INVESTING IN OUR TRANSPORT FUTURE STRATEGIC INVESTMENT ... · PDF file4 Investing in our Transport Future - Strategic Investment Framework for Land Transport. FOREWORD BY THE MINISTER

STRATEGIC INVESTMENT FRAMEWORKFOR LAND TRANSPORT

INVESTING IN OUR TRANSPORT FUTURE

Investing in our Transport Future - Strategic Investment Framework for Land Transport.2

Department of Transport, Tourism and Sport

STRATEGIC INVESTMENT FRAMEWORKFOR LAND TRANSPORT

INVESTING IN OUR TRANSPORT FUTURE

CONTENTS

FOREWORD 3

INTRODUCTION 5

WHY INVEST IN TRANSPORT? 7

Delivering Economic Growth 8

Maintaining Competitiveness 8

Meeting our Carbon Reduction Commitments 8

Transport and the Government’s wider policy agenda 10

WHY INVEST IN THE LAND TRANSPORT NETWORK NOW? 11

Current Transport Demand 12

Expected Future Transport Demand 12

WHAT INVESTMENT DOES TRANSPORT NEED? 13

Required Level of ‘Steady State’ Funding 14

Increase Efficiency of Expenditure 14

Reduce Size of State-funded Road and Rail Network 14

Reduce Performance Level Required of Certain Assets 14

Need for Higher Investment Levels 16

Exchequer Impacts of and Household Expenditure on Transport 16

Other Potential Sources of Funding 16

Identifying the Appropriate Scale of Investment 17

International Comparisons of Transport Investment Levels 18

Restoring Average Transport Investment Levels 18

UNDERTAKING THIS INVESTMENT 19

Improved alignment of transport and spatial planning 20

Better management of transport demand 20

Investing in the Right Projects 21

KEY PRIORITIES AND PRINCIPLES FOR FUTURE INVESTMENT 23

Overarching Priority 24

Priority 1: Achieve Steady State Maintenance 24

Priority 2: Address Urban Congestion 25

Priority 3: Maximise the Value of Existing Land Transport Networks 25

Key Principles for Land Transport Investment Proposals 28

IMPLEMENTATION PRIORITIES AND ACTIONS 29

Incorporating SFILT Transport Priorities in Investment Plans 30

Integrating Land Use and Transport Planning 30

Identifying a Strategic Road Network 31

Developing a New Rail Policy 31

Maintaining a Key Role for Careful Project Appraisal 32

Applying SFILT Research in Future Transport Policy Development 32


Investing in our Transport Future - Strategic Investment Framework for Land Transport. 3

FOREWORD


FOREWORD BY THE MINISTER

An effective transport system is central to thefunctioning of society and the economy.Increased transport demand without appropriateinfrastructure and services in place, inevitablyleads to increased congestion, longer journeytimes, higher costs and suppressed economicactivity. The challenge posed to Government is to allocate the resources essential to maintaintransport networks and add new capacity as it is needed. This requires large scale investmentand must compete with other policy priorities for resources.

The funding landscape having changeddramatically, Ireland, like many other countries,isnot yet in a position to invest in transport at thesame levels as before and the scope toimplement major investment programmes inareas such as transport is tightly constrained.

This proposed investment framework estimatesthe appropriate level of investment in the landtransport system and forms a set of priorities toguide the allocation of that investment to bestdevelop and manage Ireland’s land transportnetwork over the coming decades, providing avaluable background against which future policydecisions can be made.

During the course of this work, the focus was putvery firmly on economic objectives and howefficient transport can contribute to theGovernment’s job creation agenda, enhancingcompetitiveness, increasing productivity,encouraging FDI and labour mobility alwaysmindful that generating economic growth willhelp to create the fiscal space necessary to give

attention to other important objectives such asbalanced regional development and socialinclusion objectives.

The evidence from the work undertaken, alongwith our understanding of key transport andtravel trends, the impact on travel demand ofstructural changes to the economy andconsideration of how to manage demandprovides the basis for the key overall prioritieswhich are intended to guide investment decisionsin transport over the longer term.

Present funding levels are historically low.Exchequer investment for land transport capitalexpenditure has fallen from a peak of €3 billion(1.6% of GDP) in 2008 to a historic low level of€850 million (0.5% of GDP) in 2014. A significantgap now exists between the funding allocationfor land transport and the minimum fundinglevels required to maintain the existing system inadequate condition, even if all of the availablefunding is spent only maintaining the networkadequately. Moreover, these funding levels leaveno scope for network improvements and capacityincreases. This now is the challenge we face,securing more appropriate investment levels inthe future and ensuring that we are wise aboutwhere and how we invest. The Irish economy isfacing a better future. For transport, that bringswith it challenges. Unless we invest in transport,and invest wisely, the economic growth weforesee could be undermined by congestion andloss of efficiency. We must ensure that alltransport investment is focused and prioritised tosecure the most advantageous outcomes for oureconomy and our people.

