transport investment priorities under structural …transport investment priorities under structural...

Study on Strategic Evaluation on

Transport Investment Priorities

under Structural and Cohesion

funds for the Programming Period

2007-2013

No 2005.CE.16.0.AT.014

Country Report Cyprus

Final

Client: European Commission, DG-REGIO

ECORYS Nederland BV

Rotterdam, September 2006

ECORYS Nederland BV

P.O. Box 4175

3006 AD Rotterdam

Watermanweg 44

3067 GG Rotterdam

The Netherlands

T +31 (0)10 453 88 00

F +31 (0)10 453 07 68

E [email protected]

W www.ecorys.com

Registration no. 24316726

ECORYS Transport

T +31 (0)10 453 87 59

F +31 (0)10 452 36 80

Table of contents

1 Introduction 7

1.1 Background 7

1.2 The Strategic Evaluation 8

1.3 The Country Report 8

1.4 Structure of the report 8

2 Transport Sector: current situation 10

2.1 Introduction 10

2.2 Cyprus 10

2.3 Situation per mode of transport 12

2.3.1 Roads and road transport 12

2.3.2 Urban transport 15

2.3.3 Railways 15

2.3.4 Inland waterways 15

2.3.5 Sea ports 15

2.3.6 Airports 17

2.3.7 Trends and indicators 18

2.4 Current Transport policy 19

2.5 Conclusions: SWOT analysis transport system 22

3 Accessibility analysis 23

3.1 Introduction 23

3.2 Methodology: Accessibility Problem Index 23

3.3 Transport needs 25

4 Previous support programmes 30

4.1 National public funding for transport infrastructure 30

4.2 EU funding 31

4.3 Other sources of financing 31

5 National Transport Strategy 34

5.1 Introduction 34

5.2 Long term National Transport Strategy and Planning 34

5.3 Operational programme 2007-2013 35

5.4 Priorities in OP by sector 36

5.5 Towards future investment priorities 36

6 Prioritisation of Transport Investments (2007-2013) 38

6.1 Introduction 38

6.2 Community Strategic Guidelines 39

6.3 Additional factors for the prioritisation of transport investments 40

7 Assessment of Impacts 43

7.1 Introduction 43

7.2 Methodology 43

7.3 Scenarios 45

7.4 Impact assessment 45

7.5 European effects 50

8 Conclusions on investment priorities 51

8.1 Introduction 51

8.2 Transport investment priorities 2007-2013 51

Annex A TEN-T priorities

Annex B Accessibility “red flag” analysis

7

1 Introduction

1.1 Background

The recent enlargement of the EU to 25 Member States clearly creates a new challenge

for its Cohesion Policy. Disparity levels within the EU have increased substantially and

will further increase with the accession of Bulgaria and Romania in 2007. This is an

explicit point of attention as the Treaty states that, in order to strengthen its economic and

social cohesion, the Community shall aim at reducing the disparities between the levels of

development of various regions and the backwardness of the least favoured regions or

islands, including rural areas. This aim lies at the core of the Commission’s regional

policy.

One of the key elements of the cohesion policy of the Commission is the contribution of

the development of new transport infrastructure to regional economic development.

Extensive spending has taken place in this domain under ERDF, Cohesion Fund and

ISPA.

One of the prominent initiatives in the European Union in this respect is the development

of the Trans-European transport networks (TEN-T). In 2003 the Commission has

identified the 30 priority projects of the TEN-T up to 2020.1 The priority projects include:

“the most important infrastructures for international traffic, bearing in mind the general

objectives of the cohesion of the continent of Europe, modal balance, interoperability and

the reduction of bottlenecks”.

For the new programming period 2007-2013 the Commission seeks to strengthen the

strategic dimension of cohesion policy to ensure that Community priorities are better

integrated into national and regional development programmes. In accordance with the

draft Council Regulation (article 23), the Council establishes Community Strategic

Guidelines for cohesion policy to “give effect to the priorities of the Community with a

view to promote balanced, harmonious and sustainable development”2.

