Financing transport resources

EU financing of transport resources

GPI, AUEB

To sustain a competitive transport system, substantial investments are required that are normally associated with priority criteria. To identify priorities, a discussion of financial sources and shared responsibility between the public and private sector appears to be essential.
 
The EU investment process in transport projects relies on two main streams of capital flows – public programmes and private investment – combined together they set up the basis for public-private partnerships.

If it is looked in detail, each of the streams consists of a variety of financial tools, for instance, all EU public programmes allocate resources for projects under different schemes:
 
A.  grants awarded following a call for proposals;
B.  grants awarded without a call for proposals;
C.  grants awarded by virtue of basic act for the specific programmes in the fields of- Marco Polo, TENs, Competitiveness and Innovation, Galileo and certain actions under the Seventh Framework Programme[1].

EU public investments cover the following types of projects:

 mega projects (ports, roads, airports);
 small and medium-sized projects (renovation of existing facilities);
 research and development;
 projects related to transport (communications, logistics).

In addition, private investments come mainly through different channels of the capital market to provide the necessary finance.

These are:

  loan schemes, risk facility funds, treasury products, and others;
  off-budget sources (fees and charges);
  various investment and infrastructure funds, pension funds.
 
The study reviews the existing financial tools in terms of:

1.  main characteristics of the programme – public or private
2.  current trends – budgets, costs of completion, etc.
3.  fiscal implications
 
It is apparent that there is a gap between investment expectations and allocated resources. Therefore collective actions from the public and private sector are needed to deal with the continuing constraints in the governmental expenditures