Transport Policy and Funding

TRANSPORT POLICY AND FUNDING

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TRANSPORT POLICY AND FUNDING

DAI NAKAGAWA Kyoto University, Kyoto, Japan

RYOJI MATSUNAKA Okayama University, Okayama, Japan

Amsterdam ● Boston ● Heidelberg ● London ● New York ● Oxford Paris ● San Diego ● San Francisco ● Singapore ● Sydney ● Tokyo iii

Elsevier The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, UK Radarweg 29, PO Box 211, 1000 AE Amsterdam, The Netherlands First edition 2006 Copyright © 2006 Elsevier Ltd. All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone (+44) (0) 1865 843830; fax (+44) (0) 1865 853333; email: [email protected]. Alternatively you can submit your request online by visiting the Elsevier web site at http://elsevier.com/locate/permissions, and selecting Obtaining permission to use Elsevier material Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein, Because of rapid advances in the medical sciences, in particular, independent verification of diagnoses and drug dosages should be made British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book is available from the Library of Congress ISBN-13: 978-0-08-044852-7 ISBN-10: 0-08-044852-6

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Contents

Preface

vii

1.

Introduction

1

2.

Theory and Practice of Funding

7

3.

Funding Systems

25

4.

Transportation Policy and Funding Systems

41

5.

A Methodology for Comparing Financial Resources

85

6.

Calculation of Investment Amounts

101

7.

Calculation of Contributors’ Shares

123

8.

Comparative Study

141

9.

For the Future

173

Appendix

177

Bibliography

189

Subject Index

199 v

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Preface

Our first book, entitled “Funding Transport Systems — a Comparison between Developed Countries,” was published by Pergamon in 1997. At that time, funding for transportation improvement was problematic because of financial difficulties in various countries, and people were becoming more aware of the significance of this issue. Thus, the book was welcomed by many readers. More recently, a growing interest in environmental issues has been dramatically changing the transportation policy in many countries, and the importance of funding issues has been further increasing. In roadway improvement, new funding systems have been introduced, including the tolls imposed on roadway users. In railway improvement, railway operations have been privatized in some countries, with the result that the construction/ownership and operation have been separated, and various other new mechanisms have arisen. Decentralization of railway operation is also a major trend. In airport improvement, the role of private sector has generally been increased. We have now composed a new book, during this profoundly interesting time that has seen the introduction of a variety of new modes of thinking and methods of funding. The big difference between this book and our first book is that we have substantially increased the analysis of the policies of various countries. It is natural that funding is closely related to the basic transportation policy in individual countries, and the objectives of transportation improvement in these countries are of extreme importance in comparing the funding systems. Transport policies are currently at a point of significant divergence, at which some countries are shifting their funding significantly and others are shifting only slightly. In this book, we have undertaken a substantial review of the recent modes of thinking toward transportation improvement including a view of the historical background. The close examination of new policies is also an important addition in this book. We have analyzed new transportation improvement systems in detail, including the imposition of tolls on roadway users and the utilization of private funds for railway and airport improvement. vii

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Preface

The latter part of this book consists of the actual comparison of funding in various countries. In this book, we have added new data collected over the past 10 years to the previous analysis of pre-1995 data. Furthermore, as the funding issue has become a great concern both in Western nations and Asian nations, we have added South Korea to the countries compared in this book. The modes of thinking toward transportation funding have been evolving dramatically; we believe that this is illustrated by the comparisons in this book. In writing this book, we were privileged to have the cooperation of many people. A discussion at the “study group on transport funding” with members interested in international comparison of funding was of great significance to us. We received indispensable suggestions on the writing of this book from Mr. Taekyu Kim, Mr. Shinichi Ueda, Mr. Morihiro Kawata, Mr. Katsuhiro Yamaguchi, Mr. Katsuya Hihara, Mr. Kazuyuki Nozawa, and Mr. Kazunori Takahasi, who were the members of the study group. Our discussions with Professor Yoshitaka Aoyama and the researchers of Kyoto University and Okayama University were also quite valuable. The contribution of Mr. Satoshi Takagi was also worthy of note. Miss Yuko Nakagawa and Miss Aya Nakagawa well assisted the final preparation of the materials. Mr. Chris Pringle of Elsevier was especially helpful throughout the projects. We would like to express our sincere gratitude to all of these people. Last but not least, we would also like to thank Mrs. Noriko Nakagawa and Mrs. Masako Matsunaka for their assistance. January 16, 2006 Dai Nakagawa and Ryoji Matsunaka

Chapter 1

Introduction

Many countries around the world are making large investments in transportation improvements, but even greater investments are still needed. Funding is the key to promoting convenient and attractive transportation systems that will enable the creation of societies where anyone can enjoy a high degree of mobility, while simultaneously responding to environmental and energy-related problems. Various types of financial resources are currently being used in countries around the globe, the most common of these being government fund obtained through taxation and fees collected from the users of transportation facilities. Certain countries have also implemented unique means of funding from sources other than users, for example, through funding by parties such as landowners who receive benefits from transportation improvements. In recent years, new methods have also surfaced using private sector funds. Regardless of the source of funding, however, since capital is by no means abundant, new ideas appropriate to each situation must be generated to enable the continuation of high-quality transportation improvements. From a theoretical perspective, the fundamental question of who should bear the burden of funding for transportation improvements is simple: “Those who enjoy the benefits of transportation improvements should bear the related costs.” There is no need to implement projects in which costs are greater than the benefits, so the benefits of essential projects must always be greater than costs. Therefore, if the persons receiving the benefits bear costs appropriate to those benefits, then theoretically it will always be possible to secure necessary funding. In reality, however, this is not always easy because the benefits of transportation improvements come in many different forms. If the benefits are only seen by the users, then improvements can be made based on usage fees charged to the users. But in addition to the users, transportation improvements also bring benefits to the owners of nearby land and businesses. Another important factor is the positive effect on the economic activities in the region as a whole. The effects of improved public welfare for all of society have gained particular importance in recent years; for example, improvements to the environment and greater mobility for the physically disabled. An ideal way of covering costs would be to have those costs covered in keeping with the benefits generated; for example, users bear costs corresponding to 1

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Dai Nakagawa and Ryoji Matsunaka

the benefits enjoyed by users, and landowners bear costs corresponding to the increase in the value of land assets. Taxes could then be used to cover costs corresponding to benefits enjoyed by society as a whole, such as improvements to the environment. It is difficult, however, to accurately measure the benefits enjoyed by each party and to put in place methods by which the persons enjoying such benefits would actual by bear the related costs. It is therefore difficult to actually execute ideal funding methods, and in reality, these methods are determined according to policy judgments that consider the above theoretical principles. That is to say, the question of funding — who should bear how much of the costs of transportation improvements — is a question of evaluating the benefits generated by such transportation improvements, and is closely related to the most fundamental concept of “which goals are given the highest priority in the context of investments.” The role of transportation systems is not only to carry people and goods quickly, safely, and reliably. They also function as social infrastructure that supports all forms of industry and activities in a given country or region, as welfare infrastructure enables freedom of movement for people and guarantees the right to activities and as a part of social policies for responding to environmental and energy-related issues. Which role is most emphasized reflects the basic policies of the country in question, and the financial resources for transportation improvements are configured to implement these basic policies. For this reason, discussions on funding transportation improvements must be carried out with a view toward the basic policies regarding transportation. The goal of this book is to compare the different approaches to transportation improvements in each country and to discuss the actual conditions regarding funding systems that have been constructed to achieve their basic policies. Each country has its own ideas regarding transportation improvements, and these ideas are currently undergoing a transition from the traditional approaches to those of a new era. The financial resources designed to achieve these ideas are also changing. A variety of new funding systems are being introduced to cover the costs of transportation improvements depending on the country or the mode of transportation. A detailed comparison of the conceptual basis on which these funding systems are combined is extremely interesting and valuable in determining the best direction for future transportation improvements. In Chapters 1–3, we explain the fundamental theories related to funding for transportation improvements and discuss the key features of funding systems. In Chapter 4, we provide a detailed discussion of the current state of transportation policies and funding in several major countries, referring to the basic approaches used in each country.

Introduction

3

Conditions in each country related to the following factors will be important in the context of discussions presented in Chapters 1– 4. ● ●

●

●

Basic planning goals established by each country. Status of progress in specific transportation policies in response to environment problems. Approaches to the role of the public sector and the scope of private sector participation. Approaches to the division of taxes and user burden in securing financial resources.

The second half of the book (Chapters 5–7) provides a demonstrative clarification of how the ideas of each country are reflected in the makeup of actual financial resources. To do this, we present methodologies for an international comparison of the structures of financial resources, calculate the makeup of actual investment amounts and the parties making those investments, and compare these elements using charts and tables. Specific details of comparisons include: ● ● ● ●

investment amounts for roadways, railways, and airports in each country; changes in investment amounts for each transportation mode; ratios for burden of funding covered by the general public and by users; and ratio of funding currently being covered vs. loans representing funding covered in the future.

To undertake accurate comparisons, it will be necessary to conduct detailed surveys of the current status of funding systems for transportation in each country and then to construct methodologies for comparisons. This is because financial systems differ depending on the country and the transportation mode in question, so in many cases, it would be meaningless to simply compare statistical figures in a table. In this book, we have adopted a comparison of “parties actually bearing the burden of funding” as a means of achieving uniform, standardized comparisons. The calculations used have the following two main features: (1) Past research in this field has been fragmentary without considering entire investment amounts for transportation improvements or a breakdown of financial resources. For this book, we gathered comprehensive data on roadways, railways, and airports for each of the countries covered. (2) Statistical methods and tabulation methods differ from one country to the other, but in this book, we have coordinated these methods to enable uniform, standardized comparisons that concentrate on statistical details rather than using figures as they appear in the tables.

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To achieve these goals, we had to gather large volumes of materials and pay close attention to these details, so a considerable amount of effort was required. We feel, however, that this work is essential for conducting appropriate discussions regarding funding for transportation improvements and creating outstanding future transportation systems throughout the world. The following is an outline of this book’s chapters. Chapter 2: Theory and Practice of Funding. After discussing fundamental funding theories for transportation improvements, we will clarify the various characteristics of financial resources used for such improvements. We will also describe some of the most basic points, including who should undertake transportation improvements and what financial resources should be used; we will also compare the perspectives of various countries. We will then make comparisons of environmental responses in each country, which have been gaining importance in recent years. Chapter 3: Funding Systems. Here, we will compare and analyze conditions in each country with regard to important systems central to discussions on transportation improvements. Specifically, we will focus on the following issues: regarding roadways, the existence of specified funding and the status of toll charging; regarding railways, the concepts and actual conditions related to the reorganization of national railways; and regarding airports, the existence of specified funding and cross-subsidies between airports. We will also introduce specialized systems currently under development in various countries worthy of attention. Chapter 4: Transportation Policy and Funding Systems. In this chapter, we will offer a detailed introduction to the Transportation Policies and Funding Systems in six countries (France, Germany, Japan, South Korea, the United Kingdom, and the United States), with regard to roadways, railways, and airports. This introduction will also include analysis based on the important perspectives in the context of comparisons of financial resources. Chapter 5: A Methodology for Comparing Financial Resources. We will point out factors deserving consideration in international comparisons of funding for transportation improvements and also illustrate methods for carrying out these international comparisons; specifically, methods focusing on the “parties actually bearing the costs of improvements.” Based on these methods, we will categorize the actual financial resources used to achieve transportation improvements in each country. Chapter 6: Calculation of Investment Amounts. In this chapter, we will provide an outline of the total investment amounts in roadways, railways, and airports in the six countries as noted in Chapter 4, as well as a breakdown of financial

Introduction

5

resources. The utilization of extensive statistical documents ensures accurate calculation results. Chapter 7: Calculation of Contributors’ Shares. We will calculate the “Structure of Parties Bearing Costs” for transportation improvements in each country. Categories for parties bearing costs for transportation improvements include: citizens who bear the cost of general funding for national government; residents who bear the cost of general funding for regional governments; users of transportation facilities that bear the cost of user fees and related taxes; future users who will bear the cost of loan repayment; and parties receiving specified benefits, who will bear the cost of special taxes and other forms of funding. Chapter 8: Comparative Study. In this chapter, we will compare funding for actual improvements in various countries using the “Structure of Parties Bearing Costs” calculated in Chapter 7. Perspectives on these comparisons will include: the degree of dependence on borrowed funds; the ratio of financial resources derived from specific taxes charged to users; and the ratio of investments made on the regional vs. the national level. Chapter 9: For the Future. Here, we will describe the outlook for future transportation improvements based on the analyses provided in this book.

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Chapter 2

Theory and Practice of Funding

2.1 Goals of Funding Systems The most basic concept in the theory of financial resources is that “those who enjoy the benefits of transportation improvements should bear the corresponding costs.” In reality, however, it is not so simple, as the following issues come into play: ●

●

●

●

Benefits are enjoyed by a wide range of parties, and it is not always possible to identify the extent of benefits generated for each party. Benefits extend into the future, and there will naturally be a degree of uncertainty in measuring future benefits. Benefits such as revitalization of regional economies and improvements to the environment are derived through complex factors and not only as a result of transportation improvements. It is difficult, both theoretically and realistically, to identify the benefits derived only from transportation improvements. Benefits are not necessarily calculated in monetary terms. In some cases, the persons receiving the benefits may not even be aware that the benefits are commensurate with the costs (see Figure 2.1).

Even if the benefits can be measured, it is not necessarily possible to create mechanisms through which the persons enjoying the benefits can pay the related costs, and in some cases the cost of collecting those payments may be substantial. Given these problems, despite the simplicity of the basic concepts, determining how the actual burden should be distributed is an extremely complex question. In this chapter, we will explain some of the basic items that should be considered when approaching this difficult problem.

2.2 Role of the Public Sector Historically, transportation infrastructure has been substantially funded by the public sector, but there is an increasing tendency to rely on the private sector because deteriorating national finances are having difficulty finding sufficient 7

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Dai Nakagawa and Ryoji Matsunaka Benefits are enjoyed by a wide range of parties It is not always possible to identify the extent of benefits generated.

Benefits extend into the future There will be uncertainty in measuring future benefits.

Benefits are derived through complex factors It is difficult to identify the benefits derived only from transportation.

Benefits are not necessarily calculated in monetary terms Beneficiaries may be unaware that benefits are commensurate with costs.

Figure 2.1: Characteristics of benefits of transportation improvement. funds for transportation improvement. However, at the same time, such public concerns as awareness of environmental issues are increasing. The first part of this chapter describes the basic relevant theories of the public sector’s role, its potential, and its limitations. By the theory of welfare economics, goods and services are optimally supplied under market mechanisms by competition in the private sector. Transportation improvement, in some cases, should also rely on the private sector. However, because of some of the characteristics of transportation improvements, the market alone may be insufficient to achieve an appropriate level of investment. The most important characteristics are the existence of external economies and diseconomies as well as fundamental social rights to mobility. (1) External economies. The advantage of relying on market mechanisms is based on the most fundamental concept of welfare economics: market value and transaction volumes are determined at the intersecting point of the suppliers’ marginal cost curve and the users’ marginal benefit curve, and that the maximum social surplus (calculated by adding suppliers’ profits to users’ surplus) is at its maximum at that time. In other words, if the costs of transportation improvements and the benefits generated by those improvements are all reflected in the market, then it is best to entrust these improvements to the market, without public sector intervention (see Figure 2.2).

Theory and Practice of Funding

9

Costs Marginal benefit curve Marginal cost curve

Marginal total benefit curve Marginal benefit curve excluding external benefits Investment amounts Investment amounts realized (insufficient)

Optimal investment amounts

Figure 2.2: External economies resulting in insufficient volume of transportation improvements. In the transportation market, however, this is often not the case. For example, when new roadways or railways are created, the value of the surrounding land generally increases, but unless special funding systems have been put in place, the landowners do not bear the cost of construction. The existence of people who receive benefits but do not bear costs means that optimum balance in the market is not achieved. In this example, the volume of transportation improvements is less than the appropriate level. The reason is that despite the fact that those who supply more should obtain more benefits, the portion of costs that should be borne by landowners is not reflected in the market, and so appropriate supply volumes are not achieved. If mechanisms are constructed to ensure that landowners provide fund, then more transportation improvements can be implemented. In this case, the persons bearing the costs would not necessarily have to be the landowners; assuming that benefits would be generated for society as a whole, then costs could be covered by common financial resources. There are cases in which this fundamental theory is used in practice, such that funding is borne by the persons reaping the benefits of transportation improvements. The transport tax (VT) [Versement de Transport] in France is the most obvious example. A more detailed explanation will be provided in Chapter 3, but essentially, funding for public transportation is collected from companies located in the area. Another example can be found in Japan, where land development by private-sector railway companies is conducted simultaneously with the construction of

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new railway lines. Because the same company undertakes both projects, the increase in land value can be used as a financial resource to construct new railways. One way to broaden the scope of landowners who bear costs is to use property taxes to fund transportation improvements. Furthermore, a method where all residents bear these costs is to charge an additional sales tax, as in the case of the Bay Area Rapid Transit (BART) in San Francisco, California. As these examples show, there have been numerous cases in which new ideas have been implemented to have costs borne by persons receiving the benefits of improvements. The basis of these public policies is that when transportation improvements are implemented, significant benefits are often generated for persons other than users; since these benefits are not reflected in the general transportation market, it is necessary to ensure that improvement costs are borne in keeping with those benefits. (2) External diseconomies. This term refers to costs arising from transportation that do not burden anyone within the transport market. One significant example of an external diseconomy is environmental damage. The adverse effects of automobiles, such as air and noise pollution, represent a heavy social cost that is not necessarily borne by individual car users (see Figure 2.3). According to the theory of welfare economics, the difference between marginal social costs and marginal user costs creates excessive traffic volume. To realize optimal equilibrium, the two costs must be equalized by adding some burdens to user costs relevant to external diseconomies. There are several ways to do this: applying an “environment tax”on petroleum use or road charging systems, as practiced in Oslo, Singapore, and from 2003, in London. A less direct way of reducing external diseconomies than curbing automobile traffic is to subsidize alternative modes of transport such as railways or buses. The term external diseconomies is also sometimes used in a narrower sense to denote the costs imposed by users upon each other. To give an example, car drivers typically perceive the time they spend at the wheel as a cost, but they fail to consider the cost in time imposed on other car drivers as a result of their entry into traffic. In other words, the marginal time cost perceived by individual users is less than the sum of the marginal costs of all users, and this perception failure gives rise to traffic congestion. One method of transferring costs to users is by a “congestion tax.” Road charging systems such as in London are a way of dealing with such external diseconomies. They can be perceived as environmental protection or road congestion reduction measures.

Theory and Practice of Funding

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Costs Marginal cost curve Marginal benefit curve

Marginal private cost curve excluding external costs

Investment amounts Optimal investment amounts

Investment amounts realized (exccesive)

Figure 2.3: External diseconomies resulting in excessive volume of transportation improvements.

(3) Fundamental social right to mobility. The fundamental social right to mobility is consensually guaranteed by society. It means that all people have a right to travel without difficulty, and the public sector must supply this right of access to everyone including the aged, the physically challenged, and those living in remote areas. Since a pure market system would not provide these services, some kind of public support is needed. This right can be seen most clearly in a French Law, the Basic Law for Domestic Transportation (LOTI) [Loi d’oreintation des transports interiuers], whose details are explained in the following chapter.

2.3 Fundamental Theoretical Funding Issues (1) Pricing and funding theories. The fact that optimum equilibrium is found where the social marginal cost curve crosses the social marginal benefit curve is a fundamental principle that can

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be applied both when the policy being analyzed is short term, such as fare pricing, and long term, such as infrastructure investment. However, in practice, the theory of welfare economics is applied in many cases for short time projects; i.e., optimal fares can be found at the point where the marginal cost and marginal benefit curves cross. When the social marginal cost curve differs from the personal marginal cost curves, an optimal solution can be proposed by the theory. Although such an argument is quite important in transportation policy, it is different from the chief direction of this book, which is discussing infrastructure improvements. The main difference between pricing and funding theories for infrastructure investment is the consideration of fixed cost, which is generally avoided in a marginal cost curve. Although marginal cost theory can handle fixed costs by determining a longterm marginal cost curve, in practice it is difficult to establish such cost curves. For this reason, welfare economics should not play a central role in funding theory, although it suggests the necessity of the public sector in infrastructure investment. (2) Benefit measurement and funding theory. A funding theory can be applied relatively easily when benefits are known. In this case, all that is needed is to match burdens to beneficiaries. In reality, however, matters are rarely this simple because benefits, which extend widely enough to affect many people, cannot always be calculated in monetary terms; their future values are also uncertain. All methods that estimate benefits contribute to policy funding discussions, but they do not supply the final solution. (3) Efficiency and funding theory. In recent years, a number of countries have privatized their major railways and airports and institutionalized the construction of private toll roads, expecting higher efficiency will be found in the private sector than in the public sector. Competition and the profit motive will improve efficiency. However, public policy needs for corresponding externalities or the social right to mobility still exist even if efficiency is high enough and the operation is profitable. Privatization should be accompanied by public policies to measure those requirements. The relationship between privatization and infrastructure improvement in practice is discussed in Chapter 3. (4) Long-term benefits. Transportation projects provide long-term benefits across several generations thus justifying long-term loan.

Theory and Practice of Funding

13

However, when determining the amount of loan, future benefits must be estimated correctly, and the expectations of such projects discussed by those people who must pay in the future. Decisions sometimes tend to rely on loan without strict consideration of those factors. All the fundamental issues listed in this section suggest that funding systems cannot be determined theoretically, and so they consequently must depend on public policy.

2.4 Characteristics of Key Financial Resources The main potential resources for funding transportation improvements are: taxes, usage fees collected from users, funds collected from parties other than users who enjoy the benefits of improvements, and borrowed funds. Furthermore, taxes include those collected from all citizens and those charged to users, for example, in the form of automobile owner, user, and airport taxes. Borrowed funds (loans), of course, must be repaid at some point; so if we consider the financial resources for repayment, we ultimately return to either taxes or usage fees (see Figure 2.4). In reality, funding should be comprised of a combination of these elements, based on the following goals. 1. Funding systems should allow for investments on an appropriate scale (not too large or too small). 2. Funding systems should ensure that investments are used efficiently, without waste. 3. Funding systems should ensure that the burden of payment is distributed appropriately and fairly (see Figure 2.5). For example, in the case of item 1, when funds are obtained through borrowed fund, since the parties responsible for repaying the loans in the future are not making the decisions, there is a danger that the investments will be excessively large. When funding is only obtained from fares paid by users, external economics are not considered, so there is a risk that the investments will be too small. In terms of items 2 and 3, using public fund (obtained through taxes) for funding is an effective means of ensuring that the burden is distributed fairly, but because there is no need to secure income, there is a tendency for low operating efficiency. Thus, for the three goals described above, each potential financial resource has merits and demerits, which are outlined below.

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Dai Nakagawa and Ryoji Matsunaka Taxes collected from all citizens

Taxes collected from users

Usage fees collected from users

Funds collected from beneficiaries other than users

Borrowed funds

Figure 2.4: The main potential resources for funding.

Funding systems must realize; - appropriate scale of investment - efficient use of the resources - fair distribution of burden

Figure 2.5: Requirements for funding systems.

(1) Public funds: merits and demerits. When externalities are present or when fundamental social rights must be guaranteed using public funds is the preferred method because they satisfy the basic principles of fairness of the political process, unless the decision-making system is inadequate and arbitrary. From the view of social welfare, measures that address such concerns as the environment, senior citizens, or the physically challenged are especially welcomed. On the other hand, since publicly funded work generally involves little incentive for profit, it tends to be relatively inefficient (see Table 2.1). The introduction of external fund as a means of counterbalancing external economics is, in theory, an appropriate measure for increasing social surplus, but in some cases it can cause negative inefficient effects. One example of this

Theory and Practice of Funding

15

Table 2.1: Characteristics of financial resources. Merits and demerits Public funds

Merits Satisfy basic principles of fairness Counterbalance external economics Demerits Involve little profit incentive Tend to be relatively inefficient

Private funds

Merits Efficiently discourage unnecessary investment and waste Demerits Tend to ignore social benefits and costs Excessive investment under external diseconomies Insufficient investment under external economies Concentrate investment in profitable projects

Long-term loans

Merits Fair distribution of burden between present and future generations Demerits Decisions made without participation of future generations who are the actual payers Decisions based on uncertain costs and benefits Excessive investment if future benefits are overestimated Inadequate investment from underestimation of benefits

phenomenon is the inefficiency of national railways in various countries; privatization has often increased operational efficiency. The privatization of Japan’s national railways provides an extremely interesting perspective for understanding the characteristics of public fund. In Japan, the national railway had fallen deep into loan, but operating efficiency was dramatically improved with privatization, even to the extent that the company was able to operate without public subsidies. Before privatization, efficiency clearly failed to improve because of public funding. On the other hand, after privatization, the lack of public funding also resulted in a slowdown in improvements based on company fund. In fact, in Japan, investments for railway infrastructure improvements have

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decreased, and railway infrastructure operations such as increased speed and construction of new lines are conspicuously stagnant, with the exception of around Tokyo, where profit is highest. Regarding the construction and maintenance of infrastructure facilities, the reform of Japan’s national railway, which was assumed by private companies, clearly reflects the merits and demerits of private and public fund, with interesting results comprised of two contrasting phenomena: increased operating efficiency and slowdowns in fund formation. (2) User charges: merits and demerits. Work funded privately must be efficient to discourage unnecessary investment and waste. But if a transportation system depends entirely on this revenue, profitability becomes the sole basis of decision-making and social benefits and costs are ignored. The existence of external diseconomies such as environmental damage by automobile traffic leads to excessive investment because the personal costs burdening users are lower than social costs, and the existence of external economies results in insufficient investment because the personal benefits recognized by users are lower than the social benefits. Investment is likely to be concentrated in large cities where profitability is higher than in less densely populated areas. (3) Long-term loan: merits and demerits. The people burdened with long-term loan are those future individuals who will repay the loan. Since transport improvement benefits affect future generations, the distribution of burden between present and future generations can achieve a degree of fairness. However, future generations cannot participate in the decision-making, and the level of investment is decided based on uncertain cost and benefit estimates. The possibility of inappropriate decision-making is also relatively high. Excessive investment will be undertaken if future benefits are overestimated; inadequate investment results from underestimation. Uncertainty makes effective decision-making highly difficult. To sum up, from a theoretical view the best approach use general funds if externalities exist widely and loan if improvements benefit future generations; remaining costs should be borne by users. In reality, however, determining the ideal combination of funds is no simple matter because it is difficult to estimate those factors ignored by the market or involving some degree of uncertainty. The perception of this particular problem and how it is dealt with by various countries will be scrutinized in the following section.

Theory and Practice of Funding

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2.5 Principle for Transportation Funding 2.5.1 Responsibility for Transportation Improvement There are two major ideas for the responsibility of transportation improvement: the public sector or the private sector. A combination of public and private provisions is feasible but the balance can vary greatly. An idea for such a balance in each country is explained below: first, capital investment and then operation expenses. It is a common idea that the public sector is responsible for capital investment, especially in Germany and France. In Germany, the Basic Law [Grundgesetz] states that major transportation methods (roadways, railways, and waterways) belong to the federal treasury so the federal government has responsibility for improvements. Even after the reformation of the German Railways [Deutsche Bahn] in 1994 and the decentralization of short distance railway transportation in 1996, capital investment remains a public responsibility. The LOTI created public responsibility for the construction, maintenance, and management of fundamental transportation facilities. Although mixed-economy or private companies construct and maintain toll expressways, the public sector is responsible for planning and investing in improvements. However, recently the private sector’s role is increasing even in those countries. One reason is the lack of financial resources in the public sector and another is the expectation of efficiency. Examples of private transport projects are the railways in Japan. Except for municipal subway corporations, railways in Japan are owned and operated by private companies. In Japan, the situation is completely different from other countries because these private companies don’t receive any subsidies and are responsible not only for operations but also capital investment, including the construction of new lines. In recent years, a new financial system has been introduced where the government constructs new lines and leases them to private railway companies. In the United States and the United Kingdom, private sector involvement in toll road construction is increasing. In the United Kingdom, it is called Public Private Partnership (PPP). The PPP for road construction has a unique system called “shadow toll,” which is explained in the following chapter. For the operational side, a conclusive tendency of transition to the private sector can be seen, including the privatization of national railways. To involve the private sector in operations, organizations that construct and maintain basic facilities and those that manage operations should be separated. Such separation of infrastructure

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and operations is known as “vertical separation.” The construction and maintenance of basic facilities are deemed part of the social infrastructure and are therefore public responsibility, whereas private enterprise is best equipped to handle operations. The Swedish National Railway [Statens Jarnvagar] was the first to execute this idea in its entirety. Germany and the United Kingdom have followed Sweden’s lead although the details of their systems vary. Yet in Japan, privatized railway companies (JR) maintain responsibility for both construction and operations. 2.5.2 Basic Position for Funding Transportation Even when the public sector is responsible for investment, general funds may not be entirely covered by general taxes, but supplemented by revenue from users in the form of tolls, fares, and facility rental charges as well as taxes on automobiles and aircraft fuels. Such funds are governmental, but the payers are the users, who differ from general taxpayers. All countries use some combination of approaches to resources depending on their basic position for transportation funding. The following important points characterize the basic position: (1) balance between market competition and policy intervention; (2) recognition of the range of benefits of transportation improvement; and (3) determination of the primary purpose of transportation improvement. In recent years market competition has been emphasized as fundamental to transportation improvement, reflected in the increasing privatization of transportation organizations (Figure 2.6). However, if the benefits from improvement are subject to externalities, social compensation becomes necessary. From this view, the most crucial need for

Consideration of balance between competition and policy intervention.

Recognition of the range of benefits.

Determination of primary purpose.

Figure 2.6: Points forming basic concepts.

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political intervention exists in the promotion of social welfare, energy conservation, and environmental protection. In addition, an argument can be defended that the opportunity for mobility is considered a social right that must be protected by policy. The balance between market competition and policy intervention is determined by the political weight of those social factors. The second point is linked with the first. For market mechanisms to function, all benefits and costs must be internalized in the market. However, often stakeholders are not compensated, such as sufferers of environmental problems, or are not forced to pay by the market, such as those who benefited from increases in property values. The financial resource choice should recognize these costs and benefits. If users are regarded as the main beneficiaries, then usage fees are chosen. If most benefits are regarded as accruing to non-users, then, where such beneficiaries can be identified, they should shoulder the burden. Otherwise general funds are chosen. The third point relates to the purpose for which these improvements are carried out. For example, if transportation is improved to correct domestic regional differences or to reinforce international competitiveness, i.e., for strategic reasons, these goals will not be fully realized by market mechanisms, but will require public intervention. 2.5.3 Basic Position of Each Country Since Germans clearly understand that a basic transportation system of roadways, railways, and waterways should be improved as a part of the social infrastructure, the burden is placed on governments. This position may seem common, but in practice few countries have so clearly declared such policy and executed it. Even in the German system, a considerable portion of public funding comes from automobile-related taxes that burden users. In France, basic transportation policies covering all railways, roadways, inland waterways, and aviation are specified in the LOTI. One important characteristic of the law is that “transportation rights” [droit au transport] of individuals are declared. This principle converts public funds into major financial resources. The largest share of the burden of both roadways and railways is borne by general funds. However, in practice, because the number of toll roads is high, the actual burden on users is still comparatively large. Another important characteristic of the French system is the transportation tax [Versement de Transport]. Offices located in urban areas are taxed for the overall benefit obtained from transport systems.

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Other systems in other countries exist, such as utilizing property or sales taxes, which are also measures that return benefits. The important point of this French system is that it is a specific fund for improving transportation that directly connects the benefits of non-users and the costs of transportation improvement (“Versement de Transport” is explained in the following chapter.) By contrast, Japan’s idea argues that funds should be provided by users. All expressways and railways are required to be completely self-reliant in terms of funding including both costs for capital investment and operational costs. Airports are also self-reliant, although they do receive some subsidies. The idea that those facilities are public property is not clearly defined in the funding system. This principle can be regarded as excellent because general funds are not necessary. However, on the other hand, demerits include a disregard for social benefits, and an optimal level of service is not achieved if externalities exist. Moreover, under this principle, funding tends to rely on loans because then costs can be covered by future users. Compared to the above countries, the United States and the United Kingdom have adopted intermediate strategies. Traditionally, the public sector has taken responsibility for transportation; however, in recent years the idea has grown stronger that the private sector should assume this role, as illustrated by the construction of toll roads. All countries fund their transportation systems through a mixture of public funds, user revenues, and loans. In general, efficiency is expected to rise when private sector invests and so fairness is enhanced by using public funds. The balance of financial resources is different in each country and depends on political attitudes toward externalities, such as concern for environmental issues, improvement of social welfare, or dissolution of regional differences.

2.6 Transportation and the Environment An important direction in recent years is a correspondence with environmental issues. Funding systems for transportation are changing directions, aiming to reduce car traffic and promoting a modal shift to public transportation. In French transport policy, environmental concerns are one of the most important directions. Environmental costs should be considered in the evaluation of all projects. By the Law Concerning the Air Quality and the Rational Use of Energy (LAURE, 1996) [Loi sur l’Air et l’Utilisation Rationnelle de l’Energie], Urban Transport Plans (PDU) [Plans de Déplacements Urbains] must be made in all urban areas with populations over 100,000, and they must include procedures for reducing car traffic, and developing public transportation.

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The Law for Spatial Planning and Sustainable Development (LOADDT, 1999) [Loi d’Orientation pour l’Aménagement et le Développement Durable du Territoire] required scenarios for passenger and commodities transport with a travel demand forecast for different transportation policy scenarios. The Act on Urban Solidarity and Renewal (SRU, 2000) [Loi Solidarité et Renouvellement Urbains] defined the need for a common approach to urban planning and transport to make urban areas compact and concentrated. Germany’s grand transportation plan, BVWP, 2003, gives sustainable mobility the top priority for targets that should be attained. Germany is actually implementing some effective policies to reduce automobile traffic, including enforcement of an environmental tax added to the petroleum tax, and charges on large freight cars on the expressway. In Japan, a number of government reports including white papers have promoted public transportation and the reduction of car traffic. However, all effective measures including environmental taxes are only under consideration. In the United Kingdom, the “New Deal for Transport (1998)” declared that the environment is the first priority, and so the government must consider environmental issues in all decisions. In Transport 2010, devised in 2000, the government declared that rail traffic should be increased by 50% in 10 years. The report shows that individuals and firms must discover the costs of emissions and that the most efficient measures for the environment must be chosen. The government’s list of compulsory quality of life indicators includes access to public services, the overall level of traffic, and housing construction that reduces travel. An Appraisal Summary Table (AST), introduced in “A New Deal for Trunk Roads in England (1998),” must be made for roadway planning and includes an evaluation of environmental concerns. In the United States, reducing automobile traffic is shown in the Safe, Accountable, Flexible, Efficient Transportation Equity Act for the 21st Century — A Legacy for Users (SAFETEA-LU). The promotion of public transportation is desired, but the efficacy of reducing automobile traffic by investment in public transportation has been questioned because city structures favor automobile traffic; they are not friendly to public transportation. The introduction of a highoccupancy vehicle (HOV) lane is a major measure in many cities.

2.7 Evaluation of Transportation Investments The items receiving the greatest emphasis when transportation improvements are undertaken dramatically affect funding approaches. In this section, we will explain the current status of the evaluation of investments in transportation in each country.

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Germany law requires that all federal spending be subject to an investigation for economic efficiency. Germany has an outstanding system for evaluating operations related to roadways and railways, and all aspects of evaluation results are publicly disclosed. New projects are evaluated using the Transportation Investment Evaluation Guideline (RAS-W) [Richtlinien für die Anlage von Straßen, Teil: Wirtschaftlichkeitsuntersuchungen], which includes analytical approaches and calculation methods as well as samples and can be applied to roadways, railways, and waterways. As a basic element of cost–benefit analyses, both territorial policies such as fairness between regions and social policies such as the protection of the weak are reflected in the measurement of benefits. This guideline contains many worthy points, including the introduction of “regional premium coefficients” to increase benefits for former East Germany and other regions where development has been delayed and evaluations of improvements in living environments, for example, through the protection of scenic landscapes. These guidelines are an excellent illustration of Germany’s fundamental approach, which exhibits a strong sense of social responsibility with regard to transportation improvements. In the United Kingdom, the “Modernising Government” program, presented to the parliament in 1999, established goals for all government fields and introduced a policy evaluation system for measuring the degree of attainment of these goals. Policies introduced later include Comprehensive Spending Review (CSR), Public Service Agreements (PSA), and Output and Performance Analyses (OPA). An evaluation system was published in 1998 by the Department for Environment, Food and Rural Affairs (DETR) as part of “A New Deal for Trunk Roads in England.” “Appraisal Summary Table” (AST) is the most notable method in this system. It evaluates the key effects on the economy, the environment, and society based on five standards (1) ease of access, (2) safety, (3) economy, (4) environmental considerations, and (5) integration of transportation networks. A unique feature of this system is that both costs and benefits are measured in terms of society as a whole, rather than simply as “administrative costs,” demonstrating a stance that emphasizes a broad understanding of benefits from a social perspective. In France, the 1982 LOTI stipulates that operations must be evaluated before transportation improvements are undertaken. Methods for evaluating the social benefits of transportation have been established through various laws such as LAURE and SRU. In Japan, the Ministry of Land, Infrastructure, and Transport has a system for evaluating new policies comprised of a policy assessment, a policy checkup, and a policy review; it is designed to check the necessity, effectiveness, and efficiency of new policies and to ensure that only truly essential policies are implemented.

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Evaluation manuals have been created to evaluate individual operations related to roadways, railways, and airports. The system in Japan enables evaluation of user benefits as well as the effects on transportation safety and the environment, and it is undergoing a transition from the former approach in which evaluations focused solely on profitability. These manuals, however, do not carry legal force. As outlined above, methods for evaluating policies are important in understanding which factors are emphasized most when transportation improvements are implemented in each country. In recent years, these methods have placed an increasing weight on environmental evaluations, and many countries are shifting toward public transportation. There are differences, however, in terms of whether these shifts are actually reflected in financial resources. Some countries are actually significantly reforming financial resources, while other countries lack noteworthy measures. The second half of this book concretely illustrates how these differences manifest themselves in actual funding situations.

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Chapter 3

Funding Systems

3.1 Comparison of Basic Funding Systems The funding systems used for transportation infrastructure improvement are varied, and different distributions of burden have arisen depending on the type of funding (Figure 3.1). Differences in the distributions are illustrated by the following points. ●

●

●

In roadway improvement: how automobile-related taxes are used, whether there are toll road systems, and a recent trend of increased and diversified systems to charge the users of roadways. In railway improvement: whether there is public financial support for railway infrastructure, in particular, the extent of separation between construction/possession and operation. In airport improvement: whether there are special funds for airport improvement or public support for airport infrastructure, and whether there are crosssubsidy systems between airports.

Concerning the relationship between railways and roadways, funds formally appropriated for roadway improvement are increasingly used for railway improvement due to environmental considerations, another important factor in the determination of structural differences. In this chapter, we will first compare these points among the countries. We will then introduce some characteristic funding systems being developed in various countries, including fund-raising systems utilizing the private sector and those returning external benefits.

3.2 Basic Improvement Systems for Roadways 3.2.1 Specific Fund Systems All countries collect taxes for the possession and use of automobiles, but they use this revenue differently: it may be used solely for funding roadway systems, for 25

26

Dai Nakagawa and Ryoji Matsunaka Specific fund systems Roadway improvement

Special charging systems

Toll road systems

Extent of privatization Railway improvement

Subsidizing systems by general funds Subsidizing systems by automobile tax revenues Specific fund systems

Airport improvement

Subsidizing systems by general funds Cross-subsidizing systems

Figure 3.1: Key funding systems. generally funding transportation, or it may even be added to the exchequer’s general funds and used in ways quite unrelated to transportation. Table 3.1 shows comparisons of those funds. In Germany, Japan, South Korea, and the United States, the use of funds is specified. In Germany, legislation for automobile user taxation was formed by the Federal Long-Range Road Act [Bundesfernstraßengesetz] (1953) and Transport Finance Act [Verkehrsfinanzgesetz] (1955). Revenue was specifically earmarked for roadway construction, and since 1967 these funds have been available for both roadway improvements and public transportation developments. Tax rates were often raised: in 1990 when the country unified, in 1994 when the German railway was reformed, in 1999 when an environment tax was introduced, and in 2003 when the same tax was revised. The purpose of such tax hikes was not only procurement of funds but recently also to reduce car traffic. In the United States, the Highway Trust Fund was established by a road revenue act of 1956 to promote improvement of Interstate and Defense Highways. Money

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Table 3.1: Specific funds for road improvement. Usage of automobile taxes

Establishment of specified funds

France

General funds

FSIR (from 1951 to 1981) FSGR (from 1982 to 1986)

Germany

Specified for roadways and urban public transportation

From 1955 (for urban public transportation from 1967)

Japan

Specific funds for roadways

From 1956

South Korea

Specific funds for roadways, railways, and airports

Transport fund (from 1995)

U.K.

