Funding WP 1.2 Survey of Experience in the EU A. Gühnemann, P. Mackie, N. Smith, A. Whiteing December 2005.

Präsentation zum Thema: "Funding WP 1.2 Survey of Experience in the EU A. Gühnemann, P. Mackie, N. Smith, A. Whiteing December 2005."—  Präsentation transkript:

1 Funding WP 1.2 Survey of Experience in the EU A. Gühnemann, P. Mackie, N. Smith, A. Whiteing December 2005

2 WP 1. Survey of Experience in the EU Aim & Methodology –Review institutional setup and fund raising methods of infrastructure funding in Europe For European funds and for selected case studies (national systems + projects) –Use resources from European research projects, European + national transport (funding) bodies Interviews with key representatives –Assess performance along WP 1.1 questions and criteria

3 Status Quo of WP 1.2 Work in Progress –Review of EU / International funding –Case study descriptions Selection of case studies –Infrastructure funding in a cooperative federal system (Germany) –Infrastructure funding in a centrally organised system (UK / England) –Privately financed motorway in New Member State (M1/M15 Hungary) –Infrastructure fund public / private (Asfinag, A)

4 Case Study Questions Planning and financing framework, institutional aspects –political bodies / authorities / agencies –modal responsibilities (air, ports, road, rail, public, local transport) –companies (state owned and private) –external influences (lobby groups, planning culture / hidden rules) Fund raising methods –type of funding: mark-ups on transport activities, mark-ups on user costs, earmarked taxes, general budgets (taxes / debts) –costing methods (average, marginal, mix) How money is spent –type of projects / modes –subsidies loans Performance issues –accountability / transparency –multi-agent / shared responsibilities (cross-border etc.) –efficiency (under-investment, targeted) –cost recovery + rules for cost overruns

5 Germany Institutions: tiered responsibilities –subsidiarity + cooperative federalism

6 German Road Infrastructure Financing Federal roads –Fund raising Public budgets (e.g. fuel tax, vehicle tax) User charges (Heavy Vehicle Toll) PPP models –Transport Infrastructure Financing Society State roads public budgets (tax transfers, e.g. vehicle tax) Local roads public budgets (tax transfers, fixed budget 1.67 bill. ) (Gemeindeverkehrsfinanzierungsgesetz)

7 National: –Federal Government DB Netz AG Rail Infrastructure Public budgets –construction costs –financial grants (subject to negotiation) –part of reinvestment Track charges –annual depreciation Regional –Federal Government Federal States –Regionalisierungsgesetz (regionalisation law) tax transfers, budget line with growth rates

8 Lessons Learnt Issues for Consideration high coordination efforts problems in cross-border coordination (states + national) –different state of roads tendency to manifest current status inflexibility in investment decisions in accounting system, –no horizontal transfer of funds possible (exception: new fund) funding levels vary strongly between budget years; subject to change if political situation changes responsibility of federal level goes too far – funding of predominantly regional and local roads cost overruns in major railway projects led to delay of necessary reinvestment to the future ( risk allocation) debate on mode specific earmarking of user charges for infrastructure maintenance and extension; discussion about creditability of funding agency

9 Asfinag (Austria) Responsibility: –plans, finances, constructs, maintains and operates the Austrian motorway and highway network –Strategic planning in federal master plan Refunding by –National investments –Tolls Distance dependent heavy vehicles toll Time dependent cars and light vehicles –Funds raising on financial markets

10 Road financing in the UK Central planning (England: DfT) Phases of financing –Earmarked taxes (until 1920s) –General budgets (road user taxation) (until 1990s) –PPP according to Ryrie Rules no additional but replacement of public funds genuine risk transfer to private sector –PPP according to PFI (first road scheme 1994) additional, if better than public comparator DBFO contracts refunding by shadow tolls –Binary model (since 2000)

11 PFI for Roads in the UK Department for Transport (1.10.2005): –37 projects (out of ~ 300) –capital spent ~ £ 20 billion (54% of total ) Lessons learnt from PPP models –Benefits Reduction of Construction and Operating Costs Efficiency Gains –Risks Higher costs of financing (>= 5%) Transaction costs Fiscal effects Postponement of costs to future taxpayers Risk (+ benefit) allocation