Paschal Donohoe, T.D.Minister for Transport, Tourism and Sport


INTRODUCTION


INTRODUCTION

A well-performing transport system is essential to the functioning of society and theeconomy. The investment challenge presented to Governments, here and elsewhere,is to allocate the resourcing required to maintain transport networks and addrequired new capacity so that economic and social objectives are met. This requiresinvestment of a considerable scale and must compete with other policy priorities forresources.

The funding landscape in Ireland has changed dramatically since 2008 and the scopeto implement major investment programmes in areas such as transport has becometightly constrained. It is now timely to consider what role transport should play in thefuture development of the Irish economy and identify a high level strategic approachto the development and management of Ireland’s land transport network over thecoming decades. This is particularly important given the likely constraints on available resources.

This Investment Framework is underpinned by evidence presented and analysisundertaken by a Steering Group under the aegis of the Department of Transport,Tourism and Sport. The Group was tasked with overseeing the preparation of anevidence-based framework that would guide key land transport investment decisions.Draft findings and recommendations of that Steering Group were the subject ofconsultation with stakeholders, interested parties and the general public and theirconsideration was developed further in the light of consultation responses.

This document provides a summary of the Strategic Framework for Investment inLand Transport, the background report and papers of which are available on theDepartment of Transport, Tourism and Sport website. This body of work hasdeveloped a strategic framework to consider the role of transport in the futuredevelopment of the Irish economy, estimate the appropriate level of investment inthe land transport system and form a set of priorities to guide the allocation of thatinvestment to best develop and manage Ireland’s land transport network over thecoming decades. It considers the objectives of transport investment, an analysis ofpresent and expected future transport demand, key considerations for policy makersin investing in land transport, an estimate of the level of funding required to maintainthe existing transport system, options to address the shortfall in funding andimplementation. It will, of course, be subject to review and updating over time.

The Framework establishes -

(1) High level priorities for future investment in land transport; and(2) Key principles, reflective of those priorities, to which transport investment

proposals will be required to adhere.

WHY INVEST IN TRANSPORT?

SECTION 1



WHY INVEST IN TRANSPORT?

Delivering Economic Growth Investment in transport is fundamental foreconomic growth. Historically, improvements andadvancements in transport services andtechnologies have proved catalysts for periods ofaccelerated economic growth. The developmentof transport infrastructure has established impactson increased trade, enhanced competitiveness,increased productivity, labour mobility andattractiveness for Foreign Direct Investment.

Land transport policy plays a central role insupporting important government economicdevelopment objectives and our main exportingsectors. For example, the performance of road,sea and air freight is central to thecompetitiveness of our manufacturing sector; thetourism sector relies on high quality access fromairports to tourism destinations; while theefficient movement of people within cities andto/from airports is vital for maintaining andattracting service sector investment.

Increased transport demand and an inadequateor inappropriate capacity response inevitably

leads to increased congestion, longer and lessreliable journey times, higher costs andsuppressed economic activity. Failure toadequately invest in a transport network to meetthe needs of enterprise and society as a wholewill inevitably lead to long-term costs in the formof reduced competitiveness and productivity andwill act as a barrier to economic growth. In lightof Ireland’s current fiscal challenges and highlevels of unemployment, it is argued that theprimary objective for prioritising investment intransport at this time is the role transport canplay in supporting renewed and sustainableeconomic growth, improving competitivenessand job creation.

Maintaining CompetitivenessAlthough recent transport investment has seenIreland’s competitiveness ranking for transportinfrastructure improve, our transportinfrastructure rankings remain poor whencompared to those well developed economieswith whom we compete for investment.Efficiently meeting the transport needs of theeconomy is a central aspect of ensuringcompetiveness and job creation and catering forthe needs of our main exporting sectors shouldbe an important driver of investment decisions.The enterprise development agencies have notedthe need for further targeted investment intransport, particularly with regard to meeting therequirements of our export sectors andaddressing urban congestion.

Meeting our Carbon ReductionCommitmentsTransport is a large carbon emitting sector withinthe economy. Though carbon reductions haveoccurred in recent years through reducedeconomic activity, improved road vehicle enginetechnology and the use of biofuels, it is projectedthat transport emissions, having returned to

INVESTMENT IN TRANSPORT ISFUNDAMENTAL FOR ECONOMIC GROWTH



growth, will reach 2009 levels by 2020. TheGovernment has recently stated an intention toreduce carbon emissions by 80% by 2050, settingout a vision for a future smart, green economy inIreland. There will need to be a radicaltransformation in the transport sector to meetthis ambition, embracing modal shift, majortechnological improvements and bettermanagement of transport demand. Investment inthe transport sector will be necessary to meetthese climate change obligations and to adaptthe existing network to climactic changes.

Transport and the Government’swider policy agenda Infrastructure investment, and particularlytransport investment, is often seen as animportant policy tool for regional development.Such investment allows more peripheral regionsto overcome the disadvantages of peripheralityby improving accessibility, promoting economicgrowth, increasing employment, attractingtourism and enhancing social inclusion. Althoughtransport investment can mitigate some of theeffects of peripherality, it cannot eliminate them.Transport investment must therefore occur in thecontext of other supporting policies andmeasures that aim to address underlyingcompetitiveness issues.

