wider socioeconomic effects of investments in … · 4 cpa_b coke and refined petroleum products...

WIDER SOCIOECONOMIC EFFECTS OF INVESTMENTS IN MOTORWAYS

ASECAP -“47th ASECAP DAYS Study & Information Days”

29-31 May 2019|WestIn Business Hotel Costa Navarino, Messinia, Greece

Dimitrios J. DIMITRIOUPlanning, Management & Economics in Transport

Dr./Professor Assc, Dept. of Economics, DUTh, Greece

Copyrights © 2019 by Professor Assc. Dimitrios Dimitriou

Dimitrios J. DIMITRIOU - Profile

Dimitriou holds Doctorate in Transport demand forecasting; MSc in Infrastructures

Environmental Planning; MSc in Transport Planning & Management; and Diploma

(equivalent to 4 years BA & 1 year MSc) in Civil Engineering (sector of transportation).

He is Professor Associate in quantitative modelling for managing transport infrastructure in

Dept. of Economics, Democritus University of Thrace and he contributes in other

Universities in Greece and Europe. He provides dedicated courses and research in subjects

of transport economics, decision making and risk assessment.

He has published over 200 papers in referred journals, scientific and professional editions,

international conferences and he has elected in executive positions in professional

associations and committees of expert.

He has extended experience (25 years) in field of transportation, delivered many projects in

planning, operation, management, business development, investment appraisal and transport

economics. He is the Chairman of the BoD in Athens International Airport (since 2016). He

occupied many executive positions and he provided advisory in Transport Authorities,

Enterprises and Investors for investments in large projects.

In 2017/18 awarded for the Professional Achievements by the British Council and he has

elected in prestigious positions in professional associations and forums.

22

Dimitrios J. DIMITRIOUProfessor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece

ASECAP -“47th ASECAP DAYS Study & Information Days”/ 29-31 May 2019 / Messinia, Greece # 2

Outline

▪ Key variables of transport demand growth

▪ Transport trends and prospects

▪ Transport economic footprint and decision making

▪ Needs, objectives and methodology framework to estimate transport

infrastructure economic effects

▪ Types, outputs and mechanism of economic development impact

▪ Highlights on economic contribution of motorways in Greece

▪ Conclusions

33



Tran

spo

rt d

em

and

gro

wth

Increase FDI

Increase lab our market

Improve accessibility

Lead to economic development

Lead to Welfare

Interaction of economic growth and social development

Dimitriou 2107; INTECH: Mobility, Tourism & Travel Behavior

Transport services integration socioeconomic footprint

44



➢ Competitiveness

➢ Regulatory framework

➢ Monitoring/Review performance

➢ Analysis of the competition

➢ Provide information to users/market

➢ Innovation

➢ New Products - services

➢ IT – ITS – SMART Business

➢ Artificial Intelligence – machine learning

➢ Research (SU)

➢ Strategy

➢ New market development

➢ Regulation / protection vs deregulation

➢ Funding – capitals leverage

➢ Socioeconomic impact

➢ Planning

➢ New business (routes, destinations, etc)

➢ Business viability (risk sharing, incentives)

➢ Intellectual property (new business)

➢ Benefits return to society (CSR)

Dimitriou et al.2017, IJESRT, 6(1)

Dimitriou, 2016; Infrastructure Governance, OECD

Dimitriou, 2017; Mobility as a service, UNECE, Geneva

Dimitriou et al., 2018; Transportation proceedia

Dimitriou, 2018; New Skills, Economist, Athens

55# 5 #

Dimitriou, UNECE; 2018

55

Dimitrios J. DIMITRIOUDr./Professor Assoc. in Planning Management and Economics in Transport Dept. of Economics, DUTh, Greece


Transport sector key business planning variables

INPUT DECISION MAKING OUTPUT

Socio-economic

characteristics for

ORIGINs (pax)

Demand scaling

and morphing factors

Travel Demand

Generator

SET OF TRANSPORTATION NETWORK HUBS -

CONNECTIONS

OBSERVE

UPDATE

BELIEFS OBJECTIVES

DECIDE

ACT

TIP & Carriers

Performance

Regulatory and

Policy maker

framework

Network Evaluation

→ Competition (fares)