To assess the impact of programmes in relation to Community and national priorities the

Commission has indicated that evaluations on a strategic level should be undertaken. The

present evaluation should be seen as one of these specific strategic evaluations. The

strategic evaluation should feed in the process of determining transport investment

priorities and the preparation of the national strategic reference frameworks and

1 Decision 884/2004/EC of 29 April 2004. The total investment of the 30 priority projects amounts to € 225 billion at the 2020

horizon. 2 COM(2004)492

8

operational programmes. As such, it should serve to enhance the quality, effectiveness

and consistency of Fund assistance.

1.2 The Strategic Evaluation

The strategic evaluation is directed the transport sector.

Three specific objectives have been formulated for this strategic evaluation:

• To provide an analysis of the situation in selected fields relevant to transport, using

structural indicators across Member States, plus Romania and Bulgaria;

• To assess the contribution of Structural and Cohesion funds relative to the current

and previous programming periods and draw lessons of relevance for the purpose of

the study in terms of identification of potential shortcomings in the development of

transport priority projects that might have hampered the utilization of those funds or

their expected benefits;

• To identify and evaluate needs in the selected fields and identify potential investment

priorities of structural and cohesion funds for the programming period 2007-2013.

1.3 The Country Report

The strategic evaluation results in specific country reports for all 15 countries and a

synthesis report. The current report is the Country Report for Cyprus. Its main aim is to

give a more detailed indication of the strengths and weaknesses of the transport system in

the country and to address areas for future intervention. Where relevant this accompanied

by recommendations with respect to the overall transport policy of the country. The

country reports feed into the joint programming effort with the Member States for the

next period, as will be detailed in the National Strategic Reference Frameworks and the

subsequent Operational Programmes.

1.4 Structure of the report

The report is structured around three building blocks.

• First a needs assessment is presented based on an analysis of the current transport

systems and a modelling analysis which reveals the current (relative) level of

accessibility per region. This leads to first conclusions strengths and weaknesses

of the current transport system and related transport investment needs (Part A).

• Next an overview is presented of the transport investment priorities in the past

period (Part B).

• Finally, future areas for priority transport investments are identified. This builds

on the needs assessment in the first part but also addresses other factors such as

the contribution to EU and national policy objectives, the availability of other

sources of funding and the administrative capacity of the country (Part C).

9

Part A: Needs assessment current situation

10

2 Transport Sector: current situation

2.1 Introduction

This chapter describes the current transport situation and policy in Cyprus. After a brief

introduction on the geographical and economic characteristics of the country, it describes

the situation per mode of transport. The analysis of the current situation is summarized in

a SWOT table on the main strengths and weaknesses, opportunities and threats. The

assessment of the transport system is followed by an analysis of the key transport policy

issues in Cyprus.

2.2 Cyprus

Source: CIA, World fact book

Cyprus is the third largest island in the Mediterranean Sea (after Sicily and Sardinia) and

the largest island state. Due to its arid climate, there are no big rivers in Cyprus. The

island comprises a central plain with mountains forming natural barriers to the north and

south, and scattered plains along the southern coast. The mountains hamper the

construction of infrastructures.

Cyprus is located at the north eastern corner of the Mediterranean and commands a

"cross-roads" position, linking the east with the west, Europe with Africa and the Middle

East. The population of Cyprus was estimated at 705,500 persons for the Government

controlled area of Cyprus in 2002 and 793,100 for the whole of the island.

11

About half of the population lives in the four largest cities: Lefkosia (Nicosia) inland and

Limassol, Larnaca and Paphos on the coast. The latter three cities accommodate more

than 35% of the population of Cyprus. They are the main tourist-centres and their ports

are the economic centres of the island.

Since 1974, approximately 37% of the country's territory has been occupied by Turkish

troops following the invasion of the island by Turkey. Despite the 1974 events, the

economy of Cyprus flourishes and today it is considered as one of the strongest

economies in Europe. Transport, which is vital to both the economic and social wellbeing

of a country, experienced a parallel growth over the last 20 years. Transport in Cyprus

constitutes an infrastructure sector covering a wide spectrum of different activities such

as road, air and sea transport and services allied to transport, mainly provided by travel

agencies and shipping offices.

