Some Specific Obstacles to Funding and Implementing of Trans-European Transport Projects
ZAMANI H, Halcrow Fox, UK
Most major rail and road infrastructure projects are characterised by a lengthy construction period, large up-front costs, a long payback period, high uncertainties, and, at best, thin profitability, which renders financing of such projects through the pr
Most major rail and road infrastructure projects are characterised by a lengthy construction period, large up-front costs, a long payback period, high uncertainties, and, at best, thin profitability, which renders financing of such projects through the private sector by no means an easy task.
The Trans European Network (TEN) projects involve several different administrative, legislative and political landscapes, and are often much larger. These exacerbate the problems and render the task of financing TEN projects through either the private sector or private-public sectors partnership arrangements substantially more difficult. Indeed, the trans-national character of the TEN projects leads to a number of complications which potentially could act as a structural barrier to their development.
These problems arise from the national parties involved in the project having different interests, divergences between the costs and benefits of the project to the Union as a whole and the costs and benefits to individual participants, the profitability of a specific link of the network being dependent on another link of the network being built, substantial differences in the project evaluation methodologies used across the Community, and the absence of a mechanism for redistributing costs and benefits between the participants.
Successful and cost effective promotion and implementation of the TEN projects calls for the development of appropriate policies to address these problems; in particular:
* developing a common set of project evaluation criteria and procedure which would be approved and used by all the individual Member States for project evaluation and selection;
* developing a mechanism for redistributing costs and benefits, including an appropriate compensatory machinery, which would require the beneficiaries to make certain contributions towards the new sections or to compensate the parties in the case of anticipated losses; and
* developing an appropriate institutional arrangement to promote, evaluating, and implementing such projects.
Association for European Transport