FUNDING

03.31
From 2005 to 2007
The trans-European transport network (TEN-T) includes 30 priority projects, which are predicted to cost €225 billion. The White Paper "European Transport Policy for 2010: Time to Decide" raised the difficulty of mobilising capital as one of the main obstacles to carrying out infrastructure projects. Recent EU research projects have covered optimal pricing of existing infrastructure and good use of transport revenue in the presence of social marginal cost pricing. In this project the emphasis was placed on optimal charging and investment to fund new infrastructure.

The principal aim of the FUNDING research project was to develop a scientifically sound approach to the funding of large transport infrastructure investments in the EU. Two different avenues were explored for the funding of these investments. The first was the creation of an EU transport infrastructure fund financed by mark-ups on transport activities. The second was the use of mark-ups on the users’ costs charged by the infrastructure suppliers that make the investment.

The economics of infrastructure funds and the mark up method were first explored conceptually. The conceptual phase led to the formulation of a limited number of alternative scenarios for a European infrastructure fund and for the use of mark-ups. These scenarios were adjusted as a function of the financing gaps that were calculated for the horizon 2020 by mode and country given the accepted TEN investments. The financing gap was computed using the SCENES - TREMOVE baseline 1995-2020.

Two models were used to test the performance of the alternative infrastructure fund and mark-up scenarios: a multi-modal spatial general equilibrium model of the EU; and a multi-modal pricing and investment assessment model (MOLINO II), which was applied to five important "TEN" infrastructure projects. This case study approach will enable the effect of infrastructure fund scenarios on each of the investment projects to be examined in terms of financial structure, advancing or delaying the investment decisions, the pricing decisions and on welfare.

Period

From 2005 to 2007

Client

European Commission, 6th Framework Programme

Partner

KU Leuven (coordinator), ITS Leeds (UK), CAU Kiel (Germany), Free University of Amsterdam (The Netherlands), TUB (Germany), Hebrew University of Jerusalem (Israel), Tampere University of Technology (Finland), AdpC, Technische Universität Wien (Austria), Aristotle University of Thessaloniki (Greece), RRG (Germany)

Our team

Griet De Ceuster
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