Overview
Road maintenance includes several actions, for example traffic management, investments, maintenance and repair. All of these have impacts on regions and regional economy, and also different importance on different areas and typical environments. The cost-benefit analysis (CBA) is an essential method in assessing the financial impacts of road projects, but many indirect and reflective impacts of road projects are not included in CBA.
According to research done in the field, the transport infrastructure has a significant impact on the productivity of both private enterprises and the national economy. The aim of this study was to evaluate the possibilities to include the impacts on regional economy in the impact assessment of road maintenance projects. Another aim was to find out which are the most suitable methodologies to be used in the assessment process.
The study was based on an analysis of national and foreign literature written in the field of research. Also the studies done on the impact assessment processes carried out or ordered by FINNRA (the Finnish Road Administration) were included in the literature survey.
Funding
Results
Accessibility is a key concept in analyzing the impacts of transport infrastructure and investments on the regional economy. The accessibility of alternative locations is a crucial factor behind the location choices of private enterprises and households. Changes in transportation system bring about absolute and relative changes in the accessibility of locations, and enterprises and households react to these changes. Regional specialisation and accumulation of economic activity as well as expansion of regions and development of regional structure networks are all based on accessibility. There are great differences between different regions in the impacts caused by changes in accessibility. The phenomena of accumulation and regional integration are possible only in relative large urban districts.
There are many different mechanisms that generate impacts connected to regional economy and accessibility. The intensifying of freight transportation and the speeding up of business traffic have impacts on the costs and productivity of enterprises. Better accessibility of customers makes it possible to expand the market area. These factors strengthen the growth potential of enterprises and may lead to the entry of new enterprises in the region, which increases the demand of labour. The improved conditions of commutation make it easier for the enterprises to recruit new employees because commutation from farther off becomes easier and the operational area expands. The increase in the attractivity of the region combined with the increase in demand for labour lead to migration and growth of population.
The road investments that considerably improve the accessibility of the region can lead to the expansion of the operational area and the internal growth of the region. The most interesting models describing the connections between traffic and regional economy are based on the changes in household and enterprise activities caused by changes in accessibility. Inside a large operational urban region the change in accessibility generated by a change in transport system is mediated to land use as well.
Policy implications
Significant road projects can have far-reaching impacts on regional economy or urban economy, and these impacts do not unfold in the CBA and other impact assessments done by FINNRA. The impacts on regional and urban economy are significant mostly when the project has significant network impacts on an extensive transport system, when the project enables the expansion of the operational urban area, or when the project enables significant changes in land use in the urban area.
The realisation of these pre-conditions is emphasised in the extensive transport projects carried out in large urban areas. In the internal or inter-urban projects carried out by the smaller Finnish towns, the cost-benefit analysis is probably sufficient in illustrating the impacts on regional economy.