The GDP per capita (purchasing power standard) in Cyprus is slightly higher than in

Greece or in Slovenia; among the new member states Cyprus has the one with the highest

GDP per capita in purchasing power standard. (Source: Eurostat yearbook 2004)

The contribution of the transport sector to GDP in Cyprus fluctuates at around 9%. The

sector plays a significant role in development, particularly in tourism and the export of

goods and other services. Tourism is one of the main economic-branches in Cyprus (in

2003 revenues from tourism represented 15.5% of the Gross Domestic Product). About

2.4 million tourists visit Cyprus each year. (Source: www.cyprus.gov.cy)

Basic data

Population 0.8 million

Total area 9,250 km2

Population density 86 inh/km2

Main cities Nicosia (270.000 inh), Limassol (190.000 inh ), Larnaca (70.000 inh), Paphos (40.000 inh)

Source: Eurostat

Economic data

GDP (2004) 12,5 billion €

Government debt as % of GDP (2004) 71.7%

Government deficit as % of GDP (2004) -4.1%

GDP per capita, Cyprus (2004) 16,800 €

GDP per capita, EU15 (2004) 25,800 €

GDP per capita, EU25 (2004) 22,700 €

Source: Eurostat

12

2.3 Situation per mode of transport

2.3.1 Roads and road transport

Infrastructure

The road network of Cyprus comprises about 11,419 km of roads of which 268 km

motorways. About 2,178 km national and more than 8,973 km of paved and unpaved

roads constitute the primary road network within Cyprus and link the towns and villages.

Four lane motorways connect the capital Lefkosia (Nicosia) with the main coastal cities.

During the decade 1990 - 2000 there has been a 118% increase in the total length of

motorways in Cyprus from 120 to 268 km.

Table 2.1 Length of road network in Cyprus (1994-2004) in kms

1994 2004

% change

Motorways 161 268 65%

State roads 4825 5440 13%

Local roads 4878 6052 24%

Source: Eurostat, Statistical Service of Cyprus

Figure 2.1 Major road network Cyprus

Source: www.map24.com

Cyprus has a dense road-network. The density of motorways in Cyprus (28km/1000km²)

is twice as high as the EU-25 average and the highest among the new member states.

13

Table 2.2 Motorways density in Cyprus

Length motorway

km/1000 km2

Length highways, main and

national roads

(km/1000km²)

Cyprus (2000) 28 234

EU15 16 84

EU25 14 91


Means

Table 2.3 gives information on the car ownership in Cyprus in comparison to the EU15

and EU25. During the period of 1990-2002, passenger car ownership/1000 inhabitants in

Cyprus increased by 30%, while the average EU 15 increase is about 25%.

Table 2.3 Car ownership Cyprus

Cyprus (2002) EU15 (2002) EU25 (2002)

Cars/1000 inh 408 491 459


The number of cars increased 65% in the last ten years.

Table 2.4 Number of passengers cars in Cyprus

Cyprus (1994) Cyprus (2004)

Private cars 222,923 367,473

Taxis 1,763 1,883

Other cars 7,611 12,898

Total cars 232,297 382,254


Road Freight

The road freight transport sector is characterised by a majority of small and medium sized

companies. In domestic transport the competition is intense, mainly because of the high

number of operators. In international goods transport by road the level of competition is

fairly high, but restricted by the cost of performing transport from an island.

Table 2.5 Road freight vehicles Cyprus (2003)

Number of vehicles Road haulage

(1000 tkm)

National road-haulage 3,387 1,370

International road-haulage 357 30


Domestic goods are transported by road transport, since there is no railway or inland

waterway infrastructure. The domestic transport of goods by road is about 43 million of

14

tonnes, mostly crude and manufactured minerals. In international transport of goods about

15 million of tonnes were transported by Cypriot vehicles. The main goods imported and

exported by road are fruits, vegetables and foodstuff.

Table 2.6 National road freight transport in 2004

Type of transport

Total

vehicle km

Total

(1000 tons)

Hire or reward 72,108 22,884

Own account 76.718 20,187

Total 148,827 43,071


Road accidents

Road safety is ranked among the highest priorities of the Government of the Republic of

Cyprus, as it is performing badly in this respect compared to 22 other European Countries

(cf. SARTRE 3). After a period of decline in road accidents and road casualties, Cyprus

has experienced a strong increase in fatal accidents in 2004 compared to 2003, with 110

fatal accidents and 117 road accident fatalities in 2004 compared to 97 fatalities in 2003.