Transport plays a crucial role in combating socialexclusion through providing access to jobs,education, health services and social networks forvulnerable groups, such as older people,particularly in rural areas, low-incomehouseholds, and people with disabilities. Obesity is emerging as one of Ireland’s mostserious health problems. There are significanthealth benefits to be gained from cyclingregularly, and this applies even to people who arealready active in sport and other physicalactivities. The European Charter on CounteractingObesity includes ‘promotion of cycling andwalking by better urban design and transportpolicies’ as one of the key elements of a packageof essential preventative action. The relativelyshort average length of urban trips in Ireland

represents a significant opportunity for a shift toactive travel modes.

Investing in transport in the right way will also protect the rich and varied natural heritageof Ireland. Our national biodiversity strategy andaction plan aims to prevent and eliminate thecauses of biodiversity loss and maintain andenhance current levels of biodiversity. Protectingand maintaining the quality of our naturalheritage will require that appropriate assessmentsare conducted for all transport plans, strategiesand implementation programmes, and thataction is taken to mitigate potential negativeimpacts.

WHY INVEST IN THE LAND TRANSPORTNETWORK NOW?

SECTION 2



WHY INVEST IN THE LAND TRANSPORT NETWORK NOW?

Demand for transport in Ireland grew significantlyfrom 1990 to 2008, due to substantial economic and population growth along with spatialpatterns persistent over the period. The numberof people travelling to work almost doubled, carownership increased from 798,000 in 1990 to1.88 million in 2008, and the commercial vehiclefleet doubled in scale.

Investment in transport also significantlyincreased over this time. However, the majority ofthis investment was directed towards deliveringthe much-needed national motorway networkand, aside from the two LUAS lines, relativelylittle investment was targeted to urban areas.The increased demand for transport wastherefore met by an increase in use of the privatecar. The growth of dispersed commuter belts, amarked increase in car ownership and use, andfalling mode share for public transport and active travel were the most striking trends overthe period.

The road network meets the overwhelmingmajority of travel need (catering for cars, buses,commercial vehicles, cycling and walking). Giventhe spatial patterns now established, this willremain the case over a considerable time horizoneven despite any immediate successfulimplementation of policies to limit growth in car use.

Current Transport DemandSince 2008, there has been a stabilisation oftravel demand, reflecting changed economiccircumstances. While future demand growth isunlikely to be as rapid as during the 1990-2008period, a return to economic growth combinedwith demographic pressures suggest strongly thatfurther substantial demand pressures will arise.Analysis identifies a significant set of corridorsections around the cities where traffic flowconditions are already under significant pressure.These will grow in scale and extent as theeconomy resumes growth.

Expected Future Transport DemandBased on a conservative population growthscenario of 5.2 million in 2041 and a projectedunemployment rate of 7%, we estimate thatcommuting trips are expected to increase by 35%over current levels by 2040. This would imply, ata minimum, 650,000 additional daily trips to andfrom work, expected to arise largely on corridorsto and within the principal cities.

The existing land transport system cannot caterfor this increase. Without investment to cater forthis demand, our main urban centres will becomeseverely congested which will hinder economicdevelopment. Investment is critical to ensure thatwe can adequately provide for the travel needs ofthe future Irish workforce and maintainsustainable economic growth andcompetitiveness.

DEMAND FOR TRANSPORT INIRELAND GREW SIGNIFICANTLYFROM 1990 TO 2008

SECTION 3


WHAT INVESTMENT DOES TRANSPORT NEED?


WHAT INVESTMENT DOES TRANSPORT NEED?

Required Level of ‘Steady State’Funding Steady state funding, which is the fundingnecessary to maintain, manage and renew theexisting land transport infrastructure to keep it inan adequate condition, together with knowncapital commitments, has been conservativelyestimated at €1.6 billion per annum in total. Withinvestment levels of around €300 millionexpected from other sources (e.g. toll receipts)this requires, at a minimum, €1.3 billion perannum in Exchequer funding.

Exchequer funding for road improvement/maintenance and the Public Transport InvestmentProgramme is currently of the order of €1 billion,about €300 million short of the funding requiredto maintain the existing system in an adequatecondition even if all the available funding is spentonly on maintenance of this steady state, which isnot currently the case.

Given the scale of this shortfall in funding, thescope to reduce the steady state fundingrequirement was examined through;

1. Increasing the efficiency of expenditure; 2. Reducing the size of the funded road and rail

network to a more appropriate scale; and,

3. Reducing the level of performance required ofcertain assets.

Increase Efficiency of ExpenditureFirst and foremost, investment must beundertaken in the most effective and efficientmanner possible. Focus must be maintained onthe drive for efficiencies undertaken in recentyears. The Department of Transport, Tourism andSport will seek from the agencies concerned anefficiency dividend of 5% over five years onsteady state investment costs across all modes.This is the maximum considered feasible giventhe concentrated nature of expenditure nowbeing undertaken following pared back fundingallocations. However, efficiency savings cannotbridge the gap between the steady staterequirement and the Exchequer fundingallocation.

