Mon, Apr 01, 2013 - Page 9 News List

Crisis-bred austerity dulling EU’s infrastructure edge

As the European bloc stringently tightens its belt, the transport sector is being starved of much-needed upkeep and development funds as emerging market-economies pour money into their systems, threating to supercede the continent’s once-unparalleled infrastructure

By Anthony Deutsch  /  Reuters, BERLIN

A French Ministry of Transport spokesperson said two working groups were evaluating technical aspects, costs and financing options, with an outcome expected this month.

In Ireland, the transport budget for the period from 2010 to 2015 was reduced by almost 50 percent in just two years from 17.5 billion to 8 billion euros.

Plans to give Dublin its first underground rail services — one to connect Dublin Airport to the city center and another to link two existing rail lines — have been scrapped. The projects would have cost 2 billion euros, the Irish government estimated.

Italy’s parliament in December last year froze a 3.9 billion euro contract to build a road and rail bridge connecting Sicily to Italy’s mainland known as the Ponte sullo Stretto di Messina.

Spain is budgeting 9.6 billion euros in public infrastructures for this year, down 16 percent from a year earlier and down 36 percent from 2008, when 15 billion were targeted. Several major toll road projects were pulled after going bankrupt due to overspending. That led to the halt of the construction of 14 luxury stations along the high-speed rail network, saving 3.5 billion euros, and the cancelation of a railway from Madrid to Lisbon, Portugal.

Trade within Europe, which has a population of more than 730 million and represents roughly 22 percent of the world’s cargo by value, is expected to double in the coming decade.

Brussels said in a policy paper released before the recent budget cuts that 550 billion euros in high-priority projects were needed through 2020 to create a core transportation network to meet the increased demand.

The investment would connect 120 major ports and airports to rail, upgrade 15,000km of rail tracks to high speed and remove 35 key cross-border bottlenecks. The region’s railways use seven different gauges and only 20 major airports, and 35 major ports are directly connected to the rail network.

The upgrades would not only make the distribution of goods faster and cheaper, but also be required to meet EU targets to reduce carbon emissions by 60 percent, halve conventional car use and shift 50 percent of long distance freight onto trains and ships by 2050.

Airline executives have been among the most outspoken about concerns that Europe risks losing its competitive position if it fails to implement these plans.

For example, the Paris Charles de Gaulle Airport plans to spend 2.1 billion euros between 2011 and 2015 on new facilities, while Dubai last year planned to invest 6 billion euros in airport expansion by 2018 to boost capacity by 50 percent.

“Europe was a leader in terms of quality infrastructure,” Air France-KLM chief executive Jean-Cyril Spinetta told reporters. “I am very concerned about the future, especially airports. The amount of investment in other regions is incredibly high.”

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