Guest Blog Post written by Tiffany Vlaanderen for TBLI CONFERENCE™ EUROPE 2015, where UITP will host a session on Investing in Sustainable Transport Infrastructure. Views and opinions are that of the writer and are not the official views of TBLI CONFERENCE™.
Growing urbanization presents opportunities and challenges for global cities to tackle. One crucial area where communities feel this growth most notably is in the daily commute. As mobility demands rise, mass transit is tasked with finding solutions to absorb transport demand. There is an urgent need for investing in public transport infrastructure, whether it be rail tracks, data collection systems, signaling systems, bus stops, ticketing machines or the development of commercial areas among others.
TBLI spoke with Alain Flausch, General Secretary of the International Association of Public Transport known as UITP, to better understand the latest trends and financing surrounding public transport projects.
What are currently the main challenges for public transport?
According to Flausch, the question is not whether we should be for or against sustainable public transport but rather how can public transport provide quality services that are efficient and comfortable enough for communities to use them. Flausch believes the difference between the individualistic and collective mentality in regard to transportation is one of the greatest challenges the industry faces.
One of the contradictions that is of great interest to UITP is the movement of shared economies in developed countries; developing countries, particularly those with growing megacities, showcase opposing trends with private transport being at the forefront of urban mobility. Flausch believes that in regard to developing economies, the pressure of the automobile industry to promote socioeconomic status through the purchase of a car is still present and of great concern.
“The developing economies are on the path to make the same mistakes we made fifty years ago," says Flausch. “We need to be a good alternative to car transport by being efficient and comfortable, so that it makes city life more peaceful and not a struggle for life while you’re queuing in some traffic jam."
UITP works with key transit providers and key stakeholders across the globe to ensure projects are implemented smoothly such as London’s TFL, Hong Kong's MTR, Grand Paris and Tokyo Metro.
Whatever the project may be, infrastructure investment is often a challenge which varies from one region to the next. While in some regions the main difficulty is access to capital to finance projects, other regions face funding issues: how to pay back the infrastructure in the long term?
Historically most infrastructure has been publicly financed at the national level. The economic crisis and population growth have shifted the game; where now local funding sources are of growing importance for public transport financing models, as national support is no longer sufficient. In parallel, increasingly national governments are considering decentralization of public transport funding to local governments, while withholding the needed competences to raise adequate funding
“Public money is scarce. Unfortunately most of the time [ticket] fares are fixed by public authorities and kept artificially low, yet they’re not brave enough to face the funding issues. The only way we can grow is to get away from subsidies in fares towards a more diversified revenue sources including commercial revenues, contributions from indirect benefiters and land value capture,” says Flausch.
The funding of public transport projects often remains an issue for cities, hence the need to optimize costs and to find innovative funding tools. One of UITP’s goals is guiding members in how to make their projects more efficient and financially viable through the sharing of best practices, as well as the promotion of capacity building at the local level.
What role can private investment play?
Private money can mobilize public infrastructure projects in two ways according to Flausch: filling the funding gap public money cannot provide and private investments are to lead to higher efficiency gains due to a requirement of better yields.
Stability and predictability in projects with few change in governmental policies regarding mass transport systems help to create a better impression when considering private investments according to Flausch.
"We also need generate new streams of revenue so we can finance new investments and operations. We’re trying to convince old fashioned people that they should look for new creative ways for funding so we can commercialize the value we’re creating in cities,” says Flausch. That’s absolutely what we need if we want our industry to survive.”
Special Session by UITP at TBLI CONFERENCE EUROPE 2015 in Zurich
At TBLI Europe 2015 in Zurich, November 20, UITP General Secretary Alain Flausch will lead the discussion on the benefits of investing in sustainable transport. Workshop D3, 20 November, 11:20 - 13:00.