Reduce Size of State-funded Road and Rail Network The basis for the State continuing to bear thecost of a very extensive existing road and railnetwork, given the extent of usage in someareas, must be considered. As national andregional roads account for 75% of traffic, themaintenance of these roads is important from astrategic perspective to support economic activityacross a range of sectors. National and regionalroads, together, account for 19% of the network.The remaining 81% of the network consists oflocal roads.

Local authorities will be required to identify andsubmit for approval their road networks ofstrategic priority on the basis of criteria set by theDepartment of Transport, Tourism and Sport.Available Exchequer funding should then beprioritised on maintaining this strategic roadnetwork. Furthermore, in any move to fully fundregional and local roads from local resources

INVESTMENT MUST BE UNDERTAKENIN THE MOST EFFECTIVE ANDEFFICIENT MANNER POSSIBLE


(including the Local Property Tax), the strategicnature of such roads, particularly the regionalroads, should be recognised and some oversightrole should be maintained by the Department ofTransport, Tourism and Sport to ensureconformity with national policy objectives.

With regard to the existing heavy rail network,heavy rail share accounts for 1%–2% ofpassenger trip demand, 4%–5% of passengerkilometres and around 1% of freight tonnekilometres. The steady state requirement for thisheavy rail network accounts for almost 20% oftotal steady state costs for the entire landtransport network. The extent of the railwaynetwork, in the context of demand levels onroutes, must be critically examined. Thesignificant current funding, which subvents railservices in Ireland, stands at almost €130 millionper annum, adding to the costs of our existingrail network. There is, therefore, a need todevelop a new rail policy, which will address key issues such as how to focus rail investmenton where rail has, or will have the greateststrength. It should also reflect any social andenvironmental considerations uniquely addressedby the rail network in addition to securing valuefor money and considering the economic andinvestment context.

Reduce Performance Level Requiredof Certain AssetsA third option to address the steady state fundingshortfall is through a reduction in the level ofperformance required of certain parts of thetransport network. Any reduction in the requiredlevel of performance of assets must ensure thatsafety standards are maintained, but it is likelythat operational performance would be adverselyaffected. In the case of the heavy rail network, an increase in temporary speed restrictions, forexample, would result in slower and less reliablejourney times, which in turn would haveimplications for the ability of Iarnród Éireann toretain existing customers and to attract newpatronage to the railway. The proposed rail policy will play a key role in setting out wherereductions in performance level may beappropriate in certain circumstances, subject toan overall value for money objective.

While it is recommended in the case of the roadnetwork that available funding should be focusedon the maintenance of strategic roads, measuresshould also be identified to reduce the requiredlevel of performance of non-strategic roads. Thiscould, for example, include lower speed limitsand weight restrictions or acceptance of a lowerlevel of service where appropriate.


Need for Higher Investment LevelsWe will, accordingly, seek to reduce the level ofexisting capital expenditure requirements,reflecting the reductions made to availablefunding. However, given such funding levels areat historic lows and the extent of the challengesthat the transport system faces, even deliveringthe savings outlined above will not address theshortfall in Exchequer steady state funding of the network.

With travel demand set to increase in the short-term as the economy returns to growth,additional investment will be required simply tomaintain an adequate level of service on theexisting network. Furthermore, with additionalneed for investment to cater for the significantmedium to long-term increases in travel demand,along with any additional investment identified toensure that the transport sector delivers onnational carbon reduction ambitions, it is clearthat further significant investment will be requiredto provide a functioning transport system thatcan enable economic growth.

Exchequer Impacts and HouseholdExpenditure on TransportHousehold expenditure on transport represents avery significant proportion of householdspending. The average household spends €116per week on transport-related expenditure, notdissimilar to average household spending onhousing and food, and amounting to totalnational household expenditure of around €10billion per annum.

Taxes on transport represent a very significantrevenue source to the Exchequer. The cumulativetaxation raised from excise, carbon tax, VAT onmotor fuels, annual motor tax and vehicleregistration tax peaked at an estimated €5 billionin 2007 and is currently estimated at €4.4 billionper annum. This compares to a total (current andcapital) Exchequer spend on transport of around€1.32 billion per annum at present.

These existing levels of taxation and householdexpenditure need to be contemplated whenconsidering any potential for additional revenue-raising mechanisms to fund investment in the sector.

Other Potential Sources of FundingPotential alternative non-Exchequer fundingsources have been considered. The mostimportant source of non-Exchequer transportfunding has been through Public-PrivatePartnership (PPP) programmes. The Exchequeralready has significant forward commitments


relating to the road network in the form ofavailability payments to remunerate privateinvestment in PPP projects that are not tolled. The latest round of PPP road schemes requiresprovision to be made for further annualavailability payments of over €100 million, post2017. Additional use of the PPP mechanism willfurther significantly reduce the funding availablein the future to meet the steady state transportnetwork requirements and limit further potentialfor investment in additional capacity.

