FUNDING
03.31
From 2005 to 2007
TML led the research of the FUNDING project, which developed science-based financing models for major EU infrastructure investments, and analysed the effects of different scenarios for a European infrastructure fund and taxation on five key TEN projects.
The Trans-European Transport Network (TEN-T) includes 30 priority projects, estimated to total some €225 billion. The White Paper "European Transport Policy for 2010: Time to Decide" indicates that capital mobilisation is one of the main obstacles in implementing infrastructure projects. Recent EU research projects addressed optimal pricing of existing infrastructure and good use of transport revenues (by using social marginal cost pricing). This project focused on optimal pricing and investment to finance new infrastructure.
The main objective of the FUNDING research project was to develop a scientifically sound approach to financing major transport infrastructure investments in the EU. Two different avenues were explored for financing these investments. The first was the creation of an EU transport infrastructure fund financed by levies on transport operations. The second was levying fees on the costs users pay to the infrastructure provider making the investment.
The economic theory surrounding 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 applying charges. These scenarios were adapted according to the funding gaps calculated for Horizon 2020 by mode and country, considering the approved TEN investments. The funding gap was calculated based on the TREMOVE baseline for 1995 - 2020.
Two models were used to test the performance of different infrastructure fund and valuation scenarios: an EU multimodal spatial general equilibrium model and a multimodal pricing and investment appraisal model (MOLINO II) applied to five major TEN infrastructure projects. The case-study approach allowed the impact of infrastructure pricing scenarios on each of the investment projects to be examined. This looked at the financial structure, the acceleration or postponement of investment decisions, pricing decisions, and welfare.
The Trans-European Transport Network (TEN-T) includes 30 priority projects, estimated to total some €225 billion. The White Paper "European Transport Policy for 2010: Time to Decide" indicates that capital mobilisation is one of the main obstacles in implementing infrastructure projects. Recent EU research projects addressed optimal pricing of existing infrastructure and good use of transport revenues (by using social marginal cost pricing). This project focused on optimal pricing and investment to finance new infrastructure.
The main objective of the FUNDING research project was to develop a scientifically sound approach to financing major transport infrastructure investments in the EU. Two different avenues were explored for financing these investments. The first was the creation of an EU transport infrastructure fund financed by levies on transport operations. The second was levying fees on the costs users pay to the infrastructure provider making the investment.
The economic theory surrounding 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 applying charges. These scenarios were adapted according to the funding gaps calculated for Horizon 2020 by mode and country, considering the approved TEN investments. The funding gap was calculated based on the TREMOVE baseline for 1995 - 2020.
Two models were used to test the performance of different infrastructure fund and valuation scenarios: an EU multimodal spatial general equilibrium model and a multimodal pricing and investment appraisal model (MOLINO II) applied to five major TEN infrastructure projects. The case-study approach allowed the impact of infrastructure pricing scenarios on each of the investment projects to be examined. This looked at the financial structure, the acceleration or postponement of investment decisions, pricing decisions, and welfare.