General funds

From 1909 to 1937

U.S.A.

Specific funds for roadways and urban public transportation

From 1956 (for urban public transportation from 1973)

for the fund comes from automobile user taxes, subsidies from general accounts, and from toll road fees. Many states have their own highway trust funds that can be used not only for roadways but also for public transportation. The Korean system is similar to the American one. In Japan, a specific roadway improvement account was introduced in 1954. Most automobile taxes are allotted to specific funds, and they occupy the largest part of the specific account’s income. The funds of the account can be used only for roadway investment, except for monorail systems, Automated Guide-way Systems, and a few subways. By contrast, automobile user tax revenues are treated as general funds in the United Kingdom. The roadway development and improvement act of 1909 placed road and car taxes in specific funds for roadway improvement until 1937 when the system was discontinued. Similarly in France, a specific fund for roadway investment [Fonds Spécial d’Investissement Routier], financed by a fuel tax, was established in 1951 but since 1981 has been combined with general funds. In these countries, automobile user taxes are deposited into general funds from which investment in roadways is subsidized, so the existence of specific funds is not substantially related to the size of investment in roadway construction. However, where such funds do exist, financial resources will be available

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independently of national financial budgetary conditions, which is an advantage because investment can be made without requiring political negotiation and compromise. As a consequence, heaviest investment tends to occur in countries that have specific funds for roadway improvement. 3.2.2 Road Charging Systems The imposition of tolls on automobiles using roadways is a new trend seen in recent transportation improvement systems. The major objectives of toll imposition are to reduce traffic and secure funds for transportation improvement. Tolls are charged on automobiles entering a specified area, on automobiles traveling a designated route, or on automobiles using a specific bridge, tunnel, or other structure. The new system in London is most notable for charging a toll on vehicles in a designated area. We will explain this later. This collection method has already been put into practice in Oslo and Singapore. Imposition of tolls on designated routes has long been a practice in Japan and France, where expressways are toll roads. This collection method, though relatively new, has been increasingly adopted in the United States and the United Kingdom. In Germany, a toll has been imposed since 1995 on trucks using the autobahn; truck drivers are obliged to carry a voucher called Vignette. Since 2005, a very advanced method using GPS has been utilized in Germany. There are many toll bridges and tunnels in Japan and France, as well as some cases in the United States and the United Kingdom. In New York city, for example, a toll is imposed on the users of the bridges leading to the city center, and the revenue is used as public transportation funds. In South Korea, there are also toll tunnels. As explained above, charges used to be imposed mainly for the ownership of automobiles and on fuel consumption. More recently, however, charges have been imposed for the use of roadways, bridges, and tunnels. The collected revenue is used in various ways, but most of the money is used as roadway construction funds, public transport funds, or other transportation improvement funds. 3.2.3 Toll Road Systems Internationally, toll collection on expressways is relatively uncommon, but recently changing attitudes suggest that the number of toll roads will increase in the future. In France most expressways charge tolls, except around Paris Metropolitan area and specific local areas (Table 3.2). Prior to the introduction of tolls, major roadway system in France was less developed than other European countries, but this has changed. A toll road system

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Table 3.2: Toll road systems on expressways. Toll road systems France Germany Japan South Korea U.K. U.S.A.

Tolls charged in most expressways except Paris metropolitan area. Fees have only been charged on heavy load vehicles on the autobahn since 1995. Tolls are charged on all expressways. Tolls are charged on most expressways. Tolls are not charged on expressways. Toll roads exist; most are bridges. Tolls are charged on some expressways. There are many toll bridges.

contributed to such progress. The construction and maintenance of toll roads is managed by semi-governmental corporations (SEMCA) [Société d’Economie Mixte Concessionnaire d’Autoroute] or by private companies funded by banks and public bodies. Money for construction is advanced by the French Expressway Organization (ADF) [Autoroute de France], local governments, and bonds issued by companies, and it is reimbursed from toll revenues. All expressways in Japan charge tolls. In addition, tolls are sometimes employed for the construction of public roadways, tunnels, and bridges. The toll road system was introduced to hasten the establishment of roadway networks and has also facilitated expressway construction. There are no subsidies; costs are covered by loans and must be completely repaid by usage fees collected nationwide and pooled in a single account. In 2005, the Japan Public Highway Corporation and other three highway corporations, which used to construct and manage the highways, were privatized and separated into an organization that owns the facilities and companies that manage the operation. However, the funding systems for construction did not dramatically change with a few exceptions where some planned expressways in remote areas were funded by general funds instead of by loans. There are few toll roads in the United Kingdom and United States. However, that is changing. In the United Kingdom, “New Roads by New Means (1989)” proposed a way to exploit the ability of the private sector to construct, maintain, and procure funds for highway system improvement. This concept has been established for public investment in the United Kingdom and is called private finance initiative

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(PFI), or from a wider aspect, public–private partnership (PPP). Under this concept, toll roads and bridges have been constructed. In the United States, some toll roads have been constructed and owned by nongovernmental organizations. The Intermodal Surface Transportation Efficiency Act (ISTEA) gave much consideration to the promotion of toll road projects. Since 1995, heavy load-bearing vehicles on autobahns in Germany have been charged a fee, and from 2005 a new GPS system for fare collection was introduced. In the German system, autobahn construction costs are funded by issuing bonds reimbursed by income derived from special fund revenues such as petroleum taxes. Therefore, users are not charged directly for using the autobahns, but the burden remains substantially on users. Diversity in each country’s toll road system reflects particular principles of its transportation policy. Where used, toll road systems have successfully promoted roadway improvement. However, improvements tend to be undertaken only in profitable roadways. Another problem with toll systems is that the revenue for initial construction costs largely depends on loans, because initial costs are not covered other than by future income.

3.3 Basic Improvement Systems for Railways 3.3.1 Public Transportation Subsidies (1) Subsidies for operation. Operational costs for railway systems are mainly covered by income from user payments. However, as income often is insufficient to cover costs, in most countries governments subsidize urban railways. Japan is the exception, where operators are responsible for their own deficits. Governmental subsidies are also supplied to compensate for fare reductions to the aged or the handicapped. Common justifications for subsidies to urban railways include the following: (1) to ensure sustainable mobility; (2) to relieve roadway congestion; (3) to guarantee mobility for the disadvantaged; and (4) to rationalize the entire system by encouraging a shift from individual to public transport. These are based on the basic concept of externality and social rights described in the previous chapter. (2) Subsidies for basic infrastructure. All countries invest public funds in railway infrastructure. In Germany, prior to railway reform, the federal railway (DB) received subsidies from general funds. The federal government retained financial responsibility even after the reformation of DB.

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In the United States, public funds can be invested in the construction of both urban and intercity railway projects. The Highway Trust Fund subsidizes highspeed upgrades of existing passenger railway lines. However, freight railways essentially are not subsidized by any level of government. In Japan, subsidies are provided for the construction of urban subway and Shinkansen (super express intercity trains) lines. However, most lines including the Japan railway companies and private companies are not subsidized either for operation or for construction/repairs. Traditionally, railways are not seen as part of the public infrastructure, and it is generally assumed that railway projects should be profit oriented. 3.3.2 Automobile User Taxes for Public Transportation A significant trend in recent years has utilized taxes collected from automobile users to subsidize public transport. Especially in Germany and the United States, special fund revenue from automobile taxes can be used for public transportation. The promotion of public transportation is accepted as a benefit to automobile users because it eases road congestion and represents a necessary modal shift to protect the environment. In Germany, an additional concern is to provide public transport for people currently driving who may not be able to do so in the future due to age, accident, or sickness. The legislation in the United States is the ISTEA Act of 1991, which subsidizes bus transit and urban commuter trains. The idea is continued in subsequent legislation called TEA-21 (the Transportation Equity Act for the 21st century) and SAFETEA-LU (the Safe, Accountable, Flexible, Efficient Transportation Equity Act for the 21st century — a legacy for users). In France and the United Kingdom, car user taxes are placed in general funds whose use is not specified. Japan has specific funds from car user taxes, but the use of the funds is restricted to roadway construction, except for basic monorail facilities, the Automated Guide-way Transit, and a few subways.

3.4 Basic Improvement Systems for Airports Airport improvement systems are characterized by specific funding systems and public subsidies. France, the United States, and Japan all have specific funds for airport improvement (Table 3.3). In Japan, both decision-making and financing are comprehensively executed at the national level. A special central government account for airport improvements receives revenue from landing fees and aircraft fuel taxation. The shares of

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Table 3.3: Airport improvement systems. Nationwide airport plan

Subsidizing systems by Cross-subsidizing central government systems

France

—

Subsidies from BAAC (not for ADP)

Germany

—

No direct subsidies — (only to some airports)

Japan

Seven-year plans

Subsidies from Airport Special Accounts

Existing under Airport Special Accounts

South Korea

—

Subsidies from Transport Special Accounts

Existing under Transport Special Accounts

U.K.

—

No direct subsidies Non-existent (existing (only to some airports) among BAA plc airports)

U.S.A.

NPIAS

Subsidies from Airport Existing under and Airway Trust Fund Airport Improvement Programs

Non-existent (existing amoing ADP airports)

Notes: BAAC, Budget Annexe de 1’Aviation Civile; ADP, Aéroports de Paris; BAA plc, the British Airports Authority Public Limited Company; NPIAS, National Plan of Integrated Airport Systems.

burden for airport improvement between central and local governments are determined in accordance with the airport improvement act of 1956, and except for the three international airports (Tokyo Narita, Osaka Kansai, and Nagoya Chubu), airports are improved without reference to the income and expenditures of each airport. In the United States, the federal government established the Airport and Airway Trust Fund (AATF) that accumulates specific funds through the following taxes: ticketing, aviation freight, departure, and aviation fuel. The National Plan of Integrated Airport Systems (NPIAS) has a grant program based on the Airport Improvement Program (AIP) that bestows federal subsidies on airports that generally cover one-third of airport improvement expenditures but depend on the scale of the airport. At local airports, where independent operations are

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difficult, the federal government may provide as much as 90% of the investment costs, whereas a large-scale airport may receive only 20%. Basically, there is no federal grant system for airport management, so operating expenses must be covered by landing fees, stopover fees, rental fees for terminal buildings, income from concessions and parking, etc. Deficit supplements are covered by the general accounts of the local governments concerned. In France, the central government has a civil aviation special account called BAAC [Budget Annexe de l’Aviation Civile]. Except airports in Paris, which are controlled by the Paris Public Airport Corporation (ADP) [Aéroport de Paris], construction is subsidized but not operations. Ideally, construction, management, and operations should be self-supporting, so there is no generalized national improvement plan. Capital investment for such projects as expansion requires that an airport authority evaluate the investment in the light of expected returns. There are no specific funds for airport improvement in either the United Kingdom or Germany. The United Kingdom’s Airport White Paper adopts a principle of economic independence, and self-supporting companies run the airports. There are no special accounts and no national cross subsidization between airports, except some airports under the authority of the British Airport Authority Public Limited Company (BAA plc) that are substantially subsidized from BAA plc profits. Aircraft fuels are taxed but the revenue is paid directly into treasury funds. Germany has neither a specific fund nor a unified, national airport improvement program, reflecting little investment in new airport construction. International airports are owned and managed by private companies and limited corporations; the federal government participates only as a financier and gives no subsidies for construction. Through airport usage fees and loans, the companies that own and manage the airports construct runways, terminals, parking lots, and so on. Operations are not subsidized. Compared with railway improvements, which tend to be judged from a wider policy framework, airports are judged by commercial factors such as profit levels and return on investment.

3.5 Notable Systems 3.5.1 Transport Tax in France Transport Tax [Versement de transport] is a special tax collected from offices in urban areas used for the improvement and operation of public transport. This

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charge is justified because offices and enterprises benefit from the improved access of transportation systems, especially in terms of labor’s mobility. The total wages (0.5–2.6%) is collected from offices with more than nine employees. An optional system was introduced in 1973 that has been adopted in all cities with populations over 100,000. The size of urban populations required for adapting this system was lowered to 10,000 in 2001. Outside Ile-de-France, 46% of urban public transport funds were covered by this fund in 2003 and 34% in Ile-de France. This system strongly contributes to the funding for urban transport and is one major reason why urban transportation systems in France have become more convenient in recent years, especially the introduction of advanced tram systems in a number of cities. The revenue from this system, for example, amounts to about €30 million per year in cities with a population of 200,000, making it even possible for cities of this size to introduce advanced tram systems. Although every country has fixed asset taxes that have similar roles in terms of collecting fees from the people who benefit from public facilities, the purpose of this fund is specified to public transportation and the rationale of the specification is recognized by the payers. 3.5.2 Private Finance Initiative PFI is a government policy designed to promote private sector involvement in public services in the United Kingdom. The concept is widely used not only for transportation improvement but also for various public facilities. In recent years, it has been called public–private partnership (PPP) reflecting a wider meaning. PFI projects can be divided into three basic types. (1) Services sold to the public sector as purchaser and user The private sector provides the facility and sells services to the public sector. Most PFI projects are in this category. The private sector is responsible for funding, construction, and maintenance. The public sector pays for the service provided by the facility. In the case of roadway construction, “Shadow Tolls” are paid by the public sector to the private sector based on the numbers of passing cars instead of collecting tolls directly from the users. (2) Financially free-standing projects The private sector undertakes projects based on the expectation that costs will be covered entirely through charges for the services to users. Examples include the Second Severn Bridge and the Queen Elizabeth II Bridge at Dartford, whose costs were covered by revenue from user tolls. Governments should increase the

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value of projects by supporting initial planning, consultation, legal procedures, or improving related facilities such as linking roadways, etc. (3) Joint ventures Joint ventures formed by incorporation of the public and private sectors executed the project. Mainly, the private sector has overall control. The governments contribute by several ways, including provisions for direct subsidies, support for land purchases, etc. This type of project can be seen in light-rail projects that require subsidies to fund the project when fare revenue is insufficient to meet the project’s full costs. In PFI, the public sector needs to prove that the “Value for Money” of obtaining services in this way is better than alternatives such as providing by itself. Public Sector Comparator, which means the value of provisions by the public sector, is used for comparisons. PFI is not a special method among countries with a lot of experience employing private sector involvement, such as French and Japanese toll roads, Japanese railways, and airports in many countries. However, the important point is the logical organization rationale of private sector involvement, including the establishment of the concepts of “Value for Money” and “Public Sector Comparator” that urge strict comparison with public sector procurement. “Shadow Toll” is also a remarkable idea available in all cases of private sector involvement with contributions from the public sector. 3.5.3 Return of Development Profits Improvements to transportation systems generally create capital gains in the form of increased property values for the landowners in the surrounding areas. The idea of development profit returns utilizes the capital gains of owners to a fund of transportation improvement by collecting fees or taxes from the owners. There are no large-scale examples of this system because in practice it is difficult to evaluate those gains. One example is that private railway companies in Japan or airport authorities in some countries manage real estate business together with the transportation business and consequently, realize the return of development profits by receiving the capital gains themselves. Direct systems are those implemented in the United States, including Impact Fee (IF), Special Assessment District (SAD), and Tax Increment Financing (TIF). IF is a system in which local governments specify the development areas and then collect a one-time contribution from the developers based on the degree of benefits, according to a standard set beforehand. SAD is a system in which local governments specify continuous development areas and then collect fees

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regularly from the fixed asset owners making profits from improved public facilities according to a standard set beforehand based on the degree of benefit. In TIF local governments issue bonds and improve public facilities. The bonds are repaid by revenues from the increase of the total fixed asset evaluation that accompanies development.

3.6 Key Advanced Projects 3.6.1 Key Urban Railway Projects (1) Toyama Light Rail (Japan). One new trend in urban transportation is the introduction of tram systems. Advanced tram systems with low floors, low noise, and high speed have been introduced in many cities around the world. Environmental friendliness and easy access by every person including the aged or the disabled are key factors. In Japan, where the private sector has participated in railway construction and operations, various schemes exist for railway improvement. Toyama Light Rail is one such advanced railway project. The Toyama Light Rail project is the revitalization of existing local railway lines by introducing new advanced trams that dramatically improve convenience by increasing the number of train services. It is a multipurpose project that promotes public transport, supports the revitalization of the area, provides daily mobility to all people, and benefits the environment. Another important factor is an effect to form a compact city. Cities that depend on automobile transportation tend to spread spatially in low density and consume energy. The tram system will gradually form a high-density area around stations. A new Shinkansen (super express intercity trains) called the Hokuriku Shinkansen, which connects Tokyo and Osaka in the country’s north corridor, is being constructed and will connect Toyama City to Tokyo in 2 h. The new light rail system will be connected with the Shinkansen station in the same building. Connections between interurban and urban railway are key factors of advanced rail systems. From the financial side, the existing line is owned and operated by a private railway company, and an unprofitable situation has reduced service levels lower and lower, since Japan has adopted the idea that railway systems must be profit oriented. In contrast, in this project public funds were provided to the private sector line to dramatically improve services. The new system will go into operation from 2006 by a joint venture with public and private investment.

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(2) Integrated tram systems (France). Many cities have introduced new advanced tram systems in France. From the 1950s to the 1970s, so many tram systems were abolished until only three remained. However, the situation dramatically changed in the 1980s. Nantes introduced a new tram system in 1985 followed by Grenoble in 1987, St. Denis (Paris) in 1992, and Strasbourg and Rouen in 1994. Cities introducing new tram systems after 2000 include Nancy, Montpellier, Orléans, Lyon, Caen, and Bordeaux. Mulhouse, Clermont-Ferrand, and Valenciennes are about to open. Not only big cities but also cities with populations less than 300,000 are included, such as Mulhouse, Clermont-Ferrand, Valenciennes, and Caen. Most lines go directly into the city center. Such direct connections of suburbs and city centers revitalize the latter and create alternatives to large suburban shopping centers that depend on car access. Seducing people to public transportation and away from automobiles is one target together with policies that create pedestrian space in the city center or a park and ride system. The rationale of these projects is based on the basic transportation policy in France. The concept of “Transport Rights,” established in the Basic Law for Domestic Transportation (LOTI) [Loi d’orientation des transports intérieurs], requires mobility for all people. The Law Concerning the Air Quality and the Rational Use of Energy (LAURE) [Loi sur l’Air et l’Utilisation Rationnelle de l’Energie] compels each urban transport plan to include environment measures, and the Law for Urban Solidarity and Renewal (SRU) [Loi Solidarité et Renouvellement Urbains] forces the plan to include comprehensive measures for land use and transportation. (These legal systems will be explained in Chapter 4.) From the point of funding, the transport tax, mentioned in Section 3.5, has an important role. Construction costs can be covered by loans that will be repaid by income from future revenue of the transport tax. The tax rate can be raised when a city decides to introduce a new system. This system in France, which is supported by both policy provisions and funding systems, is a noteworthy model for future world urban transportation measures. 3.6.2 Key Metropolitan Railway Projects (1) Tsukuba Express (Japan). The Tsukuba express is a new rapid transit railway that opened in 2005 and connects Tsukuba science city to Tokyo. There are many national and private research institutes in Tsukuba science city, but no railway to Tokyo. Since this line passes inside the Tokyo metropolitan area, high-construction costs and land purchase

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difficulties were estimated. On the other hand, such large benefits as capital gains for landowners and increased development potential are expected. A special law that enables the simultaneous implementation of land development around stations and railway construction was enacted. In the Tsukuba express project, the railway lots were obtained by utilizing this law. Landowners donate a part of their land assets but also received capital gains on their remaining land from the introduction of the new line. It is a kind of return of development profits. Since it is quite ironic that projects that produce more benefits are generally more difficult to implement, this technique attracts attention as an advanced technique for railway improvement within large urban areas, which are expected to create large development profits. (2) Croydon Tramlink (United Kingdom). Croydon Tramlink is an integrated light rail system in Croydon and four adjoining London boroughs that feature 38 tram stops including seven main interchanges with railway services along the route. Transport for London (TfL) adopted PPP for the project because the government required private sector commitment to achieve better value for public money. Construction was undertaken by the private sector. The Croydon Council minimized disruptions to businesses and the area’s population during construction. Tramtrack Croydon Ltd (TCL) was appointed concessionaire in 1996 for a period of 99 years. Capital expenditures for the project were £200 million with the central government providing £125 million of this total. “Operational year 2000” published by the Croydon Council states that Croydon is the only London Borough to achieve zero traffic growth. In Croydon’s largest shopping mall, car park usage is down by 6% but foot traffic in the mall is up by 11%. It is also reported that one very positive outcome of the project has been the revitalization of New Addington, which is a large social housing area built between the 1930s and 1950s with a population of approximately 25,000. Access to this area from the center of Croydon used to require 55–75 min by car or bus; it has been reduced to 17 min. With the frequency of service, the maximum time required to access the town center is 25 min. Additionally with the easy access, mobility, and security at tram stops, travel, leisure, shopping, and social options have been significantly enhanced by Tramlink. The involvement of the private sector made the project possible by contributing to the procurement of part of the total costs. Public expenditure is justified by such social effects as proved in the report.

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3.6.3 Key Interurban Railway Project (Second-Phase Shinkansen Projects in Japan) Even though many years have passed since the 1973 decision that completed plans for second-phase Shinkansen projects in Japan, few sections have been completed. The main reason for the delay included a lack of funding aggravated by governmental finances, an oil crisis, and the bankruptcy of Japan National Railway (JNR). Therefore, a new funding scheme was introduced that began to promote construction again. The old funding scheme of the JNR age was to build by loan and repay with future fares; but this method was problematic because the burden of the loan’s interest is too large. In the new scheme, infrastructures are built by general funds of the central and local governments and after completion private railway operators pay rental fees to the governments. Rental revenue in subsequent years reduces the public burden, and no initial investment risks for private operators simplify the private sector’s involvement. In contrast to schemes that separate construction and operation adopted in some countries, where infrastructure should be provided by public funds, this excellent system will even cover the initial costs by operational profits through efficient operation by private companies. This type of scheme is beginning to be considered in high-speed railway construction in Europe and America, including the attempt by the French and Spanish governments to award a concession for operation and construction to a private consortium of the Perpignan-Figueras international extension (TGV Sud). 3.6.4 Key Road Charging Scheme (London Congestion Charging in the United Kingdom) Congestion charging, which collects fee from cars entering central London, was launched in 2003. The charged area is 21 km2, and vehicles entering from 7:00 a.m. to 6:30 p.m. Monday to Friday are charged £5/day. Payment can be made by telephone, mail, Internet, or at retail stores or gas stations, etc. Taxis, emergency vehicles, etc. are exempt, and area residents receive a 90% reduction. There are also discounts for the disabled. Since the United Kingdom has historically had few toll roads, paying to use a roadway itself seemed a brash challenge. In addition, since there is hardly a specific tax system in the country, the concept that profits obtained from this system must be used for transportation improvement in London is also radical. Singapore introduced an area charging system in 1975, and the Norwegian cities of Oslo, Bergen, and Trondheim have also introduced similar systems.

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Several other cities are currently examining such systems. Although the goals include easing road congestion and improving the environment by reducing automobile traffic, it can also be considered a new funding system for transportation. In 2004, TfL published “Impacts Monitoring Second Annual Report” and concluded: ●

●

●

●

within the charging zone, congestion has been reduced by 30%, and the volume of traffic has been reduced by 15% (vehicles with four or more wheels); there have been significant improvements to bus services in the zone and more widely throughout London; traffic changes resulting from charging are estimated to have saved 19% in traffic-related CO2 emissions and 20% in fuel consumed by road transport within the charging zone; approximately 550,000 congestion charge payments are made each week.

The money from congestion charging will enable improvements to public transport in London, since the scheme is expected to raise significant surplus income, which in 2003/2004 was expected to be some £66 million. Short-term spending plans for this money include bus network improvements, contributions to the costs of developing possible tram or high-quality segregated bus schemes, safe and security improvement schemes, and restructuring public transport fares. In medium to longer-term plans, the revenues could help the funding of expanded underground and rail capacity with new services across central London, together with improved orbital rail services and new Thames Gateway river crossings. Congestion charging has been successfully introduced and may prove to be a remarkable model not only as a measure for congestion reductions but also as a funding system.

Chapter 4

Transportation Policy and Funding Systems

In this chapter, we explain the transportation policy and funding systems in each country in detail. This is not a simple introduction, but instead continues the discussion started in Chapters 2 and 3; we first summarize this discussion based on several important aspects. We discuss the basic thinking mode and distinctive characteristics of each country’s transportation improvement. Some countries stress profitability and take great interest in the size of demand, while other countries emphasize the role of transportation as social infrastructure and even make strategic investments in areas with lower demand. In recent years, some countries have considered environmental protection and tried to effect major shifts in their modes of transport. These basic thinking modes regarding transportation improvement are strongly reflected in funding systems. Accordingly, it is essential to understand the basic policy of each country before discussing funding systems. As observed in Chapters 2 and 3, there are several key aspects involved in roadway, railway, and airport improvement. The important aspects of roadway improvement policy are the presence or absence of toll roads and specific funds. The existence of toll roads is an important factor that determines whether roadway improvement costs are borne by the public or by users. In other words, whether public funds are used to improve roadways as a social public property or whether user funds pay for roadways as facilities that provide a service to users. The existence of specific funds reflects the thinking mode regarding the utilization of taxes collected from automobile users. Every country has taxes paid by users, but some countries designate such revenue as general funds, while other countries designate it as specific funds for road improvement or for the entire transportation system, including public transportation. Thus, the entity that actually administers the roadway improvement funds differs greatly depending on the basic mode of thinking. In railway improvement, the three important factors are the scope of the role of private enterprise, the level of assistance from public funds, and the level of dependence on loans. These factors differ depending on the extent to which work 41

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has been consigned to the private sector as an outcome of national railway reform as well as the extent to which owners of the infrastructure and operators are separated. Some countries have privatized infrastructure, while other countries own the infrastructure and have privatized operations. These factors determine whether railway improvement is borne by public or user funds. In airport improvement, the scope of the roles of the private and public sectors and the scope of the roles of the central and local governments are especially important. Whether accounts are settled by individual airports or collectively by multiple airports with a cross-subsidy system is also crucial. In this chapter, we explain these factors, summarizing the current and past status of each country’s systems. We encounter various modes of thinking in different countries, and comparing them is of great interest. Reading this chapter from this viewpoint will provide insight into the differences among the countries in terms of the balance between general funds and user funds, the balance between national and local governments, and the balance between funds borne in the present and past; these issues constitute the key elements of traffic improvement funding.

4.1 Transportation Policy and Funding Systems in France 4.1.1 Fundamental Policies The Basic Law for Domestic Transportation (LOTI) [Loi d’orientation des transports intérieurs] was established in 1982 as the basis of a unified transportation policy covering railways, highways, inland waterways, and air transport. The Territorial Management and Development Act (LOADT) [Loi d’orientation pour l’aménagement et le développement du territoire] was enacted in 1995. LOTI and LOADT were revised in 1996 and 1999, respectively. These acts significantly influenced not only French transportation policy but also the direction of the transportation policies of other countries. In 1982, LOTI characteristics included the following points: (1) (2) (3) (4) (5)

A new set of rights called “Transport Rights” [droit au transport]. Prioritized public transportation. Decentralized transportation policy. Clarified the key concepts of public service and social costs. Clarified the central government’s role and responsibility in policy and funding.

This last point is especially important and is worth expanding. The role and responsibility of the central government should cover: (1) construction,

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43

maintenance, and management of fundamental transport facilities (infrastructure) and its safe provision; (2) regulation and supervision of transportation activities; (3) implementation of a priority public transportation policy for passenger transport; and (4) implementation of a research program as well as the preparation of statistical data. All of these governmental activities should be founded on transport rights, namely: (1) the right of all users to mobility; (2) the freedom to choose one’s mode of transportation; (3) the right of users to transport themselves personally or to entrust it to others; and (4) the right of users to information regarding transportation modes and methods of usage. In contrast to Germany where the starting point is public responsibility, French transportation policies are underpinned by user rights. But nevertheless, in practice the policies of both countries are facing the same direction. Increased political awareness of sustainable mobility is also an important trend of French policy. Regarding the Rio de Janeiro Conference and followed by the Kyoto meetings, reducing car use and greenhouse gas emissions have become a primary target. In 1996, the Law Concerning the Air Quality and the Rational Use of Energy (LAURE) [Loi sur l’Air et l’Utilisation Rationnelle de l’Energie] made environmental measures a priority in transportation policy. Under LAURE, all cities with more than 100,000 inhabitants must devise an Urban Mobility Plan (PDU) [Plans de Déplacements Urbains]. The law’s goals include reducing car use, developing public transportation, bicycles and walking, and organizing a main urban roadway system and public parking. Among these, especially increasing the use of public transportation is a common goal for all PDUs. It is addressed by increasing the quality of public transportation and developing intermodality: fare integration, timetable coordination, and ‘park and ride’ systems. A number of large cities have positioned new tramway plans in their PDU. Such political awareness concerning the problems of increasing car use was confirmed in 2000 with a law related to Urban Solidarity and Renewal (SRU) [Loi Solidarité et Renouvellement Urbains] that placed a new priority on sustainable mobility. Emphasizing that urban planning policies and grants should stress the interaction between urban development and transportation policies, it extended the scope of PDU. Another important event in France transportation funding was the creation of the Agency for the Financing of Transport Infrastructures in France (AFITF) [l’Agence de financement des infrastructures de transports de France], which was established to procure money for roadways, railway, ports, and waterways. The financial resources of the fund are tolls from expressways, payment from expressway authorities, governmental subsidies, and loans. The

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total budget in 2005 is estimated at €600 million, which will rise to €7.5 billion by 2012. 4.1.2 Roadways in France (1) Plans and systems. After the first five-year plan for roadway improvement was enacted in 1951, five-year plans have been utilized ever since. In conjunction with the ninth fiveyear plan (1984–1988), a long-range (15-year) plan was drafted. The National Road Master Plan passed in 1992 included improvements to 37,000 km of trunk road network, including 12,000 km of interurban expressways. The 12th plan was changed to a seven-year plan for the years 2000–2006. Although roadway construction in France had lagged behind other European countries, expressway construction was accelerated by the introduction of a toll road system, which was based on the Expressways Act of 1955 that established toll road companies in 1956. The first toll expressway opened in 1961. Most interurban expressways currently operate tolls. However, in the Paris metropolitan area and some remote areas, tolls are not charged. The construction and management of toll roads are entrusted to semigovernmental corporations (SEMCA) [Société d’Economie Mixte Concessionnaire d’Autoroute] whose capital is predominately managed by national organizations and neighboring local governments. Cofiroute, which is a private company, also manages some expressways (Table 4.1). The specific fund for roadway improvement, the Road Investment Special Fund [Fonds Spécial d’Investissement Routier], was established in 1951 and funded by fuel taxes. However, it was terminated in 1981. In 1995, the Land and Water Transport Investment Fund (FITTVN) [Fonds d’investissement des transport terrestre et des voies navigables] was established according to LOADT, and in 2005 AFITF was created. (2) Division and improvement authorities. National highways are classified in the National Road Master Plan [Le Schema Directeur Routier National] as follows: ● ●

●

●

Expressways (Autoroutes) Semiexpressways (LACRA) [Liaisons Assurant la Continuité du Réseau Autoroutier] Major trunk roadways for national land development (GLAT) [Grandes Liaisons d’Aménagement du Territoire] Other national highways [Autres Routes Nationales]

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Table 4.1: Financial resources for transportation improvements in France. Classification Financial resources Roadways Central government

●

General funds of central government

Uses ● ● ● ●

Local governments

●

General funds in local governments

● ● ● ● ●

Owner/ operators

●

Improvement of toll expressways

●

Public bonds

●

Construction of toll expressways

●

General funds of central government

●

Grants for basic facilities Grants for local passenger transportation, Special operating subsidies to SNCF and RFF c Capital grants Compensation for compulsory discount fare to SNCF, RFF, and RATP d

●

●

●

Railways Central government

● ● ● ●

Local governments

●

Owner/ operators

●

●

● ●

Loans

● ●

Airports

Central government

●

General funds of local governments Versement de Transport

●

Subsidies from central government Subsidies from local governments Loans, bonds and long-term low interest loans

●

Railway improvements

Loans and bonds Long-term low interest loans from local governments

●

Railway construction

Fees and taxes collected from airways and passengers (BAAC e)

●

Grants for local airport improvements by BAAC Improvement of basic facilities of local airports

●

●

Local governments Owner/ operators

● ● ● ● ● ●

Loans a

Improvement of national highways Improvement of local roads Improvement of free expressways Investment in toll expressways Subsidies to toll expressways

Road bonds Government guarantee bonds and non guaranteed bonds Investment to SEMCAb (ADF) Subsidies from local governments Investment from local governments

●

●

Loans

Improvement of national highways Improvement of local roads Improvement of free expressways Investment in toll expressways (provided by ADFa since 1987)

●

Capital grants, compensation for compulsory discount fares to SNCF, RFF, and RATP Long-term low interest loans

Capital and operating grants for local airports Improvement of basic facilities of local airports

Subsidies from central government Subsidies from local governments Self funds by airport rental fees Loans from private sector

●

Airport improvement

Loans from private sector

●

Airport construction

ADF, Autoroute de France (French Expressway Organization). SEMCA, Société d’Economie Mixte Concessionnaire d’Autoroute (Mixed-economy companies). SNCF, Société Nationale des Chemins de fer Français (French National Railway), RFF : Réseau Ferré de France (French Railway Network). d RATP, Régie Autonome des Transport Parisien (Paris Transport Company). e BAAC, Budget Annexe de l’Aviation Civil (Private Sector Aviation Special Account). b c

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Some expressway and LACRA improvements are handled directly by Ministry for Transport, Infrastructure, Tourism and the Sea [Ministère des Transports, de l’Équipement, du Tourisme et de la Mer] and others are entrusted to SEMCA or other approved companies, namely, Cofiroute or Monte Blanc Road Tunnel. The ministry takes charge of improvements to non-toll expressways, and prefecture construction bureaus are in charge of construction and management in their own areas. GLAT is structurally identical to other national highways but it was given as special name to emphasize its high priority in the national highway network. It too comes under the aegis of the ministry, and actual construction and management are conducted through local construction offices. In addition, prefecture roads are managed by prefectures, and local roads are managed by cities and towns. Each prefecture is responsible for the construction and management of prefecture roads through local construction offices. (3) Financial resources. Automobile users are subject to a multitude of taxes: registration, driver’s license, value-added, automobile, axle, and fuel. But they are general taxes and not specific funds for roadway improvement. National highways and local roads, excluding toll expressways, are improved with general funds. Central government shoulders 100% of the burden for interurban highways apart from the sections that enter or bypass urban areas jointly funded by both central and local governments. The share of the burden is decided through negotiations between the two parties. Budgets are based on Long-Range Plan for Road Network Improvement: each area has a five-year plan whose annual budget is implemented according to this plan. The construction of toll expressways is entrusted to SEMCA. The financial resources of SEMCA come from road bonds issued by companies, guaranteed government bonds, non-guaranteed bonds, prepayment from the French Expressway Organization (ADF) [Autoroute de France], and investment from local governments. ADF was established in 1982, and since 1987 it has contributed capital to SEMCA. A prepayment system was used to adjust finances among SEMCA and to adjust differences in charges between regions. There used to be specific funds for roadway improvement, but they were abolished in 1986. In 1990, Funds for Paris Metropolitan area (FARIF) [Fonds d’aménagement de la région Ile-de-France] was established, which used funds to improve roadways, schools, houses, public transportation, and so on. In 1995, FITTVN was established whose main resources are tolls from expressways and hydroelectric power taxes. They are invested in railways including new TGV

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lines, integrated transport systems, and local trains. Using the fund for roadway is limited to non-toll expressways being constructed in remote areas. 4.1.3 Railways in France (1) Master plan. The Basic High-Speed Railway Plan of 1992, which is the plan for interurban railways, calls for improvements of 4700 km of railways and 16 TGV routes including railways in operation and under construction. In 2003, the Inter-Ministry Committee for Territorial Development (CIADT) [Comité interministériel de l’aménagement et du développement du territoire] made public a transport infrastructure plan all the way to 2025, which included an investment plan through 2012. The plan seeks positive investment in railway improvement and aims to construct competitive transport networks and achieve optimum balance between transportation modes. As for high-speed rail, six lines, including the TGV east European line between Paris and Strasbourg, are listed as lines that have been completed or on which construction will begin. The goals for TGV’s future include: compatibility with the planned high-speed railway network of Europe that will contribute to the continent’s integration; creation of links between urban regions in France outside of Paris; a combination of railways and expressways for freight; and congestion reduction on expressways and at airports. The construction of new lines is expected to continue until 2015. Although profits will be quite hard to achieve on any route, other than the southeastern line, measures are underway for aggressive improvements in railway infrastructure. (2) Organizations. Under the 1842 French law that first regulated railways, the French government gave concessions to private companies to develop and operate railways. In the 1860s, there were six major railway companies in France, but by 1937 only one remained. Facing financial hardships, private railways were nationalized in 1937 by the creation of the French National Railway (SNCF) [Société Nationale des Chemins de fer Français] that was initially granted concessions for a 45-year period. SNCF was a mixed company jointly managed by the central government and private railway companies until 1982. The establishment of LOTI in 1982 changed SNCF into an industrial and commercial public facility for which the government provides all investment. Industrial and commercial public facilities are a form of operation for which the principle of public law is applied to public works and the principle of private law is applied to commercial activities. The Paris Transport Company (RATP) [Régie

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Autonome des Transports Parisiens] and the French electric and gas utilities are further examples of this type of organization. This situation was substantially modified by the French railway reform. The reform sought to: ● ● ●

●

achieve sustainable development of the railway sector; resolve SNCF’s financial difficulties by reducing its total deficit; implement European Directive 91/440 that separates infrastructure and operations; and prepare for the regionalization of public transport services.

This law established the French railway network company (RFF) [Réseau Ferré de France], which owns and manages the infrastructure. Another major reform of the French railway system was regionalization, which was carried out in two steps: an experimental phase and a generalization phase. The experimental phase started in six regions (Alsace, Centre, NordPas-de-Calais, Pays de la Loire, Provence-Alpes-Côte-d’Azur, and Rhône-Alpes). The experiment established a new financial structure by transferring regional transport supervision from the French government to each region. In generalization phase, except Ill-de-France and Corsica Island, since 2002 all regions are responsible for regional passenger train services operating on national railways within each region’s territory. Each region defines its own level of passenger train services, such as the lines, networks, tariffs, quality of service, and information to users. Compared with the national railway, urban and suburban railways are competitive. Cities or urban communities, who received the right to organize urban public transportation from LOTI, decide transportation policies including the level of infrastructure, amount of investment, and quality of services. Operators are selected by competitive contracts, and most urban and suburban railways are operated by semiprivate or private operators. The following types of contracts are included: management contracts where the private operator receives a management fee, contracts for which private operators bear certain risks, and concession contracts where the private operator fully bears responsibility for the operation and sometimes the construction risks. Some cities including Marseille operate their own urban transport systems. In the Paris metropolitan area, the Ie-de-France Transportation Union (STIF) [Syndicat des transports d’Île-de-France], the successor of Paris Transportation Union (STP) [Syndicat des transports parisiens], is the transportation authority. STIF decides operators, coordinates tariffs, confirms investment plans, and manages and distributes transport taxes [Versement de transport].

