The 2013 Summit of the International Transport Forum (ITF) attracted over 1000 decision-makers from 76 countries and Ministers from the 54 member countries, this year debating the theme “Funding Transport”.
From 22 to 24 May, transport ministers and business leaders, representatives of non-governmental organisations and researchers considered all aspects of funding and financing transport to answer: How will transport infrastructure, services and systems in general be funded to meet current and future demands?
Organised under the Norwegian Presidency, the Forum gave the floor to Marit Arnstad, Minister of Transport and Communications of Norway. José Manuel Viegas, ITF Secretary General and Dr Peter Ramsauer, German Federal Minister of Transport, Building and Urban Development, also took the floor and welcomed the participants to Leipzig to discuss the funding dilemma, as air passenger travel is projected to double, air transport to triple and container handling in ports to quadruple by 2030 and as investment needs for transport infrastructure to 2030 are estimated at USD 11 trillion for ports, airports and key rail lines alone. Current infrastructure could accommodate only a 50% increase in demand (OECD figures).
During the Opening Plenary held on 22 May, a keynote speech was made by Amartya Sen, Nobel laureate, Professor, Economics and Philosophy at Harvard University. He said:
If the world is, in many ways, much richer today than anything that our ancestors could have imagined, the credit for that achievement goes largely, as Adam Smith argued more than two hundred years ago, to the use of economies of scale and skill formation, made possible by increasing trade and exchange taking place over the centuries. In the context of this conference on the funding of transport, it is particularly important to bear in mind the central fact that gains from division of labour, which is one of the main sources of prosperity for so many people in the world, and which could help to raise the living standards of others as well, are thoroughly dependent on the availability of usable transport. In presenting this central economic thesis, Adam Smith not only referred to contemporary trade, but discussed how dependent the ancient civilizations across the world were on the use of navigable rivers for early commerce, and he gave examples based on the exchange of commodities through the rivers of ancient Egypt, China, India, and elsewhere”.
John Micklethwait, Editor-in-Chief at The Economist, UK, as well as Angel Gurría, Secretary-General of the Organisation for Economic Co-operation and Development (OECD) and Howard Davies, Chairman of The Phoenix Group, UK, discussed the fact that economies around the world struggle to retain or to regain growth momentum, and many need to cut spending while avoiding further economic slowdown. Well-targeted transport investments have the potential to foster growth, but short-run public finance concerns can reduce attention for future payoffs.
On 23 May, discussions among all Ministers from member countries and transport actors across the world on “Funding Transport” were concluded by a Declaration.
Transport infrastructure is much more than asphalt, concrete or steel; it is the backbone of national economies, providing connections for people and goods, access to jobs and services, and enabling trade and economic growth,”
With investment in transport infrastructure a long-term venture, robust, credible funding solutions that support trade, economic growth and environmental and social sustainability are urgently needed.”
With both public budgets and private sector resources under constraint, government authorities and industry must together seek new ways of ensuring stable, long-term funding for the sector.”
Download the full text of the Declaration by Ministers on Transport Funding at this link:
UIC Director-General Jean-Pierre Loubinoux, who participated in the Forum and more specifically in a Ministerial Round Table held on 22 May, together with Maksim Y. Sokolov, Minister of Transport, Russian Federation, Yeo Hyung Koo, Vice-Minister,
Korea, Robert Letteney, Deputy Assistant Secretary, US, Aleksander Wolowiec, Board member, PKP Polish Railway Lines, Poland, Michael Clausecker, Chairman of the Management Board, Bombardier Transportation, Germany, Bryan Nye, CEO, Australian
Railway Association, Australia, Alexander Saltanov, Vice President, Russian Railways, Russia, spoke of the contribution that UIC and its member railways could offer with regard to investments in High Speed Rail.
After a presentation of the global context (constant increase in transport demand .. in a context of increasingly scarce resources … but the need for continued investment and in an excellent period of innovation which should present new avenues to solve the financial issues for long-term high speed infrastructure projects, UIC Director General Jean-Pierre Loubinoux highlighted on the three necessary conditions resulting from the experience shared between operators and manufacturers to achieve a long-term high speed line (market policy with sufficient volume and appropriate distance; control of access to the latest technology; sufficient purchasing power per inhabitant).
He also insisted in the need to consider a high speed financing project from every aspect: high speed projects are costly but should only be considered on financial criteria alone. In any proposed high speed project, criteria concerning policy (in terms of land planning), economics (growth of GDP, employment…), society, and those linked to sustainable development are worth considering as part of the financial equation. And need to be better defined and valued from the start. Without attracting the attention of participants to the Round Table on the need to work together and think about innovative financing models. With a combination of sources with traditional institutional partners (WB, ADB, etc.) which remain the main contributors to infrastructure projects developed by governments, and which are henceforth learning how to cooperate more closely, with new investors who need to be reassured that their investments are sustainable (therefore well in advance and with legal assistance at each stage).
Click here to watch the video message of Jean-Pierre Loubinoux, UIC Director General at ITF in Leipzig:
UIC also wishes to warmly thank the ITF team for the quality of actions led during the Forum, and for the very professional level of exchanges, always expressed within the framework of friendly relations.
Next Summit in 2014
Headlined “Transport for a changing world” the next Summit of the International Transport Forum is scheduled to take place from 21 – 23 May 2014 in Leipzig.