Maritime Trade and Transport - HWWI

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7. Financing transport infrastructure Infrastructure is often viewed as a public asset, one whose construction, maintenance and operation is the responsibility of government. Even though this perception is partially justified in the case of social infrastructure, the economically oriented transport infrastructure examined here is generally regarded as a mixed asset. 77 Since well-developed transport routes that facilitate economic growth are in the interest of society, the state should indeed ensure the general conditions necessary for sufficient and safe logistics operations. The construction, maintenance and operation of roads, railroads, airports, seaports, and inland ports, however, can be managed completely or partially by private-sector companies. Privately financed and operated infrastructure will become considerably more important in the future. After all, the immense outlays required to ensure well-functioning infrastructure cannot be met with the notoriously limited public funds. This section will delineate the investment volume that will have to be funded in the next 25 years and the financial sources available for this purpose. Governments will (need to) concentrate on their core responsibilities in the future and institute usage-dependent financing of public projects or allocate these to private operators. Partnerships are likely in which the risks and returns of a project are shared by the state and private investors, giving rise to new opportunities for the investor. With the increasing variety of investment forms and advantageous risk-return combinations, investments in infrastructure will continue to gain in importance. 7.1 Investment potential – How much must be financed? 7.1.1 Global investment potential According to studies by the OECD and the World Bank, $250-350 bn will have to be provided annually worldwide until 2030 to maintain and expand land transport infrastructure – road and rail. 78 Investments in roads take up the lion’s share, 78%. Of this sum, $50-70 bn is subject to intervention on the part of policymakers (fiscal constraints, sustainable development, modal shifts toward the railroads). Land transport requires widely branching, well-developed networks. The funding requirements are therefore relatively higher than for air and ship transport, in which investments concentrate on the construction and operation of airport and seaport infrastructure. 79 A record sum of $36 bn was invested in airports in 2005. 80 Projecting the figures from the Asia-Pacific region to the world, this would mean that, until 2015, $30-50 bn will be required annually for airports and $10-20 bn for container ports. 81 Conclusion: In the future, up to $420 bn will be available annually for productive use in transport infrastructure. 77 Both principles of public assets – nonrivalry in consumption and nonexclusion – are infringed upon at least to an extent. Rivalry in the consumption of transport infrastructure is evident in traffic jams on the roads, handling of ships or planes in airports and seaports, and the fact that only one freight train can travel on a specific line at one time. Users can also be excluded from consumption: tolls and port and airport charges as well as fees for the use of the rails are common practice. 78 See OECD (2006a), World Bank (2003). The World Bank study only covers the period until 2010 and bases its calculations on average annual world economic growth of 2.7%. The results harmonize well with those of the OECD study, which forecasts development until 2030. 79 For shipping traffic, the expansion of important canals and inland waterways should be mentioned as exceptions. Global figures are not available here. 80 See Airports Council International (2005). The ICAO estimates that between 2000 and 2010 global expenditure for airport and air navigation services will amount to more than $300 bn. See ESCAP (2005). 81 Average figures for the so-called ESCAP region from ESCAP (2006) were extrapolated on the basis of the 28% share of the region in the world gross domestic product (2005, World Bank Statistical Database). Berenberg Bank · HWWI: Strategy 2030 · No. 4 129
200 160 120 80 40 This may seem like a large amount, considering a capital stock only for roads and rails which was estimated in 2000 at $6,000 bn. However, replacement investments of 2% annually and the states’ longstanding substantial underinvestment in maintenance and servicing should also be kept in mind. According to the OECD, world investments in road and rail, currently amounting to almost 0.5% of world economic output, will decrease continuously over the entire period to 0.35% (2030). 82 Conclusion: Whether the average expansion in transport infrastructure of almost 1.2% annually will be sufficient to meet the rapidly surging demand is questionable. With a rapid globalization pace (until 2015) and the perspective of burgeoning private funding of economic infrastructure, a high investment potential is likely in the medium term. 7.1.2 Regional breakdown Breakdown of annual investments (Road + rail) by region (in $ bn) 0 Indust. countries Emerging markets Developing countries Fig. 17 Source: WTO, OECD, Berenberg. 7.1.2.1 Industrialized countries – The biggest piece of the cake Until 2030, investments will continue to focus on the G7 nations of Western Europe and North America. Measured by their economic output, the industrialized countries spend considerably less for transport infrastructure than the emerging and developing nations. Their appreciably higher capital stock will grow at a below-average annual rate, 1.6%, since they focus on the maintenance and servicing of the existing infrastructure. Furthermore, there is a certain amount of catching up to do. In the USA, the value of transport infrastructure diminished by more than 13% between 1950 and 1990. Standard & Poor’s estimates that at least $92 bn will be required annually for the maintenance and servicing of the road network. Improvements cost an additional $34 bn annually. 83 A study by the Hudson Institute cites a figure of $48 bn per annum until 2025 to eliminate the accrued underinvestments and $168 bn for maintenance. The American highway network is expected to develop annual financing needs of $212 bn. 84 Similarly, elsewhere in the OECD, a shrinkage of transport in- 82 See World Bank (2003), OECD (2006a). 83 See Standard & Poor’s (2005). 84 See Giglio (2005). New construction 130 Berenberg Bank · HWWI: Strategy 2030 · No. 4 300 250 200 150 100 50 0 Breakdown of annual investments (Road + rail) in $ bn 2005–2010 Africa Latin America Asia North America Europe World Fig. 18 Source: WTO, OECD, Berenberg.