→ Robustness (seasonal vs

scheduled)

→ Saturation (new routes)

Business Sustainability

→ Carriers (load factors)

→ transport infra (profits)

→ Capacity / Efficiency

Economic Productivity

→ Demand volume ( total

expenditure)

→ Transfer pax

→ Spill over effects to regional

economy

DM TAXONOMY FOR TRANSPORT INFRA PERFORMANCE (TIP)

Authorities

Associations

Institutions

Suppliers

Network formulated

through interaction

between agents

AGENTS

Dimitriou D., (2017). Quantitative evaluation taxonomy for transport infrastructure projects, IJRSM, 4(3), 34-40.

66



Government

Operators

Industry Associations

R & D Institutions

Transport authorities

Equity Funds

Retail Banks

Financial Associations

Investment Banks

Multinational Companies

Stakeholders for transport industry decision making

Government

Region Authorities

Social Institutions

NGOs

MSEs

Decisions heavily depended on Social Values Impact

Decisions heavily depended on Operational Performance

Decisions heavily depended on Financial Performance

Dimitriou 2018; Economist, AthensDimitriou; ICCBMDA 2017, Spain

77



Key question in TIP assessment Dimitriou 2017; IJRSM, 4(3)

Financial analysis

Added value to CAPEX

Equilibrium??

Economic effects

Interest - AttentionPublic

Private

88



Milestone 1

Macroeconomic features

Project characteristics

Milestone 2

•Sectors share affected

Transaction tables per activity

Milestone 3

• Construction period

• Operation period

Milestone 4

• Direct impact

• Indirect impact

• Multiplied impact

Private

DIRECT

Generated by firms which will construct and operate the transportation infrastructure

INDUCED

Recycling of Euros as a result of spending from direct and indirect

INDIRECT

Generated by wider supply-chain firms purchasing goods and services from nation-based suppliers, in turn generating output, profits and employment among suppliers

CATALYTIC IMPACT

Improvement of the accessibility of a given region by reducing travel time and the changes in the interregional trade

Types of Economic impact Dimitriou et al., 2018; Transportation proceedia, Elsevier

99



`

Direct Indirect

Induced

SectorMultiplie

Income per sector

SectorsTransaction tables

Wages per sector of activity

Macroeconomic features of the project

catchment area

Jobs per sector Catalytic

Direct

Multiplied impact

Indirect Induced Catalytic

New demand from additional capacity

Jobs distribution for each project phase

Project financial features and technical characteristics

New Jobs

New Income

Dimitriou et al.2015, IJAE,47(40)

Methodology framework

Dimitriou et al., 2018; Transportation proceedia

1010



• What is the project about?

o New pipeline

o Connects Burgs – Alexandroupolis ports

• The scope of this project

o A new fast route for crude oil

o Delivery to the European and North Afriand

neighbour states

TRANS-EUROPEAN TRANSPORT NETWORK

➢ The motorways are part of the priority projects of the TEN-T network, which connect Greece to the rest of the EU.

CONCESSION MOTORWAYS Length to be constructed

Length to be upgraded

Length to be operated

M1:IONIA ODOS 196 172 360

Μ2:AEGEAN MOTORWAY 25 205 230

Μ3:OLYMPIA ODOS 284 82 366

Μ4:CENTRAL GREECE MOTORWAY(E65)

175 - 232

Dimitriou, 2019; submitted for publication

Concession motorways in Greece- Overview of the project

1111



Motorway concessions Cost (Bio euro)

IONIA ODOS –M1 1.00

AEGEAN MOTORWAY-M2 0.95

OLYMPIA ODOS-M3 1.40

CENTRAL GREECE(E65)-M4 1.37

Total 4.71

26%

7%6%

11%7%

30%

0%

20%

40%

60%

80%

100%

SECTORS SHARE IN CONSTRUCTION PERIOD

WORK

OTHER TRANSPORT EQUIPMENT

MOTOR VEHICLES

CHEMICAL PRODUCTS

COKE AND REFINED PETROLEUM

BASIC METALS

PETROLEUM PRODUCTS

Motorway concessions Construction period (T1) (employees per year)

Direct Indirect IONIA ODOS –M1 3,500 2,500AEGEAN MOTORWAY-M2 3,500 2,500OLYMPIA ODOS-M3 5,000 3,000CENTRAL GREECE(E65)-M4

4,000 3,000

Total 16,000 11,000

1 CPA_A01

………………....................................................................................................................... .............................

