease by 27%. Road freight generates eight times the external costs of rail, 2.35 Euro cents per tonne kilometre in 2005 (5.6% accidents, 74.7% air pollution and 19.7% climate) vs. 0.28 (13.4% accidents, 53.9% air pollution and 32.7% climate).     

Part I: Externalities and economic policies in road transport

Road transport imposes negative externalities on society. These externalities include environmental and road damage, accidents, congestion, and oil dependence. The cost of these externalities to society is in general not reflected in the current market prices in the road transport sector.An efficient mobility model for the future must take into account the true costs of transport and its regulatory framework will need to create incentives for people to make sustainable transport choices. This paper discusses the use of economic instruments to correct road transport externalities, but gives relatively more weight to the problem of carbon emissions from road transport, as this is particularly challenging, given its global and long-term nature.Economics offers two types of instruments for addressing the problem of transport externalities: command-and-control and incentive-based policies.Command-and-control policies are government regulations which force consumers and producers to change their behaviour. They are the most widely used policy instruments. Examples include vehicle emission and fuel standards in the US as well as driving or parking restrictions in Singapore. The implementation cost of these instruments to the government is small. Although from an economic perspective these policies often fail to achieve an efficient market outcome, the presence of political constraints often make them the preferred option, in terms of feasibility and effectiveness.Economic theory shows how policies, which affect consumption and production incentives, can be used to achieve the optimal outcome in the presence of externalities. Incentive-based policies function within a new or an altered market. We first examine incentive-based policies, which cap the aggregate amount of the externality, such as carbon emissions, by allocating permits or rights to the emitters. The emitters are then free to trade their permits amongst them. The permit allocation mechanism is important-although market efficiency would be satisfied by an auction, political influences usually favour a proportional allocation based on historic emissions. We discuss EU ETS as an example of a cap-and-trade system, however, no such policy for CO₂ emissions in road transport has been implemented anywhere in the world to date.Fiscal instruments are, like command-and-control, widely used in road transport, because they are relatively cheap and simple to implement. They include the use of taxes and charges in order to bridge the gap between private and the social costs and, in principle, can lead to an efficient market solution. Registration, ownership, fuel, emissions, usage taxes, and parking and congestion charges have been implemented in many countries around the world. On the other side of the spectrum, subsidies can be given to those scrapping old cars and buying fuel-efficient vehicles. Some cities, such as London, have implemented congestion charges and many states in the United States have introduced high occupancy lanes. Other interesting possibilities include pay-as-you-drive insurance and other usage charges. However, the size and scope of taxes and subsidies are determined by governments, and because of their imperfect knowledge of the market the outcome is still likely to be inefficient.Governments have many effective economic instruments to create a sustainable road transport model. These instruments can be used separately or together, but their implementation will be necessary in the nearest future.     

A nested logit model of mode choice for inland movement of export shipments: A case study of containerised export cargo from India

Predominance of containerised mode of transport for export of general cargo has influenced the mode choices on the inland segment. Prior to containerisation the general cargo for export moved to ports invariably on road in break bulk form. Growth of containerisation led to development of inland terminals enabling an exporter to obtain export clearance at the inland points. This process facilitated an exporter to move cargo either in break bulk or in containerised form, and as inland terminals facilitated aggregation an exporter could move cargo either by road or rail. Thus containerisation increased the inland transport options for an exporter from one to three. The paper develops discrete choice models in the Indian context for inland movement of containerised export cargo. Primary data was collected from 124 export firms through a structured questionnaire. This data is supplemented with data from transport firms and terminal operators. Using the above data, a nested logit model with rail container and road truck in one branch was found to predict the mode choice behaviour best. Amongst the transport attributes, total cost and total transit time were found to be influencing the mode choices significantly. The study however did not find the effect of reliability and loss and damage significant. In addition, the model also predicts that non transport attributes - like the percentage of letters of credit that materialise with inland way bills and the value of export benefits that materialise after export - are important in the mode choice decision.     

Overview of public transport policy developments in South Africa

Public transport in South Africa is one of the most burning issues in the transport sector. The government is faced with huge public pressure to improve public transport systems in the face of rising fuel costs, the pending implementation of expensive urban toll road systems in the Gauteng province, and elsewhere in urban environments, public transport safety issues, public transport fleet renewal, especially the commuter rail services, as well as limited resources to fund public transport. As a developing country, the South African Government has pressing funding issues such as funds needed to improve housing for the poor to improve schooling and public health services. Government is also faced with a vocal minibus taxi industry that transports an estimated 65% of all commuters in the country that is also insisting on subsidies for its services.     