The road accident fatalities per 1 million inhabitants of 167 in 2004 are significantly

above the EU average.

Table 2.7 Road transport related accidents and fatalities in Cyprus (2004)

Fatalities Total

Accidents 110 3284

Causalities 357 3294

Source: CARE (road accidents database), Eurostat, Statistical Service of Cyprus

Table 2.8 Fatal road accidents (fatalities per mln inhabitants)

Cyprus EU25

1994 1998 2004 2002

184 149 167 110


The Ministry of Communications and Works, has recently launched a 6-year Strategic

Action Plan for Road Safety (2005-2010). The quantitative target of the Plan is to half

road accident victims by year 2010, which is also the target of the European Road Safety

Action Plan. The expected development in the next 10 years is a reduction of the number

of victims involved annually in road accidents of 50 fatalities

15

2.3.2 Urban transport

Means

The domestically operating passenger transport sector in Cyprus is characterised by a

majority of small and medium sized companies. In 2003 there were 1,870 buses and

coaches operating in domestic passenger transport, the majority of which are

comparatively old vehicles.

Demand

Use of public transport has decreased from 14 million bus passengers per annum in 1980

to 3.5 million in 2002. This steady decline in the use of public transport may be attributed

mainly to a rapid increase in car ownership, coupled with the poor service offered by the

bus companies and the poor condition of the buses. The share of buses and coaches in

passenger transport in Cyprus was about 2% of passenger-kilometres (2002).

In order to shift passenger traffic from private cars to public transport, the Ministry of

Communications & Works gives particular emphasis to encouraging the use of intercity-

and rural-buses, and taxi’s by:

• Upgrading and modernising the bus and taxi fleet

• Encouragement of merging and expansion of the private bus companies

• Planning new bus stations at the outskirts of the urban areas

• Adoption of integrated ticketing

The aim of the Government is to increase the share of public transport from 2% to 10% in

2015.

2.3.3 Railways

Cyprus has no railways and currently there are no government plans to invest in rail

transport.

2.3.4 Inland waterways

Cyprus has no navigable inland waterways.

2.3.5 Sea ports

Infrastructure

The island of Cyprus is located in the north-eastern corner of the Mediterranean basin, at

the intersection of major international and regional shipping routes. It fulfils the role of a

hub for a number of key trading areas of world significance. Cyprus is an international

transshipment centre for Europe-Far East trade. Due to its excellent strategic location, it is

very important for the country to maintain and improve its maritime links with the rest of

the world.

16

Cyprus has 6 commercial seaports with Limassol and Larnaca as multipurpose ports and

the major gateways for Cyprus to international shipping. Cyprus has also port facilities

with the industrial port of Vasiliko and the oil terminals in Larnaka, Dhekelia and Moni.

The Cyprus Ports Authority (CPA) is a semi governmental organisation and is the

operator and regulator of the ports in Cyprus and owner of the multipurpose ports of

Limassol and Larnaca. From being conventional handlers of the country’s seaborne trade

and passenger traffic exclusively, Cypriot ports became important cargo transshipment

and cruise liner hubs. Limassol is one of the container ports in the Mediterranean Sea.

Means

Cyprus has one of the biggest merchant fleets within the EU. Most of the merchant ships

flying under Cypriot flag (1,180) belonged to foreign owners (1,149) in 2004.

Demand freight

Cyprus ports handle imported and exported cargo to and from the island, the

transshipment of container traffic and passenger traffic, either as a port of call within a

Mediterranean cruise or as a specialist 'mini-cruise' for tourists visiting Cyprus.

In 2004 a total of 7.5 million tons of goods has been handled in Cypriot ports, of which

almost 6 million tons were inward and 1.5 million tons outward going. Cyprus' main port,

Limassol, currently handles 3.8 million tons of freight. The handling of containers plays

an important role for the port of Limassol with about 2.2 million tons in 2004.