Furthermore, while every effort will be madewithin the constraints mentioned to maximisedraw-down from EU funding programmes and toaccess EIB loans, alternative, additional sources offunding will be severely limited in the short tomedium term.

Identifying the Appropriate Scale ofInvestment

Present Funding LevelsPresent funding levels are historically low.Exchequer investment for land transport capitalexpenditure has fallen from a peak of €3 billion(1.6% of GDP) in 2008 to a historic low level of€850 million (0.5% of GDP) in 2014. In terms of gross fixed capital formation in thetransport sector, Ireland has invested between

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AVERAGE(1953 - 1998)

LONG RUN AVERAGE

(1953 - 2012)

AVERAGE(1999 - 2011) 2012

FURTHER SIGNIFICANT INVESTMENTWILL BE REQUIRED TO PROVIDE AFUNCTIONING TRANSPORT SYSTEMTHAT CAN ENABLE ECONOMIC GROWTH

Figure 1: Annual land transport capital formation as % of GDP, 1953–2012


0.5% and 1.9% of GDP in land transport.Between 1953 and 2012, the average level ofinvestment annually was 1.13% of GDP. Capitalformation in land transport peaked in 2008 whenthe value of investment was €3.5 billion anddeclined to €1.2 billion in 2012. Expressed interms of GDP this has meant a reduction incapital formation within the sector from 1.9% of GDP in 2008 to 0.72% of GDP in 2012.

International Comparisons ofTransport Investment Levels andCompetitivenessThe long-run average level of land transportcapital formation in Ireland (the overwhelmingmajority of which occurs through Exchequerinvestment) stands at 1.13% of GDP. Averagetransport investment levels for developedcountries, for the period 1995-2007, were 1.23%of GDP. More recently, the International TransportForum have reported that 2011 OECD averageinvestment levels in land transport wereestimated to stand at 1% of GDP. This suggeststhat while long-run average investment levels inIreland are broadly consistent with OECD levels,funding levels of recent years are much lowerthan the OECD average.

It is also important to note that, because we have made only limited investment in some parts of the transport network compared withcompetitors, for example in urban publictransport, funding levels above this averagewould be required for us to improvecompetitiveness in transport relative to othercountries. Notwithstanding the recentimprovements in our transport system, Irelandcontinues to score relatively poorly in terms of our transport infrastructure globalcompetitiveness ranking according to the World Economic Forum (WEF). This WEFcompetitiveness ranking suggests that suchinvestment and improvement is necessary.

Restoring Average TransportInvestment LevelsRestoring transport investment levels to our

historic long-run average of 1.1% to 1.15% ofGDP would equate to annual investment of over€2 billion, based on 2014 GDP. Even though thiswould provide for a significant increase oncurrent allocations, with a conservative estimateof the steady state maintenance costs at €1.6billion, this would leave only €400 million perannum available for all new investment, which inthe long-term would be insufficient to cater forfuture transport needs. For example, developing ahigh quality public transport system in urbanareas and any major new road project would notbe possible with such funding envelopes.

Necessary investment in new transportinfrastructure will require increased Exchequerfunding for the sector, notwithstanding anyfurther investment potential generated throughthe vigorous pursuit of efficiencies within existing expenditure, and a reduction in theextent of the transport network that absorbsexisting capital funding allocations. While clearlychallenging in the context of current publicfinances, it is essential to protect the existingnetwork and allow vital investment to facilitatedemand growth to avoid compromisingeconomic growth.

Furthermore, significant additional investment intransport infrastructure identified as necessary tomeet the transport sector’s share of Ireland’scarbon reduction commitments and adapt tonew climate conditions will require a review ofthis target.


SECTION 4

UNDERTAKING THIS INVESTMENT


UNDERTAKING THIS INVESTMENT

Improved alignment of transport andspatial planning Transport policy has consistently had a stated aimof promoting modal shift away from the car, withthe objectives of limiting urban congestion,reducing the environmental impact of transport,and avoiding the high cost of providing additionalroad capacity. However, implementation of thispolicy has to date proved unsuccessful, as werecord an ever increasing dependency on car-based travel.

Current settlement patterns impede addressingcongestion and the shift to a low-carboneconomy. The growth of dispersed commuterbelts around the cities is not suited to effectivepublic transport provision and results inembedded car dependency. Without thecombined provision of effective alternatives to thecar through increased public transport, walkingand cycling provision and more effectiveimplementation of spatial planning policies, thistrend will continue.

Effective and mutually supportive land use andtransport planning policy, in the form of nationaland regional frameworks, are key to thedevelopment of more sustainable communities,maximising the value of past transportinfrastructure investment and ensuring theprovision of more accessible and efficient publictransport into the future. However, while therecently strengthened planning frameworks andnew initiatives, such as any new national spatialplanning framework, should help to ensure moresustainable future development, the reality is thatthe greater part of existing development cannotsupport the provision of the most sustainablepossible transport system.