Rail infrastructure,ITS and access charges

This paper presents an overview of the principles and technologies relating to railway infrastructure. Specifically this paper includes rail–wheel contact, inspection and maintenance of rail. Intelligent transport systems (ITS) and their applications for the purposes of the railway transport in Europe are discussed. The potential, levels of development, technological and operational characteristics of the European Railway Traffic Management System (ERTMS) are presented. Finally, a discussion on methodologies, principles and current practices for access charging in Europe is provided.     

Measuring the welfare effects of infrastructure: A simple spatial equilibrium evaluation of Dutch railway proposals

We specify a spatial computable general equilibrium model for the Netherlands based on the so-called New Economic Geography. The model distinguishes 14 sectors, two modes of transportation and over 500 municipalities. Key parameters are estimated by fitting predicted interregional trade flows to bi-regional input-output data. The model is then calibrated to a baseline scenario for 2020. From there, the transport grid is modified in line with six proposals for changes in rail infrastructure. The effects of these changes on employment and welfare are computed. We find that the most ambitious project leads to a redistribution of around 8000 jobs from regions further out to regions along the line and especially at the end of it. The net national welfare effect is equivalent to a 250 million euro (0.016%) increase in GDP.     

轨道交通车辆段综合开发的交通规划策略探讨

分析了轨道交通车辆段综合开发原则、模式特点及交通规划存在的诸多难题,基于“高效安全、绿色低碳”交通理念,提出多种模式的道路网络衔接与2层次的公共交通衔接策略,指导了广州市多条轨道交通线车辆段综合开发项目的交通规划和建设。     

The development of road and rail transport safety valuation in the United Kingdom

An extensive body of theoretical and empirical work has been undertaken in the UK since the middle of the last century on the estimation of values of safety for use in the appraisal of proposed transport projects, particularly road and rail. This research has focused largely on ‘willingness-to-pay’ based values in order to measure the strength of the travelling public's preference for marginal improvements in transport safety, relative to consumption of other goods and services. In terms of practical policy making, the research has resulted in a set of values for the prevention of statistical fatalities and non-fatal injuries that are applied not only in transport safety decision making, but also in other public sector contexts. This paper summarises the main findings of this research.     

Financial and environmental impacts of hypothetical Finnish dry port structure

One main theme of European Union’s in transport policy statements has been the increased role of railways in the reducing environmental impacts and costs of transport activity. One option to increase the modal share of rail transport is to utilize the dry port concept, particularly applicable to general cargo. At the Port of Gothenburg (Sweden) use of this concept in combination with rail transport has led to a reduction of CO₂ emissions, and lower transport energy costs. The main objective and motivation of this research work are to examine through analytical models, how this same dry port concept could be implemented in the Finnish transportation network, with estimates of the benefits being gained.The research method of this study is macro gravitational models of distribution. Main input data for the models are distances and population in the area. The approach aims to research, how relative transport costs behave by increasing the number of dry port distribution locations. For the actual computation work the authors apply linear integer programming. Based on the results, the authors argue that relative transport costs can decrease considerably by increasing the number of dry ports, up to the level of six locations. This is considerably less than what is the current situation in Sweden. The found solution also differs from Sweden as the fragmented Finnish seaport system enables using numerous seaports instead of one, which further decreases inland transportation distances and volumes considerably. At the same time forthcoming sulphur emission reduction regulation (for sea transports) might impact the transportation network structure by decreasing sea transport and the number of seaports used. This might lead to a further increase in land-based hinterland transport.     

Ship, port and supply chain security concepts interlinking maritime with hinterland transport chains

As maritime processes do no stop at sea ports, hinterland operations have to be considered and addressed as well. This becomes obviously on designing and managing seamless cargo and information flows from/to hinterland regions via sea ports from/to transcontinental markets. Nowadays, also security-related aspects need to be tackled in order to enable continuous flows corresponding to security legislations and technical requirements set up in the field of maritime and intermodal hinterland transport. Ensuring transport security within the European transport market requires both adequate security legislations and innovative concepts. While for the maritime sector, including sea ports, security regulations are already in force, hinterland operations (road, rail and Inland Waterway Transport) are only indirectly affected today, either on carrying out transports from/to sea ports or exporting commodities to overseas territories. This results in the need for innovative security strategies and concepts combining maritime with hinterland transport enabling seamless security processes.     

