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When are subsidies to trans-European network projects justified?

  • Proost, Stef
  • Dunkerley, Fay
  • Borger, Bruno De
  • Gühneman, Astrid
  • Koskenoja, Pia
  • Mackie, Peter
  • Loo, Saskia Van der

The trans-European transport network (TEN-T) encompasses the major planned transport infrastructure in Europe, ranging from high speed rail to port infrastructure. Projects in this category are considered priority projects and receive European subsidies; but these have been insufficient to get these projects off the ground. This paper addresses two research questions. First, it sketches the basic economics of cross-boundary infrastructure projects: what pricing and investment policies can we expect, what is the role of through traffic and high fixed costs of infrastructure? Second, it examines briefly what lessons the EU could draw from the experience of other existing federal funding institutions like the US and Germany. These ideas are used to propose a new subsidy scheme for the TEN-T projects.

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Article provided by Elsevier in its journal Transportation Research Part A: Policy and Practice.

Volume (Year): 45 (2011)
Issue (Month): 3 (March)
Pages: 161-170

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Handle: RePEc:eee:transa:v:45:y:2011:i:3:p:161-170
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  1. Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2003. "Inefficiencies and scale economies of European airport operations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 39(5), pages 341-361, September.
  2. De Borger Bruno & Dunkerley Fay & Proost Stef, 2006. "The interaction between tolls and capacity investment in serial and parallel transport networks," Energy, Transport and Environment Working Papers Series ete0607, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
  3. Bruno De Borger & Stef Proost & Kurt Van Dender, 2007. "Private port pricing and public investment in port and Hinterland capacity," Center for Economic Studies - Discussion papers ces0708, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  4. De Borger, Bruno & Dunkerley, Fay & Proost, Stef, 2009. "Capacity cost structure, welfare and cost recovery: Are transport infrastructures with high fixed costs a handicap?," Transportation Research Part B: Methodological, Elsevier, vol. 43(5), pages 506-521, June.
  5. DE BORGER, Bruno & DUNKERLEY, Fay & PROOST, Stef, 2006. "Strategic investment and pricing decisions in a congested transport corridor," Working Papers 2006021, University of Antwerp, Faculty of Applied Economics.
  6. Richard Arnott & Marvin Kraus, 1995. "Self-Financing of Congestible Facilities in a Growing Economy," Boston College Working Papers in Economics 304., Boston College Department of Economics.
  7. Brian Knight, 2003. "Parochial Interests and the Centralized Provision of Local Public Goods: Evidence from Congressional Voting on Transportation Projects," NBER Working Papers 9748, National Bureau of Economic Research, Inc.
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