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(3) Financial resources. The establishment of RFF in 1997 considerably changed the funding system. Before then, government grants were considered as an essential prerequisite for railway development, and since the Railway Construction Act of 1842, France adopted a principle that the central government should bear the burden for infrastructure. The financial resources for investment in SNCF were general funds from the central government and the investment funds of SNCF itself (inner funds, loans, and bonds). The central government also provided grants to compensate for social discounts on passengers fares. Since 1997, RFF has owned and constructed infrastructure and SNCF has operated the trains. RFF is divided into three divisions: finance, strategic development, and railway management. Representatives are posted to main regions. RFF revenues include payments by operators for utilizing infrastructure, subsidies from the central government and other business income such as selling electric power. Payments reflect usage, with a favorable burden to freight transportation considering the promotion of modal shifts. The central government grants subsidies to RFF to maintain infrastructures and also to SNCF for operation. The main justifications for the subsidies are to balance competition among modes, to guarantee the social and economical lives of the citizens, to contribute to adequate national land development, and to realize a transport right. For urban railway systems including subways and trams, operation costs are covered by fare income, transport tax [Versement de transport], and subsidies. The subsidizing systems differ between Paris Metropolitan area and other regions. In the Metropolitan area, subsidies are concentrated on STIF, which delivers them together with transport taxes. The urban areas of other regions have emphasized the promotion of railway transportation in recent years, including positive investment for advanced tram systems. City and community organizations of the region devise a plan and implement and manage it. In most cases, the train operator is a private company selected by competitive contract. 4.1.4 Airports in France (1) Plan and systems. There is no countrywide airport improvement plan. An airport network has been almost completed, and there is little need for new airports, but anticipated growth makes expanding capacities necessary especially in the Paris Metropolitan area. Even though the central government has responsibility for the formation of the airport network and the power to control the number of runways

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and terminal capacity in each airport, in practice it does little more than approve development plans, since few subsidies are provided. Since airport construction, management, and operation is profit-dependent, each operation authority generates income through airport lease fees, etc. and carries out its own capital investment and operations. In practice, only the Paris Public Airport Corporation (ADP) [Aéroports de Paris] and 10–15 local airports have sufficient independent profits to manage without help from the public sector. Most other local airports receive grants from local governments. The central government does not provide grants for operations. (2) Division and improvement authorities. Basically, the central government constructs airports and the local chamber of commerce operates them, but there has been little new airport construction in recent years. The 14 airports in the vicinity of Paris, including Charles de Gazelle Airport and Orly Airport, are managed by ADP. For the other public airports, separate authorities including the chamber of commerce handle management. The central government supervises ADP and the local chambers of commerce, but it is not directly involved in the construction or operation of airports. Fundamental operational issues, such as drawing up investment plans and setting landing fees are placed under the administration of the government. The airports provide self-funding and loans for capital investment without government subsidies. (3) Financial resources. The central government sets the fees and taxes collected from airlines and passengers and places them in the Civil Aviation Special Account (BAAC) [Budget Annexe de 1’Aviation Civile]. Except for airports under ADP’s jurisdiction, subsidies are provided for airport construction, and there are no subsidies from BAAC for operating expenses. But local governments grant subsidies for airport construction in addition to providing grants toward operation expenses. In addition, airport lease fees and loans make up their financial resources. Subsidies provided for airport infrastructure are limited. To construct new infrastructure, airport managers must procure funds independently by soliciting subsidies from local governments or loans.

4.2 Transportation Policies and Funding Systems in Germany 4.2.1 Basic Policies and Systems Policies and rationale. A comprehensive transport plan including roadways, railways, waterways, and airports was drawn up in the German Federal Transport

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Plan (BVWP) [Deutsche Bundesverkehrswegeplan]. The first plan was made in 1973. After the East/West unification of the country, BVWPs were announced in 1992 and 2003. The direction of German transportation policy after unification was described in “Verkehrspolitik der 90er Jahre” (1990). It concentrated on three basic areas: the construction of a more environmentally sensitive transport system with an emphasis on railways; improvements in the transportation infrastructure following the unification; and step-by-step progress toward European market integration. Underlying this policy stance was a belief in the efficacy of market principles, deregulation, and a need to cope with problems caused by unification, in particular, the pressing need to modernize transportation in the former East Germany. After the opening of Eastern Europe, Germany was expected to become a transit hub between the East and West, so an efficient transport system was crucial. After unification, the federal government estimated that by 2010 the flow of people and goods would increase by approximately 32% and 25%, respectively. In the more than 10 years that have passed since unification, the improvement of infrastructure levels of former East Germany is still important, and the reformation of transport systems is progressing. BVWP-2003’s targets are from 2001 to 2015. The investment of the period is €66.2 billon. Strategies described in the plan take a unified approach to the construction of long-range roadways, railways, inland waterways, and airports with financial burdens shared by federal and local governments. In contrast to most other countries, in Germany social benefits are emphasized more than traffic demands or profitability from fares. The value of the environment and the value of policy implementation for developing local communities are major concerns. Establishing equal living conditions in all areas is sought by the basic law. One characteristic of German transportation policy is a respect for the responsibility of the public sector in infrastructure improvement (Table 4.2). 4.2.2 Roadways in Germany (1) Plans and systems. The BVWP is also the strategic plan for roadways. After unification, the plan was made in 1992 and 2003. The 1992 plan specified the construction of 2000 km of autobahns, 5000 km of national highways, and the renewal and reconstruction of 3000 km of other roadways. Behind this plan was the social reform following unification and Europe integration that would bring new transportation demands. However, since this policy emphasized federal railway investments, expenditures for federal roadways decreased relative to the 1985 plan. BVWP-2003 also gives sustainable mobility the top priority. Traditionally all roadways, including the autobahn, provided free access to all. However, in 1995 the use of tolls was implemented on the autobahn. These

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Table 4.2: Financial resources for transportation improvements in Germany. Classification Roadways Federal government

Financial resources ●

●

●

Local governments

●

●

● ●

General funds of federal government Portion of petroleum tax (gasoline tax) Public loans General funds of state and local governments Subsidies from federal government Motor vehicle tax Public loans

Uses ● ●

● ●

Expressway improvements Improvement of federal highways (petroleum taxes, under authority of Federal Ministry of Transport) Subsidies for improvement of local roads Improvement of local roads (petroleum taxes, under authority of Federal Ministry of Transport)

●

Improvement of federal highways Improvement of local road (motor vehicle taxes, but allotment percentage is not always 100%.)

●

Owner/ operators Railways

Loans

●

Public loans

●

Expressway construction

Federal government

●

General funds in federal government Portion of petroleum tax (gasoline tax)

●

Basic facilities of urban railways Subsidies for capital investment in DBAG Grants to local governments (U-Bahn) Subsidies for operating expenditures of S-Bahn Improvement of public urban passenger transportation (petroleum taxes)

●

● ● ● ●

Local governments

●

●

Owner/ operators

● ●

●

General funds of state and local governments Subsidies from federal government Fare income Subsidies from federal government Subsidies from state and local governments

● ●

● ●

Basic facilities of urban railway Subsidies for operating expenditures of U-Bahn

Railway improvement Improvement of trunk lines (DBAG, national government burden)

Loans Airports

Federal government

● ●

●

Local governments

● ● ● ●

Owner/ operators

●

●

●

●

●

Loans a

●

Munich International Airport.

Investment from federal government Investment from state and local governments Self funds (airport rental fees and landing fees) Financing without interest from federal, state, and local governmentsa Loans from private sector Loans from private sector

●

● ● ●

●

Investment to main airports Basic facilities (aerial aid facilities at international airports) Financing without interest to improve airportsa Investment in international airports Improvement to airports to be managed directly Operating expenditures of airports to be managed Financing without interest for improvement of airportsa Improvement of main airports (investment from federal government) Airport improvements Basic facilities Operating expenditure

Airport construction

Transportation Policy and Funding Systems

53

changes were intended to bring Germany into line with France and Italy, where toll road systems have been in place, as well as helping cope with the financial burden of construction in the former East Germany. The adoption of a toll system is seen as a significant departure from the past. (2) Division and improvement authorities. The roadway system is divided as follows: federal long-range roads [Bundesfernstraßen], federal autobahn (Interstate Highway [Bundesautobahn]), federal roads [Bundesstraßen], state and district roads, city and town roads, state roads [Landesstraßen], districts roads [Kreisstraßen], local roads [Gemeindestraßen] and urban roads. The improvement authorities for roadways in Germany are the Federal Ministry of Transport (BMVBW) [Bundesministerium für Verkehr, Bau- und Wohnungswesen], states [land], districts [Kreis], and cities and towns [Gemeinde]. There are no private companies. The BMVBW assumes responsibility for all expenses for federal long-range roads, but has no implementation or organization duties. The ministry only studies, plans, and distributes monies. Actual construction and management are entrusted to the states that have the authority to plan, construct, and manage state roads. (3) Financial resources. The main resources are petroleum taxes and general funds, and loans are also utilized. Local governments also invest in roadway construction utilizing general funds and subsidies from the federal government. The financial resources of German transportation are entirely public, since there are only public authorities for roadway construction; but a large portion of the federal financial resources is derived from petroleum taxes. Specific funds for roadway improvement were introduced by the Federal Long-Range Road Act [Bundesfernstraßengesetz] (1953) and the Transport Finance Act [Verkehrsfinanzgesetz] (1955). A financial system was established, in which 50% of petroleum tax revenues were allocated to federal roadway construction. The tax revenues have been made available for other transportation policies than roadways since 1967. 4.2.3 Railways in Germany (1) Plans and systems. The major factors influencing Germany’s railway development are railway reformation, regionalization, and environmental issues. The unification of railways in 1991 resulted in a substantial increase in funds going to the new federal areas; in particular, approximately 29 billion DM was targeted for new line

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construction and upgrading approximately 2000 km of line extending radially from Berlin. Additionally, BVWP-1992’s highlighted priority projects are to be implemented by 2010, for which 108 billion DM (49%) out of a total of 222 billion DM go to railways. This exceeds the amount allocated to roadway improvement. BVWP-2003 followed those pro-railway concepts, although roadway investment again exceeded railway. The shift to railways as an environmental measure has become a significant aspect of urban transportation. It is the main target to advance public transportation by promoting the competitive market and supplying necessary financial support. Fundamental public transportation facilities are constructed utilizing subsidies from the federation and the states. (2) Division and improvement authorities. After unification, the two national railways, the German Federal Railway (DB) [Deutsche Bundesbahn] and the East German National Railway (DR) [Deutsche Reichsbahn] were united in 1994 to form the independent German Railway Corporation (DBAG) [Deutsche Bahn Aktien Gesellshaft]. The keys to railway reform are the establishment of this independent railway company, the separation of infrastructure and operations, the stability of railway financing, the release of rail infrastructure to third parties, and the collection of track lease fees. After its establishment, DBAG was divided into five companies: the DB travel and tourism company [DB Reise & Touristik AG], the DB regional company [DB Regio AG], the DB cargo company [DB Cargo AG], the DB network company [DB Netz AG], and the DB Station and service company [DB Station & Service AG]. In 2003, the DB reassure and tourism company was renamed the DB long distance passenger company [DB Fernverkehr AG] and DB passenger transport [DB Personenverkehr] was established, under which the DB regional company and the DB urban transportation company [DB Stadtverkehr AG] were placed. In 2003, the DB cargo company was changed to the Stinners company [Stinnes AG]. Railways not owned by the federal government include urban subways and trams owned by local governments. S-bahn is managed by DBAG or its subsidiary that operates urban rail services, and U-bahn is a subway system managed by local governments. Trams in many cities are managed by local governments. (3) Financial resources. Financial resources for railway improvement are mainly general funds and revenues from petroleum taxes. Local governments utilize their own general funds and federal government subsidies. Before the reform of the railway system, general funds of the federal government were allocated to the DB as capital investment subsidies. In particular, trunk

Transportation Policy and Funding Systems

55

lines and both new and existing line improvements were classified as public works projects, as set out in the BVWP. After reform, in the case of improvement at the request of the federal government, the government supplies no-interest loans or subsidies. Former East Germany receives special subsidies to help its level of infrastructure “catch up.” Subsidies for infrastructure investment for short distance railway services are based on a 1971 law for federal subsidies to improve urban transportation whose financial resources come from petroleum taxes. In 1993, it was decided that: (1) The responsibility for urban railway passenger transportation would be transferred from the federal government to the states. (2) The states would receive financial support from petroleum tax revenues and a fund created by the Urban Transportation Improvement Grant Act (GVFG) [Gemeindeverkehrsfinanzierungsgesetz] to maintain urban railway passenger transportation. (3) The petroleum tax is a federal tax but a proportion must be given to the states to support urban transportation. These were implemented in 1996 and the responsibility for the operation of urban railway service was transferred from the federal to state governments. State governments grant subsidies to DBAG subsidiaries that operate S-bahns under a contract between state governments and DBAG. The federal government supports this by petroleum taxes under GVFG. In 2001, a federal program for urban passenger transport (ÖPNV-Bundesprogramm 2001–2005) [Öffentlichen Personennahverkehr -Bundesprogramm] was announced. More than €300 million will be invested in subways, S-bahns, and trams every year from 2001 to 2005. The total will be €1.7 billion, €1.3 billion of which will go to the former West German areas and the rest to East German areas. The petroleum tax plays an important role in the financial resources of German railways not only as subsidies to operations but also to construction. In 2003, total petroleum tax revenues were €43.2 billion; €1.7 billion was paid to state governments as subsidies under GVFG and around €6.5 billion was paid as well to state governments as subsidies under the law for regionalization of urban passenger transport (RegG) [Gesetz zur Regionalisierung des öffentlichen Personennahverkehrs]. 4.2.4 Airports in Germany The international airports are owned and managed by private companies and corporations. The federal government has only participated as a financier for the Munich, Frankfurt, Berlin, Hamburg, and Cologne/Bonn airports. States and cities act as financiers to other airports.

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In Germany, airports are managed by states even major international airports including Frankfurt. Operators are selected airport by airport. Major airports adopt private companies, but most are substantially owned by the government. The federal government constructs such aerial support facilities as radio, weather, and air traffic control, but the companies that own and manage the airports are responsible for constructing runways, terminals, parking lots, etc. Financial resources. Each airport company secures its own financial resources for construction, maintenance, and management through airport usage fees. The federal government supplies no subsidies for construction other than to international airports. In addition to owning and managing local airports, local governments also invest and provide no-interest financing to international airports. Frankfurt am Main International Airport, the center of Germany’s air network, is operated and managed by the Frankfurt Airport Company (FAG) [Flughafen Frankfurt/Main AG], which was established in 1948. The shareholder investment ratio in the company is 25.9% by the federal government, 45.2% by the Hessen State, and 29.9% by the city of Frankfurt. In recent years, the largest amount invested has been in the Munich International Airport. The authority is Munich Airport Company Limited (FMG) [Flughafen Munchen GmbH). For this project the investment ratio is federal government, 26%; Bayern State, 51%; and city of Munich, 23%. Approximately 75% of the company’s total income is related to aerial operations with the remaining 25% derived from terminal building rents. Although there are no government grants, public sector investment can be viewed as a type of subsidy. Construction expenditures totaled 8.5 billion DM of which 2.5 billion DM is zero interest finance from the federal government, states, and cities. For related facilities, the FMG bears 33% of roadway and water supply costs, 40% of the burden for the construction of 16 km of S-bahn and the station building, with the federal government responsible for the remainder. For both of the above airports, operation costs are covered by revenue from airport lease fees. The federal government doesn’t provide subsidies; any deficit has to be covered by loans from financial markets.

4.3 Transportation Improvement Systems and Financial Resources in Japan 4.3.1 Transportation Investment Policies in Japan (1) Political objectives. The central government has made national plans for roadway and airport improvement. However a national railway plan was made only in 1973, which

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57

showed the second phase of the construction plan for the Shinkansen (super express intercity trains). Very little progress has been made in the 30 years since, and no subsequent plan has been offered. Consequently, at the moment there is no comprehensive transport plan for roadways, railways, and airports. Most local governments have no concerns about railways, which are generally planned by completely private companies, or airports, which are mainly planned by the central government. As for the direction of Japanese transportation policy, a report by the Transportation Policy Council explained that its political objectives should be as follows: (1) to resolve the transportation problems in major cities, (2) to stimulate transportation in local regions, and (3) to contribute to developing a balanced national economy. Commuter congestion is still serious in major cities, and the continuation of public transportation in local regions is threatened by deficits. The root of the problem is that population and industries are concentrated in major urban areas. Improvements in transportation are closely related to such fundamental problems of national settlement patterns. Transportation systems in Japan rapidly improved after the 1960’s, and trunk roadway lines and major airports have been almost completed. The problems remaining include lack of investment in trunk railway lines outside of metropolitan areas, an expected future lack of capacity at the international airports, and road and rail congestion in large cities. Intermodality and adequate balance between modes are also required (Table 4.3). (2) Plans and burden principle. A full cost principle in which usage fees cover all expenditures has become common for expressways, railways, and airports. In comparison with other countries, an important characteristic is that not only operation costs but also construction costs and even land purchase costs should be covered by the income from user fees. This basic principle has been followed in the past in contrast with all other countries that have privatized operations in recent years. This idea has produced conspicuous results over the entire transport system, and examples include that all expressways are toll roads and public subsidy for railways has been small. The need to introduce long-term loans is emphasized from the viewpoint that the burden of each generation requires adjustment. These principles are not only for intercity transportation but also for all fields including urban transportation. These Japanese concepts are superior because they require low dependence on public funds, but problems exist such as small incentives for new investments or to increase the total amount of loans.

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Table 4.3: Financial resources for transportation improvements in Japan. Classification Roadways Central government

Financial resources ● ●

Uses a

General funds of central government Specific funds of central government: gasoline, petroleum, and motor vehicle weight taxesb

●

● ●

Local governments

● ●

●

Owner/ operators

●

Loans

●

● ●

●

Railways

Central government

●

●

●

Investment from central and local governments Subsidies from local governments Fees from toll roads

●

Improvement of toll roads

Road bonds and loans Treasury investments and loans

●

Construction of toll roads

● ●

Improvement of national highways Improvement of local roads Investment or subsidies in public corporations

General funds of central governmenta (Railway ● Subsidies and financing to Development Fund) public corporations and Specific funds of central government: revenues constructors created from selling the Shinkansen (Superexpress)

●

General funds of local governmentc

●

Investment and subsidies to constructors

Owner/ operators

●

Subsidies and financing from central government Investment from local governments Subsidies from local governments Fare income, railway bonds, and loans

●

Railway improvements

Financing from central government Railway bonds and loans

●

Railway improvements

General funds of central governmenta Specific funds of central government (aircraft fuel tax) Shares of local governments Airport rental fees Treasury investments and loans

●

Airport improvements Basic facilities Subsidies to local governments Investment in public corporations or private companies

General funds of central governmentc Specific funds of local government: aircraft fuel transferred tax Subsidies from central government

●

Investment from central and local governments Investment and loans from the private sector

●

Airport improvements

Treasury investments and loans Loans

●

Airport construction

● ●

Loans

● ●

Central government

● ●

● ● ●

Local governments

● ●

●

Owner/ operators Loans

● ● ● ●

a

General funds of central governmentc,d Specific funds of local government: gas oil delivery and petroleum gas transferred taxes Subsidies from central government

Local governments

●

Airports

Improvement of national highways Subsidies to local governments Investment in public corporations

● ● ●

● ● ●

Airport improvements Basic facilities Shares to central government Investment to public corporation or private company

Including government bonds in general funds of central government. Motor vehicle tonnage tax is general fund. However, it is substantially treated as specific funds. c Including local bonds and Grants of local allocation tax in general funds of local governments. d Including motor vehicle tax and light motor vehicle tax in general funds of local governments. b

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59

4.3.2 Roadways in Japan (1) Plans and systems. Specific funds for highway improvement and toll road systems have become the major pillars supporting road policies. The specific funds system was founded on two basic ideas: (1) people who gain profits from using the roads pay costs, and (2) people who cause damage to the road pay costs. Presently, eight taxes are collected by the central and local governments that are directed toward specific road funds. These funds reached six trillion yen per year and are the main cause for a steady increase in roadway investment. As for the other pillar, a toll road system is utilized for all expressways and some general roads, tunnels, and bridges. Expressways, which form the trunk lines, have been especially favored by the toll road system, and now that most major routes have been completed, attention has shifted to local routes. (2) Division and improvement authorities. In Japan, roadways are divided into national expressways, urban expressways in metropolitan areas, general national highways, prefecture roads, and municipality roads. National expressways form the main automobile transportation network, connecting important political, economic, and cultural areas. Plans have been made to extend routes by 11,520 km by revising the Major National Land Development Highways Construction Act (1982). Including 2500 km of upgraded roads from national highways, a 14,000 km network is planned. This plan’s objective was to enable people to arrive at interchanges within one hour from all municipalities. Based on this plan, toll expressways were extended by approximately 5700 km in 1995 and 7400 km in 2005. By 2005, 63% of the plan had been completed. In recent years, the most significant change is the reform of highway public corporations in 2005. Before the reform, national expressways were constructed by the Japan Highway Public Corporation and the Honshu-Shikoku Public Expressway Corporation. After the reform, the corporations were privatized and separated into six companies. The companies are still owned by the government and are not completely private sector. Authorities in charge of construction and maintenance of urban expressways in the Tokyo and Kansai metropolitan areas were the Metropolitan Expressway Public Corporation and the Hanshin Expressway Public Corporation, respectively. Both of these public corporations implemented projects dictated by a basic plan provided by the Ministry of Land, Infrastructure and Transport, and after 2005 they were reformed as well as the Japan Highway Public Corporation.

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Other toll roads are classified as urban expressways in designated cities (Nagoya, Fukuoka, and Kitakyushu) and general toll roads constructed and maintained by public companies of local governments. The general national highway system covers a wide area around 55,000 km long, which is about 4% of the 1.1 million km of all roadways. (3) Financial resources. Taxes on automobile users are collected by the central government for specific funds; some are transferred to local governments for their specific funds. Among those taxes, the automobile weight tax goes into the general funds of the central government, but 80% of the fund is allotted to roadway improvement. The automobile tax and a light vehicle tax contribute to the general funds of local authorities. Most of the financial resources for toll road construction are some form of loan, e.g., guaranteed government bonds and public enterprise bonds. Toll rates are determined under the principles of “reimbursement,” “rational charges,” and “benefit equivalence.” The reimbursement principle states that the reimbursement of expenditures including all construction, maintenance, and management expenditures as well as interest on loans should be made by the continuous collection of fees. The rational charge principle argues that a rational fee should be charged that considers the balance of the burden capability of the users and fares for other modes of transportation. The benefit equivalence principle is that fees should be charged in a range that does not exceed profits gained from using the roadways. However, no particular priority is given to any of these three principles. 4.3.3 Railways in Japan (1) Plans and systems. The second phase Shinkansen construction plan, which was published in 1973, is the only nationwide trunk railway plan. Five lines are planned but only a portion has been completed. Public work projects for roadways, airports, and harbors have five-year or seven-year plans, but no such plans are prepared for interurban railways. However, the Railway Development Fund Act of 1991 established the Railway Development Fund on the basis that central government grants are necessary to improve railways because large capital investments are needed and there is a long interval before profits can be realized. The act stated that the purpose of the Railway Development Fund is to promote construction of the Shinkansen and the major trunk and urban railways and to grant subsidies to railway constructors. However, since the business policies of the private railway constructors must be respected, the grants are simply to encourage them to undertake investment.

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For this reason, the grant objectives are to promote the policies of the public authorities, such as Shinkansen improvement and congestion reduction in the subways of major cities. (2) Division and improvement authorities. The construction and operation authorities of the trunk lines are the JR (Japan Railway) companies that were privatized in 1987. Construction is also executed by the Japan Railway Construction, Transport and Technology Agency (JRTT) and third-sector enterprises. Many suburban railways are owned by purely private companies, and in major cities the subways are owned by local governments. In recent years, some of the new lines have been constructed by joint venture in which local governments and private companies have invested. The Railway Project Act (1987) divided railway construction companies into three types: companies that both own and use track facilities, companies that own track facilities but do not use them, and companies that use but do not own track facilities. This act recognized the need for private sector companies to operate efficiently on railways constructed by governments and to separate the operation of transportation business and the construction of infrastructure. It also recognized that the scale of railway systems constructed by private railway companies has increased. (3) Financial resources. The central government established the Railway Development Fund by selling the Shinkansen infrastructure to JR. This fund is used for grants to improve the Shinkansen, major trunk railways, and urban railways. The following are also included in this fund: transfers from general accounts and a special account for industry investment created by the selling of NTT (the former Japan telegram and telephone). The central government also uses general funds to provide grants to public subways and new town railways. Local governments use general funds to invest in and give grants to public subways. Loans from the central government are used for the JRTT, while loans from the private sector are used in the case of other authorities. Private railway companies generally do not receive subsidies. As for the burden rate for Shinkansen improvements, two-thirds is held by the central government and the remaining one-third by local governments. These funds are repaid as lease fees for the infrastructures paid by the JR companies after the Shinkansen is operational. No JR company is required to provide a fund outlay for construction expenditures until the Shinkansen begins operations.

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4.3.4 Airports in Japan (1) Plans and systems. Domestic airports have reached the required level, and the air network is nearly completed with the finishing of Chubu international airport in 2005. However, airports in the Tokyo and Kansai metropolitan areas are operating at full capacity. The level of improvement of airport runways in Japan is reportedly 70% of western European countries, so Japan appears to be somewhat lagging. The New Tokyo International Airport (Narita) is 66 km from the center of the city and is handicapped because only few domestic flights can use it. Airport improvement plans are comprehensively decided at the national level and reported in a series of seven five-year plans. The seventh five-year plan (1996, revised into seven-year plan in 1997) decided the entire investment amount for the seven years as 3.6 trillion yen. The seventh plan proposed improvements in the three large metropolitan area airports, parallel runways at Narita, extension of the Tokyo International Airport (Haneda), a second runway at the Kansai International Airport, and the completion of the Chubu International Airport. The sixth five-year plan in 1991 included plans to promote international access for airports both in large metropolitan areas and the rest of Japan. The sixth fiveyear plan proposed: (1) securing a high-standard level of service at the international hub airports for the New Tokyo and Kansai International Airports and presenting them as gateways to Japan and eastern Asia; (2) the formation of a directional gateway network incorporating Sapporo (Chitose), Nagoya, and Fukuoka, the major airports of the cities outside the two largest metropolitan areas; and (3) the formation of a regional network focusing on other main airports. To execute these plans, massive funds are necessary, especially for the three international airports. Financial problems are important because airport rental fees, which are a major financial resource for airport construction, are already high by international standards. Therefore, the Aviation Council Report warns that airport rental fees should not be raised above the present level, suggesting that it is necessary to secure other financial resources, including the expansion of general funds. Additionally, the report said that international hub airports are international public property and that improvements should be the responsibility of Japan as a member of the international community. (2) Division and improvement authorities. Central and local governments directly control airport improvements and provide basic facilities such as runways, but terminal buildings are generally

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operated and maintained by private companies. A public corporation makes improvements to the New Tokyo International Airport, and joint-stock companies make improvements to the Kansai and Chubu International Airports. Airports are divided as follows: (i) First-class airports. Tokyo International Airport (Haneda), Osaka International Airport (Itami), New Tokyo International Airport (Narita), Kansai International Airport (Osaka), and Chubu International Airport (Nagoya). Basically, the central government constructs and manages the airports used by international airlines, and all expenditures used to be the responsibility of the central government. However, gradually special legislation has been introduced, and so at the newly established Kansai and Chubu International Airports, private funds are also being used. (ii) Second-class airports. 25 facilities including the New Chitose Airport (Sapporo) and the Sendai and Fukuoka airports. The central government constructs these airports that are mainly used by domestic airlines. The central or local governments manage them. (iii) Third-class airports. 55 airports classified as necessary to guarantee local aviation. Local governments construct and manage them. (iv) Airports shared by the Japanese Defense Agency and the United States military. (3) Financial resources. The central government has a special account for airport improvement financed by airport rental fees such as landing fees and fuel taxes. Grant subsidies are provided from this account to airports, which are constructed and managed by the central and local governments, and invested in the New Tokyo International Airport Authority and the Kansai and Chubu International Airport Companies. Local governments improve airports using aircraft fuel transferred taxes, subsidies from the central government, airport rental fees, and general funds. The financial resources of the New Tokyo International Airport Authority include investment from the central government and such loans as public corporation bonds and self-created funds. The financial resources for improvements by the Kansai and Chubu International Airport Companies come from investments from the central and local governments, the private sector, and loans. The shares of burden were set by the Airport Improvement Act (1956). As the central government settles the Airport Improvement Plan, airports are not constructed under individual income and expenditure computations. The financial resources for airport improvement come from a nationwide pool system, with the exception of the New Tokyo, the Kansai, and Chubu International Airports.

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4.4 South Korea 4.4.1 Basic Ideas in South Korea By utilizing specific transportation funds, South Korea has aggressively invested in transportation facilities. Expressway extensions have progressed, a high-speed rail between Seoul and Pusan has started operations, and the Incheon International Airport (New Seoul Airport) has been opened. Improvements to transport systems have been emphasized as essential to the development of the entire country. The total investment amount for transport systems is relatively high compared with the other countries analyzed in this book, a fact clarified in subsequent chapters. In 1994, a special transportation account was established that aims to procure transport improvements including roadways, railways, and airports. It is particularly unique that airport improvement is included in the system. 4.4.2 Roadways in South Korea (1) Division and authorities. Roadways in South Korea are divided into five categories: (1) express ways, (2) national roads, (3) special city roads, (4) prefectural roads, and (5) municipality roads. Roadways are managed by the central and local governments as well as the Korea Highway Corporation (KHC) (Table 4.4). The 1961 toll road law stated that the purpose of tolls was to procure roadway improvement and maintenance. There are two types of toll roads. One is expressways managed by KHC, and the other is general toll roads managed by local governments. (2) Financial resources. The financial resources of the national government are mainly petroleum taxes and general funds. Those of the local government are tax transferred from the national government and local taxes, including automobile taxes. Central government roadway projects are covered by a special account, 60% of which is invested in roadways. The KHC procure funds by loans or government investment. 4.4.3 Railways in South Korea (1) Division and authorities. Railways in South Korea include a national railway and urban subways. The national railway is operated by the Korean National Railroad. Urban subways are operated by public corporations who receive investments from local governments.

Transportation Policy and Funding Systems

65

Table 4.4: Financial resources for transportation improvements in South Korea. Classification Roadways Central government

Financial resources ●

● ●

Local governments

●

●

Owner/ operators

● ● ● ●

Railways

●

●

Improvement of national roads Investment to public corporation (subsidies to local governments)

Specific funds (general funds of local governments) (subsidies from central government) Public bonds

● ●

Improvement of local roads Investment or subsidies to public corporations

Investment from central and local governments Subsidies from central and local governments Fees from toll roads Loans

●

Improvement toll roads

Loans

●

Public bond and loans

●

Road construction

Central government

●

General funds of central government (including transfers to a special account for transportation improvement) Specific funds Public bond

●

Subsidies to national railroad Subsidies to local governments

● ●

Local governments

●

●

Owner/ operators

● ● ● ●

Airports

General funds of central government (including transfer to a special account for transportation improvement) Specific funds Public bonds

Uses

●

Specific funds (general funds of local governments) (subsidies from central government) Public bonds

●

Investment or subsidies to public corporation

Investment from central and local governments Subsidies from central and local governments Fare income Loans

●

Railway improvements

Loans

●

Public bond and loans

●

Railway construction

Central government

●

General funds of central government (including transfers to a special account for transport improvement) Specific funds Public bonds

●

Airport improvement Basic facilities Investments or subsidies to public corporations Financing to public corporations

● ●

● ●

●

Local governments Owner/ operators

● ● ●

Loans

●

Investment and subsidies from central government Airport rental fees Loans

●

Airport improvements

Public bond and loans

●

Airport construction

The high-speed rail between Seoul and Pusan is being constructed by the Korea High Speed Rail Construction Authority, which was reformed to the Korea Rail Network Authority in 2004. (2) Financial resources. The central government grants subsidies to the operator for both construction and operation, utilizing both specific and general funds. About 20% of the specific funds are invested in railways. The deficits of national railways have been

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problematic, and cost reductions and fare increases have been tried. However, significant recovery has not been achieved. Privatization of the national railway has also been discussed, but no conclusions have been reached. For subways, deficits are covered by the local governments, including Seoul. 4.4.4 Airports in South Korea (1) Division and authorities. Including Incheon International Airport, the country has 4 international and 16 public airports. Incheon International airport, which opened in 2001, is one of the two recent large transportation projects in South Korea; the high-speed rail project is the other. The Korean Airport Corporation (KAC) construct airports and the Incheon International Airport Corporation separated from the corporation to construct and manage the Incheon international airport. (2) Financial resources. Incheon airport is funded by subsidies from the central government and loans. The other airports are managed by the KAC. The central government grants subsidies to airports for construction, utilizing both specific and general funds. About 4% of specific funds are invested in airports.

4.5 Transportation Improvement Systems and Financial Resources in the United Kingdom 4.5.1 Transportation Investment Policies in the United Kingdom Targets. In recent years, privatization and public–private partnership (PPP) of all forms of transport have been promoted. British Railways and British Airways were both privatized because market competition was expected to stimulate increases of efficiency. Toll roads and tramways have been constructed under the concept of PPP. The purpose of these policies is to reduce government expenditures and to encourage less expensive construction and management. A future plan is presented in “Transport Ten Year Plan 2000,” which covers from 2000 to 2010. The plan argues that transport plays its full part in delivering wider objectives, in particular contributing to the renaissance of cities and the revitalization of the countryside. It will support regeneration and economic growth. The strategies declared in the plan tackle congestion and pollution by improving all types of transport — rails and roadways, public and private — in ways that increase choice.

Transportation Policy and Funding Systems

67

The requirements shown in the plan include: ●

●

●

Integrated transport. Looking at transport as a whole and matching solutions to specific problems by assessing all options. Public and private partnership. Government and the private sector working more closely together to boost investment. New projects. Modernizing the transport network in ways that make it bigger, better, safer, cleaner, and quicker.

The government predicts public and private capital investment of £121 billion, which is an increase of almost 75% in real terms compared with the last 10 years (Table 4.5). 4.5.2 Roadways in the United Kingdom (1) Plans and systems. The main concern of roadway investment is relieving congestion and measuring environmental issues. Targets presented in the Ten-year plan include: ● ● ●

●

●

●

reduction of congestion below current levels, particularly in large urban areas; easing of bottlenecks by widening 360 miles of strategic roads; 80 major trunk roads, 100 new bypasses, and 130 other major local road improvement schemes; HGV lanes on congested strategic routes to provide priority for lorries and safer lanes for cars; 40% reduction in the number of people killed or seriously injured in road accidents; and accelerated adoption of cleaner vehicles to reduce air pollution and CO2 emissions.

During the 1970s increasing awareness of environmental problems combined with the oil crisis changed attitudes toward motorway expansion, but Prime Minister Thatcher put building roadways at the center of her transportation policies. The central government’s transport budget was increased by a factor of 1.64 between 1981 and 1990, and the national road budget increased by a factor of 2.68. “Roads for Prosperity” (1989) argued for a substantial increase in roadway investment, based on the need to relieve traffic congestion on trunk roads because economic development was being hindered. The plan included improvement, expansion, and new construction of a trunk road network focusing on 2700 miles of expressways. “New Roads by New Means” (1989) proposed the introduction of privatization for construction, maintenance, and fund procurement to quicken the pace of

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Table 4.5: Financial resources for transportation improvements in the United Kingdom. Classification Roadways Central government

Financial resources ●

General funds of central government

Uses ● ● ●

Rate and Rate Support Grants (RSG), Transport Supplementary Grants (TSG)

Road improvements Expressway improvements Subsidies to local governments

Local governments

●

Owner/ operators

●

Toll road fees

●

Toll roads

●

General funds of central government

●

Subsidies to local governments PSO (until 1996) Subsidies

● ●

Road improvements Expressway improvements

Loans Railways

Central government

● ●

Local governments

●

Rate and Rate Support Grant (RSG)

●

Railway improvements (excluding former BRa and LTb)

Owner/ operators

●

Self funds by fare income Subsidies from central government Loans from Minister of Transportation

●

Railway improvements

● ●

Airports

Loans

●

Loans from Minister of Transportation

●

Railway construction

Central government

●

General funds of central government

●

Airport improvements Operating grants to subsidiaries of CAAc

Local governments

●

Owner/ operators

●

●

● ●

● ●

●

Loans

General funds of local governments

● ●

Self funds Subsidies from CAA Subsidies to non-profit airports from local governments Government financing and loans Government financing-loans Loans from the private sector

●

●

● ●

Airport improvements Subsidies to non-profit airports Airport operating, development, and aerial control Capital investment by self funds and loans of BAA plcd Return of development profits Construction of airports of BAA plc

a

Former BR, Railtrack (Network Rail) and Train Operating Company (TOC). LT, London Transport. c CAA, Civil Aviation Authority. d BAA plc, British Airport Authority Public Limited Company. b

roadway improvement. This idea was extended to the concept of PFI and PPP from wider aspects. There were fewer toll roads and bridges in the network compared to other countries, but some have been constructed in recent years. (2) Division and improvement authorities. Roadways are categorized as follows: trunk roads (motorways and nonmotorway trunk roads), principal roads (local authority motorways, classified principal roads, and classified non-principal roads), and other unclassified roads. The construction and maintenance of trunk roads is the responsibility of the central government. Trunk roads were established by the central government to

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aggressively improve and reorganize existing roadways in an attempt to rationalize land use. These roads link major economic centers and play an important tactical role. In England, trunk roads are administered by the central government and in Wales and Scotland by local road bureaus. Both principal and unclassified roads are constructed and maintained by local governments using central government grants. Roadways that connect interurban and urban roadways are classified as principal roads. (3) Financial resources. The central government mainly invests general funds in roadways. Local governments utilize general funds, subsidies from the central government, and loans. On a few toll roads, revenue from user charges is utilized. Automobile user taxes include car registration taxes, fuel taxes, and valueadded taxes. The United Kingdom does not use a specific fund system for roadway improvement; taxes are processed through the general accounts of the central and local governments. Although a specific fund system for roadway improvement was introduced by the Development and Road Improvements Fund Act (1909), it was effectively terminated in 1937, when hypothecation of motor vehicle license duties was ended. However, 20–30% of the revenue collected from automobile user taxes is allocated to roadway improvement, partly through Revenue Support Grants (RSG) In addition to highways, RSG subsidies cover education, housing, social welfare, sanitation, health and safety, law enforcement, etc. Transport Supplementary Grants (TSG) was specifically designed for transportation funding. Funds were not granted for individual projects but for entire packages.listed in the Transportation Policy and Programme (TPP). The TPP has been replaced by the Local Transport Plan (LTP) and the grant has been changing to the new system that is intended to give local authorities more discretion and flexibility in delivering capital investment. In 1992, PFI was introduced for implementation of all kinds of public works. Expressways used to be one of the main targets of PFI. Especially after the HM Treasury decided in 1994 that all projects should be surveyed for the possibility of private financing, several roadways have been completed utilizing PFI schemes. 4.5.3 Railways in the United Kingdom (1) Plan and systems. Railway reform was based on the privatization of the British Railway Board (BR), which in 1994 was separated into infrastructural and operational sections.

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Railtrack, which was succeeded by Network Rail, managed the rental of track and station buildings and the allocation of train operation schedules. Passenger transport was split geographically into regions and franchised to private sector operators on an open access basis. Freight and support services were franchised separately. The grand plan presented after railway reform is shown in the Ten-year plan 2000, which emphasized the promotion of railways. Main targets listed in the plan are: Railways: ● ● ●

●

●

●

50% increase in use, measured by passenger kilometers; 80% increase in rail freight; improvements in service quality: more punctual and reliable trains, less overcrowding; modernization and increased capacity on the West Coast and East Coast Main Lines; the high-speed Channel Tunnel Rail Link that also serves Kent and the Thames Gateway; and improved commuter services in London and other cities. London Transport:

●

● ● ●

improved service on the Underground, more capacity and fewer delays, through PPP; extension to City Airport of the Docklands Light Railway; a new east–west rail link, such as CrossRail; and Thameslink 2000, East London Line extensions, upgrades of major stations, and commuter rail services. Locally across England:

●

up to 25 new rapid transit lines in major cities and conurbations, more than doubling light rail use.