Part II: Policy instruments for sustainable road transport

Without questioning the fact that to achieve efficiency emitters should pay for the true costs of their actions (a core principle of economic policies such as pollution taxes), we find sufficient evidence in the literature to demonstrate that many other policy instruments can be used in combination with taxes and permits to ensure that the transport needs of the present generation can be met without compromising the ability of future generations to meet any needs of their own.The policies and policy aspects considered in this paper broadly fall into three categories: physical policies, soft policies, and knowledge policies. All three aim to bring about changes in consumers’ and firms’ behaviour, but in different ways. The first category includes policies with a physical infrastructure element: public transport, land use, walking and cycling, road construction, and freight transport. We also consider the particular challenges for mobility in developing countries, and how these may be addressed. Soft policies, on the other hand, are non-tangible aiming to bring about behavioural change by informing actors about the consequences of their transport choices, and potentially persuading them to change their behaviour. These measures include car sharing and car pooling, teleworking and teleshopping, eco-driving, as well as general information and advertising campaigns. Finally, knowledge policies emphasise the important role of investment in research and development for a sustainable model of mobility for the future.The main findings can be summarised as follows.

Physical policies

An increase in the use of public transport, combined with a decrease in the use of private cars, can reduce traffic congestion and, more importantly, carbon dioxide (CO₂) emissions, as public transport generally causes lower CO₂ emissions per passenger kilometre than private cars. Public transport fares are subsidised in most places, which can be justified by economies of scale and by the fact that public transport can reduce total road transport externalities. London, Singapore, Portland and Curitiba are all examples of good practice at government level, having achieved reliable, frequent and integrated public transport.Policies to increase public transport use must be part of an integrated policy. Integrated policy refers to integration across different modes of transport, different government objectives (such as the economy, health and the environment), considering the needs of different social groups, and coordinating action between the relevant government institutions. There is evidence that a lack of coordination can jeopardise the achievement of policy objectives.A sustainable model for transport policy also requires integration with land-use policies. These may be somewhat limited within the bounds of existing cities, but as cities grow and new cities are built, urban planners must put more emphasis on land use for sustainable transport in order to reduce congestion and CO₂ emissions. Sustainable land-use policy can direct urban development towards a form that allows public transport as well as walking and cycling to be at the core of urban mobility.Walking and cycling, which improve general health and produce no tailpipe emissions, constitute an excellent alternative to motorised transport on short-distance trips within towns and cities. The policies which can incentivise walking and cycling include crime reduction to make streets safer, well-maintained and clean pavements, attractive street furniture, safe crossings with shorter waiting times, dedicated cycle paths, showers in offices, and lower speed limits, to name but a few.Road construction and expansion used to be seen as one of the most promising ways to reduce traffic congestion. However, in the mid-1990s, the issue was reassessed and it was found that building and expanding roads, increased, rather than decreased, congestion, and ultimately induced higher levels of travel demand. The reason for this is that the extra capacity reduces the general cost of travelling and the less expensive the travel, the more it will be demanded. Regarding freight modal shift, road transport is much more polluting than rail per tonne-km of goods transported and therefore a shift towards greater use of rail in freight transport is desirable. Inadequate infrastructure is the main obstacle preventing this modal shift taking place.Developing countries face great mobility challenges: rural areas are often extremely poorly connected to transport infrastructure, such that, in contrast to the situation in developed countries, the benefits of road construction can strongly outweigh the total costs (including environmental ones). The main challenge, however, is to develop a solution to the problems arising from the combination of urbanisation and motorisation. Integration of transport and land-use policy will be key to rising to this challenge.

Soft policies

Car sharing and car clubs can also potentially reduce CO₂ emissions, although the aggregate reduction in congestion and emissions has not been measured with an adequate degree of precision in the literature. Teleworking and teleshopping can potentially reduce congestion and also CO₂ emissions. However, the evidence for this reduction is rather mixed, as it is unclear whether these measures lead to overall reductions in road transport.Eco-driving campaigns aim to inform and educate drivers in order to induce them to drive in a fuel-efficient and thus environmentally friendly way. There seems to be some consensus in the literature that eco-driving could lead to reductions in CO₂ emissions of around 10 per cent.Information and education policies have often been advocated as instruments which may affect behavioural change. We find in this paper that these types of measures are necessary, but not sufficient for behavioural change. Advertising and marketing may go a long way in changing peoples’ behaviour. In California, for example, Kahn (2007) finds the “Prius” effect: the Toyota Prius is preferred by consumers relative to other similarly green vehicles, probably due to extensive marketing and celebrity endorsements. Family life changes are also found to trigger changes in behaviour ( [Goodwin, 1989] and [106]). People whose lives are being changed by some important development (birth of a child, retirement, etc) tend to respond more to changes in the relative attractiveness of different transport modes. Advertising campaigns promoting a modal shift towards public transport, for instance, may thus be more successful if targeted at people in the process of important life transitions.

Knowledge policies

Research and Development is crucial for developing sustainable and low-carbon transport for the future, and it is essential that governments provide incentives to undertake R&D, so that new low-carbon technologies in the transport sector can be demonstrated and applied at a large scale.Finally, we consider the issue of policy combination and integration. There is evidence that the combination and integration of policies can lead to positive side-effects and synergies. Policy integration is crucial in order to rise to the challenges we face in moving towards a sustainable mobility model. We conclude that classical economic policies may be successfully combined with a number of policy measures discussed in this paper in order to achieve sustainability in transport.     