The cargo handled by the port of Vassiliko increased to 1.1 million tons of freight and the

port of Larnaca handles 0.6 million tons of freight. The oil terminals of Cyprus handled

about 1.9 millions tons. Table 2.9 shows freight handling in the main ports.

Table 2.9 Cargo handled at the principal ports of Cyprus (1000 tons)

Ports 1994 2000 2004

Limassol 3.584 3.589 3.818

Larnaca 1.553 439 619

Larnaca (oil) 1.472 1.988 1.295

Vassiliko 813 1.089 1.117

Moni (oil) 187 201 144

Dhekelia (oil) 525 527 503

Total 8.134 7.833 7.496

Source: Cyprus Ports Authority

Cyprus is well located to perform competitively against other regional ports as a container

hub in the Eastern Mediterranean. However, two obstacles require removal before Cyprus

can consider competing in the container hub market:

- the Turkish embargo on vessels visiting Turkish ports with cargos from Cyprus; and

- the labour practices in Cyprus ports, which prevent the promotion of transparent and

predictable cargo handling costs, particularly affecting container vessels.

17

Demand passengers

Being an island country, passenger transport by sea is highly important for Cyprus.

Passenger transportation by sea accommodates domestic mini cruise lines for tourists

visiting Cyprus, as well as international Mediterranean passenger cruise between

countries. Limassol is one of Europe's important cruise ports.

The total arrivals and departures of passengers at the ports of Cyprus amounted to

509,000 passengers in 2004; a decrease of almost 50% compared to 2000. The port of

Limassol handles about 455,000 passengers and the port of Larnaca about 54,000

passengers.

Table 2.10 Passengers arrivals / departures in the principal ports of Cyprus

Ports 1994 2000 2004

Limassol 829.062 991.900 454.981

Larnaca 26.175 50.700 54.158

Total 855.237 1.042.600 509.139

Source: Cyprus Ports Authority

Future competitiveness in the cruise passenger market will be influenced by the quality of

passenger terminal facilities. At present these are scarcely adequate at Limassol and their

upgrading is urgently needed. Plans are in place to do this. It is also anticipated that some

Limassol passenger traffic will transfer to Larnaca, following the development of that

port as a major passenger cruise centre.

2.3.6 Airports

Infrastructure

Air transport is very important for the tourism-sector. Cyprus has a wide network of air

routes connecting Cyprus with Europe, Africa and Asia. It has become a major

international transit station, with excellent connections within the entire region. The main

international airports in Cyprus are Larnaca and Paphos. Cyprus is the third most

important new member state in terms of total passenger air transport. In 2004 a total

number of 6.4 million passengers passed the international airports of Cyprus.

Means

Three Cypriot companies, Cyprus Airways (10 aircrafts), Eurocypria Airlines (4 aircrafts)

and Helios Airlines (3 aircrafts) are the national carriers that provide air transport to and

from Cyprus. 30 Foreign airlines have scheduled flights and 61 foreign airlines non-

scheduled flights to Cyprus.

Demand

Traffic growth through Cyprus airports has been robust over the years, with an average

growth of 10 % per annum. Cyprus' main airport, Larnaca, currently handles 4.8 million

passengers annually and Paphos 1.6 million passengers. About 85% of the total

passengers are foreign leisure travellers. Since 1990 the Cyprus’ airports have doubled

the movements of passengers by air transport and the expectations are a continuing

growth of 10% per annum in air passenger transport.

18

Table 2.11 Aircraft, passengers and freight movements air ports of Cyprus

Air port 1994 2000 2004

Aircraft movements 42.000 53.000 60.000

Passengers 4.200.000 6.100.000 6.400.000

Freight (tons) 34.000 33.000 37.000

Source: Department of Civil Aviation

It is questionable whether this rate of growth in tourism can continue indefinitely. At

some point, the tourism carrying capacity of the island will be approached, and before

this point is reached, any policy of seeking value tourism instead of volume tourism, will

have been overtaken by events.

Both airports are currently in the process of being privatized through a Build Operate and

Transfer (BOT) scheme involving the construction of new airport terminals. This BOT

scheme (and its possible variants) forms the basis of the development options for Cyprus'

airports.