(2) Division and improvement authorities. The British Railway was privatized in 1994 and passenger transport service is operated by 27 companies (Train Operating Companis). Freight transport is operated by “English, Welsh, and Scottish Railways,” and Freightliner. Railway infrastructure was managed by Railtrack, established in 1994, but in 2002 it went bankrupt and was succeeded by Network Rail. Network Rail maintains, improves and upgrades the railway infrastructure, including the track, signaling systems and stations. New projects include cross-country route

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modernization, train protection and warning system, and west coast route modernization. In the Greater London area, Transport for London (TfL) was established in 2000 under the Greater London Act. The body brings together all organizations in London responsible for provision of transport in the area. It is responsible for London buses, the Underground, the Docklands Light Railway and the management of Croydon Tramlink. The Undergrounds, which are operated by London Underground Limited (LUL), is unable to generate sufficient revenue to cover the full costs of maintaining and operating the network. LUL made a radical change to secure longterm sustained funding, through the PPP. Under the PPP scheme, the infrastructure of the Underground — the track, signaling system, stations and trains was transferred to three private companies. These companies manage the infrastructure for their group of lines – Jubilee, Northern and Piccadilly lines (JNP); Bakerloo, Central, Victoria and Waterloo & City lines (BCV); and Sub Surface lines (Circle, District, East London, and Metropolitan lines). The consortium selected for the JNP lines was Tube Lines, while Metronet is selected for the BCV lines (Metronet Rail BCV) and Sub-Surface lines (Metronet Rail SSL). As part of the implementation of the PPP, LUL has re-organized itself into an operating business, responsible for providing trains and station services. Docklands Light Railway introduced franchise system. Docklands Light Railway Ltd (DLR), which is a subsidiary of TfL, owns the assets of the Docklands Light Railway. The operation and maintenance of the railway was franchised to the private sector. Serco Docklands Ltd won the bid for the franchise and operates and maintains the Docklands Light Railway. (3) Financial resources. Before railway reform, the British Railway received a Public Service Obligation Grant, which was compensation in the form of accumulated funds for non-profit passenger transportation introduced by the 1974 Railway Act. This system imposed a public service provision obligation to maintain the standard of passenger service of British Railway. On the other hand, as compensation, the system used accumulated funds on all networks including intercity railways. There were no grants from the central government for construction, but most infrastructure costs were appropriated as operation expenses, and costs including capital expenses were dealt with by grants. After railway reform, a franchise system was introduced. In all 27 companies, which are called Train Operating Companies (TOCs), operate trains and receive subsidies according to the contract. As for capital investment, Network Rail improves the infrastructure, including the track, signaling systems, and stations.

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4.5.4 Airports in the United Kingdom (1) Plans and systems. The United Kingdom has neither a large-scale airport plan nor a countrywide improvement plan. However, to maintain London’s international status and the international competitiveness of the country’s airlines, the need to upgrade metropolitan area airports was recognized. Outside the metropolitan area there is little airport investment; most airports receive no subsidies from the central government with a few exceptions in Scotland. From the end of World War II to the 1960s, the central government improved existing airports and built new ones. Governments have stressed the need for airports to become self-supporting and to operate within a market framework. Since competition is the theme of the day, there is no crosssubsidization between profitable and unprofitable airports. (2) Division and improvement authorities. Airports are owned by the central government, local authorities, and the British Airports Authority Public Limited Company (BAA plc). Some local airports are managed and operated by the private sector. There are several airports on isolated Scottish islands owned by the Civil Aviation Authority (CAA). BAA plc owns and operates the airports of Heathrow, Gatwick, Stansted, Southampton, Glasgow, Edinburgh, and Aberdeen. The British Airport Authority (BAA) was established as a national enterprise in 1966 under the Airport Authority Act of 1965 and privatized as BAA plc by the Airports Act in 1986. (3) Financial resources. The central government only grants subsidies to airports on the isolated highland islands in Scotland that are under the management of the CAA. Airports owned by local governments are constructed and operated using self-generated income from airport rental fees, etc. For unprofitable airports, deficits are covered by the general accounts of local authorities. There are no grants for investment or operations in BAA plc and its financial resources come from self-created revenues and loans. Although an aircraft fuel tax is collected, it is not specified for airport improvement but is placed in the treasury as general funds. In summary, the income sources available to airport authorities are: (1) airport rental fees for air transport (landing fees, passenger fees, etc.); (2) commercial rental fees (concessions, parking lot fees, etc.); (3) rental fees for air traffic control facilities; and (4) subsidy income (only small local airports with deficits). Airport rental fees are not unified nationally and can be set at the discretion of operators. Rental fees and commercial services are not subject to special regulations.

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Some BAA plc airports do operate with a deficit so cross-subsidization occurs within the company.

4.6 Transportation Improvement Systems and Financial Resources in the United States 4.6.1 Transportation Investment Policies in the United States (1) Political objectives. ISTEA (the Intermodal Surface Transportation Efficiency Act’ 1991) of and its successors, TEA-21 (the Transportation Equity Act for the 21st Century, 1998) and SAFETEA-LU (the Safe, Accountable, Flexible, Efficient Transportation Equity Act for the 21st Century — A Legacy for Users, 2005) are the comprehensive transport plans. ISTEA is the key to understanding American transportation policy. It required that intermodal transport systems be developed nationwide that must be economically efficient, environmentally sound, and energy efficient as well as strengthening the country’s competitiveness in the world economy. Their core political objectives were: (1) to build a National Highway System (NHS) by selectively investing in interstate highways or important roadways connecting airport and harbors; (2) to allow states and local governments to make flexible plans for choosing public transportation or roadway transportation as well as allowing them to implement optimal choices using new techniques for planning and management; (3) to support the development of new technologies for transportation in the 21st century such as the Intelligent Transport system (ITS) and magnetic levitation systems (linear motorcars); (4) to encourage the ownership of toll roads by the private sector and to ease regulations concerning the use of the federal budget for toll roads; (5) to continue grants for public transport; and (6) to release highway funds for preservation of wildlife, plants and historical sites, reduction of air pollution, improvement of bicycle paths and walkways, and improvement of such environmental concerns as road landscapes. These policies recognized that transportation improvements were failing to keep up with increases in demand for automobile and air transport, and that even the ability to maintain appropriate maintenance was questionable. These policies also reflect the necessity of a modal shift to more environmentally sensitive transport (Table 4.6). ISTEA was succeeded by TEA-21 in 1998, which showed the grand plan of trunk roadways and public transportation. The targets listed in TEA-21 are: ●

Rebuilding America: Guaranteed $198 billion in surface transportation investments, while protecting commitments to a balanced budget and the President’s other vital priorities.

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Table 4.6: Financial resources for transportation improvements in the United States. Classification Roadways Federal government

Financial resources ● ●

●

General funds of federal government Highway Trust Funds (specific funds) Fuel taxes, and so on Interest revenue of Highway Trust Fund

Uses ● ● ●

●

Local governments

● ● ●

● ●

Railways

Owner/ operators

●

Loans Federal government Local governments Owner/ operators

●

● ● ● ●

Improvement of Interstate and Defense Highway Improvement of state roads Roadside improvement Redemption of public loans Improvement of toll roads

Subsidies from federal government Funds from private sector (contributions from beneficiaries and returns of development profit)

●

Improvement of toll roads

●

Public bonds

●

Road construction

●

General funds of federal government Highway Trust Funds

●

Subsidies to local government Capital and operating grants by general funds

●

●

● ●

● ● ● ● ●

Airports

Subsidies from federal government General funds of local governments Highway Trust Funds (specific funds) Fuel taxes, registration tax, and so on Fees from toll roads Public bonds

Improvement of direct control roads Subsidies to local governments Subsidies to state and local governments for toll road improvements Exceeding necessary expenditure investments of public loans

●

General funds of local governments Subsidies from federal government to public transportation

●

Capital and operating grants by subsidies from federal government and general funds

Fare income Subsidies from federal government Subsidies from local governments Burden of private enterprises Bonds and return of development profit

●

Railway improvements

Loans

●

Bonds (urban railways)

●

Railway construction

Federal government

●

Airport and Airway Trust Fund (specific funds): ticket, aircraft fuel, and aerial freight taxes Interest revenues of AATF

●

C.I.Q. Maintenance and administration of aviation safety facilities Subsidies for airport improvements to constructors and local governments

●

Local governments

● ● ● ●

●

Owner/ operators

●

● ● ●

Loans

Subsidies from federal government General funds of local governments State aircraft fuel taxes Self funds; landing fees and airport rental fees Local bonds, general fund bond, and revenue bond Self funds; landing fees and airport rental charge Subsidies from federal government Subsidies from local governments Bonds

Local bonds ● General fund bonds and revenue bonds ● Bonds

●

●

● ●

●

●

Airport improvements (as constructors) Maintenance and administration by airport rental fees (as constructors) Subsidies for airport improvements by state aircraft fuel taxes Subsidies for operating expenditures by general funds (in case of a deficit)

●

Airport improvements Maintenance and administration by airport rental fees

●

Airport construction

●

Transportation Policy and Funding Systems ●

●

●

75

Balanced investment: Balanced investment in highways, transit, intermodal projects, and technologies such as Intelligent Transport systems; strong state and local flexibility in the use of funds. Improving safety: Incentive grants to increase seat belt use and fight drunk driving by encouraging states to adopt 0.08 blood alcohol concentration standards. Strong programs to continue making roadways and rail-highway grade crossings safer. Improved truck safety programs to get bad drivers and vehicles off the roads. Protecting the environment: Expanded congestion mitigation and air quality improvement and transportation enhancements programs to help communities improve the environment. Advanced Vehicle Program to develop clean, fuelefficient trucks. Continued programs for National Scenic Byways, bicycle and pedestrian paths, recreational trails, and roadside wildflower plantings. Increased tax-free transit benefits to encourage transit ridership.

SAFETEA-LU was signed in 2005 with guaranteed funding for roadways, roadway safety, and public transportation for the five-year period 2005–2009. SAFETEA-LU addresses the challenges such as improving safety, reducing traffic congestion, increasing intermodal connectivity, and protecting the environment. It promotes more efficient and effective surface transportation programs by focusing on national transportation issues, while giving state and local decision makers more flexibility for solving transportation problems in their territories. SAFETEA-LU makes it easier and more attractive for the private sector to participate in transport infrastructure projects, by promoting innovative changes such as eligibility for private activity bonds, additional flexibility to use tolling to finance infrastructure improvements, and broader loan policies. (2) Plans and burden principle. The year before ISTEA was passed, “Moving America : new direction, new opportunities (1990)” indicated the future direction. Transportation policies should incorporate an optimal intermodal mixture of transport for moving people and goods through deregulation. But the responsibilities and power of the states and local government must be increased as well as by using the private sector. In particular, there is a need to reinforce the “principle of beneficiary burden” by increasing the weight of user taxes, increasing returns on development profits, extending toll road systems, and increasing utilization of private sector funds. Also, to improve the environment and relieve congestion, it is proposed that

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roadway and land use plans should be integrated and that both growth and demand management should be used to coordinate transportation improvement and land development. Those concepts were included in its successors, TEA-21 and SAFETEA-LU. SAFETEA-LU requires Metropolitan Planning Organizations (MPOs) to develop long-range transportation plans and transportation improvement programs for metropolitan areas. TEA-21 listed seven factors to be considered during the metropolitan planning process. SAFETEA-LU separates the safety and security factor into two separate planning factors. The environmental factor is modified to specify that the planning process is to promote consistency between transportation improvements and state and local planned growth and economic development patterns. The new act also requires the Transportation Improvement Program (TIP) to cover a four-year period and be updated at least once every four years, and extends the federal certification of the planning process in Transportation Management Areas (TMAs; MPOs of over 200,000 population) from three years to not less than once every four years. States are required to develop long-range statewide transportation plans and Statewide Transportation Improvement Program (STIP) covering a four-year period. The federal review of the state’s planning process is extended from every two years to every four years. 4.6.2 Roadways in the United States (1) Plans and systems. In 1991, ISTEA introduced a nationwide trunk road network called the NHS composed of the most important roadways for interstate movement and national defense, roadways that connect other modes of transportation such as harbors and airports, and roadways indispensable for international commercial activities. NHS covers about 166,000 miles throughout the entire country and is seen as the first step toward building a comprehensive National Transport System (NTS) for land, sea, and air in the 21st century. The mobility of the people and goods is expected to become safer, faster, and more comfortable. Industrial competitiveness will also be strengthened by reducing transportation costs and increasing domestic employment. The annual federal budget for NHS set for the period was more than $3 billion. The promotion of toll road projects is another important point of the ISTEA reforms. This policy promotes the improvement of roadways through federal cooperation with states, local governments, and the private sector. States can entrust the construction and operation of toll roads to public organizations or the private sector and utilize federal grant funds.

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SAFETEA-LU especially focuses on safety and environment. It creates a new core highway safety improvement program that is structured and funded to make progress in reducing highway fatalities, and a positive agenda for increased safety on highways by almost doubling the funds for infrastructure safety and strategic highway safety planning. As for environment, SAFETEA-LU retains and increases funding for environmental programs of TEA-21, and adds new programs focused on the environment, including a pilot program for non-motorized transportation. (2) Division and improvement authorities. Roadway improvement projects are divided into federal grant projects promoted by state and local governments using federal, state, and local government funds, private or public toll road projects, and projects implemented individually by state and local governments. Roadways entitled to receive federal grants were divided into four categories: interstate and defense highways, primary roads, urban roads, and secondary roads. ISTEA has condensed these categories into two: the national highway system and other roads. Government transport administration is handled by the Department of Transportation, and the Federal Highway Administration (FHWA) manages roadway administration. There are FHWA divisional offices across regions that oversee grant plans through individual state highway departments, which actually implement the projects. The federal government only directly manages special roads, and other roads are managed by states, counties, cities, or towns. (3) Financial resources. Financial resources include the general funds of federal, state, and local governments and Highway Trust Fund as well as funds procured by local governments from tolls and loans. In the case of toll roads, construction companies utilize private funds and subsidies. The federal government adopted a specific funding system called the Highway Trust Fund, which was established by the Highway Revenue Act in 1956, to promote improvements in interstate and defense highways. A large portion of automobile user taxes such as fuel taxes, user taxes, and tire taxes go into this fund. Funds are also defrayed from general accounts to roadway improvement projects. Before the fund was introduced, automobile user taxes collected as general funds were transferred to specific funds for roadway improvement, over 70% of which were utilized as financial resources for the construction of interstate and defense highways. In addition, on the principle of “pay as you go,” it is not permitted to issue public bonds that depend on future income for reimbursement. The National Highway Traffic Safety Administration (NHTSA) and FHWA control road safety projects, which are funded by the Highway Trust Fund and

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from general accounts. Safety plans are drawn up by state and local governments. The federal government guides the roadway policies of each state on such issues as improvement priority, decisions for routes, and integration of technical standards. Many states have established highway trust funds comparable to the federal government. Income comes from automobile user taxes, toll road fees, and the investment of general funds in addition to federal subsidies. ISTEA established Surface Transportation Program (STP) grants to which states and local governments can apply for all roadways (including NHS), except local roadways, making it possible to divert investments to public transportation (buses, commuter railways, etc.). Each state uses 10% of its allocation on safety projects such as intersections of railways and roadways and places 10% in reserve for investing in transport quality improvements for environmental preservation. Overall 50% is distributed to regions with populations over 200,000 and other regions according to population, and the remaining 30% is distributed at each state’s discretion. Financial resources for toll expressways come from fees that cover the costs of each individual route. Currently, there are approximately 5000 km of toll expressways. State governments sometimes construct toll roads themselves but, more often, committees comprised of state and local government organizations or public corporations called “authorities” undertake construction. Private companies also construct toll roads. Currently there are about 100 organizations, including state and local governments, authorities (public corporations), and private companies who undertake such work. Only a few states have issued bonds for roadway improvement, and there are few organizations to which counties and local governments issue bonds. SAFETEA-LU represents the larger surface transportation investment than ISTEA and TEA-21, supplying the funds and refining the programatic framework for investments needed to maintain and grow the vital transportation infrastructure. It also retains and increases funding for environmental programs of TEA-21. SAFETEA-LU gives states more flexibility to use road pricing to manage congestion, and promotes real-time traffic management in all states to help improve transportation security and provide better information to travelers and emergency responders. 4.6.3 Railways in the United States (1) Plans and systems. Interurban railways are operated by Class I Railroads, which account for most of the freight-handled, and Amtrak, which is the only passenger railway company. Existing networks are large, and no concrete plans exist for new large-scale investment in interurban railways.

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In recent years, investment has been directed toward urban and suburban railways to relieve rush hour congestion, to measure environment issues, or to improve airport access. ISTEA introduced STP and the Mass Transit Program (MTP) for railway improvement. STP is mainly a regional grant program for roadway improvement but it can be diverted to improve public transportation. MTP gives substantial power to state and local governments regarding public transport choices and makes it possible to receive funds from the Highway Trust Fund to promote projects on existing passenger lines, as well as to issue bonds guaranteed by the government to construct high-speed railways. SAFETEA-LU requires Metropolitan Planning Organizations (MPOs) to develop long-range transportation plans and transportation improvement programs for metropolitan areas. (2) Division and improvement authorities. There is no national railway in the United States. The large-scale freight companies are known as Class I Railroads, and Amtrak provides interurban passenger transportation. There are 12 freight companies operating as Class I railways with an annual income of over US $250 million. They account for only about 2% of the number of railways in the United States but handle approximately 70% of the total operation mileage of all railways, employ approximately 90% of total rail staff, and earn approximately 90% of the total freight income. Amtrak, established in 1970 as a result of the Rail Passenger Act of 1970, began operations in 1971 with federal government subsidies and private sector funds. When operations first began, the company had a rate of operation income to expenses of around 40%, but this has grown to approximately 80% in recent years. Amtrak operates trains on approximately 25,000 miles of track and at about 500 stations, but owns only 600 miles of tracks and stations in the northeastern corridor between Boston and Washington, DC. On the other lines, they operate trains on tracks and station facilities borrowed from freight companies. Railways in urban areas are constructed and operated by local governments, such as the Los Angeles Mass Transit Authority (LAMTA), the Washington Metropolitan Area Transportation Authority (WMATA), and the New York Metropolitan Transportation Authority (MTA). Some private railways also exist. (3) Financial resources. Financial resources for railways include the general funds of federal, states and local governments and the Highway Trust Fund as well as operators’ funds procured by bond issues, private finances, or government subsidies. In the case of Amtrak, financial resources have been procured by capital federal subsidies under

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the Amtrak Reform and Accountability Act (ARAA) in 1997, but abolishing such subsidies is being discussed by the Amtrak Reform Council (ARC). Grants for urban railways were provided from general funds and grants based on ISTEA including STP and MTP from the Highway Trust Fund to local governments. ISTEA was succeeded by TEA-21, and budgets were enlarged by 40% more than ISTEA. Local governments individually construct and operate railways in their region and grant capital and operation subsidies to Amtrak from their general funds. In addition, part of the financial resources for urban railways is secured by bond issues and returns of development profits. In 2002, the total income components of urban transportation broke down as: fare income 35.2%, subsidies from local governments 23.7%, state governments 22.5%, federal government 4.5%, and the rest, advertising fees etc., 14.1%. SAFETEA-LU provides a federal investment for public transportation, $52.6 billion over six years from 2004, an increase of 46% over the amount guaranteed in TEA-21. It increases annual guaranteed transit funding from a level of $7.2 billion in fiscal year 2003 (the last year of TEA-21) to $10.3 billion in fiscal year 2009. 4.6.4 Airports in the United States (1) Plans and systems. Airport improvement plans are shown as the National Plan of Integrated Airport Systems (NPIAS), introduced in the 1982 Airport and Airway Improvement Act (AAIA). NPIAS is an improvement plan for public airports summarized every two years by the Federal Aviation Administration (FAA). “Subsidy plans” are drawn up by the Airport Improvement Program (AIP). The FAA estimates the level of expenditure needed to improve airports to provide a countrywide system that will meet passenger demand as well as support national defense and the postal system. Airports included in the NPIAS are chosen from applications submitted by states, counties, and cities and are judged based on expected future demand and their role in the national network. Federal subsidies are granted to airports based on this plan. When investment is analyzed by airport type, the proportion taken by large hub airports is about 50%. When analyzed by purpose, extensions of existing airports and construction of new airports accounts for around 70%. The AIP establishes ways for implementing investments in airports based on NPIAS. AIP’s basic idea disperses subsidies to smaller airports while refraining from grants to large airports. Large airports are expected to be self-dependent. Since new airports require heavy initial investment with a long-payback period, large public grants are required at the early stages of construction, which

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are then covered from operational income. However, local airports with few users cannot expect to become profitable, so projects must be judged on their importance to the aviation network and the provision of basic aviation transportation. In these circumstances, subsidies may have to be continued. (2) Division and improvement authorities. Most airports are operated by local governments (city and country), port authorities, or airport authorities. States also own and operate some airports. There are about 4200 public and 1500 private airports. The 10 largest airports account for one-third of all passengers. The federal government supports financial resources by subsidies for airport improvements. In addition, the FAA has funds to cover maintenance and expenditure on aviation safety facilities. It grants federal funds for airport improvement to about 3700 airports included in the NPIAS. The roles of the FAA include: (a) determining airport improvement plans for the entire country; (b) granting subsidies to airports based on airport improvement plans; (c) setting design standards and construction specifications for airports; and (d) providing air traffic control. The main roles of state governments are to determine airport improvement plans and provide subsidies from state fuel taxes. Some states including Alaska and Hawaii own and operate their own airports. Cities and counties also own and operate airports. At such airports, the cities and counties compile detailed plans for future improvement and implement them with federal and state subsidies. It is the responsibility of each city and county to fund operations and the maintenance of their airports, and they are also responsible for the burden of deficits. There are no federal subsidies. (3) Financial resources. The federal government established the Airport and Airway Trust Fund (AATF) and introduced such taxes as ticket, aviation freight, departure, and aviation fuel, which are collected for specific funds as laid down in the Airport and Airway Revenue Act (AARA) of 1970. Using these funds, the FAA makes grants based on the NPIAS. In total, one-third of airport improvement expenditures in the United States are covered by federal subsidies. Subsidy ratios vary according to the scale of the airport. For local airports where independent operations are difficult, the burden of the federal government can be as high as 90%, but the level of subsidies to large-scale profitable airports is approximately 20%. Various bonds are utilized including general obligation bonds, for which refunds are given using all available financial resources and revenue bonds, which are issued by local governments to create funds from the reimbursement of airport

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income. Additionally, if an airport is losing money, funds may be provided from the general accounts of local governments. Improvements carried out by airport authorities utilize financial resources such as federal subsidies, local government subsidies, self-created funds, and loans. Such revenue as tax-free local government bonds can be issued to procure investment funds for public purposes for states, local governments, special areas, and special organizations. Revenue bonds can only be redeemed by income from airports, and the local authorities who issue them have no obligation to raise other funds for reimbursement. Sources of airport construction funding at general airports break down as 30% federal subsidies, 35% revenue bonds, and approximately 30% self-created funds. Operating expenses are covered by landing fees, airplane parking fees, rental fees of terminal buildings, and income from concessions and parking lot fees because the federal government has no grant system for these expenses. Supplements for deficits must be covered by the general accounts of the concerned local governments. When cities and counties own and operate airports, deficits may become a problem, but a highly profitable airport can generate income for the city or county. Airport authorities are semi-independent organizations, whose merits include low-fund procurement costs and financial independence, and income is not diverted to other required funds but remains within the airport. Another merit is that burden equality can be promoted by creating an organization that includes all the related local governments.

4.7 Transportation Investment Policies in the EU (1) Political objectives. The policies of individual European countries are clearly related to the policies of the EU. The 1992 Maastricht Treaty incorporated the concepts of the Trans European Network, which is now called the trans-European transport network (TEN-T). “Transportation in a Fast Changing Europe (Transportation 2000 Plus report) (1991)” recognized the critical situation of transportation infrastructure in this area in terms of urban and interurban railways, roadways, airports, and access to airports. In 1994, 14 TEN-T priority projects were announced and targeted for completion by 2010. Of the 14, 10 are railway projects. In 1996, the European Parliament and Council adopted a decision on community guidelines for the development of TEN-T that included roadways, railways, and airports as well as inland waterways. The decision was addressed to member states, which are primarily responsible for achieving TEN-T. A number of financial instruments have

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been set up at the community level to conduct the development of TEN-T and support member states financially in specific cases. However, in 1998 a TEN-T implementation report admitted that plans were not progressing as expected. Investments in TEN-T projects in 1996–1997 were about €38 billion, while the financial resources needed to complete the network by 2010 are estimated to be €400 billion. If the rate of funding does not increase, the network will not be fully completed, in particular the railway projects. In 2001, the European Parliament and the Council amended the TEN-T guidelines adding six projects. A more fundamental revision of the TEN-T Guidelines was proposed in 2003 to consider enlargement of the EU and expected changes in traffic flow patterns. New outline plans for 2020 were drawn up with 18 new projects. Political objectives for transportation include increasing the freedom of people’s movement, the flow of goods and services as well as ensuring fair competition and maintaining economic growth. Transportation policies are expected to promote competition that does not conflict with other EU policies. However, free market constraints are inevitable in the face of concerns over the environment, energy, and safety. There is also concern over enhancing international competitiveness. Central to these aspirations is the appropriate burden of transportation costs and the balance of fund procurement between the public and private sectors, as well as aspects of taxation systems and the promotion of technological development. Recent concerns about sustainable development mean that all transportation policies are designed to minimally impact the environment by: (1) maximizing existing capacities, (2) tightening pollution standards, (3) developing environmentally neutral transportation modes and techniques, (4) locating and developing industrial and commercial activities that accurately reflect the transportation costs imposed on the entire society. (2) Plans and burden principle. The EU has an annual grants budget devoted to the development of a European-wide transport network. Projects receiving priority include those that eliminate missing links and bottlenecks and attempt to equalize modernization and technical know-how levels across countries. Improving the high-speed railway network and intermodality are especially relevant means of relieving road congestion and alleviating environmental problems. General rules for the financial supports to TEN-T are: ● ●

EU may only fund projects identified in the guidelines. EU will not fund more than 50% of the cost of feasibility studies and 10–20% of the construction costs.

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An environmental impact assessment must be made for each project. The project must be consistent with the Union’s other policies, especially regarding the environment, competition, and rules for awarding public contracts. At least 55% of TEN-T funds will be given to railway projects and not more than 25% to roadways.

The amount of financial support from the general accounts of the EU is not so large, but adoption by the EU raises a project’s priority because it is recognized as possessing interest to Europe. Such notification increases the chances of favorable financing. In this chapter, the transportation policies and systems of six countries were described and differences recognized. The following chapters will investigate how the policies and systems influence the actual investment amounts and the shares of the actual contributors.

Chapter 5

A Methodology for Comparing Financial Resources

This chapter develops the concept of the “actual contributor,” which defines the ultimate payer of financial resources and allows for cross-comparisons between countries with different policies and financial systems. In the following chapters, this concept is used to compare financial resources by calculating the investment amounts and contributor shares in six countries: France, Germany, Japan, South Korea, the United Kingdom, and the United States.

5.1 Problems in International Comparisons of Financial Resources 5.1.1 Statistical Problems Two sets of difficulties arise when comparing financial resources across countries or modes: technical problems relating to incompatible statistics and methodological problems resulting from differences in financial systems. The discussion below provides a concrete explanation of former issue. (1) Although, there is a general lack of statistical data related to transportation investment and the composition of financial resources, meaningful comparisons must still include a solid understanding of related investments. In this study, financial resources are calculated in a comprehensive manner using many statistics; instances where data are unavailable are noted. (2) Statistics are recorded for a variety of specific purposes and statistical content and means of collection vary from country to country. An attempt has been made to ensure that the data are coordinated and the contents unified. Any ambiguity is noted. For example, interest on previous debt may or may not be included in the total investment; however, we are interested in new investment and loans. Another example, the cost of rolling stock is generally

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included in railway improvement investment data; but vehicle and aircraft costs are not incorporated into roadway and airport improvements. Thus, we deduct rolling stock from railway investment to compare investment across modes. (3) Since the means of collecting statistics depend on their intended use, even the values of identically named data may sometimes vary, which could be misleading. Therefore, we have investigated the basis of data collection and have made any necessary adjustments to ensure compatibility.

5.1.2 Methodological Problems Since each country has different financial systems, the following points must be considered when attempting to make precise comparisons: (1) Conventionally, financial resources for transportation improvements are classified within budget systems, such as “national expenditures” or “local expenditures.” However, such classifications do not identify the actual payer of the resources because national and local expenditures for transportation improvements often include both resources from general taxes paid by general taxpayers and resources from special taxes that place the burden on users. (2) The specified usage of special taxes on users differs in each country; such funds are either used for particular transportation modes or paid directly into the general funds. (3) The burden imposed on one set of users may subsidize another set; for example, in Germany, the petroleum tax on car users provides financial resources to improve public transportation. (4) Financial resources are sometimes derived directly from beneficiaries, as in the French transportation tax (VT) [Versement de Transport ]. Private investment may also be involved; some countries are trying to promote this mechanism. (5) Loans are often utilized as a financial resource. The actual contributors to such loans are those people burdened by repaying the loan; these are not always the same people who borrowed the funds. For example, the contributors to loan procured by the government will differ depending on whether it is repaid from general funds or with specific funds paid by users. All of these problems illustrate the inadequacy of conventional manners of comparison. It is necessary to develop a methodology that allows comparisons from a unified viewpoint, as we will discuss next.

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5.2 The Basic Concept of Contributor Classification As shown in Table 5.1, financial resources can be divided into two main types: public funds procured by national and local governments, and owner/operator funds procured directly by the owner/operator. Table 5.1: Classification of financial resources. Funds

Financial resources

Contributors

Public funds

General funds

●

●

Specific funds

●

●

●

Owner/operator funds

Loans

●

Inner funds

●

External funds

●

●

“National Taxpayers” and “Local Taxpayers” who pay taxes as general funds, whether or not they use transportation systems “Users” who pay taxes as general funds when they use transportation systems “National Taxpayers” and “Local Taxpayers” who pay taxes as specific funds whether or not they use transportation systems “Users” who pay taxes as specific funds when they use transportation systems “Indirect Beneficiaries” Payers of reimbursement funds may vary due to the method of reimbursement “Users”, because inner funds are the self funds of owner/ operators provided by fees and fares users bear “National Taxpayers” and “Local Taxpayers,” when subsidies from central and local governments and investments from governments or private enterprises “Future Users,” when loans are refunded in charges and fare income from users

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Public funds can be classified as general funds, specific funds, or loan. Owner/operator funds can be classified as inner and self-generated funds or as external funds, such as subsidies. Each class of financial resources can further be divided into subsets based on the actual contributors, as listed below and also shown in Figure 5.1. (1) National Taxpayers and Local Taxpayers. National Taxpayers shoulder the general funds of the national government via income and corporate taxes, etc. Local Taxpayers sustain the general funds of local governments via property, fixed asset, and other taxes. (2) Users. Users pay taxes such as fuel taxes or usage fees. Since the taxes levied on users are utilized as either general funds or specific funds for transportation improvements, users can be further classified as: (i) users taxed for general funds; (ii) users taxed for specific funds; and (iii) users burdened by usage fees. These subgroups are designated as Users/general taxes, Users/specific taxes, and Users/fees, as shown in Figure 5.1. (3) Indirect beneficiaries. Indirect beneficiaries pay a special burden, not for using the transportation facilities but for such external benefits as increased property values resulting from transportation improvements. (4) Users/future. Contributors to the loan should be classified as those who are responsible for repayment. Loan is sometimes repaid through general taxes and sometimes by

Public funds

Contributors Payers of National Taxes Payers of Local Taxes

General funds Specific funds

Owner/ Operator funds

Loans Inner funds (fees, fares) External funds

Loans

Users

2) Users/general taxes

Payers of National Taxes Payers of Local Taxes

3) National Taxpayers Local Taxpayers

Users

4) Users/specific taxes

Beneficiaries

5) Indirect beneficiaries

Users

6) Users/future

Users

7) Users/fees

Users

8) Users/future 9) Classified by financial resources of subsidies

Subsidies Private investment

Contributors' Shares 1) National Taxpayers Local Taxpayers

Beneficiaries

10) Indirect Beneficiaries

Figure 5.1: Classification of financial resources.

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funds collected from users. In the former case, the actual contributors are national or local taxpayers. In the latter case, the actual contributors are the users. The set of users contributing to repayment is not the present users, but future users; this is denoted as Users/future. The contributors of financial resources can be divided into the categories defined above. There are two taxpayer categories, national and local, three present user categories, general taxes, specific taxes and fees, indirect beneficiaries, and future users. An explanation of each category and examples of financial resources are shown in Table 5.2. Table 5.2: Contributors. Category National Taxpayers

Financial resource burden

Example of financial resources

Citizens widely bear Income tax, corporate whether or not they tax, inheritance tax, use the transportation consumption tax, systems liquor tax (Japan) Local Residents widely bear Prefectural residence Taxwhether or not they tax, business tax, payers use the transportation fixed assets tax systems (Japan) Users/ Transportation users Motor vehicle tax, light general bear as general funds motor vehicle tax taxes (Japan) Users/ Transportation users Petrolatum tax specific bear as specific funds (Germany), autotaxes mobile acquisition tax, gasoline tax (Japan) Users/fees Transportation users Toll road fees and railbear as fees and fares road fares Indirect Indirect beneficiaries Private investment, benebear to improve “Versement de ficiaries transportation Transport”(France) systems Users/ Users in later years Toll road fees and future bear as fees and fares railroad fares to refund loans

Classification Figure 5.1 (1), (3) National Taxpayers

(1), (3) Local Taxpayers

(2) Users/ general taxes (4) Users/specific taxes

(7) Users/fees (5), (10) Indirect beneficiaries (6), (8) Users/ future

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By separating the contributors in this way, all of the financial resources utilized to improve transportation systems can be classified, and numerical values can be calculated to enable comparisons among countries and transportation modes.

5.3 Determination of Contributors of Financial Resources In this section, the financial resources of each country are classified by contributor category. 5.3.1 Classification of Financial Resources in France(Table 5.3) (1) Roadways. Because there is no specific funding system, other than toll roads, all roadways are constructed using general funds. Such automobile-related taxes as fuel, registration, and automobile are utilized for roadway construction; however, these taxes are allocated to general funds and correspond to Users/general taxes. The remaining funds allocated for construction are the general funds collected by the central and local governments, and correspond to National Taxpayers and Local Taxpayers. In addition, financial resources utilized by mixed-economy companies to construct toll roads fall into the Users/fees and Users/future categories. (2) Railways. There are no taxes on railway users for construction. The transport tax (VT) is a local tax collected from enterprises that locate in urban areas, i.e., indirect beneficiaries. Other subsidies are provided from the general funds of the central and local governments and therefore correspond to National Taxpayers and Local Taxpayers. (3) Airports. Subsidies from the Private Sector Aviation Special Account are covered by taxes and fees collected from airlines and passengers. These funds are classified as Users/specific taxes and Users/fees, respectively. There are no definite financial resources allocated to airport construction by the central or local governments. 5.3.2 Classification of Financial Resources in Germany (Table 5.4) (1) Roadways. National Taxpayers contribute to the general funds of the federation, and local taxpayers contribute to the general funds of the state and local governments. A portion

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Table 5.3: Classification of financial resources by contributors (France).

National Taxpayers

Local Taxpayers

Users/general taxes

Users/specific taxes

Roadways

Railways

Airports

General funds of central government (excluding automobile user taxes.) General funds of local governments (excluding automobile user taxes.) The following taxes; registration, driver’s license, motor vehicle, axle, fuel, corporation vehicle special, load transportation No major funds

Subsidies from central government

No major funds

Subsidies from local governments

No major funds

No major funds

No major funds

Users/fees

Fee income of toll roads

Indirect beneficiaries Users/future

No major funds Loans of toll road owner/operators

No major funds

Taxes collected from airways and passengers Fare income of Airport rental railway owner/ fee income; operators fees collected from airlines and passengers Versement de No major Transport funds Loans of railway Loans of airowner/ port owner/ operators operators

of petroleum and automobile taxes specified for roadway construction corresponds to Users/specific taxes. A portion of these taxes allocated to general funds corresponds to Users/general taxes. The public bonds correspond to Users/future.

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Table 5.4: Classification of financial resources by contributors (Germany). Roadways

Railways

Airports

National Taxpayers

General funds of federal government (excluding automobile user taxes)

Subsidies from federal government (part of general funds)

(General funds of federal government)

Local Taxpayers

General funds in state and local governments (excluding motor vehicle relation taxes) Local bonds Petroleum tax (part of general funds) Motor vehicle tax (part of general funds) Petroleum tax (part of specific funds) Motor vehicle tax (part of specific funds)

Subsidies from federal government (part of general funds)

(General funds of state and local governments)

No major funds

No major funds

Subsidies from federal government (part of specific funds paid by road users) (Fare income of railway owner/ operators) No major funds

No major funds

Users/ general taxes Users/ specific taxes

Users/ fees

No major funds

Indirect beneficiaries Users/ future

No major funds

Public loans

Loans of railway owner/operators

Airport usage fee income No major funds

Loans of airport owner/ operators

(2) Railways. Both general funds and petroleum taxes are sources of subsidy from the federal government. The portion of petroleum tax corresponds to Users/specific taxes because it is allocated to specific funds for subsidizing public transportation.

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Loans correspond to Users/future for reimbursement in the future. Fare income corresponds to Users/fees as it is substantively allocated to railway improvement. (3) Airports. Financial resources for airport improvement from the general funds of federal and local governments are classified as National Taxpayers and Local Taxpayers. Airport usage fees correspond to Users/fees and loans incurred correspond to Users/future. 5.3.3 Classification of Financial Resources in Japan (Table 5.5) (1) Roadways. Automobile-related taxes, such as gasoline and petroleum, etc., provide specific funds for the central and local governments and correspond to Users/specific taxes. Other taxes, such as automobile and light automobile taxes, etc., are local taxes allocated to general funds and are therefore Users/general taxes. Although revenues from the automobile tonnage tax go into general funds, this corresponds to Users/specific taxes, because it is substantially used for roadway construction. “Treasury investment and loans” are utilized by the highway public corporations for improving expressways. These funds are treated as loans for repayment through fees charged to future users and thus are classified as Users/future. After privatization of the highway public corporations in 2005, new private companies also utilize loans as a financial resource. Subsidies provided from the general funds of central and local governments correspond to National Taxpayers and Local Taxpayers, respectively. Although subsidies provided from the general funds of the central government are very rare, they are included as a possible means of roadway finance. (2) Railways. There are no taxes on railway users for construction. The central government used part of the transfer revenue of the infrastructures of existing high-speed rail [Shinkansen] to establish the Railway Development Fund for railway construction. In 2003, the Japan Railway Construction, Transport and Technology Agency was established, unifying the Japan Railway Construction Public Corporation and the Corporation for Advanced Transport & Technology and reorganizing the Railway Development Fund. Subsidies are disbursed from this agency to construct new Shinkansens, new trunk lines, and urban railways. Because this fund is not collected as a tax, but is practically covered by a burden on the users of Japan Railways (JR), it corresponds to Users/fees.

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Table 5.5: Classification of financial resources by contributors (Japan). Roadways

Railways

Airports

National Taxpayers

General funds of central government (excluding automobile users taxes) Government bonds

Subsidies from central government

General funds of central government Subsidies by central government

Local Taxpayers

General funds of local governments (excluding automobile users taxes) Local bonds of general accounts

Subsidies from local governments Investments from local governments

General funds of local governments Subsidies from local government

Users/ general taxes

Motor vehicle tax Light motor vehicle tax

No major funds

Aircraft fuel tax

Users/ specific taxes

The following taxes; gasoline, gas oil delivery, petroleum gas, petroleum gas transferred, motor vehicle weight, motor vehicle weight transferred, local road, and automobile acquisition

No major funds

No major funds

Users/fees

Fee income of toll roads

Specific funds in central government (created by selling Shinkansens) Fare income of railway owner/ operators Capital increase of railway owners

Indirect beneficiaries Users/ future

No major funds

No major funds

Private investments

Loans of toll road owner/operators (including treasury investment and loans)

Loans of railway owner/ operators

Loans of airport owner/operators (including treasury investment and loans)

Airport rental fee income

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Subsidies provided by the central and local governments are derived from general funds and therefore correspond to National Taxpayers and Local Taxpayers. Funds procured privately by railway companies are classified as Users/fees and Users/future. (3) Airports. Aircraft fuel tax revenues go into a specific fund of the central government, and aircraft fuel transferred tax revenues constitute a specific fund of the local governments, thereby corresponding to Users/specific taxes, since the burden is placed on users. Other financial resources to improve airports include investment by private companies that benefit from the use of the airports, which are classified as Indirect Beneficiaries. “Treasury investments and loans” utilized as financial resources from special accounts for airport improvement are classified as Users/future, since repayment of the loan will be covered by fees collected from future users. Since subsidies from general funds are provided by the central and local governments, they therefore correspond to National Taxpayers and Local Taxpayers.