Rail and multi-modal transport

This paper elaborates on the definitions of inter and multi-modal transport, as well as their differences in terms of performance. A survey of the barriers, both internal and external, to an efficient intermodal transport is included followed by an analysis of the advantages and disadvantages of combining rail transport with the other transport modes. Transhipment technologies for efficient freight service and some examples of freight rail corridors between sea and inland terminals are presented. The integration between air and rail transport is discussed and the potential synergies between air and high-speed rail services are emphasised. The paper concludes with a discussion on energy use for sustainable rail performance.     

A Bayesian model to assess rail track geometry degradation through its life-cycle

One of the major drawbacks in rail track investments is the high level of uncertainty in maintenance, renewal and unavailability costs for the Infrastructure Managers (IM) during the life-cycle of the infrastructure. Above all, rail track geometry degradation is responsible for the greatest part of railway infrastructure maintenance costs. Some approaches have been tried to control the uncertainty associated with rail track geometry degradation at the design stage, though little progress has improved the investors' confidence. Moreover, many studies on rail track life-cycle cost modelling tend to forget the dynamic perspective in uncertainty assessments and do not quantify the expected reduction of the uncertainty associated with degradation parameters as more inspection data is collected after operation starts.     

Current publications

Despite the European Union (EU) efforts promoting policies that encourage short sea shipping (SSS) based on its advantages in terms of intermodality and environment, this mode has not yet reached a significant market share compared to land transport. In this paper, we establish a thesis that suggests that funding programs (such as Marco Polo I and II) have not properly offered the right incentives to promote SSS, and aspects such as the key role of port infrastructure and its characteristics, have not been taken into consideration. In a departure from traditional transport cost models, to prove our thesis, we use a theoretical intermodal competition model to compare alternative modes—road transport vs. SSS. We reach the conclusion that the EU needs to focus on ports and transport system efficiency as a whole in order to compete effectively in the freight transport market.     

基于IFC的水运基础设施信息模型

根据水运基础设施领域数据交换需求,引入了国际数据描述交换标准——工业基础类(IFC),基于其开放、共享、可扩展的特点,提出了一条适用于水运基础设施IFC标准的实施技术路线图。根据该路线,对水运基础设施领域的数据交换需求、数据分类、数据编码进行了验证和实践。该体系方法,能够满足水运工程领域IFC技术的研究要求,保障了水运基础设施IFC标准研究的顺利实施,也可为基础设施其它领域IFC研究和实践工作提供技术支撑。     

Rail infrastructure charging EU-directive,Swedish concerns and theory

The first railway package is being recast by the legislative bodies of the European Union. One point of departure in this paper is how Swedish agencies treat issues concerning marginal cost based charges, financing charges and allocation of scarce capacity and it discusses these issues from a welfare point of view, partly by use of theoretical modelling. It is seen here that the Swedish infrastructure manager (the Swedish Transport Administration) so far has no method for calculation of marginal costs as a base for charging, especially for costs of scarce capacity, and that the infrastructure manager is applying or discussing various methods for allocations of scarce track capacity. The EU-recast gives no guidance on principles for calculation of charges for scarce capacity, so we recommend the Swedish Transport Administration to develop such charges. The Administration seems to ignore important externalities that should be taken into consideration from a welfare point of view, with respect both to efficient charging and to allocation of scarce capacity. The analytical modelling part of the paper aims to derive these charges in principle, taking these externalities into account. If financing charges exceeding social marginal costs are applied, the model shows how to minimise the welfare loss of these increases. It also shows that financing charges should primarily be applied to market segments that cause large external costs from the operation of the train, where its customers have low valuation of wait time and delay time, where customers of other segments have high valuations of delay and where increased profits for other operators are induced.     

Competition in transit markets

Despite regulatory reforms in a number of countries, competition in transit markets is still relatively rare. Moreover, where it does occur it tends to be small group in nature and the outcomes are difficult to predict. In this paper, simulation models of competition in inter-urban rail markets and urban bus markets are developed and applied in studies of Great Britain and Sweden. It is found that on busy routes head-on competition is commercially feasible (although for rail this assumes low access charges) but is not socially desirable. For routes with thin demand (or high access costs), competition may be limited to cream skimming. In most competed cases, there appears to be a tendency for the provision of too much service, at too high price and (at least for bus) at too low quality. Rather than classical Bertrand-Cournot oligopoly models, transit markets may be best described by models of oligopolistic competition based on horizontal product differentiation.