Effects of transport on the national economy

This book is the final report of a three-year research programme on transport infrastructure and logistics in the Finnish economy. The report collects separate studies assessing the roles of the transport sector and logistics in the economy, as well as the contribution of transport infrastructure on economic growth. Two of the studies also attend the question of infrastructure service provision both from the point of view of governance and budgeting as well as life-cycle planning and market incentives. The report covers the interdependencies of transport, logistics and business activities. The role of logistics is seen as an enabling one. In assessing the contribution to economic growth of transport infrastructures, the report develops new methods for estimating the value of road and rail infrastructures. Based on the concepts of serviceability and maintenance, it is estimated that the value of public Finnish road network in 2003 was 37 billion euros and that of the rail network in 2005 7 billion euros. The contribution of the road network to productivity growth in the private sector has according to the study been significant and the rates of return on these investments been above average private sector returns in the period 1975 - 2003. The report assesses means available to authorities to increase efficiency in maintenance and construction of the transport infrastructure. It is argued that result-oriented management would benefit from the introduction of capital budgeting much in the vein of the recent UK reforms. Market-based solutions, such as public-private partnerships can also be used to raise efficiency in infrastructure service provision. These, however, only work under fairly stringent conditions, and much of their potential has been realised by the introduction of better budgetary discipline and life-cycle planning. This report may be found at http://www.mintc.fi/fileserver/2508.pdf