5.3.4 Classification of Financial Resources in South Korea (Table 5.6) (1) Roadways. National expenditures to improve transportation facilities are covered by a special transportation account. A transportation tax (gasoline tax), which is a burden on car users, goes into the special account for transportation, corresponding to Users/specific taxes. General funds also go into this special account, which corresponds to National Taxpayers. (2) Railways. National expenditures to improve railways are covered by the special account for transportation. This fund corresponds to Users/specific taxes. Financial resources for the Korea National Railroad are provided by a national loan, which corresponds to Users/future. The Seoul Metropolitan Subway Corporation issues loans that also correspond to Users/future. (3) Airports. For airport improvement, national expenditures are covered by the special account for transportation. This corresponds to Users/specific taxes. The financial resources of the Incheon International Airport are provided by loans, and this corresponds to Users/future.

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Table 5.6: Classification of financial resources by contributors (South Korea).

National Taxpayers

Local Taxpayers

Users/ general taxes Users/ specific taxes Users/ fees

Roadways

Railways

Airports

General funds of central government (excluding automobile users taxes) Government bonds General funds of local governments (excluding automobile user taxes) Local bonds Drivers license tax Motor vehicle tax

General funds of central government Subsidies from central government

General funds of central government

General funds of local governments Subsidies from local governments

No major funds

No major funds

No major funds

Tranportation tax Special consumption tax of vehicle Fee income of toll roads

Tranportation tax

Tranportation tax

Fare income of railway owner/ operators No major funds

Airport rental fee income

Loans of railway owner/operators

Loans of airport owner/operators

Indirect No major benefunds ficiaries Users/ Loans of toll road future owner/operators

No major funds

5.3.5 Classification of Financial Resources in the United Kingdom (Table 5.7) (1) Roadways. Because no specific funds have been introduced for the construction of roadways, all roadways except for toll roads are constructed with general funds. Automobile-related taxes, including fuel and automobile taxes correspond to Users/general taxes, and other general funds of the central and local governments

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Table 5.7: Classification of financial resources by contributors (United Kingdom).

National Taxpayers

Roadways

Railways

Airports

General funds of central government (excluding automobile user taxes)

General funds of central government Subsidies from central

General funds of central government Subsidies from central government

government Local Taxpayers

Users/ general taxes

Users/ specific taxes Users/fees Indirect beneficiaries Users/future

General funds of local governments (excluding automobile user taxes) Grant from central government Local bonds Motor vehicle special tax (motorcar tax) Motor vehicle tax Fuel tax No major funds

Fee income of toll roads No major funds

No major funds

General funds of local governments

General funds of local governments Subsidies from local governments

No major funds

Aircraft fuel tax

No major funds

No major funds

OSC

OSC

No major funds

No major funds

Loans of railway owner/operators

Loans of airport owner/operator

correspond to National Taxpayers and Local Taxpayers. The financial resources for toll roads correspond to Users/fees and Users/future. (2) Railways. There are no taxes on railway users for construction. Subsidies to the Transport for London (TfL) and the train operators for former BR lines correspond to

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Table 5.8: Classification of financial resources by contributors (United States). Roadways

Railways

Airports

National Taxpayers

General funds of federal government (excluding automobile user taxes) Subsidies from federal government

General funds of federal government Subsidies from federal government

No major funds

Local Taxpayers

General funds of state and local governments (excluding automobile user taxes) Local bonds No major funds

General funds of state and local governments Subsidies from state and local governments No major funds

General funds of state and local governments General fund bonds

Motor vehicle fuel tax Trucks and trailers tax Fees from toll roads

Highway Trust Fund paid by road users

Users/fees

Fees from toll roads

Fare income of railway owner/ operators

Indirect beneficiaries Users/ future

Contribution from beneficiaries

Private investment

Airport and Airway Trust Fund (ticketing, leaving, aerial freight, and aerial fuel taxes) Airport rental fee income; Airport operation income (landing fees, ticketing, aviation freight, departure and aviation fuel taxes) No major funds

Loans of toll road owner/operators

Loans of railway owner/operators

Users/ general taxes Users/ specific taxes

No major funds

Loans of airport owner/operators (revenue bonds)

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National Taxpayers because they are subsidized by the general funds of the central government. Incidentally, public service obligation (PSO) grants were abolished in 1996. The fixed asset tax of local governments is classified as Local Taxpayers. Other financial resources are Users/fees and Users/future. (3) Airports. The aircraft fuel tax, which is allocated to the general funds of the central government, is a tax burden on users and corresponds to Users/general taxes. Other general funds of the central and local governments correspond to National Taxpayers and Local Taxpayers, and airport usage fees correspond to Users/fees. 5.3.6 Classification of Financial Resources in the United States (Table 5.8) (1) Roadways. Automobile users are burdened by such taxes as road use and tires that go into specific funds of the federal government as well as registration fees, etc., from which funds are allocated to specific funds of the state and local governments. Therefore, these financial resources are classified as Users/specific taxes. Some individuals are burdened by Tax Increment Financing (TIF), Special Assessment Districts (SAD), and Impact Fees (IF). These funds correspond to Indirect Beneficiaries. (2) Railways. Since the establishment of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA, ’91), funds from the Highway Trust Fund have been available for urban railway construction, covered by gasoline taxes and so on. This financial resource corresponds to Users/specific taxes. Fare income is substantively allocated for railway construction and is therefore classified as Users/fees. Subsidies from federal and local governments provided from general funds correspond to National Taxpayers and Local Taxpayers, respectively. (3) Airports. The federal government subsidizes airport construction with funds from the Airport and Airway Trust Fund (AATF). This fund is created by interest income from deposits and through ticketing or departure taxes classified as Users/specific taxes. Airport usage fees correspond to Users/fees. Revenue bonds are also used by local governments, but since reimbursement comes from airport income, this corresponds to Users/future.

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Chapter 6

Calculation of Investment Amounts 6.1 Methods of Calculation In this chapter we calculate the amount of investment for improvements of each mode of transport in our sample of six countries. Special attention is given to: (1) unification of the data and (2) confirmation of data reliability by utilizing more than one set of statistics. The calculation procedure includes: (1) calculating the total amount of annual actual investment, (2) dividing this amount into construction, repairs, and maintenance, and (3) analyzing the composition of financial resources, which denotes the share provided by each category of payer: national expenditures, local expenditures, owner/operator funds, and loans. The shares of actual contributors will be calculated and analyzed in Chapter 7, based on the result of this chapter. Transport authorities included in the calculation are listed in Table 6.1.

6.2 Roadways 6.2.1 Roadway Investment in France Statistical Data Sources World Road Statistics (International Road Federation) Les comptes des transports en 2001 (Ministère de l’Equipement, des Transports et du Logement) Evolution du financement des investissenebts publics en transports (Conseil National des Transports) Annuaire Statistique de la France (Ministére de l’Economie). (1) Total investment. Central and local governments are the authorities for the improvement of roadways, and mixed-economy transferred highway companies (SEMCAs) [Sociétés d’Economie Mixte Concessionnaires d’Autoroutes] are the authorities for toll roads. 101

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Table 6.1: Authorities for improvements of transportation systems. Roadways

Railways

Airports

France

Central government Local governments Mixed-economy companies (SEMCA) Concessionaire companiesa

French National Railway (SNCF) French Railway Network (RFF) Paris Transport Company (RATP) Local governmentsa Private companiesa

Central governmenta Local governmentsa Chamber of commercea Paris airport public corporation (ADP) Private companiesa

Germany

Federal government State governments Local governments

German Railway Corporation (DBAG) Private companiesa State and local government cf. U-Bahna

Federal government (radio and weather facilities, and aerial control) State and local governments Corporations (international airports) Incorporated companies (München International Airport)

Japan

Central government Local governments Public corporations (Japan Highway, Metropolitan Expressway, Hanshin Expressway and Honshu-Shikoku bridge Authority) Local Road Public Corporations

Private companies Japan Railways (JRs) Japan Railway Construction, Transport and Technology Agency (JRTT) Honshu-Shikoku Bridge Authority Local governments (public subways) Teito Rapid Transit Authority The third sector companies

Central government Local governments New Tokyo international airport public corporation Kansai international airport company Central Japan international airport company

South Korea

Central government Local governments Korea Highway Corporation

Korean National Railroad Korean High Speed Rail Construction Authority Seoul Metropolitan Subway Corporation Seoul Metropolitan Rapid Transit Corporation Busan Public Transportationa Incheon Rapid Transit Corporationa Daegu Metropolitan Subway Corporationa

Incheon international airport corporation Korea airport corporation

U.K.

Central government Local governments

Railtrack (Network rail) and TOC (Train operating companies) London transport Local governmentsa Private companiesa

Civil aviation authoritya Local governmentsa British Airport Authority Public limited companies Private companies

U.S.A.

Federal government State and local governments Public corporations

National Railroad Passenger Corporation (AMTRK) Class I Railroad Transit Public Corporation (LAMTA, WMATA, MAT) State and local governments Private companiesa

Federal government State and local governments Port/airport authoritiesa Private companiesa

a

Authorities are excluded in the detailed calculation of this book because of data limitation. Authorities are listed by the names at the time of years calculated.

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For the central and local governments, data sources are included in the “Les comptes des transports en 2001.” For SEMCAs, we used “Evolution du financement des investissenebts publics en transports.” The total investment amount in 2000 was €17.94 billion, which includes maintenance/repairs. The maintenance/repair amount for the central government was 36.3% according to the budget summary provided by the National Diet Library. (2) Composition of financial resources. National and local expenditures were €3.05 and €13.21 billion, respectively, as cited in “Les comptes des transports en 2001.” Owner/Operator funds were €214 million and SEMCA loans provided €1.47 billion, as cited in “Evolution du financement des investissements publics en transports.” 6.2.2 Roadway Investment in Germany Statistical Data sources World Road Statistics (International Road Federation) Verkehr in Zahlen (Der Bundesminister für Verkehr) Straßenbaubericht (Der Bundesminister für Verkehr) Statistisches Jahrbuch (Statistishes Budesamt). (1) Total investment. Federal, state, and local governments are responsible for improving roadways. The data sources are included in “Verkehr in Zahlen” and “Straßenbaubericht.” Of the two, “Verkehr in Zahlen” gives the most details. For the total amount invested, “Net Road Expenses of the Federation, State, and Local Governments [Nettoausgaben des Bundes, der Länder und der Gemeinden für das Straßenwesen Insgesamt]” from “Verkehr in Zahlen” provides the most accurate value: €16.78 billion in 2000. The content of the total amount invested in roadway improvements by category is: Bundesautobahnen (autobahn) €3.27 billion; federal and state roads [Bundesundlandstraßen] €3.95 billion; district roads [Kreisstrassen] €953 million; town and village roads [Gemeindestrassen] €7.49 billion; and other management operations [Verwaltung und Sonstiges] €1.12 billion. Maintenance/repairs are also included in these figures. The percentage of maintenance/repair expense for federal long-range roads was 15.7%. (2) Composition of financial resources. National expenditures are €5.07 billion, as cited in “Transportation Expense of the Federal Government, Federal Long-Range Roads [Verkehrsausgaven

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Bundesfernstraßen]” in “Verkehr in Zahlen.” This value is in approximate agreement with “Straßenbaubericht.” Since there are no financial resources classified as owner/operator funds in the German roadway system, the remaining amount is local expenditures. 6.2.3 Roadway Investment in Japan Statistical Data Sources Road Statistics Yearbook (National Road Users Conference) Japan Highway Public Corporation Yearbook (Japan Highway Public Corporation) Metropolitan Expressway Public Corporation Yearbook (Metropolitan Expressway Public Corporation) Hanshin Expressway Public Corporation Yearbook (Hanshin Expressway Public Corporation) Honshu-Shikoku Bridge Authority Data (Honshu-Shikoku Bridge Authority) Reference Calculation Data for Local Taxes (Ministry of Home Affairs) Financial Statistics (Ministry of Finance). Roadways are improved by central and local governments as well as by highway public corporations, urban expressway corporations, and local road public corporations. Central and local governments improve general roads without collecting any user fees. Toll roads are improved by the public corporations, urban expressway public corporations, local road public corporations, or local governments. (1) Total investment 1) General roadway improvements: The most detailed data for the amount of investment in roadway improvements is in the “Road Statistic Yearbook,” published annually by the National Road Users Conference, as well as the data provided by the highway public corporations. Investment amounts are calculated utilizing the data mentioned in the “Road Statistic Yearbook”, which was \10.5 trillion in 2000. 2) Toll road improvements by urban expressway public corporations: The investment amount for toll road improvements by urban expressway public corporations is provided in the “Road Statistic Yearbook.” The items listed are classified as construction and maintenance/repair expenses, whose sums are totaled.

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3) Toll road improvements by local road public corporations and local governments: The investment amounts for toll road improvements by local road public corporations and local governments are provided in the “Road Statistic Yearbook,” and they are calculated as mentioned in (2). The total investment amount is ¥316 billion, derived by adding (2) and (3). 4) Toll road improvements by the four highway public corporations: Investment amounts for toll road construction by the four highway public corporations are mentioned in yearbook published by each corporation. The total investment amount is ¥2.2 trillion. Investment amounts are divided utilizing an appropriate ratio of construction to maintenance, and maintenance/repair expenses were also calculated. The resulting share of investment spent on construction is 78.9% and 22.1% on maintenance/repair. (2) Composition of financial resources 1) General road improvements: National and local expenditures are utilized for general road improvements. The figures listed under central government in the “Road Statistic Yearbook” are national expenditures, and those listed under prefectures, towns, and villages are local expenditures. 2) Toll road improvements by urban expressway public corporations: The financial resources available to public urban expressway public corporations include local expenditures, owner/operator funds, and loans. Investment from prefectures and cities in the “Road Statistic Yearbook” becomes local expenditures, and maintenance/repair expenses become owner/operator funds, since they are covered by revenues from collected fees. The remaining amount is in the form of loans. 3) Toll road improvements by local road public corporations and local governments: Local expenditures and loans are utilized for toll road improvements by local road public corporations and local governments. National expenditures are not utilized. The amount of local expenditures and loans can be calculated from the “Road Statistic Yearbook.” 4) Toll road improvements by four highway public corporations: The four highway public corporations utilize investments from the central and local governments. Owner/operator funds come from business income and loans,

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such as government loans and guaranteed government bonds. The total amounts are taken from the yearbooks of each public corporation. But since expenses that are not directly related to road construction, such as operating expenses or nonbusiness expenses, are also included, such expenses are subtracted. 6.2.4 Roadway Investment in South Korea Statistical Data sources World Road Statistics (International Road Federation) Data from Ministry of Construction and Transportation Data from Korea Highway Corporation. (1) Total investment. The road improvement authorities are the central and local governments and the Korea Highway Corporation that improves toll roads. Transportation improvements by the central government are funded by an account of a special transportation fund and are allotted not only to roadways but also to railways, airports, and port facilities. Since most of the data concerning roadway investment are unpublished, the total investment amount is calculated by utilizing data from the ministry of construction and transportation. Construction and maintenance expenses of expressways and national and local roads are calculated from the data. The total investment amount was 18.36 trillion won in 2000, which covers most of the roadway improvement projects undertaken in South Korea 1) Expressways: Expenses for new construction and expressway extension projects by the Korea Highway Corporation are calculated as construction expenses. Maintenance/repair expenses are calculated from annual statistic reports from the ministry of construction and transportation. 2) National roads: Construction and maintenance/repair expenses are calculated by utilizing data from the ministry of construction and transportation. 3) Local roads: Both construction and maintenance/repair expenses are calculated utilizing the local government section of data from the ministry of construction and transportation. (2) Composition of financial resources. The financial resources for transportation investment are unified in an account of a special transportation fund from which national expenditures were 7.48

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trillion won. Local expenditures were 8.31 trillion won, as listed in the local government section of the data from the ministry of construction and transportation. Loans are used only for expressway improvements by the Korea Highway Corporation, and the amount, calculated from corporation data, was 1.82 trillion won. Owner/operator funds of the Korea Highway Corporation were calculated at 742 billion won by subtracting national expenditures, local expenditures, and loans from the total investment amount. 6.2.5 Roadway Investment in the United Kingdom Statistical Data Sources World Road Statistics (International Road Federation) Transport Statistics Great Britain (Department of Transport) Annual Abstract of Statistics (HMSO). Central and local governments are the improvement authorities for roadways. Data can be found in “World Road Statistics” (International Road Federation), “Transport Statistics Great Britain” (Department of Transport), and the “Annual Abstract of Statistics” (HMSO). We used “Transport Statistics Great Britain” and “World Road Statistics.” In 2000, national expenditures of the central government were £1.63 billion, and expenditures of local governments and municipalities were £2.81 billion. Investments were divided between new construction (48%) and maintenance/repair expense (52%). 6.2.6 Roadway Investment in the United States Statistical Data Sources Highway Statistics (Federal Highway Administration) World Road Statistics (International Road Federation) Statistical Abstract of the United States (Department of Commerce, Bureau of the Census) (1) Total investment. The authorities for roadway improvement are the federal, state, and local governments as well as public corporations that improve toll roads. The investment amounts for roadway improvement can be found in the “World Road Statistics” (International Road Federation) and “Highway Statistics” (Federal Highway Administration). The amount invested in roadways was listed in “Highway Statistics” as $113 billion in 2000.

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Financial resources are categorized as national expenditures, local expenditures, owner/operator funds, and loans. Using the values of revenue in “Funding for Highways,” the composition ratios can be calculated. The composition of the financial resources are calculated by multiplying the composition ratios by the investment amounts. The results include 23.5% for national expenditures, 63.5% for local expenditures, 4.4% for owner/operator funds, and 8.6% for loans. The amounts invested in roadway improvements and the composition of financial resources are shown in Table 6.2(1), and in Table 6.2(2) they are also shown as a percentage of GDP.

6.3 Railways Since many authorities in every country improve railways, it is difficult to calculate the amount of investment and the composition of financial resources of all of the authorities because the statistical data fails to cover all of them. However, in this section, an attempt is made to cover the large-scale authorities: France, the French National Railway (SNCF) [Socoété Nationale des Chemins de fer Français], the French Railway Network (RFF) [Réseau Ferré de France], and the Paris Transport Corporation (RATP) [Régie Autonome des Transport Parisiens]; in Germany, the German Railway Corporation (DBAG) [Deutsche Bahn Aktien Gesellshaft]; in Japan all railway authorities; in South Korea, the Korean National Railroad, the Korean High Speed Rail Construction Authority, and subways in Seoul (Seoul Metropolitan Subway Corporation, Seoul Metropolitan Rapid Transit Corporation); in the United Kingdom, Railtrack (Network Rail) and Train Operating Companies (TOC) for the former British Railways, and London Transport (LT); and in the United States, Class I Railroads, Amtrak (National Railroad Passenger Corporation, the sole intercity passenger railway in the United States) and public passenger transportation (Transit) managed by local governments. The amount of investment and the composition of financial resources for railway improvement are calculated utilizing methods explained below. (1) Methods for calculating total investment. Since the items included under investment vary from source to source, an attempt has been made to unify the definition of total investment: capital investment consisting of capital expenditures and maintenance/repair expenses. Rolling stock and operational expenses are excluded. Maintenance/repair, which are generally appropriated to operating expenses in profit and loss statements, are included because they represent substantive investments in railway infrastructure.

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Table 6.2(1): Investment amount and financial resources for roadway improvements.

France Central and local governments Toll roads Total Germany Autobahn Federal and state roads District roads Town, and village roads Others Total Japan General roads Local road public corporations Highway public corporations Total South Korea National and local roads Highway

Investment amount

National expenditures

16,171

3,008

Local expenditures

Owner/ operator funds

Loans

New construction (%)

Maintenance and repairs (%)

63.7

36.3

84.3

15.7

78.8

21.2

13,164

1,771

41

43

214

1,472

17,942

3,049

13,207

214

1,472

3,271 3,949

2,995 1,736

276 2,213

953 7,487

339

9,217

16,776

5,070

11,706

10,463 316

3,950 0

6,513 80

0 10

0 226

2,185

365

48

708

1,064

12,964

4,315

6,641

718

1,290

13,604

5,290

8,314

0

0

1,116

4,759

2,191

0

1,826

742

Total

18,363

7,481

8,314

1,826

742

65.1

34.9

U.K. Total

4,442

1,631

2,811

0

0

48.0

52.0

56,864

13,366

36,111

2,486

4,901

34,597

8,132

21,971

1,512

2,982

21,550

5,065

13,685

942

1,857

113,011

26,563

71,767

4,941

9,741

72.9

27.1

U.S. State-administered Highways Locally administered roads Others Total

Unit and year

France Germany Japan Korea U.K. U.S.A.

Million € Million € Billion Yen Billion Won Million £ Million US$

2000 2000 2000 2000 2000 2000

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Table 6.2(2): Investment amount and financial resources for roadway improvements (GDP ratio). Investment National Local Owner/ Loans New Maintenance amount (%) expenditures expenditures operator (%) construction and repairs (%) (%) funds (%) (%) (%) France Germany Japan Korea U.K. U.S.A.

1.265 0.828 2.525 3.518 0.470 1.150

0.215 0.250 0.840 1.433 0.173 0.270

0.931 0.578 1.294 1.593 0.298 0.730

0.015 0.000 0.140 0.350 0.000 0.050

0.104 0.000 0.251 0.142 0.000 0.099

0.806 0.698 1.990 2.290 0.226 0.838

0.459 0.130 0.535 1.228 0.244 0.312

(2) Methods for calculating financial resource composition. In most cases, the composition of financial resources for railway investments are not shown separately in the data but are combined with operation expenses, so the compositions were calculated as follows: The total revenue of railway constructors is broken down into six categories covering both investment and operating expenses: (i) capital grants from central governments, (ii) capital grants from local governments, (iii) operating grants from central governments, (iv) operating grants from local governments, (v) operation income, and (vi) loans. We calculate the composition of financial resources for railways based on these six categories. Incidentally, when rolling stock expenditures are included in the investment amounts, they are deducted after calculating the composition of the investment amount, which includes rolling stock expenditures. 6.3.1 Railway Investment in France Statistical Data Sources Annual Report (SNCF) Annual Report (RFF) Rapport annuel (RATP). (1) Total investment. Investment amount and financial resource composition were calculated for the SNCF, the RFF and the RATP. 1) French National Railway (SNCF) and French Railway Network (RFF): Detailed data for the investment amounts of SNCF and RFF are provided in the “Annual Report” published by SNCF and in the “Annual Report” published by RFF.

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111

Investment amounts in 2000, excluding rolling stock expenditures, were € 3.1 billion and € 1.5 billion, respectively. 2) Paris Transport Corporation (RATP): Detailed data on RATP’s investment is given in “Rapport annuel” (RATP) but includes businesses other than railways (e.g., busing), which were subtracted from the total. The maintenance/repair total can be found in the “Operating Improvement in the Capital Investment Accounts” section of the report. (2) Composition of financial resources 1) French National Railway (SNCF) and French Railway Network (RFF): Detailed information on the composition of the financial resources of SNCF and RFF is provided in their respective annual reports. First, the ratios of each financial resource item for investment, including rolling stock expenditures, are calculated, and then the values for rolling stock expenditures are removed. 2) Paris Transport Corporation (RATP): The composition of RATP’s financial resources can be calculated from the figures in the “Capital Investment Account” section in its “Rapport annuel” from which operating expenses were excluded. 6.3.2 Railway Investment in Germany Statistical Data Sources Geschäftsbericht (DBAG) Verkehr in Zahlen (Der Bundesminister für Verkehr). (1) Total investment. The DBAG investment amounts can be found in the “Geschäftsbericht” (DBAG) and in“Verkehr in Zahlen” (Der Bundesminister für Verkehr). Of the two, “Geschäftsbericht” gives the most detail. In 2000, the investment amount calculated from the “Geschäftsbericht” was € 7.13 billion, excluding rolling stock expenditures. (2) Composition of financial resources. The composition of financial resources is mentioned in detail in the “Geschäftsbericht.” 6.3.3 Railway Investment in Japan Statistical Data Sources Investigation Report of Capital Investment Trends by Enterprises Related to Transportation (Ministry of Transport)

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Subway (Separate volume, Japan Subway Society) Financial Tables (Japan Railway Construction Public Corporation) Data from the Honshu-Shikoku Bridge Authority Comprehensive Bibliography of Subsidies (Financial Investigation Meeting) Japan National Railways Inspection Report (Japan National Railways) Transport Almanac (Transport Newspaper). Investment amounts and financial resource composition were calculated for each of the following authorities: (i) private railway companies including Japan Railways (JR), (ii) Teito Rapid Transit Authority and local governments (public subways), (iii) Japan Railway Construction Public Corporation, and (iv) Honshu–Shikoku Bridge Authority. Also included is the calculation for the former Japan National Railway (JNR). (1) Total investment 1) Private railway companies: Investment details of private railway companies are provided in the “Investigation Report of Capital Investment Trends by Enterprises Related to Transportation.” Here, the capital investment amounts are listed as expense- and construction-based. Investment was calculated using the expense-based values. However, the items listed only as construction-based were converted to expensebased. 2) Teito Rapid Transit Authority and local governments (public subways): Investment amounts were provided for each improvement authority in a separate volume of “Subway”, which provides data from the Teito Rapid Transit Authority and public subways. Since the investment amounts for rolling stock were included in these values, they were subtracted from the total. 3) Japan Railway Construction Public Corporation: Investment amount details are provided in each annual edition of the “Japan Railway Construction Public Corporation Financial Tables.” 4) Honshu-Shikoku Bridge Authority: Investment amount details are provided in “Honshu-Shikoku Bridge Authority Data.” The construction and investigation expenditures listed in this data were utilized as investment amounts. Since the Japan Railway Construction Public Corporation and the HonshuShikoku Bridge Authority do not manage railway operation, there are no rolling stock expenditures.

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113

(2) Composition of financial resources l) Private railway companies: Information regarding the procurement of capital investment funds for private railway companies is provided in each edition of the “Investigation Report for Capital Investment Trends by Enterprises Related to Transportation.” However, the income gathered from fees charged by companies and subsidies from central and local governments are lumped together and appropriated as inner funds. Therefore, the values of subsidies to private railway companies provided in the “Comprehensive Bibliography of Subsidies” are also utilized. 2) Teito Rapid Transit Authority (Tokyo Metro) and local governments (public subways): The information regarding financial resources is provided in separate volumes of “Subway” for each improvement authority of the Teito Rapid Transit Authority and public subways. 3) Japan Railways Construction Public Corporation: The information is provided in the “Japan Railway Construction Corporation Financial Tables.” 4) Honshu-Shikoku Bridge Authority: The information is provided in the “Honshu-Shikoku Bridge Authority Data.” There are no financial resources from local governments. (3) Former Japan National Railway (JNR). Detailed information on investment and financial resource composition for the Japan National Railway, the former national railway, are provided in the “Japan National Railways Inspection Report” and the “Transport Almanac.” Subsidies from local governments were not granted to JNR, and there were no capital or operating grants from local governments. 6.3.4 Railway Investment in South Korea Statistical Data Sources Data from Ministry of Construction and Transportation Data from Korean National Railroad (1) Total investment. Investment amounts and composition of the financial resources were calculated for the Korean National Railroad, the Korean High Speed Rail Construction Authority, the Seoul Metropolitan Subway Corporation, and the Seoul Metropolitan Rapid Transit Corporation.

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National government investment is covered by a special transportation fund, which is used not only for railways but also for roadways, airports, and port facilities. As most of the data concerning railway investment is unpublished, the total investment amount is calculated utilizing data from the ministry of construction and transportation and the Korean National Railroad. In 2000, the total investment amount of the national railroad and the Seoul Metropolitan Subway was 6.06 trillion won. (2) Composition of financial resources. Composition of financial resources is also calculated by utilizing data from the ministry of construction and transportation and the Korean National Railroad. Owner/operator funds were calculated by subtracting national expenditures, local expenditures, and loan from the total investment amount. 6.3.5 Railway Investment in the United Kingdom Statistical Data Sources Transport Statistics Great Britain (Department for Transport) Rail Industry Monitor (TAS) Annual Report & Accounts (Railtrack (Network Rail)) London Transport Annual Report (London Transport) Annual Report and Accounts (British Railways Board). (1) Total investment. Investment amounts and financial resource composition were calculated for Railtrack (Network Rail) and the TOC for the former British railways and the LT. 1) British Railways Board (former BR): The BR data are given in “Great Britain Transport Statistics” published by the Department for Transport. The amount of investment listed in the “Great Britain Transport Statistics” as national rail was £2.40 billion in 2000. 2) London Transport (LT): The LT investment was calculated using “Great Britain Transport Statistics” and “London Transport Annual Report.” The total investment amount was £438 million in 2000. (2) Composition of financial resources 1) British Railways Board (former BR): The composition of financial resources was calculated using the data of the “Annual Report & Accounts (Railtrack),” the “Annual Report and Accounts (British Railroads Board),” and the “Rail Industry Monitor (TAS).”Incidentally,

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115

since there are no capital and operating grants from local governments in the United Kingdom system, zero is appropriated to the corresponding columns. 2) London Transport (LT): The composition of financial resources is calculated by subtracting rolling stock expenditures after calculating the ratio of financial resources to investment. Detailed data are provided in the LT Annual Report. 6.3.6 Railway Investment in the United States Statistical Data Sources Statistical Abstract of the United States (Department of Commerce, Bureau of Census) Railroads Facts (Association of American Railroads) Annual Report (National Railroad Passenger Corporation) National Transit Database 2000 Data Tables (U.S. Department of Transportation). (1) Total investment. Investment amounts and financial resource composition were calculated for Class I railroads, Amtrak, and public transportation (transit). 1) Class I Railroads and Amtrak: The data for investment amount in Class I Railroads are provided in “Statistical Abstract of the United States” and “Railroad Facts.” Amtrak data are provided in “Railroad Facts” and the “Annual Report” of the National Railroad Passenger Corporation (Amtrak). Investment amounts in 2000 were $7.9 billion for Class I Railroads and $1.0 billion of Amtrak. 2) Public transportation (transit): The data source are “National Transit Database 2000 Data Tables,” published by the U.S. Department of Transportation, and the relevant categories include automated guideways, cable cars, commuter rail, heavy rail, light rail, and monorail. The amount of investment in 2000 was $6.4 billion. (2) Composition of financial resources 1) Class I Railroads and Amtrak: For Class I railroads, the data for composition of financial resources were provided in “RAILROADS FACTS.” Since there is no clear mention of grants from the federal and local governments, “-” is placed in the corresponding columns. For Amtrak, government grants listed in “Amtrak Reform and Accountability Act of 1997” are regarded as National Expenditures, and the remaining amount is owner/operator funds.

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2) Public transportation (transit): The composition of financial resources was calculated from “Data Tables of the National Transit Database Section,” which in turn were used to calculate investment amounts. The amounts invested in railway improvements and the composition of financial resources are shown in Table 6.3(1), and they are also shown in Table 6.3(2) as a percentage of GDP.

6.4 Airports Scant comprehensive data on investment are available because of a plethora of improvement authorities and constructors (central government, local government, airport authorities, private companies, etc.) as well as little participation from central governments. As most investment occurs at major airports, such data were used for calculation. 6.4.1 Airport Investment in France Statistical Data Sources Les comptes des transports (Ministère de l’Equipement, des Transports et du Logement) RAPPORT ANNUEL (Aéroports de Paris). Investment amount data for the major airports in France are provided in “Les comptes des transports” published by the “Ministère de l’Equipement, des Transports et du Logement.” For the Paris Airport Public Corporation (ADP) [Aéroports de Paris], detailed data are provided in “Annual Report [RAPPORT ANNUEL]” published by ADP. The investment amounts for ADP and the composition of financial resources were calculated from this source. 6.4.2 Airport Investment in Germany Statistical Data Sources Verkehr in Zahlen (Der Bundesminister für Verkehr) Digest of Statistics Series, Airports, and route facilities (ICAO) Annual Report (FMG). For airport improvements in Germany, the data for investment amount and financial resource composition were provided in “Verkehr in Zahlen” and “Digest of

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117

Table 6.3(1): Investment amount and financial resources for roadway improvements. Investment National Local Owner/ Loans New Maintenance amount expendi- expendi- operator construction and repairs tures tures funds (%) (%) France SNCF and RFF RATP

4,593 348

1,217 3

303 28

3,073 163

0 155

36.49 69.68

63.51 30.32

Total

4,941

1,221

330

3,236

155

38.82

61.18

Germany DBAG

7,136

2,914

0

3,959

263

66.24

33.76

841 545 482

7 124 201

4 139 87

555 132 84

274 150 110

80.89 67.95 98.46

19.11 32.05 1.54

1

0

0

1

0

0.00

100.00

Total Japan Railways

1,867 788

332 176

230 89

772 309

535 214

81.62

18.38

South Korea Korean national railroad

4,137

1,670

0

2,267

200

37.01

62.99

Total

6,059

2,942

76

2,841

200

2,404

411

0

1,656

337

438

125

0

312

0

62.50

37.50

2,842

536

0

1,968

337

7,920

0

0

7,920

0

57.44

42.56

1,009 6,395

1,009 2,439

0 1,940

0 2,016

0 0

85.30 74.88

14.70 25.12

15,325

3,449

1,940

9,936

0

66.55

33.45

Japan Private railways Public subways Japan railway construction corporation Honshu-Shikoku bridge authority

U.K. Former British Rail London transport Total U.S. Class I Railroads Amtrak Transit Total

Unit and year France Germany Japan Korea U.K. U.S.A.

Million € Million € Billion Yen Billion Won Million £ Million US$

2000 2000 2000 2000 2000 2000

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Table 6.3(2): Investment amount and financial resources for railway improvements (GDP ratio). Investment National Local Owner/ Loans New Maintenance amount expenditures expenditures operator (%) construction and repairs (%) (%) (%) funds (%) (%) (%) France Germanya Japan Korea U.K. U.S.A.

0.348 0.352 0.364 1.161 0.301 0.156

0.086 0.144 0.065 0.564 0.057 0.035

0.023 0.000 0.045 0.015 0.000 0.020

0.228 0.195 0.150 0.544 0.208 0.101

0.011 0.013 0.104 0.038 0.036 0.000

0.135 0.233 0.297

0.213 0.119 0.067

0.104

0.052

a

Germany: Values for DBAG.

Statistics Series, Airports and route facilities” (International Civil Aviation Organization, ICAO). Detailed data for investment and financial resources for Munich International Airport were provided in the “Annual Report” published by Munich Airport Company (FMG) [Flughafen München GmbH]. Investment amounts and composition of financial resources for airport improvements in Germany and for Munich International Airport were calculated using data from the above sources. 6.4.3 Airport Investment in Japan Statistical Data Sources Seeing Aviation by the Figures (Aerial Promotion Fund) Data of the New Tokyo International Airport Authority Airport Handbook (Kansai Airport Investigation Meeting) Financial Statistics (Ministry of Finance) Annual Statistics Report on Local Government Finance (Local Government Financial Society). (1) Total investment. Japan has a seven-year plan (1996–2002) for airport improvements that includes airport improvement expenses but excludes maintenance and operating expenses. Investments by the New Tokyo International Airport Authority and the Kansai International Airport Corporation are only partly included in the sevenyear plan. Therefore, investment amounts and financial resource composition are broken up into five categories and then calculated: (1) Improvements covered by the seven-year plan, (2) New Tokyo International Airport Authority, (3) Kansai

Calculation of Investment Amounts

119

International Airport Corporation, (4) Central Japan International Airport Corporation, and (5) other airport maintenance. 1) Improvements during the seven-year plan: Data are provided in “Seeing Aviation by the Figures.” (The New Tokyo International Airport Authority and Kansai International Airport Corporation are dealt separately.) 2) New Tokyo International Airport Authority: Detailed data for investment amounts were provided by the authority. As these data also provided expenses unrelated to airport improvements, the items in the data were classified to exclude them. 3) Kansai International Airport Corporation: Data for the Kansai International Airport Corporation were provided in the “Airport Handbook.” 4) Central Japan International Airport Corporation: Data for the Central Japan International Airport Corporation were provided in the “Airport Handbook.” 5) Other airport maintenance: Airport maintenance is not included in the investment amounts for improvements listed in the seven-year plan calculated in (1). Therefore, airport maintenance expense is obtained from the “Maintenance and Operating Expenses” of the “Airport Improvement Special Accounts” and in the “Local Airport Maintenance Expense” of the “Annual Statistics Report on Local Government Finance.” (2) Composition of financial resources. The composition of financial resources is calculated in the same manner as that utilized to calculate the investment amounts (i.e., by five categories). 1) Construction during the seven-year plan: Financial resources for improvements carried out under the seven-year plan are covered by the general funds of local governments and the “Airport Improvement Special Accounts”. A more detailed explanation of the financial resources of the “Airport Improvement Special Accounts” is provided in “Financial Statistics.” 2) New Tokyo International Airport Authority: Details of the financial resources for the New Tokyo International Airport Authority are provided in the annual report published by the authority. Local expenditures are not utilized as a financial resource by the New Tokyo International Airport Authority.

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3) Kansai International Airport Corporation: Details of the financial resources for the Kansai International Airport Corporation are provided in the “Airport Handbook.” 4) Central Japan International Airport Corporation: Details of the financial resources for the Central Japan International Airport Corporation are provided in the “Airport Handbook.” 5) Other airports: The local airport maintenance expenses of other airports are appropriated as taxes on local governments. 6.4.4 Airport Investment in South Korea Statistical Data Sources Data from Ministry of Construction and Transportation Data from Incheon International Airport Corporation (1) Total investment. Airports in South Korea consist of the Incheon International Airport managed by the Incheon International Airport Corporation and 19 others managed by the Korea Airport Corporation. As most data concerning airport investment are unpublished, the total investment amount is calculated utilizing data from the ministry of construction and transportation. (2) Composition of financial resources. Airport investment for construction is covered by a special transportation fund, and maintenance expense is covered by income from airport operations. National expenditures are calculated by utilizing data from the ministry of construction and transportation, and owner/operator funds are calculated by subtracting national expenditures from the total investment amount. 6.4.5 Airport Investment in the United Kingdom Statistical Data Sources Transport Statistics Great Britain (Department of Transport) Annual Report (BAA plc). Investment amount data for airports in the United Kingdom are provided in “Great Britain Transport Statistics: The Department of Transport.” Data related to facilities investment by the British Airport Authority Public Company Limited (BAA plc) are provided in ”Annual Report” (BAA plc).

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121

Table 6.4(1): Investment amount and financial resources for airport improvements. Investment National amount expenditures France Aéroport de Paris (ADP)

362

Total

458

Local Owner/ expendi- operator tures funds

Loans

New Maintenance construction and repairs (%) (%)

93

0

259

10

88

0

0

37

51

1,320

60

170

1,090

0

Japan New Tokyo (NRT) Kansai (KIX) Chubu (NGO) Others

131 90 90 575

8 30 7 205

0 14 2 152

106 1 8 189

17 46 74 28

Total

886

250

167

304

165

82.70

17.30

South Korea Incheon (ICN)

1,825

387

0

0

1,438

100.00

0.00

Total

2,181

742

0

0

1,438

U.K. BAA plc

615

0

0

439

176

77.24

22.76

Total

729 7,654

0

0

0

1,950

0

9,788

5,236

9,604

0

9,788

5,236

72.53

27.47

Germany Munich Total

U.S. Federal Aviation 7,654 Administration Others 16,974 Total

24,628

Unit and year France Germany Japan Korea U.K. U.S.A.

Million € Million € Billion Yen Billion Won Million £ Million US$

1999 2000 2000 2000 2000 1999

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Table 6.4(2): Investment amount and financial resources for airport improvements (GDP ratio). Investment National Local Owner/ Loans New Maintenance amount expenditures expenditures operator (%) construction and repairs (%) (%) (%) funds (%) (%) (%) Francea Germany Japan Korea U.K.b U.S.A.