Better management of transportdemandIt is also likely that, over the timeframe envisagedby this framework, and even alongside betterspatial planning and appropriate public transportand walking and cycling provision, demandgrowth will erode the economic efficiency of theexisting transport system, in particular in or nearmajor urban areas. Looking beyond investmentdecisions will be necessary, to the important rolesthat can be played by network management andtechnology to deliver a low-carbon future; tomaximise operational capacity; and minimisesafety risks thereby ensuring that maximum valueis derived from the currently existing system.

Demand management through fiscal measures –and specifically road user charging – is likely to benecessary where it can efficiently address theissue. To secure the most efficient outcomes, any


such pricing should be based on distance andtime. With an average household spend of €116per week on transport-related expenditure andamounting to total national householdexpenditure of around €10 billion per annum, thescope for such additional charges is currentlylimited by the existing burden of transporttaxation and levels of household expenditure on transport.

However, demand pricing schemes could alsoserve to gradually refocus excise-based transporttaxes, the revenue from which is anticipated todecline over time, while encouraging moresustainable travel behaviour. Where people haveno, or inadequate, access to more sustainabletransport, cost-effective alternatives will need tobe provided in the event of pricing mechanisms

being implemented. Investment in thesealternatives could potentially be at least part-funded through those pricing mechanisms.

Investing in the Right Projects Significant public transport provision will benecessary to meet future travel demand. Recentexperience has shown that the right transportprojects provide a good return on investment.Reviews were undertaken of two sample projects– a key interurban motorway corridor (Dublin-Galway M4/M6) and a key urban public transportinvestment (the original two LUAS lines) – whichindicate that transport infrastructure investmentin Ireland can yield a good return on investment,particularly so in respect of LUAS. Of course, theachievement of such returns depends on prudent


project choices. Notwithstanding the generalfindings of transport investment offering a goodreturn on investment, it is of course the case thatwhile many projects may yield an excellent return, many others will not. Detailed economicappraisal of projects is therefore essential toensure that public money is being put to its most productive use.

Ireland has a rich and varied natural heritage,which has an importance to the social andeconomic fabric of Ireland far beyond scientificinterest. We must ensure that in catering forfuture travel needs, this natural heritage isprotected. This will require sufficient investmentto deliver well-designed plans and transportschemes, and to mitigate negative impacts onwildlife and habitats.

SECTION 5

KEY PRIORITIES AND PRINCIPLES FORFUTURE INVESTMENT



KEY PRIORITIES AND PRINCIPLES FOR FUTUREINVESTMENT

Overarching PriorityPresent funding levels are not sufficient tomaintain the existing land transport network.Furthermore, there is essentially no scope forinvestment in infrastructure improvements vital tocater for future demand growth and supportcompetitiveness and economic development.

Therefore, the key challenge with regard to futureinvestment in land transport is the need to attainfunding levels consistent with maintaining,renewing and improving an appropriate transportnetwork that can efficiently support theeconomic and social needs of the country.

In order to maintain the transport network andprovide for some limited investment to addressadditional demand, capital investment in landtransport should, at a minimum, be restored to,and maintained at, its long run average level of1.1% to 1.15% of GDP per annum. It is worthnoting that this represents an average target tobe achieved over an economic cycle. Therefore,to redress the period of underfundingexperienced, funding in excess of the average will be required to begin with, followed by aconvergence towards the recommended averagelong run investment level.

Significant additional investment in transportinfrastructure identified as necessary to meet thetransport sector’s share of Ireland’s carbonreduction commitments and adapt to newclimate conditions would require a review of this target.

Priorities within the availableinvestment budget for land transportThe following will be the priorities within anyavailable land transport investment allocation.

PRIORITY 1ACHIEVE STEADY STATE MAINTENANCE

The first priority for future investment is thesteady state maintenance of the strategicallyimportant elements of the land transportsystem - the maintenance and renewalexpenditure necessary to keep the system inan adequate condition, including meetingclimate adaptation and EU standardsrequirements. Those elements of the systemto be considered as strategically importantwill be identified by local authorities inassociation with the DTTaS in respect of roadsand by the development of a new rail policy. The maintenance of strategically importantregional and local roads in both rural andurban areas is vital. Efficiencies ininfrastructure maintenance and managementmust be driven continuously to ensure thatthe value of this investment is maximised.

RESTORING TRANSPORT CAPITALFUNDING TO AN AVERAGE LEVEL OF 1.1% TO 1.15% OF GDP PERANNUM AT A MINIMUM IS ANOVERARCHING IMPERATIVE.


PRIORITY 2ADDRESS URBAN CONGESTION

The next investment priority is to addressurban congestion and to improve theefficiency and sustainability of the urbantransport systems. This must be guided bydemand/capacity assessments and recognisethe role of urban centres as key drivers ofeconomic activity, nationally and regionally.Measures should include:

• Improved and expanded public transportcapacity;

• Improved and expanded walking andcycling infrastructure;

• The use of ITS to improve efficiency andsustainability and to increase the capacityof existing urban transport systems.