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Hamburgisches WeltWirtschafts Insti
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»Berenberg Bank · HWWI: Strategy
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Contents Part A 7 Summary Part A 8
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5.2.5 Shipyards and shipbuilding na
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Summary Global economic development
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and have consistently modernized an
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The leading exporters and importers
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The three core regions also play a
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The USA continues to be the most im
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Whereas Ricardian foreign trade the
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y the European Union are the Euro-M
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Box 1 Advantages and disadvantages
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eached 1.6% annually between 1985 a
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portant customers for coal in 2004.
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The various regions of the world ar
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Intra-EU trade by mode of transport
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3.3. Determinants of maritime trade
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Annual growth rate in seaborne worl
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4. Maritime trade and port economic
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Shares of individual shipping areas
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2004 amounted in Wilhelmshaven to 9
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of total goods handling in Le Havre
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Shares of total goods handling of t
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4.3 Hubs and feeder transport in Eu
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The top 10 of the world’s largest
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The Taiwanese port of Kaohsiung44 i
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areas. Its location on the Elbe, ho
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Modal split in container handling t
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Generally speaking, it should be as
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Box 5 education and research polici
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5. HWWI forecast 5.1 World trade Th
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has grown much more than trade volu
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ences. Whereas the annual growth ra
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5.3.1 Basic scenario For the basic
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Part B Perspectives of maritime tra
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Among the various modes of transpor
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1.3 The symptoms: Delays at ports f
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2. The macroeconomic significance o
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Parking aids and cruise controls ar
Page 80 and 81: Using the findings of the HWWI as a
Page 82 and 83: In the PRC, as in Europe, the futur
Page 84 and 85: slipped down to a lower middle-clas
Page 86 and 87: 4. Reorganization of the logistics
Page 88 and 89: In the long term, however, the mark
Page 90 and 91: Fuijan (located opposite Taiwan) fo
Page 92 and 93: Hapag Lloyd, Hanjin (South Korea) -
Page 94 and 95: The mood can become significantly o
Page 96 and 97: The second method, using larger shi
Page 98 and 99: completely or transferred to smalle
Page 100 and 101: Since the large capesize freighters
Page 102 and 103: (1,719 ships) were ordered at the b
Page 104 and 105: The result: Peak Oil will ultimatel
Page 106 and 107: LNG tankers - Elite class with pote
Page 108 and 109: dern technologies, and a productive
Page 110 and 111: Europe’s shipbuilding opportuniti
Page 112 and 113: first time in 2007. Series producti
Page 114 and 115: 6.1.2 Comparing modes of transport:
Page 116 and 117: The highest growth rates in air fre
Page 118 and 119: Growth in shares of modes of transp
Page 120 and 121: Crossing Paths at the Port of Hambu
Page 122 and 123: should especially benefit the share
Page 124 and 125: 6.2.2 Harmonizing and privatizing t
Page 126 and 127: 6.2.4 Support for intermodal networ
Page 128 and 129: 6.3.2 Many roads lead to Rome: New
Page 132 and 133: 300 250 200 150 100 50 frastructure
Page 134 and 135: The traditional chronology accordin
Page 136 and 137: frastructure program involving priv
Page 138 and 139: World potential for private partici
Page 140 and 141: 250 200 150 100 50 7.3.2 Investment
Page 142 and 143: Transport infrastructure sectors Fi
Page 144 and 145: Hafen Hamburg (November 1, 2005) ww
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