0.027 0.065 0.173 0.418 0.065 0.266

0.007 0.003 0.049 0.142 0.000 0.104

0.000 0.008 0.033 0.000 0.000 0.000

0.019 0.054 0.059 0.000 0.046 0.106

0.001 0.000 0.032 0.276 0.019 0.056

0.143

0.030

0.050 0.193

0.015 0.073

a

Values for ADP. Values for BAA plc.

b

6.4.6 Airport Investment in the United States Statistical Data Sources REPORT TO CONGRESS: NATIONAL PLAN OF INTEGRATED AIRPORT SYSTEMS (NPIAS) (Federal Aviation Administration) BUDGET IN BRIEF: Fiscal Year 2000 (Federal Aviation Administration). Airports in the United States are mainly improved in accordance with the “National Plan of Integrated Airport Systems (NPIAS)”, which includes 3364 of about 5600 public airports. Therefore, a combination of the total investment amount for airports covered by NPIAS and investments (maintenance and operating expenses such as air-traffic control and facility construction) by the Federal Aviation Administration is considered the investment amount for airport improvements in the United States. Data for airport expenses are included in the NPIAS congressional report “National Plan for Integrated Airport Systems 2001-2005” published by the FAA. Information on the FAA budget is provided in the “BUDGET IN BRIEF: Fiscal Year 2000.” Calculations of total investment and financial resources composition for airport improvements are shown in Table 6.4(1), and they are also shown in Table 6.4(2) as a percentage of GDP. Tables 6.2–6.4 provide the calculation results for roadways, railways, and airports. Numerical values are given as a percentage of GDP in the tables and are converted into U.S. dollars in the appendix (see Tables 6.A.1–6.A.9). The results are also illustrated and discussed in Chapter 8.

Chapter 7

Calculation of Contributors’ Shares Based on the method discussed in Chapter 4, investment amounts, which were classified as national expenditures, local expenditures, owner/operator funds, and loans, are recalculated to give contributors’ shares; this enables precise comparisons.

7.1 Methods of Calculation Contributors’ shares are divided into the following five categories: (a) National taxpayers. People burdened by taxes that provide the general funds of central or federal governments, such as income and corporate taxes. (b) Local taxpayers. People burdened by taxes that provide general funds of local governments, such as residence taxes. (c) Users. People who pay to utilize transportation systems can be subdivided into: (i) Users/general taxes: Users burdened by taxes from which revenues are allocated for general funds. (ii) Users/specific taxes; same mode: Users burdened by taxes from which revenues are allocated to specific funds for the same transportation mode. (iii) Users/specific taxes; different modes: Users burdened by taxes from which revenues are allocated to specific funds for different transportation modes. (iv) Users/fees: Users burdened by fees charged for using transportation systems. (d) Indirect beneficiaries. People burdened by charges based on the indirect benefits, such as increased property values. (e) Users/future. Future users burdened by repayment of loans. Below, the previously calculated national and local expenditures, owner/operator funds, and loans are recalculated based on the above contributors.

7.2 Roadways For roadways, each country’s national and local expenditures are recalculated, as shown in Tables 7.1(1) and (2). In this calculation, special attention was given to the various systems of specific funds for roadway improvement. 123

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Table 7.1(1): Refigured national expenditures for roadways. General funds National taxpayers

France Germany Japan Korea U.K. U.S.A.

2,351 30 1,540 164 1,486 1,195

Specific funds

Users

698 4 5 0 146 0

Total

3,049 33 1,545 164 1,631 1,195

National taxpayers

0 0 0 0 0 0

General funds (%) National taxpayers

France Germany Japan Korea U.K. U.S.A.

77.1 0.6 35.7 2.2 91.1 4.5

Users

22.9 0.1 0.1 0.0 8.9 0.0

Users same mode

Total

Grand total

0 5,037 2,770 7,317 0 25,368

3,049 5,070 4,315 7,481 1,631 26,563

Total

Grand total (%)

different modes

0 5,037 2,770 7,317 0 25,368

0 0 0 0 0 0

Specific funds (%) Total

100.0 0.7 35.8 2.2 100.0 4.5

National taxpayers

Users same mode

different modes

0.0 0.0 0.0 0.0 0.0 0.0

0.0 99.3 64.2 97.8 0.0 95.5

0.0 0.0 0.0 0.0 0.0 0.0

Unit and year

France Germany Japan Korea U.K. U.S.A.

0.0 99.3 64.2 97.8 0.0 95.5

100.0 100.0 100.0 100.0 100.0 100.0

Million € Million € Billion yen Billion won Million £ Million US$

2000 2000 2000 2000 2000 2000

7.2.1 France Automobile user taxes are not placed in specific funds for roadway improvement, so all national and local expenditures come from general funds calculated as National and Local taxpayers and Users/general taxes. Within national expenditures, fuel and axle taxes produced revenues of €698 million.1 Therefore, the remaining burden of €2.35 billion burden falls completely on the National taxpayers.

1

The burden on users for general funds of the central government is calculated utilizing rate (α) of the automobile user tax revenues for the general account revenue. α = (axle tax + fuel tax + special tax for corporate vehicles (figures from annual ownership and other taxes, motor fuel, and other special taxes of “World Road Statistics”))/general account revenue of the central government (figures from Les Recettes du Budget Général in “Annuaire Statistique de la France”).

Calculation of Contributors’ Shares

125

Table 7.1(2): Refigured local expenditures for roadways. General funds National taxpayers

France 10,996 Germany 5,430 Japan 4,183 Korea 5,861 U.K. 2,560 U.S.A. 26,782

Specific funds

Users

2,211 34 263 673 251 248

Total

13,207 5,465 4,446 6,534 2,811 27,030

National taxpayers

0 0 0 1,780 0 0

General funds (%) National taxpayers

France Germany Japan Korea U.K. U.S.A.

83.3 46.4 63.0 70.5 91.1 37.3

Users

16.7 0.3 4.0 8.1 8.9 0.3

Users same mode

different modes

0 6,241 2,195 7,317 0 44,737

0 0 0 0 0 0

Total

Grand total

0 6,241 2,195 1,780 0 44,737

13,207 11,706 6,641 8,314 2,811 71,767

Total

Grand total (%)

Specific funds (%) Total

100.0 46.7 66.9 78.6 100.0 37.7

National taxpayers

Users same mode

different modes

0.0 0.0 0.0 21.4 0.0 0.0

0.0 53.3 33.1 0.0 0.0 62.3

0.0 0.0 0.0 0.0 0.0 0.0

Unit and year

France Germany Japan Korea U.K. U.S.A.

0.0 53.3 33.1 21.4 0.0 62.3

100.0 100.0 100.0 100.0 100.0 100.0

Million € Million € Billion yen Billion won Million £ Million US$

2000 2000 2000 2000 2000 2000

Within local expenditures, registration, and annual ownership taxes produce revenues of €2.21 billion.2 Therefore, there is a burden of €10.99 billion on Local taxpayers. 7.2.2

Germany

Germany has a system of specific funds for roadway improvement, so the actual payers into the general and specific funds of the national and local expenditures 2

The user burden for the general funds of local governments is calculated from rate (α) of automobile user tax revenues to general account revenue. α = (driver’s license tax + registration tax + automobile tax (figures from driver’s license fees, tax on acquisition, and annual ownership taxes for cars from “World Road Statistics”))/general account revenue of the local government (figures from Impôts Directs Locaux of Impôts Directs par Nature d’impôt Versements Effectués ou rôles émis in “Annuaire Statistique de la France”).

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were calculated. National expenditures are covered by revenues from petroleum taxes and general funds. The amount of petroleum tax as part of the specific funds is €5.04 billion (assuming that 15.19% of petroleum tax revenue is allocated as specific funds), as shown in Table 7.1(1), and falls into the category of Users/specific taxes; same mode. The general fund amount is €33.2 million, which includes a petroleum tax of €3.6 million.3 Therefore, the National taxpayer burden is €29.7 million. Local expenditures (Table 7.1(2)) of €11.71 billion, including revenues from petroleum and automobile taxes and general funds, are comprised of €6.24 billion from specific funds4 that correspond to Users/specific taxes; same mode and €5.47 billion from general funds. €34 million from local governments’ general funds is created by automobile taxes.5 The burden on Local taxpayers is €5.43 billion. 7.2.3 Japan As Germany and the United States, Japan also has a system of specific funds for roadway improvement. Therefore, the actual payers of general and specific funds for national and local expenditures were calculated. For national expenditures, revenues from gasoline and liquefied petroleum gas taxes go into specific funds, as shown in Table 7.1(1), which total ¥2.77

3 Rate (α) of petroleum tax revenue to the general account revenue in the federal governments is calculated as follows: α = total petroleum tax revenue (value of Mineralölsteuer in “Verkehr in Zahlen”) × 0.6443/(general account revenue in central government (value of Bund, Steuern und steuerähnliche Abgaben in “Statistisches Jahrbuch”) – petroleum tax revenue (value of Mineralölsteuer in “Verkehr in Zahlen”) × 0.1519). 4 The proportion of automobile tax invested in road improvement varies by state. Total automobile tax revenue is €7.01 billion (value of Kraftfahrzeugsteuer in “Verkehr in Zahlen”). Assuming that 80% of automobile tax revenue is allocated as specific funds, the amount is €5.61 billion. €629 million was allocated as subsidies for local road improvement from petroleum tax revenues (assuming that 1.9% of petroleum tax revenue is allocated as specific funds). Therefore, local expenditures from specific funds are €6.24 billion. 5 Rate (α) of automobile tax revenue to general account revenue in local governments is calculated as follows: α = total automobile tax revenue (value of Kraftfahrzeugsteuer in “Verkehr in Zahlen”) × 0.2/(general account revenue in local government (value of Länder, Gemeinden Steuern und steuerähnliche Abgaben in “Statistisches Jahrbuch”) – portion corresponding to the specific funds of automobile tax (0.8 × value of Kraftfahrzeugsteuer in “Verkehr in Zahlen”)).

Calculation of Contributors’ Shares

127

trillion.6 All correspond to Users/specific taxes; same mode. The amount of general funds is ¥1.54 trillion, which includes an automobile tonnage tax of ¥5.3 billion.7 Therefore, the National taxpayer burden is ¥1.74 trillion. Specific funds for local expenditures are created from gas/oil delivery and automobile acquisition taxes, etc. The specific funds in Table 7.1(2) total ¥2.19 trillion.8 All funds correspond to Users/specific taxes; same mode. General funds total ¥4.45 trillion, which includes ¥263 billion from automobile and light vehicle taxes.9 Therefore, the Local taxpayer burden is ¥4.18 trillion. 7.2.4 South Korea South Korea has a specific fund system for transportation improvements. Automobile taxes and airport-use charges go into specific funds, which the national government utilizes for transportation improvements. The amount of specific funds in Table 7.1(1) is 7.32 trillion won.10 All correspond to Users/specific taxes; same mode. The amount of general funds in national expenditures is 164 billion won. This does not include any automobile taxes. Therefore, all correspond to National taxpayers.

6

Of the automobile user taxes in Japan, revenues from gasoline taxes and half of the petroleum gas tax revenues are allocated to the central government’s specific funds for road improvement. Of the automobile tonnage tax, 80% of the 3/4 portion provided is normally utilized as specific funds. Specific funds for national expenditures = gasoline tax + petroleum tax × (1/2) + automobile tonnage tax × (3/4) × (4/5) (from “Financial Statistics”). 7 Rate (α) of automobile user tax revenue to general account revenue of the central government is calculated as follows: α = automobile tonnage tax × (3/4) × (1/5)/(national tax – (gasoline tax + petroleum gas tax + automobile tonnage tax × (3/4) × (4/5) + local road tax)) (from “Financial Statistics”). 8 Local government specific funds come from the following taxes: gas/oil delivery, automobile acquisition, automobile tonnage transferred, petroleum gas transferred, and local road transferred. The automobile tonnage transferred tax is 1/4 of the automobile tonnage tax, the petroleum gas transferred tax is 1/2 of the petroleum gas tax, and the local road transfer tax is a local road tax. Specific funds for local expenditures = gas/oil delivery tax + automobile acquisition tax + automobile tonnage transferred tax + petroleum gas transferred tax + local road transferred tax (from “Financial Statistics”). 9 Rate (α) of automobile user tax revenue to general account revenue of local governments is calculated as follows: α = (automobile tax + light vehicle tax (from “Financial Statistics”))/(local tax (“Reference Calculation Data for Local Taxes”) – (gas/oil delivery tax + automobile acquisition tax (from “Financial Statistics”))). 10 The amount of road investment from the specific fund is shown in the fund’s account. In the investment, 7.32 trillion won comes from automobile taxes.

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Local expenditures include automobile taxes and local surpluses, which constitute a specific fund listed in Table 7.1 as 1.78 trillion won. This does not include any automobile taxes. Therefore, all correspond to Local taxpayers. The amount of general funds in local expenditures is 6.53 trillion won, which includes 673 billion from automobile taxes. Therefore, Local taxpayers supply 5.86 trillion won.11 7.2.5 United Kingdom As in France, there is no specific funding system for roadway improvement in the United Kingdom, so national and local expenditures come from general funds, which include taxes imposed on automobiles users. Therefore, the contents of general funds are calculated as National and Local taxpayers and Users (general taxes). National expenditures from general funds, which include automobile and fuel taxes, amount to £146 million.12 Therefore, the National taxpayer burden is £1.49 billion. Automobile users do not contribute to local general funds. However, in the United Kingdom, in many cases the finances of local governments depend on grants (RSG) from the central government, and the portion corresponding to Users/general taxes is calculated.13 The amount is £251 million, and the burden solely on Local taxpayers is £2.56 billion. 7.2.6 United States As in Germany, the United States has a system of specific funds for roadway improvement, so the actual payers of general and specific funds for national and local expenditures are calculated. For national expenditures, revenues from such taxes as automobile fuel, road use, and tire are allocated to specific funds. The amount of specific funds in

11

It is calculated by using 10.3%, which is the ratio of automobile tax revenue in the total income in the general account of the local government. 12 The user burden for the general funds of the central government is calculated by rate (α) of automobile user tax revenue to the general account revenue. α = (automobile tax + fuel tax + motorcar tax (figures from annual ownership taxes, motor fuel, and taxes on acquisition of “World Road Statistics”))/general account revenue of the central government (figures from current tax revenue receipts in “Annual Abstract of Statistics”). 13 The user burden for general funds of local governments is calculated from rate (α) of the automobile user tax revenues to general account revenue of the central government.

Calculation of Contributors’ Shares

129

Table 7.1(1) is US$25.37 billion.14 All funds correspond to Users/specific taxes; same mode. The amount of general funds is US$1.19 billion. This includes US$0.2 million automobile users taxes paid into general funds.15 Therefore, the burden by National taxpayers is US$1.19 billion. For local expenditures, revenues from automobile and driver’s license taxes go into specific funds. The amount corresponding to specific funds in Table 7.1(2) is US$44.74 billion.16 All funds correspond to Users/specific taxes; same mode. The amount of general funds is US$27.03 billion. This includes US$248 million of automobile users taxes. Therefore, the Local taxpayer burden is US$26.78 billion.17

7.3 Railways National and local expenditures of each country are recalculated, as shown in Tables 7.2(1) and (2), with special attention given to using automobile user tax revenues for railway improvements.

14

Automobile user taxes are transferred to the highway trust fund, and most are allocated for road improvement. In “Highway Statistics,” this amount is shown as value Net used for highway purposes of funding for highways and disposition of highway-user revenues. Coordination of values for revenue and investment amounts totals US$25.37 billion. 15 Rate (α) of automobile user tax revenue to general account revenue of the federal government is calculated as follows: α = portion corresponding to general funds provided by automobile user tax revenue (figure from amount for non-highway purposes and amount for territories of the funding section for highways and disposition of highway-user revenues in “Highway Statistics”)/general account revenue of federal government (figured by taking the value from federal government tax revenue “Annual Abstract of Statistics” – Net used for highway purposes in the funding section for highways and disposition of highway-user revenues in “Highway Statistics”). 16 The figure labeled Net used for highway purposes from funding for highways and disposition of highway-user revenues in “Highway Statistics” is the amount allocated for road improvements from automobile user tax revenues as well as the case of the federation. Combining the revenue and investment amounts, the total becomes US$44.74 billion. 17 Rate (α) of automobile user tax revenues to general account revenue in state and local governments was calculated as follows: α = portion corresponding to general funds provided by automobile user tax revenue (figures from amounts for non-highway purposes and collection expenses of funding for highways and disposition of highway-user revenues in “Highway Statistics”)/general account revenues of state and local governments (figures from state and local government tax revenues “Annual Abstract of Statistics” – Net used for highway purposes from funding for highways and disposition of highway-user revenues in “Highway Statistics”).

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Table 7.2(1): Refigured national expenditures for railways. General funds National taxpayers

France Germany Japan Korea U.K. U.S.A.

1,221 2,850 259 761 536 1,108

Specific funds

Users

0 0 0 0 0 0

Total

1,221 2,850 259 761 536 1,108

National taxpayers

0 0 0 0 0 0

General funds (%) National taxpayers

France Germany Japan Korea U.K. U.S.A.

100.0 97.8 100.0 25.8 100.0 32.1

a

Values for DBAG.

Users

0.0 0.0 0.0 0.0 0.0 0.0

Users same mode 0 0 0 0 0 0

Total different modes 0 64 0 2,182 0 2,341

0 64 0 2,182 0 2,341

Grand total

1,221 2,914 259 2,942 536 3,449

Specific funds (%) Total

100.0 97.8 100.0 25.8 100.0 32.1

National taxpayers

0.0 0.0 0.0 0.0 0.0 0.0 Unit and year

Users same mode 0.0 0.0 0.0 0.0 0.0 0.0

Total different modes 0.0 0.2 0.0 74.2 0.0 67.9

France Germanya Japan Korea U.K. U.S.A.

Grand total (%)

0.0 2.2 0.0 74.2 0.0 67.9

100.0 100.0 100.0 100.0 100.0 100.0

Million € Million € Billion yen Billion won Million £ Million US$

2000 2000 2000 2000 2000 2000

7.3.1 France Taxes that burden transportation users are not allocated as specific funds for railway improvement. No charges on railway users go to general funds, so therefore, all national expenditures are completely a National taxpayer burden. The amounts total €1.22 billion: €1.22 billion for the French National Railway (SNCF) [Société Nationale des Chemins de fer Français] and the French Railway Network (RFF) [Réseau Ferré de France], and €3 million for Paris Transport Corporation (RATP) [Régie Autonome des Transport Parisiens]. For local expenditures, the French transportation tax (VT) [Versement de Transport], a charge on offices that reap indirect benefits, is allocated as financial resources of the local governments for railway improvement and is sufficient to

Calculation of Contributors’ Shares

131

Table 7.2(2): Refigured local expenditures for railways. General funds

France Germany Japan Korea U.K. U.S.A.

National taxpayers

Users

0 0 230 76 0 1,749

0 0 0 0 0 0

Specific funds Total

0 0 230 76 0 1,749

National taxpayers

Users same mode

different modes

0 0 0 0 0 706

0 0 0 0 0 0

0 0 0 0 0 80

General funds (%) National taxpayers

France Germany Japan Korea U.K. U.S.A.

0.0 0.0 100.0 100.0 0.0 69.0

a

Values for DBAG.

Users

0.0 0.0 0.0 0.0 0.0 0.0

Total

Grand total

0 0 0 0 0 786

0 0 230 76 0 2,535

Total

Grand total (%)

Specific funds (%) Total

0.0 0.0 100.0 100.0 0.0 69.0

National taxpayers

0.0 0.0 0.0 0.0 0.0 27.8 Unit and year

Users same mode 0.0 0.0 0.0 0.0 0.0 0.0

different modes 0.0 0.0 0.0 0.0 0.0 3.2

France Germanya Japan Korea U.K. U.S.A.

0.0 0.0 0.0 0.0 0.0 31.0

0.0 0.0 100.0 100.0 0.0 100.0

Million € Million € Billion yen Billion won Million £ Million US$

2000 2000 2000 2000 2000 2000

cover all local expenditures.18 Therefore, all local expenditures can be appropriated as burdens on indirect beneficiaries. 7.3.2 Germany A portion of petroleum tax revenue is allocated as specific funds for the national expenditures of public urban passenger transportation. The amount of specific

18

The amount collected by the VT exceeds the amount of local expenditures calculated in Chapter 5 (“Outline of Railway Improvement in Foreign Countries”). No tangible data are available that show the correct amount of grants to the SNCF or RATP by the VT.

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funds in Table 7.2(1) is €64 million.19 All funds correspond to Users/specific taxes; different modes. The amount of general funds is €2.85 billion, but none burden railway users. Therefore, all funds become a National taxpayer burden. 7.3.3 Japan Transport user taxes are not allocated as specific funds for railway improvement; so all national and local expenditures come from general funds. No charges on railway users go into the general funds. Thus all national and local expenditures become completely a burden on National and Local taxpayers, respectively. These amounts are ¥259 billion and ¥230 billion. Additionally, in the same manner as for JR (Japan Railway), the National and Local taxpayer burden becomes ¥176 billion and ¥89 billion. 7.3.4 South Korea Automobile taxes and airport use charges go into the specific funds. The amount of specific funds in Table 7.2(1) becomes 2.18 trillion won.20 All correspond to Users/specific taxes; different modes. The amount of general funds in national expenditures is 761 billion won. As this does not include any burden on railway users, all correspond to National taxpayers. 7.3.5 United Kingdom As in France, the tax burden on transportation users is not placed in specific funds for railway improvement. All national and local expenditures are general funds. No charges on railway users go to general funds; therefore, all national expenditures are National taxpayer burdens. The amounts are £411 million for the former British Railways and £125 million for London Transport (LT), totaling £536 million. 19

The petroleum tax allocated for public urban passenger transportation of the German Railway Corporation (DBAG) [Deutsche Bahn Aktien Gesellshaft] is €131 million (Finanzbericht 2004 (Bundesministerium der Finanzen)). The amount of petroleum tax allocated to improve transportation systems as a portion of national expenditures is calculated as follows: petroleum tax allocated for public urban passenger transportation of DBAG in 2003 (€131 million)/petroleum tax revenue in 2003 (€45.42 billion) × petroleum tax revenue in 2000 (€33.16 billion) × national expenditures (€2.91 billion)/(capital grants from federal government (€3.61 billion) + operating grants from federal government (€766 million)). 20 The amount of railway investment from the specific fund is shown in the fund’s accounts. In the investment, 2.24 trillion won comes from automobile taxes.

Calculation of Contributors’ Shares

133

7.3.6 United States As in Germany, a portion of automobile user tax revenues subsidizes mass transportation, so the actual payers of both general and specific funds for national and local expenditures are calculated. Such funds are not available to Class I Railroads or Amtrak. Since no charges on railway users go into the general funds, all national expenditures for Class I Railroads and Amtrak become completely a burden on the National taxpayers. This amount is US$1.01 billion. Regarding national expenditures for transportation, the portion of automobile user taxes that go into specific funds (Table 7.2(1)) is US$2.34 billion.21 This entire amount corresponds to Users/specific taxes; different modes. The amount of general funds is US$98 million. The burden is completely on National taxpayers. The total national expenditure burden on National taxpayers for Class I Railroads, Amtrak, and Transit becomes US$1.11 billion, as shown in Table 7.2(1). Regarding local expenditures for transportation, the portion of automobile user taxes that goes into specific funds (Users/specific taxes; different modes) is US$80 million.22 Additionally, income and sales taxes are dedicated as sources for transit operation and capital funding. These are specific funds, however, the actual contributors are Local taxpayers. The amount is US$706 million.23

21

Funding for Highways and Disposition of Highway User Revenues in “Highway Statistics” includes expenditures for mass transportation such as busing. Therefore, the following computation calculated expenditures for railways (Transit): national government railway (Transit) expenditures = national expenditures for transit calculated in Chapter 5/federal total (operating funds, capital funds) in “National Transit Database 2000, Data Tables” × amount for mass transportation (federal total from Funding for Highways and Disposition of Highway-User Revenues in “Highway Statistics”). 22 Local railway (Transit) expenditures were calculated as mentioned in footnote 20: local expenditures for transit calculated in Chapter 5/total state and local value (operating and capital funds) in “National Transit Database 2000, Data Tables” × amount for mass transportation, total of state and local governments of funding for highways and disposition of highway-user revenues in “Highway Statistics.” 23 Value = local expenditures for transit calculated in Chapter 5 × (value of state and local taxes dedicated at source for applied transit operating funds and capital funds – value of gasoline taxes (taken from “National Transit Database 2000, Data Tables”)/total state and local value (operating and capital funds) in “National Transit Database 2000, Data Tables”).

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7.4 Airports For airports, each country’s national and local expenditures are recalculated, as shown in Tables 7.3(1) and (2). Special attention should be given to the existence of systems with specific funds for airport improvement. 7.4.1 France The central government of France has a system that utilizes specific funds for airport improvement called the “Private Sector Aviation Special Account (BAAC) [Budget Annexe de l’Aviation Civile].” Its financial resources include tolls and taxes from airways and users. The actual payers of general and specific funds were calculated for national expenditures for the Paris Airport Public Corporation (ADP) [Aéroports de Table 7.3(1): Refigured national expenditures for airports. General funds

France Germany Japan Korea U.K. U.S.A.

National taxpayers

Users

8 60 162 85 0 0

0 0 0 0 0 0

Specific funds Total

National taxpayers

Users same mode

different modes

8 60 162 85 0 0

0 0 0 0 0 0

85 0 88 68 0 9,604

0 0 0 590 0 0

Total

National taxpayers

Users same mode

different modes

0.0 0.0 0.0 0.0 0.0 0.0

91.6 0.0 35.2 9.2 0.0 100.0

0.0 0.0 0.0 79.4 0.0 0.0

General funds (%) National taxpayers

France Germany Japan Korea U.K. U.S.A. a

8.4 100.0 64.8 11.4 0.0 0.0

Values for ADP. Values for BAA plc.

b

Users

0.0 0.0 0.0 0.0 0.0 0.0

Total

Grand total

85 0 88 658 0 9,604

93 60 250 742 0 9,604

Total

Grand total (%)

Specific funds (%)

8.4 100.0 64.8 11.4 0.0 0.0

Unit and year

Francea Germany Japan Korea U.K.b U.S.A.

91.6 0.0 35.2 88.6 0.0 100.0

100.0 100.0 100.0 100.0 0.0 100.0

Million € Million € Billion yen Billion won Million £ Million US$

1999 2000 2000 2000 2000 1999

Calculation of Contributors’ Shares

135

Table 7.3(2): Refigured local expenditures for airports. General funds National taxpayers

France Germany Japan Korea U.K. U.S.A.

0 170 151 0 0 0

Specific funds

Users

Total

0 0 0 0 0 0

National taxpayers

0 170 151 0 0 0

0 0 0 0 0 0

Total

National taxpayers

General funds (%) National taxpayers

France Germany Japan Korea U.K. U.S.A.

0.0 100.0 90.4 0.0 0.0 0.0

a

Values for ADP. Values for BAA plc.

b

Users

0.0 0.0 0.0 0.0 0.0 0.0

Users same mode

Total different modes

0 0 16 0 0 0

0 0 0 0 0 0

0 0 16 0 0 0

Grand total

0 170 167 0 0 0

Specific funds (%)

0.0 100.0 90.4 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 Unit and year

Users same mode 0.0 0.0 9.6 0.0 0.0 0.0

Total different modes 0.0 0.0 0.0 0.0 0.0 0.0

Francea Germany Japan Korea U.K.b U.S.A.

Grand total (%)

0.0 0.0 9.6 0.0 0.0 0.0

0.0 100.0 100.0 0.0 0.0 0.0

Million € Million € Billion yen Billion won Million £ Million US$

1999 2000 2000 2000 2000 1999

Paris].24 As a result, Users/specific taxes; same mode is €85 million, and the burden purely on National taxpayers is €8 million. 7.4.2 Germany There is no system of specific funds for airport improvement in Germany. All national and local expenditures are general funds, and no charges on airport users go into general funds. Therefore, all national and local expenditures become purely a burden on National and Local taxpayers. These amounts are €60 and €170 million, respectively.

24 Users/specific taxes; same mode value of Subventions dont Etatin in “Activité des Aéroports Français Anné” and National taxpayers = value of Subventions dont CEE in “Activité des Aéroports Français Anné.”

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Table 7.4(1): Shares of contributors for roadway improvements. National taxpayers

France Germany Japan Korea U.K. U.S.A.

2,351 30 1,540 164 1,486 1,195

Local taxpayer

10,996 5,430 4,183 7,641 2,560 26,782

Users/ general taxes 2,909 38 268 673 397 248

Users/specific taxes Users/ Same Different fees mode modes 0 11,278 4,965 7,317 0 70,105

0 0 0 0 0 0

214 0 718 1,826 0 4,941

Indirect beneficiaries

Users/ future

Grand total

0 0 0 0 0 0

1,472 0 1,290 742 0 9,741

17,942 16,776 12,964 18,363 4,442 113,011

Note: France, Germany, million €; Japan, billion yen; Korea, billion won; U.K., million £; U.S.A., million US$. Values of fiscal year 2000.

Table 7.4(2): Shares of contributors for roadway improvements (GDP ratio).

France Germany Japan Korea U.K. U.S.A.

National taxpayers (%)

Local taxpayer (%)

Users/ general taxes (%)

0.166 0.001 0.300 0.031 0.157 0.012

0.775 0.268 0.815 1.464 0.271 0.273

0.205 0.002 0.052 0.129 0.042 0.003

Users/specific taxes Same Different mode modes

0.000 0.557 0.967 1.402 0.000 0.714

0.000 0.000 0.000 0.000 0.000 0.000

Users/ fees (%)

Indirect beneficiaries (%)

Users/ future (%)

Grand total (%)

0.015 0.000 0.140 0.350 0.000 0.050

0.000 0.000 0.000 0.000 0.000 0.000

0.104 0.000 0.251 0.142 0.000 0.099

1.265 0.828 2.525 3.518 0.470 1.150

Note: Values of fiscal year 2000.

7.4.3 Japan As the United States, Japan also has a system of specific funds for airport improvement, so the actual payers of general and specific funds must be calculated for national and local expenditures. National expenditures from specific funds are ¥88 billion (“Financial Statistics”). All correspond to Users/specific taxes; same mode. The amount of general funds is ¥162 billion and is a National taxpayer burden. For local expenditures, financial resources for specific funds are the aircraft fuel transferred tax that amounts to ¥16 billion. All correspond to Users/ specific taxes; same mode. The amount of general funds is ¥151 billion and is a Local taxpayer burden. 7.4.4 South Korea Automobile taxes and airport-use charges go into specific funds for transportation improvement. Those funds are used for airport improvement as well.

Calculation of Contributors’ Shares

137

Table 7.5(1): Shares of contributors for railway improvements. National Local Users/ taxpayers taxpayer general taxes France Japan Korea U.K. U.S.A. France (SNCF and RFF) Germany (DBAG) Japan (JRs) Japan (JNR) Korea (KNR) U.K. (former BR) U.S.A. (Class I and Amtrak)

Users/specific taxes Same Different mode modes

Users/ fees

Indirect beneficiaries

Users/ Grand future total

1,221 259 761 536 1,108

0 230 76 0 2,455

0 0 0 0 0

0 0 0 0 0

0 0 2,182 0 2,421

3,236 844 2,841 1,968 9,341

330 0 0 0 0

155 535 200 337 0

4,941 1,867 6,059 2,842 15,325

1,217

0

0

0

0

3,073

303

0

4,593

2,850

0

0

0

64

3,959

0

263

7,136

176

89

0

0

0

309

0

214

788

34

0

0

0

0

405

0

274

713

511

0

0

0

1,160

2,267

0

200

4,137

411

0

0

0

0

1,656

0

337

2,404

1,009

0

0

0

0

7,920

0

0

8,930

Note: France, Germany, million €; Japan, billion yen; Korea, billion won; U.K., million £; U.S.A., million US$. Values of fiscal year 2000.

Table 7.5(2): Refigured local expenditures for roadways.

France Japan Korea U.K. U.S.A. France (SNCF and RFF) Germany (DBAG) Japan (JRs) Japan (JNR) Korea (KNR) U.K. (former BR) U.S.A. (Class I and Amtrak)

National taxpayers (%)

Local taxpayer (%)

Users/ general taxes (%)

Users/specific taxes Same Different mode modes

Users/ Indirect Users/ Grand fees benefi- future total (%) ciaries (%) (%) (%)

0.086 0.051 0.146 0.057 0.011 0.086

0.000 0.045 0.015 0.000 0.025 0.000

0.000 0.000 0.000 0.000 0.000 0.000

0.000 0.000 0.000 0.000 0.000 0.000

0.000 0.000 0.418 0.000 0.025 0.000

0.228 0.164 0.544 0.208 0.095 0.217

0.023 0.000 0.000 0.000 0.000 0.021

0.011 0.104 0.038 0.036 0.000 0.000

0.348 0.364 1.161 0.301 0.156 0.324

0.141 0.034 0.010 0.098 0.043 0.010

0.000 0.017 0.000 0.000 0.000 0.000

0.000 0.000 0.000 0.000 0.000 0.000

0.000 0.000 0.000 0.000 0.000 0.000

0.003 0.000 0.000 0.222 0.000 0.000

0.195 0.060 0.120 0.434 0.175 0.081

0.000 0.000 0.000 0.000 0.000 0.000

0.013 0.042 0.081 0.038 0.036 0.000

0.352 0.153 0.211 0.793 0.255 0.091

Note: France, Germany, million €; Japan, billion yen; Korea, billion won; U.K., million £; U.S.A., million US$. Values of fiscal year 2000. Japan (JNR) is 1986.

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Dai Nakagawa and Ryoji Matsunaka

Table 7.6(1): Shares of contributors for airport improvements. National taxpayers

Germany 60 Japan 162 Korea 85 U.S.A. 0 France (ADP) 8 Germany 0 (Munich) U.K. (BAA plc) 0 Japan (NRT) 5 Japan (KIX) 19 Japan (NGO) 4 Korea (ICN) 44

Local taxpayer

Users/ general taxes

Users/specific taxes Users/ Same Different fees mode modes

Indirect beneficiaries

Users/ future

Grand total

170 151 0 0

0 0 0 0

0 104 68 9,604

0 0 590 0

1,090 295 0 9,788

0 9 0 0

0 165 1,438 5,236

1,320 886 2,181 24,628

0 0

0 0

85 0

0 0

259 37

0 0

10 51

362 88

0

0

0

0

439

0

176

615

0

0

3

0

106

0

17

131

12

0

12

0

0

1

46

90

2

0

2

0

0

8

74

90

0

0

35

308

0

0

1,438

1,825

Note: France, Germany, million €; Japan, billion yen; Korea, billion won; U.K., million £;U.S.A., million US$. NRT, New Tokyo International Airport (Narita); KIX: Kansai International Airport; NGO, Chubu International Airport; ICN: Incheon International Airport. Values of fiscal year 2000. U.S.A. and France (ADP) are 1999.

Table 7.6(2): Shares of contributors for airport improvements (GDP ratio)

Germany Japan Korea U.S.A. France (ADP) Germany (Munich) U.K. (BAA plc) Japan (NRT) Japan (KIX) Japan (NGO) Korea (ICN)

National taxpayers (%)

Local taxpayer (%)

Users/ general taxes (%)

Users/specific taxes Same Different mode modes

Users/ fees (%)

Indirect beneficiaries (%)

Users/ future (%)

Grand total (%)

0.003 0.032 0.016 0.000

0.008 0.029 0.000 0.000

0.000 0.000 0.000 0.000

0.000 0.020 0.013 0.104

0.000 0.000 0.113 0.000

0.054 0.057 0.000 0.106

0.000 0.002 0.000 0.000

0.000 0.032 0.276 0.056

0.065 0.173 0.418 0.266

0.001 0.000

0.000 0.000

0.000 0.000

0.006 0.000

0.000 0.000

0.019 0.002

0.000 0.000

0.001 0.003

0.027 0.004

0.001

0.000

0.000

0.001

0.000

0.021

0.000

0.003

0.025

0.004

0.002

0.000

0.002

0.000

0.000

0.000

0.009

0.018

0.001

0.000

0.000

0.000

0.000

0.000

0.002

0.014

0.018

0.008

0.000

0.000

0.007

0.059

0.000

0.000

0.276

0.350

0.000

0.000

0.000

0.000

0.000

0.046

0.000

0.019

0.065

Note: France, Germany, million €; Japan, billion yen; Korea, billion won; U.K., million £; U.S.A., million US$. NRT, New Tokyo International Airport (Narita); KIX, Kansai International Airport; NGO, Chubu International Airport; ICN, Incheon International Airport. Values of fiscal year 2000. U.S.A. and France (ADP) are 1999.

Calculation of Contributors’ Shares

139

The amount of specific funds in Table 7.2(1) becomes 658 billion won.25 68 billion won corresponds to Users/specific taxes; same mode, and 590 billion won corresponds to Users/specific taxes; different modes. The amount of general funds in national expenditures is 85 billion won. Since this does not include any airport user burden, all correspond to National taxpayers. 7.4.5 United Kingdom In the United Kingdom, the British Airport Authority Public Limited Company (BAA plc) utilizes no airport improvement financial resources from national or local expenditures. Therefore, no additional calculations are required. 7.4.6 United States The United States has a specific fund for airport improvement, so both general and specific funds for national expenditures must be calculated. Specific funds for national expenditures are created through ticket and aviation freight taxes, etc., and total US$6.40 billion, as shown in Table 7.3(1).26 All funds correspond to Users/specific taxes; same mode. In the above results, the actual contributors to national and local expenditures were calculated by utilizing the categories of National and Local taxpayers, Users/general taxes, Users/specific taxes; same mode, and Users/specific taxes; different modes. Additionally, owner/operator funds were classified as Users/fees and loans as Users/future. These classifications enabled the calculation of the burdens on all contributors. The results are shown in Tables 7.4–7.6. In these tables for roadways, railways, and airports, the shares of the actual contributors are shown in monetary terms and the GDP ratio of the country concerned. The same values in US dollars are provided in Tables 7.A.1–7.A.6 in the appendix.

25 The amount of airport investment from the specific fund is shown in the fund’s account. In the investment, 68 billion won comes from airport-use charges and 590 billion won comes from automobile taxes. 26 Operation (Airport and Airway Trust Fund) + grants-in-aid for airports + facilities and equipment (FAA Statistical Handbook of Aviation).

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140

Chapter 8

Comparative Study

8.1 Comparison of Investment Amounts In this chapter, we make cross-country comparisons of investment amounts in transportation improvements and financial resources. This comparison focuses on how the basic policies toward transportation improvements in various countries are reflected in actual funding. In particular, the following points are assessed: (1) The relationship between the use of fuel tax revenues and the total amount of investment in roadways. Countries use automobile fuel tax revenues differently. Japan only uses the revenue for roadway funding; Germany, South Korea, and the United States use the revenue for roadway and public transportation improvements; France and the United Kingdom use it as a general source. Accordingly, as a first step, we must determine the differences in the total amount invested in roadway improvements that depend on the differences in funding systems. (2) The relationship between the use of fuel tax revenues and the total amount of investment in railways. We assess whether the amount of investment in railways is relatively high in those countries that use fuel taxes to fund public transportation. (3) Toll road systems and the total amount of investment in roads. France, Japan, and South Korea have many toll roads. In the United Kingdom and the United States, the number of toll roads is gradually increasing. Germany has introduced a unique scheme using Global Positioning System (GPS) that only charges trucks. Since toll revenues are often used to facilitate roadway construction, we assess whether the amount of investment in roadway improvement differs depending on the existence of toll roads. (4) Toll road systems and loans. The construction of toll roads is often financed with loans that future toll revenues are expected to repay. We assess whether the ratio of loan financing for roadway construction is related to the ratio of toll roads. 141

142

Dai Nakagawa and Ryoji Matsunaka

(5) Separation of railway construction/ownership and operation, and the ratio of public and private funds. Privatization of national railways has resulted in various forms of railway administration. In Germany and France, the public sector constructs and owns the infrastructure, and private companies are engaged in operations. In Japan, private companies are engaged in both infrastructure construction/ownership and operations. In the United States, a private passenger railway company uses infrastructure owned by private freight companies and is engaged in operations. In South Korea, the public sector is engaged in both infrastructure construction/ownership and operations. Private companies use fare revenue as funds, while the public sector uses general sources of revenue and fuel tax revenue in addition to fare revenue. Accordingly, we assess whether the major payers differ depending on the types of administration system. (6) Amount of public subsidies and loans for railway improvements. Public subsidies for railway improvements differ greatly depending on the country. As countries with small public subsidies rely on loan financing for infrastructure improvement, we will assess the relationship between public subsidies and loans. (7) Airport improvement systems and identification of the payers. Countries fund airport improvement systems differently. In addition to general sources of revenue, airplane fuel tax revenues and private funds from revenue collected at terminal buildings can be used. Accordingly, we assess whether the major payers differ depending on the type of funding system. (8) Changes in the composition of funds. Some countries are shifting their basic transportation policies in view of environmental and energy issues, while other countries are not. We assess the extent to which the composition of funds in respective countries has changed to reflect changes in basic policies.