Investment to improve the quality and timecompetitiveness of alternatives to the caroften play an important role as a driver ofmodal shift and should be supported.Demand management measures may alsoprove necessary to, inter alia, maximise thevalue of transport infrastructure. To receiveinvestment, projects must be implemented in conjunction with supportive spatialplanning policies.

PRIORITY 3MAXIMISE THE CONTRIBUTION OF LANDTRANSPORT NETWORKS TO OURNATIONAL DEVELOPMENT

Finally, the value of the land transportnetworks should be maximised throughtargeted investments that:

• enhance the efficiency of the existingnetwork, particularly through increased useof ITS applications;

• improve connections to key seaports andairports;

• in the case of roads, provide access topoorly served regions, for large-scaleemployment proposals, to completemissing links and to address critical safetyissues; and

• support identified national and regionalspatial planning priorities.


Translating these Priorities into KeyProject Investment PrinciplesEconomic circumstances have required thedeferral of major planned road and railinvestments, most notably Metro North, DARTUnderground and the M20. It is highly unlikelythat the annual transport capital allocation will besufficient in the medium term to fund theseprojects, or to finance a private fundingarrangement. Nonetheless, failure to deliverpublic transport investment will result in a highlycongested network that cannot meet theeconomy’s transport needs. There is, additionally,a very high opportunity cost in delivering anysingle large project as opposed to investingacross the network. Additional public transportcapacity requirements for the greater Dublin areamust, therefore, be met, in the medium term,through investment in lower-cost alternatives.

Recognising the inefficiencies of cyclicalinvestment patterns and the long lead-in timesrequired for the delivery of transport projects,early planning and five-year minimum budgetarycycles are essential. The timeframe for planningmajor projects generally exceeds 10 years and it isgenerally too late to start planning whenincreased congestion or a capacity constraintbecomes a reality. Funding should be provided topermit the timely planning of projects consistentwith the priorities set out in this Framework.

Investment of public funds in transport projectsand programmes requires careful evaluation. Tobe eligible for Exchequer funding, projects willneed to be consistent with principles set out hereand aligned with national and regionaldevelopment priorities.

All investment proposals will be subjected tocomprehensive and rigorous appraisal takingaccount of all costs and all benefits in accordancewith a robust and published methodology.Appraisal outcomes prepared consistently andincorporating the consideration of alternativeoptions (including non-infrastructural options)and on a corridor basis, will provide the primarybasis for ranking investment proposals. Regionaltransport strategies should include an assessmentof corridor demand and specific project appraisalshould address how this demand is best met withall viable options considered.

Before any proposed investment in a project orprogramme proceeds to detailed appraisal, a highlevel review of its coherence with the nationaltransport investment principles and priorities setout in this Framework must be undertaken by thepromoting agency. Failure to align projects andprogrammes with these principles should form abarrier to taking appraisal any further and,therefore, to Exchequer support.



KEY PRINCIPLES FOR LAND TRANSPORTINVESTMENT PROPOSALS

• The overall outcomes of transportinvestment, as governed by theseprinciples, should maintain and improvethe quality of life of citizens and beconsistent with environmental, climateand biodiversity objectives, imperativesand obligations, including those arisingfrom the EU Habitats Directive.

• The foremost priority for land transportfunding should be the maintenance andrenewal of identified strategicallyimportant elements of the existing landtransport system, so as to protect earlierinvestment and maintain essentialfunctioning.

• The next key priority for investmentinvolves measures to address current andfuture urban congestion and to improvethe efficiency and sustainability of urbantransport including improved andexpanded public transport; capacity andwalking and cycling infrastructure,improved traffic management and buspriority; and more and better use ofIntelligent Transport Systems.

• Any further investment should betargeted to maximise the contribution ofthe land transport networks byenhancing the efficiency of the existingnetwork, particularly through increaseduse of ITS applications or throughinvestments that improve connections tokey seaports and airports or supportother identified national and regionalspatial planning priorities. In the case ofroads, investment should provide accessto poorly served regions, access forlarge-scale employment proposals,complete missing links or address criticalsafety issues.

• To receive funding, transport projectsmust be implemented in conjunctionwith the implementation of supportivenational and regional spatial planningpolicies, along with other demandmanagement measures whereappropriate.

SECTION 6

IMPLEMENTATION PRIORITIES AND ACTIONS



IMPLEMENTATION PRIORITIES AND ACTIONS

Incorporating SFILT TransportPriorities in Investment Plans Work is underway, led by the Department ofPublic Expenditure and Reform, revisiting andupdating the existing Multi-Annual CapitalInvestment Framework 2012–2016 to developceilings to 2019. This framework provides the keyland transport input to that review.