4 CPA_B Coke and refined petroleum products

5 CPA_C10-C12 Chemicals and chemical products

8 CPA_C17 Other non-metallic mineral products

9 CPA_C18 Basic metals

…………………………………………………………………………………………………………………….

14 CPA_C23 Motor vehicles, trailers and semi-trailers

15 CPA_C24 Other transport equipment

………………………………………………………………………………………………………………………

21 CPA_C30 Constructions and construction works

………………………………………………………………………………………………………………….

35 CPA_H53 Financial services, except insurance and pension funding

41 CPA_K64

Architectural and engineering services; technical testing and analysis services

………………………………………………………………………………………………………………………….

65 CPA_U

Budget Profile Sectors share

Construction period shared in 3 different periods



1212



113,000 Jobs Μultiplied & Spill over:

1128.7 Mio incomeDirect and indirect

1231.6 Mio income

Cumulative (3 years) socioeconomic footprint

9,600 JobsΜultiplied: 102.4 Mio incomeDirect and indirect

116 Mio income

Spill over: 1,030.5 Mio income



Construction (last 3 years)

Operation (last 3 years)

1313



0 2 4 6 8 10 12 14

Austria

Belgium

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg

Malta

Montenegro, Republic of

Netherlands

Poland

Portugal

Romania

Slovak Republic

Slovenia

Sweden

Turkey

United Kingdom

2015 2010

GVA of the transport sector as a share of GDP OECD, ITF, Report 2018

1414



Port Infrastructure Railroad Infrastructure

Airport Infrastructure Road Infrastructure

Completion of TEN-T Road Core Network

Quality Infrastructure Index Eurostat (2018)

1515



16

Investments in new transport infrastructure Typical operation

Transport infrastructure /GDP

Typical variation for different phases of Mega Transport Infrastructure development

New transport infrastructure

Capacity expansion Demand increase

Demand decrease

1616



❖ The results indicate that for the motorways concession project the economic

impacts are highly cyclical with significant short-term employment during

construction phases that disappears once the project is in operation.

❖ The results suggest that investment in large transportation infrastructure

spurs economic growth and generates employment directly through the

actual construction, operation and maintenance of the project but also

through indirect and induced multiplier effects across the economy

❖ The results show a strong relationship between economic infrastructure

investment and sectors of construction, industries including energy and trade

❖ The estimated results provide a strong evidence of the existence of long run

cointegrating relationship among infrastructure investment ,economic growth,

and unemployment reduction

Concluding remarks

1717



➢ Why to estimate impacts in national/regional economy?

✓ Estimate the overall contribution in an economic system (regional – national

scale)

✓ Estimate the economic impacts on other economic sectors

✓ Provide essential economic and social outputs for a variety of stakeholders

involved in decision process (such as Government; authorities; NGOs, etc.)

✓ Monitoring the productivity and the efficiency of air transports in economies

➢ How significant are the transport industry impacts in Greek economy?

✓ Quick and HIGH impacts in unemployment and business growth

✓ Income multiplier ÷ 4 (construction period) ÷ 2 (operation period)

✓ Act as un FDI providing additional impact to the poorest region of the country

✓ GDP contribution very high

Concluding remarks

1818



Thank you

ASECAP -“47th ASECAP DAYS Study & Information Days”

29-31 May 2019|WestIn Business Hotel Costa Navarino, Messinia, Greece

Dimitrios J. DIMITRIOUPlanning, Management & Economics in Transport

Dr./Professor Assc, Dept. of Economics, DUTh, Greece


WIDER SOCIOECONOMIC EFFECTS OF INVESTMENTS IN MOTORWAYS

wider socioeconomic effects of investments in … · 4 cpa_b coke and refined petroleum products...

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