8.2 Total Investment Total investments in roadways, railways, and airports in each country are expressed as a ratio of GDP and shown in Figures 8.1(1)–(3), which compare the 1985 and 2000 values. The 2000 values are broken down into new construction and maintenance components.

Comparative Study Total 1.564%

France (1985) France (2000)

0.806%

0.459% Total 1.265%

0.130% Total 0.698% 0.828% Total 2.135%

Japan (1985) Japan (2000)

2.290%

Total 2.525% 1.228%

Total 3.518%

Total 0.887%

U.K. (1985) 0.226% 0.244%

Total 0.470% Total 1.295%

U.S.A. (1985) 0.312%

U.S.A. (2000)

0.535%

1.990%

Korea (2000)

U.K. (2000)

New construction Maintenance and repairs Total investment

Total 1.117%

Germany (1985) Germany (2000)

143

0.838%

Total 1.150%

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% GDP ratio

Figure 8.1 (1): Roadway investments (GDP ratio). Roadway investment in 2000 as a proportion of GDP in the European countries and the United States is in the range 0.47–1.27% (Figure 8.1(1)), whereas South Korea (3.52%) and Japan (2.53%) are higher. South Korea’s greater investment is possibly due to the existence of a special account for transportation facilities funded by fuel taxes. Japan also has a specific fund system. Among European countries and the United States, France, which has adopted a toll system and the United States, which has special accounts, are larger. Compared with 1985, in Germany, the United Kingdom and the United States the total investment decreased, whereas in Japan it increased. (France and South Korea cannot be compared because of 1985 data limitations.) The rates of maintenance and repair expenses are high in France and the United Kingdom. As shown in Figure 8.1(2), railway investment in 2000 in South Korea is quite a bit larger (1.16%) than other countries because it largely depends on investment into high-speed rail construction between Seoul and Pusan. After South Korea,

144

Dai Nakagawa and Ryoji Matsunaka Total 0.186%

France (1985) France (2000)

0.135% 0.213%

New construction Maintenance and repairs Total Investment

Total 0.348%

Total 0.302%

Germany (1985)

Total 0.363%

Germany (2000)

Total 0.478%

Japan (1985) 0.297% 0.067%

Japan (2000)

Total 0.364% Total 1.161%

Korea (2000) Total 0.344%

U.K. (1985)

Total 0.297%

U.K. (2000)

Total 0.202%

U.S.A. (1985) 0.104%

Total 0.156% 0.052% 0.00% 0.20% 0.40%

U.S.A. (2000)

0.60%

0.80%

1.00%

1.20%

1.40%

GDP ratio

Figure 8.1 (2): Railway investments (GDP ratio). Note: France (1985): Values for SNCF [Société Nationale des Chemins de fer Français] and RATP [Régie Autonome des Transports Parisiens]. Excluding urban railways except those in Paris; France (2000): Values for SNCF, RFF [Réseau Ferré de France], and RATP. Excluding urban railways except those in Paris; U.S.A. (1985): Value for Class I. Excluding Amtrak and urban railways.

next are France (0.35%), Germany (0.36%), Japan (0.36%), and the United Kingdom (0.30%) at almost the same level in contrast to the low level of investment in the United States (0.16%). Compared with 1985, France and Germany have increased. The United Kingdom has slight decreased, and Japan and the United States have considerably decreased. As mentioned in Chapters 3 and 4, in France and Germany, environmental friendly policies are being emphasized, and the increase of investment in railways is consistent with such policies. Regarding airport improvements in 2000 (Figure 8.1(3)), South Korea (0.42%) and the United States (0.27%) show very large investments compared to Germany

Comparative Study France (1989)

Total 0.041%

France (1999)

Total 0.034%

Germany (1985)

Total 0.032%

New construction Maintenance and repairs Total

Total 0.065%

Germany (2000)

Total 0.085%

Japan (1985) Japan (2000)

0.143% 0.030%

Total 0.173% Total 0.418%

Korea (2000) Total 0.060%

U.K. (1985) U.K. (2000)

0.050%

Total 0.065% 0.015% Total 0.248%

U.S.A. (1989) U.S.A. (1999)

145

0.193%

Total 0.073% 0.266%

0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% 0.45% 0.50% GDP ratio

Figure 8.1 (3): Airport investments (GDP ratio). Note: U.K.: Values for BAA plc (British Airports Authority Public Limited Company).

(0.07%), France (0.03%), and the United Kingdom (0.07%). Japan is in the middle (0.17%). Among transportation modes, roadway improvement is the largest for each country, followed by railway improvement, except the United States, where more is invested in airports than in railways. Figures 8.2(1)–(3) show investment trends for six countries. Note that because of data limitations, some countries are not expressed in some years. The level of roadway investment is almost steady. The same decreasing tendency can be seen in Germany, the United Kingdom, and the United States. In contrast, the level of railway investment is changing. Japan’s investment was large in the 1970s, but has rapidly decreased. Germany’s investment increased in the 1990s. The level mainly reflects changes before and after railway reforms in each country in the late 1980s and early 1990s.

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Dai Nakagawa and Ryoji Matsunaka

4.00% 3.50%

Korea

GDP ratio

3.00% 2.50%

Japan

2.00% Germany 1.50%

France U.S.A

1.00% U.K. 0.50% 0.00% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.2 (1): Roadway investment trends (GDP ratio).

1.40% 1.20%

GDP ratio

1.00%

Japan

Korea

0.80% 0.60%

France (SNCF and RATP)

U.K.

Germany

0.40% 0.20%

U.S.A. (Class I Railroads) 0.00% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.2 (2): Railway investment trends (GDP ratio). Note: France: Values for SNCF, RFF, and RATP. Excluding urban railways other than in Paris; U.S.A.: Values for Class I Railroads. Excluding Amtrak and urban railways.

Comparative Study

147

0.45% 0.40%

Korea

0.35%

GDP ratio

0.30% 0.25% 0.20% Japan 0.15%

U.S.A. (FAA)

0.10% 0.05%

Germany

U.K. (BAA)

France 0.00% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.2 (3): Airport investment trends (GDP ratio). Note: U.S.A.: Values for FAA.

2.50 U.S.A.

2.00

Japan France

1.50

Germany U.K.

1.00

0.50

0.00 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Figure 8.3 (1): Roadway investment growth rates.

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Dai Nakagawa and Ryoji Matsunaka

4.00

France

3.50 3.00 Germany 2.50 U.K.

2.00 1.50

Japan

1.00

U.S.A.

0.50 0.00 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Figure 8.3 (2): Railway investment growth rates.

7.00 6.00 5.00 Germany 4.00 U.K. 3.00 Japan 2.00

U.S.A.

1.00 0.00 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Figure 8.3 (3): Airport investment growth rates.

Comparative Study France

149

0.22

Germany

0.31

Japan

0.13

Korea

0.25

U.K.

0.39

U.S.A.

0.12 0.00

0.10

0.20

0.30

0.40

0.50

Railway investment shares

Figure 8.4 (1): Railway investment shares (2000). Note: Railway investment shares ⫽ railway investments/(railway investments ⫹ roadway investments).

0.50

Railway investment shares

0.45 0.40 Germany

0.35 0.30

U.K.

0.25

France

Korea

0.20 0.15

U.S.A.

0.10

Japan

0.05 0.00 1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

Figure 8.4 (2): Trends of railway investment shares. Note: Railway investment shares ⫽ railway investments/(railway investments ⫹ roadway investments).

150

Dai Nakagawa and Ryoji Matsunaka France (1985)

National expenditures Local expenditures Owner/ operator funds Loans

France (2000) Germany (1985) Germany (2000) Japan (1985) Japan (2000) Korea (2000) U.K. (1985) U.K. (2000) U.S.A. (1985) U.S.A. (2000) 0.00%

1.00%

2.00% GDP ratio

3.00%

4.00%

Figure 8.5 (1): Financial resource compositions for roadway improvements (GDP ratio). Note: France (1985): Values for national roads. Excluding local roads and toll roads.

Airport investment is generally large in South Korea, Japan, and the United States. The effect of large airport construction is significant, such as Incheon in Seoul, Kansai and Chubu in Japan, and Munich in Germany. Figures 8.3(1)–(3) show growth rate trends from 1985, which we consider the starting point of a diversion in transport policy and funding, including railway reform in each country, increased concern for environmental issues, and such new ideas as private financing. In the United States and Japan, significant increases can be seen in roadway investment, and in France and Germany, in railway investment. Figure 8.4(1) shows the rate of railway investment as the total of roadway and railway to assess the political weight of these transportation modes. Figure 8.4(2) shows its trend. Although in no country does the rate of railway investment exceed 50%, i.e., railway investment does not exceed roadway investment, high rates are seen in Germany and the United Kingdom.

Comparative Study

151

France (1985) National expenditures Local expenditures Owner/ operator funds Loans

France (2000) Germany (1985) Germany (2000) Japan (1985) Japan (2000) Korea (2000) U.K. (1985) U.K. (2000) U.S.A. (1985) U.S.A. (2000) 0.00%

0.20%

0.40%

0.60% 0.80% GDP ratio

1.00%

1.20%

1.40%

Figure 8.5 (2): Financial resource compositions for railway improvements (GDP ratio). Note: France (1985): Values for SNCF and RATP. Excluding urban railways except those in Paris; France (2000): Values for SNCF, RFF, and RATP. Excluding urban railways except those in Paris; Germany (1985): Values for DB [Deutsche Bundesbahn]. Excluding DR [Deutsche Reichsbahn] and urban railways such as the U-Bahn; Germany (2000): Values for DBAG [Deutsche Bahn Aktien Gesellshaft]. Excluding urban railways such as the U-Bahn; U.K. (1985): Values for BR. Excluding urban railways; U.K. (2000): Values for former BR (British Railway Board) and LT (London Transport). Excluding urban railways except those in London; U.S.A. (1985): Values for Class I. Excluding Amtrak and urban railways.

8.3 Composition of Financial Resources Figures 8.5(1)–(3) show the composition of financial resources as a ratio of GDP. For roadway improvement in 2000, national and local expenditures in South Korea and local expenditures in Japan are very large, as shown in Figure 8.5(1),

152

Dai Nakagawa and Ryoji Matsunaka France (1989) National expenditures Local expenditures Owner/ operator funds Loans

France (1999) Germany (2000) Japan (1985) Japan (2000) Korea (2000) U.K. (1991) U.K. (2000) U.S.A. (1989) U.S.A. (1999) 0.00%

0.10%

0.20% 0.30% GDP ratio

0.40%

0.50%

Figure 8.5 (3): Financial resource compositions for airport improvements (GDP ratio). Note: France: Values for ADP [Aéroports de Paris]; U.K.: Values for BAA plc.

exceeding those of the European countries and the United States. In descending order, the utilization of owner/operator funds and loans is found in South Korea, Japan, France, and the United States, a fact that reflects a substantial dependence on toll roads in these countries. For railway improvement, both national expenditures and owner/operator funds in South Korea exceed the total investment amounts of the other countries. Loans in Japan and the increases of owner/operator funds in Germany and France are also remarkable. For airport improvements, national expenditures and loans in South Korea are the highest, followed by national expenditures and owner/operator funds in the United States and Japan. In the other countries, national expenditures are extremely small. Figure 8.6(1) shows national railways (former national railways). There is a wide variance across countries; national expenditures in Germany, France, and

Comparative Study France (SNCF 1990)

153

National expenditures Local expenditures Owner/ operator funds Loans

France (SNCF and RFF 2000) Germany (DB 1990) Germany (DBAG 2000) Japan (JNR 1986) Japan (JRs 2000) Korea (KNR 2000) U.K. (BR 1990) U.K. (Railtrack 2000) U.S.A. (Class I 1990) U.S.A. (Class I and AMTRAK 2000) 0.00%

0.20%

0.40% 0.60% GDP ratio

0.80%

1.00%

Figure 8.6 (1): Financial resource compositions of national railways (GDP ratio). South Korea are relatively high and relatively low in the United States and Japan. In each country, before and after railway reform comparisons can be made. After reform, France and Germany increased owner/operator funds and accordingly total investment. A high percentage of loans can be seen for JNR (Japan National Railway) in Japan, but they decreased after railway reform. As Japanese railway reform was completely private including infrastructure and operation, and since private companies only perform profitable investment, total investment, especially loans, have decreased. On the other hand, since the government started railway construction by using general funds, such as second phase Shinkansen (high-speed train), national and local expenditures are increased. Figure 8.6(2) shows the case for large airports. Main airports are constructed mainly by owner/operator funds or loans reflecting that they are expected to produce revenue themselves through airport usage fees and terminal rental revenue. A high percentage of loans can be seen in the Incheon International Airport in South Korea and in the three international airports in Japan (New

154

Dai Nakagawa and Ryoji Matsunaka France (ADP 1989) National expenditures Local expenditures Owner/ operator funds Loans

France (ADP 2000) Japan (NRT 1985) Japan (NRT 2000) Japan (KIX 1985) Japan (KIX 2000) Japan (NGO 2000) Korea (ICN 2000) U.K. (BAA plc 1991) U.K. (BAA plc 2000) 0.00%

0.05%

0.10%

0.15% 0.20% GDP ratio

0.25%

0.30%

0.35%

Figure 8.6 (2): Financial resource compositions of main airports (GDP ratio).

Tokyo International, Kansai International, and Central Japan International Airports). The graphs in Figures 8.7(1)–(3) show the ratios of each component to total investment amounts. Local expenditures for roadway improvement are large in every country. Another characteristic is that owner/operator funds and loans are high in France, the United States, South Korea, and Japan, accounting for approximately 10–15% of the total investment amounts, where toll road systems are currently being introduced. This amount has especially increased in the United States. Looking at railway improvement, in France, Germany, and South Korea, the proportions of national and local expenditures are high (31.4%,40.8%,and 49.8%), although the proportions in France and Germany have decreased compared with 1985. Yet, in Japan the value has fairly increased from 12.6% in 1985 to 30.1% in 2000. As discussed in Chapter 3, this disparity reflects new schemes for second phase Shinkansen.

Comparative Study National expenditures

Owner/operator funds

155

Loans

France (1985) Lacal expenditures

France (2000) Germany (1985) Germany (2000) Japan (1985) Japan (2000) Korea (2000) U.K. (1985) U.K. (2000) U.S.A. (1985) U.S.A. (2000) 0%

20%

40%

60%

80%

100%

Figure 8.7 (1): Financial resource compositions for roadway improvements. Note: France (1985): Values for national roads. Excluding local roads and toll roads.

Also, in the case of airport improvement, in contrast to railways, financial resources are nearly covered by owner/operator funds and loans in France, Germany, and the United Kingdom; public funds are utilized in the United States, South Korea, and Japan (34–47%).

8.4 Shares of Contributors The calculation of contributors’ shares is an important characteristic of this book, particularly for use as an index for comparison. Graphs illustrating those shares as a ratio of GDP are given in Figures 8.8(1)–(3). In addition, Figures 8.9(1) and (2) show the shares of contributors to national railways (or former national railways) and major airports.

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Dai Nakagawa and Ryoji Matsunaka National expenditures

Loans

France (1985) France (2000) Lacal expenditures

Owner/operator funds

Germany (1985) Germany (2000) Japan (1985) Japan (2000) Korea (2000) U.K. (1985) U.K. (2000) U.S.A. (1985) U.S.A. (2000) 0%

20%

40%

60%

80%

100%

Figure 8.7 (2): Financial resource compositions for railway improvements. Note: Germany (1985): Values for DB. Excluding DR and urban railways such as the U-Bahn; Germany (2000): Values for DBAG. Excluding urban railways such as the U-Bahn; France (1985): Values for SNCF and RATP. Excluding urban railways except those in Paris; France (2000): Values for SNCF, RFF, and RATP. Excluding urban railways except those in Paris; U.K. (1985): Values for BR. Excluding urban railways; U.K. (2000): Values for former BR and LT. Excluding urban railways except those in London; U.S.A. (1985): Values for Class I. Excluding Amtrak and urban railways.

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157

Loans

France (1989) France (1999) National expenditures

Germany (2000) Japan (1985) Japan (2000) Lacal expenditures

Korea (2000) U.K. (1991) U.K. (2000) U.S.A. (1989) U.S.A. (1999) 0%

20%

40%

60%

80%

100%

Figure 8.7 (3): Financial resource compositions for airport improvements. Note: France: Values for ADP; U.K.: Values for BAA plc.

The results for roadway improvement (Figure 8.8(1)) show that the existence or non-existence of specific funds is reflected in the shares; the burden on users is larger in Germany, Japan, South Korea, and the United States where there are specific funds for roadway investment, and lower in France and the United Kingdom where there are no specific fund systems, although a considerable amount of automobile user taxes exists in general funds. A comparison of the shares of general taxpayers shows that these shares are low in Germany and the United States. Figure 8.5(1) shows the composition of financial resources; in those two countries, national and local expenditures are not small, but a large portion of the expenses of national and local government are actually covered by automobile user taxes, and the burden on general taxpayers is small, as shown in Figure 8.8(1). For the burden placed on future users, the values are larger in Japan, South Korea, France, and the United States, which is clearly the effect of toll roads usually built by loans.

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Dai Nakagawa and Ryoji Matsunaka France (1985)

General taxpayers Users Indirect beneficiaries Future users

France (2000) Germany (1985) Germany (2000) Japan (1985) Japan (2000) Korea (2000) U.K. (1985) U.K. (2000) U.S.A. (1985) U.S.A. (2000) 0.00%

1.00%

2.00% GDP ratio

3.00%

4.00%

Figure 8.8 (1): Shares of contributors for road improvements (GDP ratio). Note: France (1985): Value for national roads. Excluding local roads and toll roads.

For railway improvement, in Germany and South Korea the amounts from general taxpayers are large. The burden on users is large in every country, especially in South Korea. The burden on future users is large in Japan, although it has decreased since 1985. For airport improvement, the burden amount on users is large in the United States and South Korea. General taxpayers appear in Germany, Japan, South Korea, and the United States. Figure 8.5(3) illustrates that national and local expenditures in the United States and South Korea are 0.10% and 0.14%, respectively. However, the category of general taxpayers in Figure 8.8(3) is less than 0.02% because the national expenditures of these countries substantially burden users in terms of taxes on airplanes and airports. The graphs in Figures 8.10(1)–(3) compare contributors’ shares by ratios. For roadways, the shares of contributors are highly dependent on the existence or

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159

France (1985) General taxpayers Users Indirect beneficiaries Future users

France (2000) Germany (1985) Germany (2000) Japan (1985) Japan (2000) Korea (2000) U.K. (1985) U.K. (2000) U.S.A. (1985) U.S.A. (2000) 0.00%

0.20%

0.40%

0.60% 0.80% GDP ratio

1.00%

1.20%

1.40%

Figure 8.8 (2): Shares of cotributors for railway improvements (GDP ratio). Note: Germany (1985): Values for DB. Excluding urban railways such as the U-Bahn; Germany (2000): Values for DBAG. Excluding urban railways such as the U-Bahn; France (1985): Values for SNCF and RATP. Excluding urban railways except those in Paris; France (2000): Values for SNCF, RFF, and RATP. Excluding urban railways except those in Paris; U.K. (1985): Values for BR. Excluding urban railways; U.K. (2000): Values for former BR and LT. Excluding urban railways except those in London; U.S.A. (1985): Values for Class I. Excluding Amtrak and urban railways.

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Dai Nakagawa and Ryoji Matsunaka France (1989) Germany (2000)

General taxpayers Users Indirect beneficiaries Future users

Japan (1985) Japan (2000) Korea (2000) U.K. (1991) U.K. (2000) U.S.A. (1989) U.S.A. (1999) 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% 0.45% 0.50% GDP ratio

Figure 8.8 (3): Shares of contributors for airport improvements (GDP ratio). Note: U.K.: Values for BAA plc.

non-existence of specific funds for roadway improvement. In Germany, the United States, South Korea, and Japan, where specific funds are utilized, the burden placed on users, including user/specific taxes (same mode), accounts for 38–67% of the total. On the other hand, in France and the United Kingdom, which have no specific funds, the burden on users/general taxes accounts for some degree of the total (about 10–16%), but the burden on national and local taxpayers accounts for the largest portion of the total rates. The burden on future users is largest in Japan (about 10%) followed by France and the United States. For railway improvement, the burden on national taxpayers is about 40% in Germany and about 25% in France; but it is less than 15% in Japan, South Korea, and the United States. User/specific taxes (different mode), a burden on road users, is also apparent in Germany, South Korea, and the United States. Future users in Japan face high burdens (28.6%), although it has decreased from 1985.

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For airport improvement, the burden on national taxpayers accounts for a larger rate in Japan (18.3%) than other countries. The burden on users created by user/specific taxes (same mode) and user/fees is high overall. Another characteristic is that the rate of future users for airports in every country is larger than roadways or railways, showing that airport investment tends to switch to private funds.

8.5 Consideration by Comparative Graphs Figures 8.11(1)–(3) show the burden trends by each contributor in roadway investment. Figure 8.11(1) shows that the burden by public funds (i.e., national and local taxpayers) is only increasing in Japan. The burden by users (Figure 8.11(2)) is rapidly increasing in South Korea. On the other hand, it is slightly decreasing in the United States, Germany, and Japan. Figure 8.11(3) shows trends

France (SNCF 1990) General taxpayers Users Indirect beneficiaries Users /future

France (SNCF and RFF 2000) Germany (DB 1990) Germany (DBAG 2000) Japan (JNR 1986) Japan (JRs 2000) Korea (KNR 2000) U.K. (BR 1990) U.K. (Railtrack 2000) U.S.A. (Class I 1990) U.S.A. (Class I and AMTRAK 2000) 0.00%

0.20%

0.40% 0.60% GDP ratio

0.80%

1.00%

Figure 8.9 (1): Shares of contributors for national railways (GDP ratio).

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Dai Nakagawa and Ryoji Matsunaka France (ADP 1989) General taxpayers Users Indirect beneficiaries Future users

France (ADP 2000) Japan (NRT 1985) Japan (NRT 2000) Japan (KIX 1985) Japan (KIX 2000) Japan (NGO 2000) Korea (ICN 2000) U.K. (BAA plc 1991) U.K. (BAA plc 2000) 0.00%

0.05%

0.10%

0.15% 0.20% GDP ratio

0.25%

0.30%

0.35%

Figure 8.9 (2): Shares of contributors for main airports (GDP ratio).

by ratio of the public funds of the total investment amount. The United Kingdom and France are high, and Germany and the United Stats are low. Regarding railways (Figure 8.12(1)), the burden by public funds is changing year by year. In general, it is large in Germany, France, and South Korea. The burden by users (Figure 8.12(2)) is high in South Korea. Japan used to be the highest but it has decreased to almost the same level as Germany, the United Kingdom, and France. The ratio of the public funds of the total investment amount (Figure 8.12(3)) is high in France and Germany, whereas it is low in the United Kingdom and Japan. Regarding airports (Figures 8.13(1) and (2)), the burdens on both public funds and user funds are high in South Korea and Japan, although few countries are compared because of data limitations. The ratios of public funds (Figure 8.13(3)) of all countries are lower than roadways and railways. The last comparison is made for loan as a ratio of GDP in roadway and railway investment (Figures 8.14(1) and(2)). In Japan and South Korea, where

Comparative Study National Taxpayers

Users/general Users/ taxes fees

163

Future users

France (1985) Local Taxpayers

France (2000) Germany (1985) Users/specific taxes same mode

Germany (2000) Japan (1985) Future users

Japan (2000) Users/ fees

Korea (2000) U.K. (1985) National Taxpayers

Users/general taxes

Local Taxpayers

U.K. (2000) U.S.A. (1985) Users/specific taxes same mode

U.S.A. (2000) 0%

20%

40%

60%

80%

100%

Figure 8.10 (1): Shares of contributors for road improvements. Note: France (1985): Values for national roads. Excluding local roads and toll roads.

most expressways are constructed as toll roads, the ratio is clearly high. In railways, Japan has been high, although the ratio decreased after railway reformation in 1988. These comparative considerations show that the financial resources in each country largely vary in both total investment and their components. For roadways, burden by user tends to increase, reflecting that automobilerelated taxes and revenues from tolls remain steady in contrast to the fluctuation of government financial situations. For railways, the policy of each country strongly affects total investment and its components. Some countries have already switched to railways because of environmental concerns. Airport investment tends to shift to private funds.

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Dai Nakagawa and Ryoji Matsunaka Indirect beneficiaries

National Taxpayers

France (1985) Users/fees

France (2000) Germany (1985) Germany (2000) Japan (1985) Future users

Japan (2000) Local Taxpayers

Korea (2000) Users /specific taxes different mode

U.K. (1985) Users/fees

U.K. (2000) U.S.A. (1985) U.S.A. (2000) 0%

20%

40%

60%

80%

100%

Figure 8.10 (2): Shares of contributors for railway improvements. Note: Germany (1985): Values for DB. Excluding DR and urban railways such as the U-Bahn; Germany (2000): Values for DBAG. Excluding urban railways such as the U-Bahn; France (1985): Values for SNCF and RATP. Excluding urban railways except those in Paris; France (2000): Values for SNCF, RFF and RATP. Excluding urban railways except those in Paris; U.K. (1985): Values for BR. Excluding urban railways; U.K. (2000): Values for former BR and LT. Excluding urban railways except those in London; U.S.A. (1985): Values for Class I. Excluding Amtrak and urban railways.

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165

Future users

France (1989) Users/fees

France (1999) Local Taxpayers

Germany (2000) Japan (1985) National Taxpayers

Users/specific taxes same mode

Japan (2000) Korea (2000) Indirect beneficiaries

Future users

U.K. (1991) U.K. (2000) Users/fees

U.S.A. (1989) Users/specific taxes same mode

U.S.A. (1999) 0%

20%

40%

60%

80%

100%

Figure 8.10 (3): Shares of contributors for airport improvements. Note: France: Values for ADP; U.K.: Values for BAA plc.

1.80% Korea

1.60% 1.40%

Japan

GDP ratio

1.20% 1.00%

France

0.80% 0.60%

U.S.A.

U.K.

0.40% Germany 0.20% 0.00% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.11 (1): Trends of public fund burden (GDP ratio) — Roadways.

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Dai Nakagawa and Ryoji Matsunaka 2.50%

Korea

GDP ratio

2.00%

1.50%

Japan

1.00%

U.S.A. Germany

0.50%

France

U.K. 0.00% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.11 (2): Trends of user burden (GDP ratio) — Roadways. 100%

U.K.

90% 80%

France

70% 60% 50%

Korea Germany

40% 30% 20%

U.S.A.

Japan

10% 0% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.11 (3): Trends of public fund burden (shares) — Roadways. 0.30% Germany (DB)

0.25%

Korea

GDP ratio

0.20% 0.15% 0.10%

France (SNCF) U.K. (BR)

Japan

0.05% U.S.A. (Class I Railroads) 0.00% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.12 (1): Trends of public fund burden (GDP ratio) — Railways.

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167

1.20% 1.00% Japan

GDP ratio

0.80%

Korea U.S.A. (Class I Railroads)

0.60% 0.40%

Germany (DB)

U.K. (BR)

0.20% France (SNCF) 0.00% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.12 (2): Trends of user burden (GDP ratio) — Railways. Note: Germany: Values for DB and DBAG. Excluding urban railways such as the U-Bahn; France: Values for SNCF, RFF, and RATP. Excluding urban railways except those in Paris; U.K.: Values for BR. Excluding urban railways; U.S.A.: Values for Class I Railroads. Excluding Amtrak and urban railways.

100% 90%

France (SNCF)

80% 70% 60% 50% U.K. (BR)

40% 30% 20%

Germany (DB) Korea

Japan

10%

U.S.A. (Class I Railroads) 0% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.12 (3): Trends of public fund burden (shares) — Railways. Note: Germany: Values for DB and DBAG. Excluding urban railways such as the U-Bahn; France: Values for SNCF, RFF, and RATP. Excluding urban railways except those in Paris; U.K.: Values for BR. Excluding urban railways; U.S.A.: Values for Class I Railroads. Excluding Amtrak and urban railways.

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Dai Nakagawa and Ryoji Matsunaka 0.12% 0.10%

Korea

GDP ratio

0.08% 0.06% 0.04% 0.02%

Japan Japan (NRT)

Korea (ICN)

France (ADP)

0.00% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.13 (1): Trends of public fund burden (GDP ratio) — Airports. Note: France (ADP): Values for ADP; Korea (ICN): Values for Incheon International Airport; Japan (NRT): Values for New Tokyo International Airport.

0.45% 0.40% 0.35%

Korea

GDP ratio

0.30% 0.25% 0.20% Japan

0.15% 0.10% 0.05%

Japan (NRT)

Korea (ICN)

France (ADP)

0.00% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.13 (2): Trends of user burden (GDP ratio) — Airports. Note: France (ADP): Values for ADP; Korea (ICN): Values for Incheon International Airport; Japan (NRT): Values for New Tokyo International Airport.

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100% 90% 80% 70% 60% 50% 40%

Japan

30%

Korea

20% Japan (NRT)

10%

Korea (ICN) France(ADP)

0% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.13 (3): Trends of public fund burden (shares) — Airports. Note: France (ADP): Values for ADP; Korea (ICN): Values for Incheon International Airport; Japan (NRT): Values for New Tokyo International Airport.

0.70% 0.60%

Japan

GDP ratio

0.50% 0.40% 0.30% 0.20%

Germany U.K.

France

0.10% U.S.A. 0.00% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.14 (1): Trends of loans burden (GDP ratio) — Roadways.

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0.70% 0.60%

GDP ratio

0.50% 0.40%

Japan

0.30% 0.20% 0.10%

U.S.A. (Class I Railroads) France (SNCF) Germany (DB)

U.K. (BR)

Korea

0.00% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Figure 8.14 (2): Trends of loans burden (GDP ratio) — Railways. Note: Germany:Values for DB and DBAG. Excluding urban railways such as the U-Bahn; France: Values for SNCF, RFF, and RATP. Excluding urban railways except those in Paris; U.K.: Values for BR. Excluding urban railways; U.S.A.: Values for Class I Railroads. Excluding Amtrak and urban railways.

8.6 Conclusions In this chapter, we conducted a detailed comparison of the status of financial resources for transportation improvements in various countries. Looking at the changes in recent years, we found first that investments in roadways had decreased in some countries considering environment issues. In a breakdown of financial resources, there was an overall trend toward having the financial burden borne by users. This is in part because as financial conditions on the government budgets become increasingly harsh, taxes related to automobiles have remained comparatively strong. Another factor is the introduction of a variety of new charging systems for automobiles. Examining investment amounts in individual countries, we confirmed that roadway investments tend to be large in the countries, which have specific fund systems for roadway improvement or a large percentage of toll roads. Regarding the composition of financial resources, we focused on the fact that in countries where a large portion of income is derived from toll roads, there is a high dependence on borrowed funds. In many countries, there is a trend toward increased investments for railways. This trend is particularly noticeable in countries where railways are a focus of

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emphasis in government policies. Another possible factor in the expansion of railway improvement is the increased efficiency of operations that has resulted from the privatization of national railways. One particularly notable characteristic is that there are countries in which railway investments in infrastructure have actually increased following such privatization. Investment amounts increase in countries where public responsibility for railway improvement is very clearly positioned through privatization, but the trend toward increased investments is small in countries where management of railways is simply entrusted to private-sectors. Looking at a composition of financial resources in railway improvement, notable characteristics include the increased use of automobile-related taxes, and, in some countries, the low level of public assistance coupled with an increased dependence on borrowed funds. Investments in airports are dramatically affected by the construction of large airport facilities. In terms of financial resources, there is a major shift toward the private sector investments. As indicated above, financial resources for improvements to transportation systems in various countries differ considerably in terms of both scale and composition. Because these investments reflect differences in transportation policies in each country, by comparing the composition of these financial resources, we can learn about the different approaches to transportation improvements in each country.

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Chapter 9

For the Future Transportation improvement is now entering a new era. Following years of improvement, the transportation infrastructure, including roadways, railways, and airports, has attained high standards. However, issues of the environment, ageing societies, and other new social changes are arising and increasingly demanding higher quality transportation improvement. In regard to funding resources, there has been a major shift from publicly funded systems to systems utilizing private funds, while, at the same time, public funds are expected to play a greater role in providing for the public welfare. New ideas are being sought in terms of the standards of services to be provided, the amount of money to be invested, and the burden sharing for implementation of the services. In view of the current status of transportation-improvement systems and funding resources as described in this book, we suggest the following future directions: (1) The role played by transportation in land use and city formation needs to be properly assessed. Transportation systems must contribute to the construction of compact cities. Cities depending solely on automobiles tend to be less dense and less efficient. We need government policies that prioritize the development of public transportation that will help create dense and compact cities. The important thing is to understand that transportation systems have the power to change the structure of a city. Transportation planning should not only help cope with traffic demand, but also help create the less energy consumptive and sustainable cities. (2) New transportation infrastructure must be as environmentally friendly as possible. The conventional transportation system, which has been dependent on gasoline and other fossil fuels for decades, now requires drastic changes. To this end, funding systems such as toll charges on automobiles and assistance for public transportation play the greatest role. It is urgent to build up such environmentally friendly transportation funding systems as have been already implemented in several countries. (3) Utmost consideration must be given to senior citizens and physically handicapped people. As a matter of course, the funding system must help attain this objective. When entrusting a transportation improvement to the private sector, 173

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it is necessary to clarify who is responsible for the provision of social welfareconscious services, and to build up funding systems to execute the project. (4) As the number of foreign users of transportation infrastructures increases in this era of active international communications, imbalances in the structure of the financial burden among nations have arisen as a critical issue. As foreign users frequently use transportation facilities improved with a nation’s general funds, the partiality of the burden becomes an issue. In line with globalization of society, international consistency is also required in transportation-improvement systems. Funding systems for transportation improvements that will attain these objectives should have the following functions: (1) Funding systems achieving a balance between efficiency and social values. The financial situations in all nations tend to be increasingly difficult, and the public funds that can be invested in transportation improvement are limited. Entrusting transportation improvement projects to the private sector, a method already introduced in many countries, is excellent in that it increases the efficiency of operation and reduces the public burden. However, the decisions made by the private sector do not necessarily realize the optimal scale of investment. The public sector is excellent in that it can invest for the sake of social values through the political process, unless the decision-making system is inadequate and arbitrary. In light of environmental issues and aging societies, the importance of the public sector is increasing. As discussed in Chapter 2, the issues of externality and social justice arising in connection with the environment and social welfare should not be ignored. The roles of the public and private sectors have changed throughout history. Many nations are still seeking the optimal combination of the public and private sectors. As a result, new transportation improvement methods are now being created by better partnerships of the public and private sectors. The desirable conclusion is that the public sector makes decisions on the standards of services, and the private sector provides those services within a competitive market. (2) Funding systems leading to partiality of burden sharing. As discussed at the beginning of this book, the basic principle of burden sharing is that “those who enjoy the benefit of transportation improvement should bear the costs.” It is, in fact, difficult to realize this principle, but it is important to understand that proper burden sharing will lead to proper improvement standards.

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175

In particular, the burden borne by landowners and other beneficiaries should be adequately increased. Increasing the burden share of beneficiaries does not mean only an increase in burden; in the end, the beneficiaries will benefit from the increase as the transportation improvements are enhanced to a proper level. (3) Funding systems that maintain proper dependence on loans. Many countries have swelling loans incurred for transportation investment. Transportation improvement through loans is a fair way of sharing the burden for infrastructure construction between current and future generations. However, the future burden should not exceed the future benefit. If the future benefit is overestimated, the loans become too large. In particular, the future benefits tend to be intentionally overestimated by the current generation. On the other hand, if the future benefits are underestimated, insufficient investment will be made in infrastructure. In some countries, there is a growing tendency to underestimate the benefit of transportation systems as a social capital improvement. In either case, the current generation is not fulfilling its responsibility for transportation infrastructure improvement. An important point to note is that the future beneficiaries are not involved in decision-making regarding this issue. Therefore, we must understand that the current generation is responsible for properly assessing the standards of services and burden sharing on behalf of future generations. (4) Funding systems supporting new technology development. New technological development for the future cannot necessarily be achieved solely by the private sector. Technological development is constantly required to improve energy efficiency, reduce the environmental burden, and enhance safety and comfort. Public funding systems also need to be built up to support such technological development. New transportation technologies include high-speed magnetic levitation trains, fuel cell vehicles, and low-noise supersonic aircraft. Low-floor trams and buses are also important in public transportation systems. Development of these technologies should not be abandoned due to the problems with funding systems. Technological development, which is expected to bring substantial benefits to international society, should be promoted through international cooperation so that global transportation technologies can take a new step forward. (5) Funding systems leading to sustainable society. Motorization creates a comfortable modern life; however, many cities pay an even greater social cost. We believe that our generation is obliged to prepare an answer for this problem. The recently introduced toll charge on vehicle drivers in

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London and the GPS-based toll charging system introduced on autobahn users in Germany are considered to be important future models not only in terms of technology but also in terms of innovative policies. Transportation funding systems play an extremely important role in increasing the benefits to society as a whole, while controlling traffic volume in a proper manner.

9.1 Epilogue Visitors to a given city will inevitably experience that city’s transportation systems, and when visiting a city with outstanding transportation systems, one will no doubt recognize the appeal of that city. Safe, convenient transportation systems that are well designed and environment friendly embody the charm of the city itself. Transportation systems act as a mirror that reflects the city’s stance with regard to the environment and social welfare. The quality of transportation systems could be seen as an important index for measuring the progress of the city. For countless generations, people have combined their knowledge and wisdom in overcoming many obstacles to build transportation systems. The greater interactions among peoples that have resulted from improvements in transportation have in turn led to the greater progress and prosperity of human society. The history of civilization reflected the history of transportation improvements. The transportation infrastructures created over many years and at great costs continue to support our lifestyles even today, and our generation has a responsibility to build excellent transportation infrastructures for the future as well. We must build attractive transportation infrastructures to ensure the sustainable prosperity of the human society.

Appendix

Table 6.A.1: Statistical data list (roadways).

France

Data name

Issue

World Road Statistics Les comptes des transports

International Road Federation Ministère de l’Equipement, des Transports et du Logement Conseil National des Transports

Evolution du financement des investissenebts publics en transports Annuaire Statistique de la France

Ministère de l’Economie

Germany

World Road Statistics Verker in Zahlen Straßenbaubericht Statistisches Jahrbuch

International Road Federation Der Bundesminister für Verkehr Der Bundesminister für Verkehr Statistishes Bundesamt

Japan

Road Statistics Yearbook Japan Highway Public Corporation Yearbook Data of Japan Highway Public Corporation Metropolitan Expressway Public Corporation Yearbook Hanshin Expressway Public Corporation Yearbook Honshuu-Shikoku Bridge Authority Data Reference Calculation Data for Local Taxes Financial Statistics

Japan Highway Users Conference Japan Highway Public Corporation Japan Highway Public Corporation Metropolitan Expressway Public Corporation Hanshin Expressway Public Corporation Honshuu-Shikoku Bridge Authority Ministry of Home Affairs Ministry of Finance

Korea

World Road Statistics Ministry of Construction & Transportation Data Korea Highway Corporation

International Road Federation Ministry of Construction & Transportation Korea Highway Corporation

U.K.

World Road Statistics Transport Statistics Great Britain Annual Abstract of Statistics

International Road Federation Department of Transport HMSO

U.S.A.

World Road Statistics Highway Statistics Statistical Abstract of the United States

International Road Federation Federal Highway Administration Department of Commerce, Bureau of Census

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Dai Nakagawa and Ryoji Matsunaka

Table 6.A.2: Statistical data list (railways). Data name

Issue

France

Annual Report Annual Report Rapport annuel Overseas Urban Transpor Information No.43; Paris Transport Corporation Annual Report

SNCF RFF RATP Teito Rapid Transit Authority

Germany

Geschäftsbericht Verker in Zahlen

Deutsche Bahn AG Der Bundesminister für Verkehr

Japan

Investigation Report of Capital Investment Trend by Enterprises Related to Transportation Subway Financial Tables

Ministry of Transport

Honshu-Shikoku Bridge Authority Data Comprehensive Bibliography of Subsidies Japan National Railway Inspection Report Transport Almanac

Japan Subway Association Japan Railway Construction Public Corporation Honshu-Shikoku Bridge Authority Ministry of Finance Japan National Railway Transport Newspaper

Korea

Ministry Data of Construction & Transportation Korean National Railroad Data

Ministry of Construction & Transportation Korean National Railroad

U.K.