However, the time horizon of this analysis andinvestment priorities extends beyond the nextmulti-annual capital investment framework.Transport priorities, established as part of arevised national and regional spatial planningframework and prepared in accordance withthese priorities, should form the central basis fordetermination of the land transport componentof the multi-annual capital investment frameworkto commence in 2020.

ACTION 1SFILT transport priorities will be reflected inthe Multi-Annual Capital InvestmentFramework to 2019 by DPER and DTTaS

ACTION 2Transport priorities established in therevised national and regional spatialplanning framework will form the centralbasis for determination of the landtransport component of the multi-annualcapital investment framework from 2019 -DPER and DTTaS

Integrating Land Use and TransportPlanning To ensure effective integration between land useand transport planning, the key interfacebetween transport investment underpinned bythis framework and the land use planning systembegins at national level. The evidence consideredand findings made in developing this frameworkshould form key inputs to any new nationalspatial planning framework, informing, andthereby strengthening, the practicalunderpinnings of its transportation aspects.

The preparation of key regional transportstrategies will be undertaken by the NTA, toprovide a key input to regional spatial andeconomic strategies, and ensure that futuretransport investment has maximum effect andbest possible co-ordination between transportand wider spatial and development policies.

ACTION 3SFILT analysis will be incorporated into thenew national spatial planning frameworkby DECLG and DTTaS

ACTION 4Regional transport strategies will beprepared by the NTA and provide an inputto regional spatial and economic strategies


Identifying a Strategic Road NetworkLocal authorities will work with the DTTaS andthe NRA on the basis of clear guidelines toidentify roads of strategic importance to beprioritised for maintenance. As national andregional roads account for 75% of traffic, themaintenance of these roads is important from anational policy perspective to support economicactivity across a range of sectors. In any futuredevolution of funding for regional and local roadsto local level, the strategic nature of key roads,within the context of a land transport network,must be recognised. To ensure that localinvestment priorities are aligned with nationalpolicy objectives concrete mechanisms must bedeveloped to ensure compliance with suchoverarching national policy objectives.

ACTION 5Roads of strategic importance will beidentified by DTTaS in conjunction withLocal Authorities and the NRA

Developing a New Rail PolicyA new rail policy will be developed following awide-ranging public consultation, which willaddress key questions including how to focus railinvestment on where rail has, or will have itsgreatest strength, reflect any social andenvironmental considerations uniquely addressed by the rail network in addition tosecuring value for money, an affordable scale of network and considering the economic andinvestment context.

ACTION 6A new rail policy will be developed byDTTaS to address the future role of railtransport in Ireland.


Maintaining a Key Role for CarefulProject AppraisalExpenditure of public funds on transport needs tobe carefully evaluated. All investment proposalsshould be subject to comprehensive and rigorousappraisal, taking account of all costs and allbenefits in accordance with a robust andpublished methodology.

This framework establishes the overall principlesguiding expenditure decisions in transport overthe longer term. Under this framework,investment programmes will be developedregionally with the framework priorities andprinciples providing a standard against which theDTTaS will assess those plans.

The DTTaS’s transport appraisal guidance (TAG) iscurrently being reviewed and updated. Thisreview will update many of the parameter valuesused in a cost–benefit analysis. It will also providedetailed appraisal guidance in a number of newand important areas (e.g. sustainable transportmodes), increase the transparency of theappraisal process and reduce the level ofdiscretion in appraisal.

In essence, the case for investment shouldoriginate in regional transport strategies –themselves consistent with the principles of thisstrategic framework and national spatialdevelopment priorities. Regional transportstrategies should include an assessment ofcorridor demand. Specific project appraisal shouldaddress how this demand is best met, with allviable options considered.

ACTION 7Regional transport investment programmeswill be developed consistent with prioritiesand principles established by thisFramework - DTTaS, NTA, NRA and LAs

ACTION 8Transport appraisal guidance will beupdated - DTTaS

Applying SFILT Research in FutureTransport Policy DevelopmentThe analysis of the land transport sectorundertaken as part of this work, in addition tothe development of investment priorities, arrivedat conclusions and recommendations acrosstransport policy including the role of demandmanagement and ITS and addressing ruraltransport needs. It also refers to aviation andshipping policies and climate change mitigationand biodiversity policies. This analysis, and anyconclusions arising from it, will play a key role infuture transport policy development, including forexample the Low Carbon Roadmap and keysectoral policies in Maritime, Aviation and Rail.

ACTION 9Development of the transport sector LowCarbon Roadmap and climate adaptationstrategy will draw on the findings of thisFramework and may prompt areconsideration of its conclusions - DTTaS

ACTION 10The SFILT analysis of the land transportsector will play a key role in thedevelopment of future sectoral strategiesand policies including aviation, intelligenttransport systems, shipping, energy andbiodiversity - DTTaS

Documents

INVESTING IN OUR TRANSPORT FUTURE STRATEGIC INVESTMENT ... · PDF file4 Investing in our Transport Future - Strategic Investment Framework for Land Transport. FOREWORD BY THE MINISTER