12 Case Study M1/M15 Vienna-Budapest Privately financed toll motorway –Motivation: Insufficient funds from public budgets (road user taxation) –Finance, build, own, operate contract Awarding Process –Prequalification (1991) –Tendering Phase (1992) Final Decision Concession Company SPV Elmka created (1993) Operation –less traffic growth –high toll rates court ruling Re-Nationalisation

13 Case Study M1/M15 Vienna-Budapest Lessons learnt –Financing and building of motorway in short time with virtually no cost overruns (despite economically difficult situation) –Traffic substantially below expectations –Relatively robust financial structure –Conflict of interests revenue oriented vs. public interest –Success factor: Commitment and full and sustained support of the Client/Principal

14 European & International Funding Bodies Review of various multinational agency publications Questions to key representatives –political and legal differences between Fund and budget line in the EU –key rules of the Fund autonomy rules and principles flexibility –Lessons learnt for Transport Fund e.g. appraisal criteria

15 Summary & Outlook Lessons learnt from four representative types of financing –responsibilities / problems in federal and central funding system –PPP and private funding experiences –setups of infrastructure funds Question for discussion –Are they representative? –Are there other lessons learnt from other countries?

16 Reserve & From Kick-off

17 Transport Planning in Germany Source: Rothengatter, 2005

18 Payment – Shadow Tolls Source: Briggs 2005

19 PPP Issues to Consider - Benefits Reduction of Construction and Operating Costs –more efficient management, risk management, shortening of construction times, partly avoidance / coverage of cost overruns... Efficiency Gains –Estimates 10 – 30% However, high costs for contractual arrangements

20 PPP Issues to Consider - Constraints Higher costs of financing (>= 5%) –higher interest rates Transaction costs –Legal costs (bidding, tendering, contracting) –Learning effects to be expected Fiscal effects Postponement of costs to future taxpayers Risk (+ benefit) allocation

21 Asfinag (Austria) Streckenlänge von über 2.000 km. Hiervon entfallen etwa 160 km auf Tunnels und fast 210 km auf Brücken. Neben der fahrleistungsabhängigen Maut für alle Fahrzeuge über 3,5t höchstzulässigem Gesamtgewicht (hzG) hebt die ASFINAG Maut Service GmbH für Fahrzeuge bis zu 3,5t hzG die Sondermaut und eine zeitabhängige Maut in Form einer Vignette ein. Die ASFINAG wurde 1982 gegründet. Sie ist eine Gesellschaft des Bundes. 1997 erhielt das Unternehmen durch einen Vertrag mit dem Bund erweiterte Aufgaben: Die ASFINAG hat seither das Fruchtgenussrecht an den im Eigentum des Bundes stehenden Grundstücken und Anlagen des hochrangigen Bundesstraßennetzes und ist berechtigt, Mauten bzw. Benützungsgebühren einzuheben. Der Strategie der ASFINAG-Gruppe folgend änderte sich die Konzernstruktur mit 1. Jänner 2005. Unsere bisherigen Tochterunternehmen, Alpenstraßen AG (ASG) und Österreichische Autobahnen- und Schnellstraßen-Gesellschaft m.b.H. (ÖSAG) werden mit der ASFINAG verschmolzen. Die einzelnen Bereiche Planen & Bau, Betrieb und Erhaltung sowie Maut werden in neuen Gesellschaften zusammengefasst. Gleichzeitig wird der Bereich Verkehrstelematik aus der ASFINAG in eine neue Gesellschaft überführt. Für die betriebliche Erhaltung des hochrangigen Straßennetzes gibt die ASFINAG jährlich rund EUR 150 Mio. aus. Die Investitionen für Neubauten und Erweiterungen lagen im Jahr 2004 bei rund EUR 750 Mio. (Plan für 2005: rund EUR 900 Mio.), für Erneuerungen und bauliche Instandhaltungen bei rund EUR 320 Mio (Plan für 2005: rund EUR 345 Mio).

22 Structure Source: Annual Report 2004

23