Transport Statistics Great Britain Rail Industry Monitor Annual Report & Accounts London Transport Annual Report Overseas Urban Transport Information; London Transport Annual Report Annual Report and Accounts

Department of Transport TAS Railtrack London Transport Teito Rapid Transit Authority

U.S.A.

Statistical Abstract of the United States Railroads Facts Annual Report National Transit Database 2000 Data Tables

British Railways Board Department of Commerce, Bureau of Census Association of American Railroads National Railroad Passenger Corporation U.S. Department of Transportation

Appendix Table 6.A.3: Statistical data list (airports).

France

Data name

Issue

Les comptes des transports Rapport annuel

Ministère de l’Equipement, des Transports et du Logement Aéroports de Paris

Germany

Verkehr in Zahlen Digest of Statistics Series, Airports and route facilities Annual Report

Der Bundesminister für Verkehr International Civil Aviation Organization Flughafen Munchen GmbH

Japan

Seeing Aviation by the Figures Data of New Tokyo International Airport Airport Handbook Financial Statistics Annual Statistics Report on Local Government Finance

Aerial Promotion Fund New Tokyo International Airport Kansai Airport Reaearch Institute Ministry of Finance Local Government Financial Society

Korea

Ministry of Construction & Transportation Data Incheon International Airport Corporation Data

Ministry of Construction & Transportation Incheon International Airport Corporation

U.K.

Transport Statistics Great Britain Annual Report

Department of Transport

U.S.A.

Report to congress national plan of integrated airport systems (NPIAS) Budget in Brief

Federal Aviation Administration

BAA plc

Federal Aviation Administration

179

180

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Table 6.A.4: Investment amounts for roadway improvements (Table 6.2(1) in US$). Investment amount

National expenditures

Local expenditures

Owner/ operator funds

Loans (million US$)

France Central and local governments Toll roads

15,047 1,648

2,799 39

12,249 40

199

1,370

Total

16,695

2,837

12,289

199

1,370

3,044 3,675 887 6,967 1,038

2,787 1,615

257 2,060

316

8,576

Total

15,610

4,718

10,892

Japan General roads Local road public corporations Highway public corporations

91,058 2,751 19,016

34,374 0 3,178

56,684 694 417

0 86 6,161

0 1,971 9,260

112,825

37,553

57,794

6,246

11,231

South Korea National and local roads Highway

10,758 3,763

4,184 1,732

6,575 0

0 1,444

0 587

Total

14,522

5,916

6,575

1,444

587

6,629

2,434

4,194

0

0

56,864 34,597 21,550

13,366 8,132 5,065

36,111 21,971 13,685

2,486 1,512 942

4,901 2,982 1,857

113,011

26,563

71,767

4,941

9,741

1€ = 1€ = 1 Yen = 1 Won = 1£ =

US$0.9305 US$0.9305 US$0.0087 US$0.0008 US$1.4922 US$1.0000

Germany Autobahn Federal and state roads District roads Town and village roads Others

Total

United Kingdom Total United States State-administered highways Locally administered roads Others Total

Exchange rate France Germany Japan Korea U.K. U.S.A.

2000 2000 2000 2000 2000 2000

Appendix

181

Table 6.A.5: Investment amounts in roadway improvements (financial resource composition, %).

France Germany Japan Korea U.K. U.S.A.

Investment amount (%)

National expenditures (%)

Local expenditures (%)

Owner/ operator funds (%)

Loans (%)

100.00 100.00 100.00 100.00 100.00 100.00

16.99 30.22 33.28 40.74 36.72 23.51

73.61 69.78 51.22 45.27 63.28 63.50

1.19 0.00 5.54 9.94 0.00 4.37

8.21 0.00 9.95 4.04 0.00 8.62

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Table 6.A.6: Investment amounts for railway improvements (Table 6.3(1) in US$). Investment amount

National expenditures

Local expenditures

Owner/ operator funds

Loans (million US$)

France SNCF and RFF RATP Total

4,274 324 4,598

1,133 3 1,136

282 26 307

2,860 151 3,011

0 144 144

Germany DBAG

6,640

2,711

0

3,684

245

7,315 4,740 4,191

59 1,079 1,749

37 1,207 754

4,830 1,152 727

2,389 1,302 961

6 16,253 6,855

0 2,888 1,532

0 1,998 772

6 6,715 2,688

0 4,652 1,862

South Korea Korean national railroad Total

3,272 4,792

1,321 2,327

0 60

1,793 2,247

158 158

United Kingdom Former British Rail London transport Total

3,587 653 4,240

613 187 800

0 0 0

2,471 466 2,937

503 0 503

7,920 1,009 6,395 15,325

0 1,009 2,439 3,449

0 0 1,940 1,940

7,920 0 2,016 9,936

0 0 0 0

Japan Private railways Public subways Japan railway construction corporation Honshu-Shikoku bridge authority Total Japan Railways

United States Class I Railroads Amtrak Transit Total

Exchange rate

France Germany Japan Korea U.K. U.S.A.

2000 2000 2000 2000 2000 2000

1€ = 1€ = 1 Yen = 1 Won = 1£ =

US$0.9305 US$0.9305 US$0.0087 US$0.0008 US$1.4922 US$1.0000

Appendix

183

Table 6.A.7: Investment amounts in railway improvements (financial resource composition, %).

France Germanya Japan Korea U.K. U.S.A. a

Investment amount (%)

National expenditures (%)

Local expenditures (%)

Owner/ operator funds (%)

Loans (%)

100.00 100.00 100.00 100.00 100.00 100.00

24.699 40.831 17.766 48.559 18.869 22.504

6.683 0.000 12.293 1.249 0.000 12.660

65.491 55.486 41.318 46.891 69.269 64.836

3.127 3.683 28.623 3.301 11.862 0.000

Values for DBAG.

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Table 6.A.8: Investment amounts for airport improvements (Table 6.4(1) in US$).

Investment amount France Aéroport de Paris (ADP) Total

363

National Local expendi- expenditures tures

Owner/ Loans operator (million funds US$)

93

0

260

10

460

Germany Munich Total

82 1,229

0 56

0 158

34 1,105

48 0

Japan New Tokyo (NRT) Kansai (KIX) Chubu (NGO) Others Total

1,136 783 787 5,005 7,711

73 257 58 1,787 2,175

0 119 14 1,321 1,454

919 8 72 1,649 2,648

144 400 642 248 1,434

South Korea Incheon (ICN) Total

1,443 1,724

306 587

0 0

0 0

1,137 1,137

United Kingdom BAA plc Total

918 1,088

0

0

655

263

7,654

7,654

0

0

0

16,974 24,628

1,950 9,604

0 0

9,788 9,788

5,236 5,236

Exchange rate

France Germany Japan Korea U.K. U.S.A.

2000 1€ = 2000 1€ = 2000 1 Yen = 2000 1 Won = 2000 1£ = 2000

US$0.9305 US$0.9305 US$0.0087 US$0.0008 US$1.4922 US$1.0000

United States Federal Aviation Administration Others Total

185

Appendix

Table 6.A.9: Investment amounts in airport improvements (financial resource composition, %). Investment National amount expenditures (%) (%) France Germanya Japan Korea U.K.b U.S.A.

100.00 100.00 100.00 100.00 100.00 100.00

25.710 4.531 28.204 34.043 0.000 38.996

Local expenditures (%)

Owner/ operator funds (%)

Loans (%)

0.000 12.895 18.860 0.000 0.000 0.000

71.419 82.575 34.344 0.000 71.377 39.743

2.871 0.000 18.592 65.957 28.623 21.261

a

Values for DBAG. Values for BAA plc.

b

Table 7.A.1: Shares of contributors for roadway improvements (Table 7.4(1) in US$). National Local taxpayers taxpayers France Germany Japan Korea U.K. U.S.A.

2,187 28 13,399 130 2,217 1,195

10,232 5,053 36,407 6,042 3,820 26,782

Users/ Users/specific taxes general Same Different taxes mode modes 2,707 0 0 35 10,494 0 2,332 43,209 0 532 5,786 0 592 0 0 248 70,105 0

Users/ Indirect Users/ Grand Total fees beneficiaries future (million US$) 199 0 1,370 16,695 0 0 0 15,610 6,246 0 11,231 112,825 1,444 0 587 14,522 0 0 0 6,629 4,941 0 9,741 113,011

Exchange rate

France Germany Japan Korea U.K. U.S.A.

2000 1€ = US$0.9305 2000 1€ = US$0.9305 2000 1 Yen = US$0.0087 2000 1 Won = US$0.0008 2000 1£ = US$1.4922 2000 US$1.0000

Table 7.A.2: Shares of contributors for roadway improvements (%).

France Germany Japan Korea U.K. U.S.A.

National Local Users/ taxpayers taxpayers general (%) (%) taxes (%) 13.10 61.29 16.21 0.18 32.37 0.23 11.88 32.27 2.07 0.89 41.61 3.66 33.44 57.62 8.93 1.06 23.70 0.22

Note: Values of fiscal year 2000.

Users/specific taxes (%) Users/ Indirect Users/ Same Different fees beneficiaries future mode modes (%) (%) (%) 0.00 0.00 1.19 0.00 8.21 67.23 0.00 0.00 0.00 0.00 38.30 0.00 5.54 0.00 9.95 39.85 0.00 9.94 0.00 4.04 0.00 0.00 0.00 0.00 0.00 62.03 0.00 4.37 0.00 8.62

Total (%) 100.00 100.00 100.00 100.00 100.00 100.00

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Table 7.A.3: Shares of contributors for railway improvements (Table 7.5(1) in US$). National Local taxpayers taxpayers France 1,136 Japan 2,257 Korea 602 U.K. 800 U.S.A. 1,108 France 1,133 (SNCF and RFF) Germany 2,652 (DBAG) Japan (JRs) 1,532 Japan (JNR) 199 Korea (KNR) 404 U.K. 613 (former BR) U.S.A. 1,009 (Class I and Amtrak)

0 1,998 60 0 2,455 0

Users/ general taxes 0 0 0 0 0 0

Users/specific taxes Same Different mode modes 0 0 0 0 0 1,725 0 0 0 2,421 0 0

Users/ Indirect Users/ Grand total fees beneficiaries future (million US$) 3,011 307 144 4,598 7,346 0 4,652 16,253 2,247 0 158 4,792 2,937 0 503 4,240 9,341 0 0 15,325 2,860 282 0 4,274

0

0

0

59

3,684

0

245

6,640

772 0 0 0

0 0 0 0

0 0 0 0

0 0 917 0

2,688 2,399 1,793 2,471

0 0 0 0

1,862 1,619 158 503

6,855 4,217 3,272 3,587

0

0

0

0

7,920

0

0

8,930

Note: Values of fiscal year 2000.

Exchange rate

France Germany Japan Japan Korea U.K.

2000 1€ = US$0.9305 2000 1€ = US$0.9305 2000 1 Yen = US$0.0087 2000 1 Yen = US$0.0059 2000 1 Won = US$0.0008 2000 1£ = US$1.4922

Table 7.A.4: Shares of contributors for railway improvements (%). National Local Users/ Users/specific taxes (%) Users/ Indirect Users/ Total taxpayers taxpayer general Same Different fees beneficiaries future (%) (%) (%) taxes (%) mode modes (%) (%) (%) France 24.70 0.00 0.00 0.00 0.00 65.49 6.68 3.13 100.00 Japan 13.89 12.29 0.00 0.00 0.00 45.20 0.00 28.62 100.00 Korea 12.55 1.25 0.00 0.00 36.01 46.89 0.00 3.30 100.00 U.K. 18.87 0.00 0.00 0.00 0.00 69.27 0.00 11.86 100.00 U.S.A. 7.23 16.02 0.00 0.00 15.80 60.95 0.00 0.00 100.00 France (SNCF 26.50 0.00 0.00 0.00 0.00 66.91 6.59 0.00 100.00 and RFF) Germany 39.94 0.00 0.00 0.00 0.89 55.49 0.00 3.68 100.00 (DBAG) Japan (JRs) 22.35 11.27 0.00 0.00 0.00 39.22 0.00 27.17 100.00 Japan (JNR) 4.72 0.00 0.00 0.00 0.00 56.89 0.00 38.39 100.00 Korea (KNR) 12.34 0.00 0.00 0.00 28.03 54.79 0.00 4.83 100.00 U.K. (former 17.09 0.00 0.00 0.00 0.00 68.89 0.00 14.02 100.00 BR) U.S.A. (Class I 11.03 0.00 0.00 0.00 0.00 88.70 0.00 0.00 100.00 and Amtrak) Note: Values of fiscal year 2000. Japan (JNR) is 1986.

187

Appendix Table 7.A.5: Shares of contributors for airport improvements (Table 7.6(1) in US$). National Local taxpayers taxpayers Germany 56 Japan 1,409 Korea 67 U.S.A. 0 France (ADP) 8 Germany 0 U.K. (BAA plc) 0 Japan (NRT) 47 Japan (KIX) 166 Japan (NGO) 37 Korea (ICN) 35

158 1,315 0 0 0 0 0 0 108 13 0

Users/ Users/specific taxes general Same Different taxes mode modes 0 0 0 0 905 0 0 54 466 0 9,604 0 0 86 0 0 0 0 0 0 0 0 26 0 0 102 0 0 22 0 0 28 243

Users/ Indirect Users/ Grand total fees beneficiaries future (million US$) 1,015 0 0 1,229 2,568 80 1,434 7,711 0 0 1,137 1,724 9,788 0 5,236 24,628 260 0 10 363 34 0 48 82 655 0 263 918 919 0 144 1,136 0 8 400 783 0 72 642 787 0 0 1,137 1,443

Exchange rate

France Germany Japan Korea U.K. U.S.A.

1999 1€ = 2000 1€ = 2000 1 Yen = 2000 1 Won = 2000 1£ = 2000

US$1.0028 US$0.9305 US$0.0087 US$0.0008 US$1.4922 US$1.0000

Table 7.A.6: Shares of contributors for airport improvements (%). National Local Users/ taxpayers taxpayers general (%) (%) (%) Germany 4.53 12.89 0.00 Japan 18.27 17.05 0.00 Korea 3.88 0.00 0.00 U.S.A. 0.00 0.00 0.00 France (ADP) 2.16 0.00 0.00 Germany 0.00 0.00 0.00 (Munich) U.K. 0.00 0.00 0.00 (BAA plc) Japan (NRT) 4.17 0.00 0.00 Japan (KIX) 21.24 13.74 0.00 Japan (NGO) 4.76 1.66 0.00 Korea (ICN) 2.42 0.00 0.00

Users/specific taxes (%) Same Different mode modes 0.00 0.00 11.74 0.00 3.12 27.04 39.00 0.00 23.55 0.00 0.00 0.00

Users/ Indirect Users/ Grand fees beneficiaries future total taxes (%) (%) (%) (%) 82.57 0.00 0.00 100.0 33.30 1.04 18.59 100.0 0.00 0.00 65.96 100.0 39.74 0.00 21.26 100.0 71.42 0.00 2.87 100.0 41.56 0.00 58.44 100.0

0.00

0.00

71.38

0.00

28.62

100.0

2.27 13.00 2.76 1.94

0.00 0.00 0.00 16.85

80.90 0.00 0.00 0.00

0.00 1.01 9.18 0.00

12.67 51.02 81.63 78.79

100.0 100.0 100.0 100.0

Note: NRT, New Tokyo International Airport (Narita); KIX, Kansai International Airport; NGO, Chubu International Airport; ICN, Incheon International Airport Values of fiscal year 2000. U.S.A. and France (ADP) are 1999.

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198

Subject Index A New Deal for Trunk Roads, 21–22 actual contributors, 84, 86, 88–89, 101, 133, 139 Aéroport de Paris, 33, 121, 184 Agency for the Financing of Transport Infrastructures in France (AFITF) [l’Agence de financement des infrastructures de transports de France], 43–44 Airport and Airway Revenue Act (AARA), 81 Airport and Airway Trust Fund (AATF), 32, 74, 81, 99, 139 Airport Improvement Act, 32, 63 Airport Improvement Program (AIP), 32, 80 airport improvement, 25, 31–33, 41–42, 45, 49, 52, 58, 62–65, 68, 72, 74, 80–81, 86, 93, 95, 116, 118–119, 121–122, 134–136, 138–139, 141, 143, 151, 154, 156–157, 159–160, 164 airport rental fee, 45, 52, 58, 62–63, 65, 72, 74, 98 Alsace, 48 Amtrak (National Railroad Passenger Corporation), 79–80, 115 Amtrak Reform and Accountability Act (ARAA), 80 Amtrak Reform Council (ARC), 80 Appraisal Summary Table (AST), 21–22 Association of American Railroads, 115

authority, 32–33, 48, 50, 52–53, 56, 63, 65, 68, 72, 79, 102, 104, 108, 112–113, 117–120, 139, 144 autobahn, 28–30, 51, 53, 103, 109, 175 Automated Guide-way Transit, 31 automobile acquisition tax, 127 automobile-related taxes, 19, 25, 90, 93, 96, 170 Aviation Council, 62 aviation freight tax, 139 aviation fuel tax, 98 axle tax, 124 Bakerloo, Central, Victoria and Waterloo & City lines (BCV), 71 Basic Law for Domestic Transportation (LOTI), 42 Bay Area Rapid Transit (BART), 10 Bayern State, 56 beneficiaries, 8, 12, 14, 19, 74, 86–90, 92, 95, 97–99, 123, 131, 157–161, 163–164, 174 benefit measurement, 12 Bergen, 39 Bordeaux, 37 British Airport Authority (BAA), 68, 72, 102, 120, 139 British Airport Authority Public Limited Company (BAA plc), 32–33, 68, 72–73, 120–122, 134–135, 138–139, 144, 151, 153, 156, 159, 161, 164

199

200

Subject Index

British Railway Board (BR), 68–69, 97, 114, 137, 150, 152, 155, 158, 160, 163, 165–166, 169 Bundesminister für Verkehr, 53, 103, 111, 116, 132, 177–179 Busan Public Transportation, 102 business tax, 89 capital expenditures, 38, 108 capital grants, 45, 110, 132 capital increase, 94 Caen, 37 central government, 31–33, 38, 42, 45–47, 49–50, 56–58, 60–61, 63–69, 71–72, 91, 93–97, 102–103, 105–107, 110, 116, 124, 126–128, 134 chamber of commerce, 50, 102 Channel Tunnel Rail Link, 70 Charles de Gazelle Airport, 50 Chubu International Airport Company, 63 Chubu international airport [Central Japan International Airport (NGO)], 62–63, 121, 138, 153, 161 City Airport, 70 Civil Aviation Authority (CAA), 68, 72, 102 Civil Aviation Special Account (BAAC) [Budget Annexe de 1'Aviation Civile], 32–33, 45, 50, 134 Class I Railroads, 78–79, 108, 115, 133, 145, 165–166, 169 classification of financial resources, 87–88, 90–99 Clermont-Ferrand, 37 Cofiroute, 44, 46

composition of financial resources, 85, 101, 103, 105–106, 108, 110–111, 113–116, 118–120, 150, 156, 169–170 Comprehensive Spending Review (CSR), 22 concessions, 33, 47, 72, 82 congestion charging, 39–40 congestion tax, 10 consumption tax, 89 contributors, 5, 84, 86–92, 94, 96–98, 101, 123, 133, 136–139, 154, 157, 159–164 corporate tax, 88, 123 Corporation for Advanced Transport & Technology, 93 corporation, 29, 33, 50, 54, 58–59, 63–66, 91, 93, 95, 102, 104–108, 111–113, 115–120, 130, 132, 134 corporation vehicle special tax, 91 Corsica Island, 48 cross-subsidy system, 42 Croydon Council, 38 Croydon Tramlink, 38, 71 Daegu Metropolitan, 102 DB cargo company [DB Cargo AG], 54 DB long distance passenger company [DB Fernverkehr AG], 54 DB network company [DB Netz AG], 54 DB passenger transport [DB Personenverkehr], 54 DB regional company [DB Regio AG], 54 DB Station and service company [DB Station & Service AG], 54 DB travel and tourism company [DB Reise & Touristik AG], 54

Subject Index DB urban transportation company [DB Stadtverkehr AG], 54 Department of Transport (UK), 107, 115, 120 Department of Transportation, 115 departure tax, 99 deregulation, 51, 75 Development and Road Improvements Fund Act, 69 Docklands Light Railway, 71 Docklands Light Railway Ltd (DLR), 70–71 drivers license tax, 96 East German National Railway (DR) Deutsche Reichsbahn, 54, 150, 155, 163 East Germany, 22, 51, 53 English, Welsh, and Scottish Railways, 70 environment tax, 10, 26 Expressways Act, 44 external diseconomies, 10–11, 15–16 external economies, 8–9, 15 external funds, 87–88 externalities, 12, 14, 16, 18, 20 federal autobahn (Interstate Highway) [Bundesautobahn]), 50 Federal Aviation Administration (FAA), 80–81, 122, 139, 146 federal government, 17, 30, 32–33, 51–56, 74, 77–82, 92, 98–99, 102–103, 123, 126, 129, 132 Federal Highway Administration (FHWA), 77, 107 Federal Long-Range Road Act [Bundesfernstraßengesetz], 26, 53

201

federal long-range roads [Bundesfernstraßen], 53, 103–104 Federal Ministry of Transport (BMVBW) [Bundesministerium für Verkehr, Bau- und Wohnungswesen], 53, 103, 111, 116, 132, 177–179 federal roads (Bundesstraßen), 53 financial resources, 1–4, 7, 9, 13, 15, 17, 19–20, 23, 27, 43, 45–46, 49–50, 52–56, 58, 60–66, 68–69, 71–72, 74, 77–83, 85–99, 101, 103–106, 108–111, 113–122, 134, 136, 139–140, 150, 156, 162, 169–170 five-year plan, 44, 46, 62 fixed assets tax, 89 fixed costs, 12 former British Railway Board, 108, 114, 132 Frankfurt am Main International Airport, 56 Frankfurt/Main Airport Company (FAG) [Flughafen Frankfurt/Main AG], 55, 56 Freightliner, 70 French Expressway Organization (ADF) [Autoroute de France], 29, 45–46 French National Railway (SNCF) [Société Nationale des Chemins de fer Français], 45, 47–49, 102, 108, 110–111, 117, 130–131, 137, 143–145, 150, 152, 155, 158, 160, 163, 165–166, 169 French railway network company (RFF) [Réseau Ferré de France], 45, 48–49, 102, 108, 110–111,

202

Subject Index

117, 130, 137, 143–145, 150, 152, 155, 158, 160, 163, 166, 169 French transportation tax (VT) [Versement de Transport], 86, 130 fuel taxes, 44, 63, 69, 74, 77, 81, 88, 98, 140, 142 fundamental social rights, 8, 14 funding system, 2–4, 7, 9, 13–14, 20, 25–26, 29, 31, 37, 40–42, 49–50, 77, 90, 128, 140–141, 172–175 Funds for Paris Metropolitan area (FARIF) [Fonds d’aménagement de la région Ile-de-France], 46 future benefits, 7–8, 13, 15–16, 174 future users, 20, 87, 89, 93, 95, 123, 156–164 gas/oil delivery tax, 127 gasoline tax, 52, 89, 95, 99, 127, 133 GDP, 108, 110, 116, 118, 122, 136, 138–139, 141–146, 149–154, 157–161, 164–169 GDP ratio, 110, 118, 122, 136, 138–139, 142–146, 149–153, 157–161, 164–169 general funds, 16, 18–20, 26–27, 29–31, 39, 41–42, 45–46, 49, 52–54, 58, 60–66, 68–69, 72, 74, 77–80, 86–99, 119, 123–136, 139, 152, 156, 173 general taxes, 18, 46, 86, 88–89, 91, 93, 96, 99, 123–124, 128, 139, 159 general taxpayers, 18, 156–161 German Federal Railway (DB) [Deutsche Bundesbahn], 30, 54, 150, 152, 155, 158, 160, 163, 165–166, 169 German Federal Transport Plan (BVWP) [Deutsche Bundesverkehrswegeplan], 21, 50–51, 54–55

German Railway Corporation (DBAG) [Deutsche Bahn Aktien Gesellshaft], 52, 54–55, 102, 108, 111, 117–118, 130–132, 137, 150, 152, 155, 158, 160, 163, 166, 169 GPS, 28, 30, 140, 175 Grenoble, 37 Hanshin Expressway Public Corporation, 59, 104 Hessen State, 56 high-speed rail, 39, 47, 65–66, 79, 83, 93, 142 Highway Revenue Act, 77 Highway Trust Fund, 26–27, 31, 74, 77–80, 99, 129 HM Treasury, 69 Hokuriku Shinkansen, 36 Honshu-Shikoku Bridge Authority, 102, 104, 112–113 HOV (high-occupancy vehicle) lane, 21 Ile-de-France, 34, 46 Ile-de-France Transportation Union (STIF) [Syndicat des transports d’Île-de-France], 48–49 Impact Fees (IF), 1, 7–9, 12–13, 15–16, 18–20, 35, 82–83, 99, 174 Incheon International Airport (ICN), 66, 95, 102, 120, 138, 121, 138, 153, 161, 167–168 Incheon Rapid Transit Corporation, 102 income tax, 89 incorporated companies (München International Airport), 102 indirect beneficiaries, 87–90, 95, 123, 131, 157–161, 164 inheritance tax, 89 inner funds, 87–88, 113 integrated transport, 47, 67

Subject Index Intelligent Transport System (ITS), 2, 8, 18, 30, 43, 46, 48, 50, 54–57, 66, 72–73, 75, 76, 78, 111, 134, 149, 162, 174 Inter-Ministry Committee for Territorial Development (CIADT) [Comité interministériel de l'aménagement et du développement du territoire], 47 Intermodal Surface Transportation Efficiency Act (ISTEA), 30–31, 73, 75–80, 99 intermodal transport systems, 73 International Civil Aviation Organization (ICAO), 116, 118, 179 International Road Federation, 101, 103, 106–107 Interstate and Defense Highways, 26, 77 Interstate Highway, 53, 73 investment amount, 3–4, 9, 11, 62, 64, 84, 101, 103–123, 129, 140, 151, 153, 161, 169–170 Japan Highway Public Corporation, 59, 104 Japan National Railways (JNR), 39, 112–113, 137, 152, 160 Japan Railway Construction Public Corporation, 93, 112 Japan Railway Construction, Transport and Technology Agency (JRTT), 61, 102, 93 Japan Railways (JR), 18, 61, 93, 112, 102, 113, 117, 132 Japan Subway Society, 112 Joint ventures, 35 Jubilee, Northern and Piccadilly lines (JNP), 71

203

Kansai International Airport (KIX), 62, 102, 118–120, 138, 121, 138, 153, 161 Korea Airport Corporation, 102, 120 Korea Highway Corporation (KHC), 64, 102, 106–107 Korea Rail Network Authority, 65 Korean Airport Corporation (KAC), 66 Korean High speed Rail Construction authority, 108 Korean National Railroad, 64, 102, 113–114 Kyoto meeting, 43 Land and Water Transport Investment Fund (FITTVN) [Fonds d'investissement des transport terrestre et des voies navigables], 44, 46 land value, 10 landing fees, 31, 33, 50, 52, 63, 72, 74, 82, 98 landowners, 1–2, 9–10, 35, 38, 174 lane, 21 Law Concerning the Air Quality and the Rational Use of Energy (LAURE) [Loi sur l’Air et l’Utilisation Rationnelle de l’Energie], 20, 43, 55 Law for regionalization of urban passenger transport (RegG) [Gesetz zur Regionalisierung des öffentlichen Personennahverkehrs], 20, 22, 37, 43, 55 Law for Spatial Planning and Sustainable Development (LOADDT, 1999) [Loi d’ Orientation pour l’Aménagement et le Développement Durable du Territoire], 21, 42

204

Subject Index

Law for Urban Solidarity and Renewal (SRU) [Loi Solidarité et Renouvellement Urbains], 21–22, 37, 43 light motor vehicle tax, 58, 94 liquor tax, 89 load transportation tax, 91 loans burden, 168–169 local airports, 32, 45, 50, 56, 72, 81 local expenditures, 86, 101, 103–105, 107–108, 114, 123–137, 139, 149–153, 156 local governments, 29, 32–33, 35–36, 39, 42, 44–46, 50–54, 56–66, 68–69, 72–74, 76–82, 87–88, 90–97, 99, 101–108, 110, 112–113, 115, 119–120, 125–130, 133 local road public corporations, 104–105 local roads, 45–46, 52–53, 58, 65, 106, 109, 149, 154, 157, 162 local taxpayers, 88–90, 93, 95, 97, 99, 123–124, 126, 128, 132–133, 135, 139, 160, 162, 164 Local Transport Plan (LTP), 69 London, 10, 28, 38–40, 68, 70–72, 97, 102, 108, 114–115, 117, 132, 150, 155, 158, 163, 175 London Transport (LT), 68, 70, 102, 108, 114–115, 132, 150, 155, 158, 163 London Underground Limited (LUL), 71 long-term benefits, 12 long-term loan, 12, 15–16, 57 long-term marginal cost curve, 12 Los Angeles Mass Transit Authority (LAMTA), 79, 102 Lyon, 37

maintenance and repairs, 142–144 maintenance/repair expenses, 104–106, 108 Major trunk roadways for national land development (GLAT) [Grandes Liaisons d’Aménagement du Territoire], 44, 46 marginal benefit curve, 8–9, 11–12 marginal cost curves, 12 market competition, 18–19, 66 market mechanisms, 8, 19 Mass Transit Program (MTP), 79–80 Metronet Rail BCV, 71 Metronet Rail SSL, 71 Metropolitan Expressway Public Corporation, 104 Metropolitan Planning Organizations (MPOs), 76, 79 Ministry for Transport, Infrastructure, Tourism and the Sea (France) [Ministre des Transports, de l’ quipement, du Tourisme et de la Mer], 46 Ministry of Construction and Transportation (Korea), 106–107, 113–114, 120 Ministry of Transport (Japan), 52–53, 111 Mixed-economy companies (SEMCA: Société d’Economie Mixte Concessionnaire d’Autoroute), 29, 44–46, 90, 101–103 modal shift, 20, 31, 49, 73 monetary terms, 7–8, 12, 139 Monte Blanc Road Tunnel, 46 Montpellier, 37 motor vehicle fuel tax, 98 motor vehicle registration tax, 91 motor vehicle special tax, 97

Subject Index motor vehicle tax, 52, 58, 89, 94, 96–97 motor vehicle weight tax, 58 motor vehicle weight transferred tax, 94 Moving America, 75 Mulhouse, 37 Munich Airport Company (FMG) [Flughafen München GmbH], 56, 116, 118 Munich International Airport, 52, 118 Nancy, 37 Nantes, 37 national expenditures, 86, 95, 101, 103, 105–108, 114–115, 120, 123–124, 126–128, 130, 132–134, 136, 139, 149–157 National Highway System (NHS), 73, 76–78 National Highway Traffic Safety Administration, 77 National highways, 44–46, 51, 59 National Plan of Integrated Airport Systems (NPIAS), 32, 80–81, 122 National Road Master Plan [Le Schema Directeur Routier National], 44 national taxpayers, 87–88, 90, 93, 95, 97, 99, 123–124, 127, 129, 132–133, 135, 139, 159–160, 162–163 National Transport system (NTS), 76 Network Rail, 68, 70–71, 102, 108, 114 New Addington, 38 New Chitose Airport (Sapporo), 62–63 New Deal for Transport, 21 New Roads by New Means, 29, 67 New Tokyo International Airport (Narita), 32, 62–63, 138 New Tokyo International Airport Authority, 63, 118–119

205

New York Metropolitan Transportation Authority (MTA), 79 Non-motorized transportation, 77 Nord-Pas-de-Calais, 48 operating grants, 45, 68, 74, 110, 113, 115, 132 operation income, 79, 98 operational expenses, 108 optimal equilibrium, 10 Orléans, 37 Orly Airport, 50 Osaka International Airport (Itami), 63 Oslo, 10, 28, 39 Output and Performance Analyses (OPA), 22 owner/operator funds, 88, 101, 103–105, 107–108, 114–115, 120, 123, 139, 151–156 Paris metropolitan area, 29, 46, 48–49 Paris Public Airport Corporation (ADP) [Aéroport de Paris], 32–33, 50, 102, 116, 121–122, 134–135, 138, 151, 153, 156, 161, 164, 167–168 Paris Transport Company (RATP) [Régie Autonome des Transport Parisiens], 45, 47, 102, 108, 110–111, 117, 130–131, 143, 145, 150, 155, 158, 163, 166, 169 Paris Transportation Union (STP) [Syndicat des transports parisiens], 48, 78–80 Pays de la Loire, 48 personal marginal cost curves, 12 petroleum gas tax, 127 petroleum gas transferred tax, 58, 127 petroleum taxes, 52–55, 92 policy intervention, 18–19

206

Subject Index

port/airport authorities, 102 prefectural residence tax, 89 principle of beneficiary burden, 75 Private approval company (Société Privé Concessionnaire), 29, 44–46, 101 private companies, 16–17, 29, 31, 33, 39, 47, 53, 55–58, 61, 63, 71, 78, 93, 95, 102, 116, 141, 152 Private Finance Initiative (PFI), 29–30, 34–35, 68–69 private investment, 36, 86, 89, 98 privatization, 12, 15, 17–18, 26, 66–67, 69, 93, 141, 170 profit and loss statements, 108 Provence-Alpes-Côte-d’Azur, 48 public corporations, 58–59, 64–65, 78, 93, 102, 104–105, 107 public fund burden, 164–168 public funds, 14–15, 19–20, 30–31, 36, 39, 41, 57, 87–88, 154, 160–161, 172–173 Public Private Partnership (PPP), 17, 30, 34, 38, 66, 68, 70–71 Public Sector Comparator, 35 Public Service Agreements (PSA), 22 Public Service Obligation (PSO), 68, 99 public subways, 102, 112–113, 117 Queen Elizabeth II Bridge, 34 Rail Passenger Act, 79 railroad fares, 89 railtrack, 68, 70, 102, 108, 114, 152, 160 Railway Construction Act, 49 Railway Development Fund, 60–61, 93 Railway Project Act, 61 regional premium coefficients, 22

registration tax, 69, 74, 125 reimbursement, 60, 77, 81–82, 87, 93, 99 revenue bond, 74, 81–82, 98–99 Revenue Support Grants (RSG), 68–69, 128 Rhône-Alpes, 48 Rio de Janeiro Conference, 43 road charging systems, 10, 28 Road Investment Special Fund [Fonds Spécial d’Investissement Routier], 27, 44 Roads for Prosperity, 67 rolling stock, 85–86, 110–112 Rouen, 37 Safe, Accountable, Flexible, Efficient Transportation Equity Act for the 21st Century—A Legacy for Users [SAFETEA-LU], 21, 31, 73, 75–80 Sapporo (Chitose) airport, 62–63 S-bahn, 52, 54–56 Second-phase Shinkansen project, 39 Second Severn Bridge, 34 Semiexpressways (LACRA) [Liaisons Assurant la Continuité du Réseau Autoroutier], 44, 46 semi-governmental corporations (SEMCA) [Sociéte d’Economie Mixte Concessionnaire d’Autoroute], 29, 44, 101 Seoul Metropolitan Rapid Transit Corporation, 102, 108, 113 Seoul Metropolitan Subway Corporation, 95, 108, 113 separation between construction/ possession and operation, 25 Serco Docklands Ltd, 71

Subject Index shadow tolls, 34 shares of contributors, 136–138, 154, 157, 159–164 Shinkansen, 31, 36, 39, 57–58, 60–61, 93, 152–153 Singapore, 10, 28, 39 social marginal benefit curve, 11 social marginal cost curve, 11–12 social public property, 41 social right to mobility, 11–12 social surplus, 8, 14 Special Assessment Districts (SAD), 35, 99 special consumption tax of vehicle, 96 special transportation account, 95 specific fund for roadway investment [Fonds Spécial d’Investissement Routier], 27, 44 specific funds, 27–28, 31–33, 41, 46, 53, 58–60, 65–66, 74, 77, 81, 86–89, 92, 94, 96, 99, 123–136, 139, 156, 159 St. Denis (Paris), 37 state and local governments, 74, 77–79, 90, 99, 102, 129 Statewide Transportation Improvement Program (STIP), 76 Stinners company [Stinnes AG], 54 Strasbourg, 37, 47 Sub Surface lines (Circle, District, East London and Metropolitan lines), 71 subway corporation, 17, 95, 102, 108, 113 suppliers’ profits, 8 Surface Transportation Program (STP), 75, 78 Swedish National Railway [Statens Jarnvagar], 18

207

Tax Increment Financing (TIF), 35–36, 99 Teito Rapid Transit Authority (Tokyo Metro), 102, 112–113 Territorial Management and Development Act (LOADT) [Loi d’orientation pour l’aménagement et le développement du territoire], 42, 44 TGV, 39, 46–47 Thameslink, 70 The Basic High-Speed Railway Plan in France, 47 The Basic Law for Domestic Transportation (LOTI) [Loi d'orientation des transports intérieurs], 11, 17, 19, 22, 37, 42, 47–48 the Basic Law [Grundgesetz] in Germany, 11, 17, 37, 42, 51 The British Railway, 69–71 ticketing tax, 32, 98, 99 tire tax, 77 Tokyo International Airport (Haneda), 62–63, 118–119, 138, 167–168 toll road, 12, 17, 19–20, 25–30, 35, 39, 41, 44, 53, 57–60, 64–66, 68–69, 73–78, 89–91, 94, 96–98, 101, 104–107, 109, 140, 149, 151, 153–154, 156–157, 162, 169 toll road fees, 27, 68, 78, 89 toll road systems, 25–26, 28–30, 53, 59, 75, 140, 153 toll tunnels, 28 Toyama Light Rail, 36 traffic congestion, 10, 67 traffic-related CO2 emissions, 40 Train Operating Companies (TOCs), 71 tram system, 34, 36–37 Tramlink, 38, 71

208

Subject Index

Tramtrack Croydon Ltd (TCL), 38 trans-European transport network (TEN-T), 82–84 transit public corporation, 102 Transport and Technology Agency, 93 Transport Finance Act [Verkehrsfinanzgesetz], 26, 53 Transport for London (TfL), 38, 40, 71, 97 Transport Rights [droit au transport], 37, 42–43 Transport Supplementary Grants (TSG), 68–69 transport tax (VT), 9, 33, 37, 48–49, 86, 90, 130–131, Transport Ten Year Plan 2000, 66 Transportation Equity Act for the 21st Century (TEA-21), 31, 73, 76–78, 80 Transportation Investment Evaluation Guideline (RAS-W) [Richtlinien für die Anlage von Straßen, Teil: Wirtschaftlichkeitsuntersuchungen], 22 Transportation Management Areas (TMAs), 76 Transportation Policy and Programme (TPP), 69 treasury investment and loans, 93 Trondheim, 39 trucks and trailers tax, 98 Tsukuba Express, 37 Tsukuba science city, 37 Tube Lines, 71

Uncertainty, 7–8, 16 Underground, 40, 70–71 Urban Mobility Plan (PDU) [Plans de Déplacements Urbains], 20, 43 Urban Transportation Improvement Grant Act (GVFG) [Gemeindeverkehrsfinanzierungsgesetz] [Bundesprogramm], 55 Use tax, 27, 124, 125, 127–129, 133 user burden, 3, 125, 128, 139, 165–167 Users/fees, 88–91, 93–95, 97–99, 123, 139, 163–164 Users/future, 88–91, 93, 95, 97, 99, 123, 139 Users/general taxes, 88, 91, 93, 96, 99, 123–124, 128, 139, 159 Users/specific taxes, 88, 90–93, 95, 99, 123, 126–127, 129, 132–133, 135–139, 162, 164 Users/specific taxes; different modes, 123, 132–133, 139 Users/specific taxes; same mode, 123, 126–127, 135–136, 139 users’ surplus, 8

U.S. Department of Transportation, 115 U-bahn, 52, 54, 102, 150, 155, 158, 163, 166, 169

Washington Metropolitan Area Transportation Authority (WMATA), 79, 102

Valenciennes, 37 Value for Money, 35 vertical separation, 18 Vignette, 28