Big and bold versus small and beautiful?
In transport, one of the most hotly debated topics is where and how governments should target capital investment. This is by no means unique to Ireland; however of particular relevance are the limited financial resources available to us in the medium term.
Why does it evoke such interest? Interest is far from limited to those in the industry, and that is neither surprising nor unhealthy given the role of transport in facilitating, or hindering, a variety of economic and social activities. Business interest groups throughout the country are particularly vocal in highlighting the costs of congested, unreliable or unsafe transport networks to business activities and how these costs limit prospects for securing foreign direct investment.
What have we done in the recent past? Capital investment plans of yesteryear often promised all things to all people. Indeed, such was the scale and coverage of planned investment during the Celtic Tiger era, one might have thought that transport was the panacea to all life’s ills! A new sense of realism has dawned, thanks, in part, to the troika and now by our planned return to the financial markets later this year. This is reflected in the current national investment framework, ‘Infrastructure and Capital Investment 2012-16: Medium Term Exchequer Framework’. Despite the reduced overall levels of investment set out within the framework, transport remains the largest single element of Government capital expenditure, accounting for over 25% of the €17 billion investment over the five year period. Substantial elements of the overall capital envelope however relate to maintenance of road and rail networks over the period.
What are the risks of failure? At a policy level, transport investment is one of the most tangible forms of government action. Given the emerging nature of economic recovery, and the challenge of supporting the unemployed in their return to work, the political prize of targeting appropriate levels of investment in the right schemes in the right areas and at the right time are enormous. And given the multitude of dimensions at play in reaching a decision, so are the risks of getting it wrong!
What type of schemes should be the focus of future capital investment in Ireland? Should it be centred on the City Regions – with the exception of Dublin, the Cinderella of capital investment in the past; or on further enhancing the inter-urban motorway network? Should the emphasis be on a small number of large schemes or on a greater number of smaller schemes?
Very few areas in transport have clear black and white answers, and one must delve into the myriad of local and international sources of evidence; analyse the range of options available; and assess their land use, economic, social and environmental benefits and costs before drawing meaningful conclusions. Research for the UK Department for Transport by a consortium including the Institute for Transport Studies at the University of Leeds has highlighted the value for money benefits of smaller local transport schemes. For example:
- Sustainable Travel Towns initiatives in the cities of Darlington, Peterborough and Worcester were estimated to have returned “high value for money, ranging from £2.60 – £8 of social and economic benefits (over ten years) for every £1 spent.”
- Car sharing schemes were estimated to “generate a high value for money, ranging from around £2 to over £6 (again, over ten years) per £1 invested.”
The above Benefit Cost Ratios are the stuff of dreams for most major transport schemes (In 2011, the UK Highways Agency assessed its average major scheme benefits, over thirty years, at around £3 per £1 invested). Although small scheme benefits are impressive, we should not necessarily overlook the potential significant role of major schemes in addressing location specific challenges such as enhancing labour market access to key business centres, or unlocking regeneration opportunities.
So what does the future hold for Ireland – big and bold or small and beautiful?
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1. Assessment of Small Schemes, ITS Leeds
2. Post Opening Project Evaluation Meta-analysis of Major Schemes (2002 to 2009), Highways Agency, May 2011