2.3.7 Trends and indicators

Modal split

Because Cyprus has no railways or inland waterways, all domestic freight is transported

by road. The sea ports and airports have an important gateway function in the

international transport network.

Road transport is also by far the dominant mode in Cyprus in passenger transport, due to

the increase of car ownership. It can be expected that car ownership will further increase

with economic development, which will further strengthen the position of road transport

in future. In order to shift passenger traffic from private cars to public transport the

Ministry of Communications & Works gives emphasis in their policy and measures to

encourage the use of buses and taxis.

Table 2.12 Modal split passenger transport (share in passenger kilometres, 2002)

Passenger cars Buses Railways Tram & metro

Situation 2002

Cyprus 98.0 2.0 - -

EU15 83.5 8.8 6.6 1.0

Source: Eurostat

19

2.4 Current Transport policy

This section summarizes some key issues with respect to the policy of Cyprus with

respect to the transport sector and puts them in the light of EU policy objectives.

Improving road safety

Road safety is ranked among the highest priorities of the Government since Cyprus has

one of the worst records of road accidents and fatalities in Europe. The Ministry of

Communications and Works has recently launched a 6-year Strategic Action Plan for

Road Safety (2005-2010). The Cyprus Strategic Action Plan addresses all 3 major road

accident factors i.e. the human factor, the vehicles and the road environment.

Motorway of the Sea (TEN)

Cyprus is actively participating in the priority project ‘Motorway of the Sea of South East

Europe’, connecting the Adriatic Sea to the Ionian Sea and the Eastern Mediterranean,

including Cyprus by 2010. For further development of Cyprus the east-west connections

should be strengthened, so that the ports can be part of the Mediterranean network. The

ports are the gateways for Cyprus to the world and connections should be made. Cyprus

has taken part in Trans European Networks Study of the European Union and has

submitted its proposals for port development programmes.

Other infrastructure projects that are incorporated in the TEN-T network are: Larnaca and

Paphos airports, Limassol and Larnaca Ports, Limassol-Nicosia motorway, Limassol-

Paphos motorway, Limassol-Larnaca motorway and Larnaca-Nicosia motorway.

Figure 2.2 Road TINA Network Cyprus

Source: TINA Cyprus, 2002

20

Promoting transport by sea by developing seaports

The seaports (and airports) are important for the economy of Cyprus. The main objective

of the Cyprus Government is the development of Limassol port as a safe and efficient

place for transporting goods (containers) and passengers within the framework of inter-

European transport networks and the development of Larnaca port mainly for passengers.

Port upgrading or transformation (in the case of Larnaca) is financed from private funds.

Also the promotion of Cyprus as a base for international shipping activities is a main

objective in shipping policy.

Controlling growth in air transport

The growth of air transport in Cyprus is vitally important for the economy of Cyprus,

because of its role in the growth of the tourism sector. The government plans to expand

the terminal capacities of the two airports of Larnaca and Paphos to control the growth in

air transport. The Government is in the process of a implementing a new Air Traffic

Management System that should contribute to the efficiency of the airport system.

Developing high quality public transport

The Ministry of Communications & Works gives particular emphasis to encouraging the

use of intercity- and rural buses and taxis, by upgrading and modernising of bus and taxi

fleet and improving connections of the intercity and urban bus routes. These and many

other measures should improve the quality of service in passenger transport and

encourage a modal shift from cars to public transport.

Motorway connections

It’s the policy of the government to put its emphasis more on road network maintenance

and less on new infrastructure projects. The motorway connections to the main sea and air

ports will be improved. The Ministry of Communications & Works is planning a study

for design and implementation of Intelligent Transport System (ITS), to consider

possibilities of electronic charging and real time traffic information. In view of the

political pressure for a re-unification of the island and free movement of goods and

people on the island, the government is considering to link the existing motorways in the

northern and southern parts of the island.

Environmental sustainability of the transport system

Transport is a key element to the socioeconomic development of Cyprus. The main

transport policy of the government for the next few years is the upgrading of the main

transport infrastructure (airports, ports and roads) of Cyprus so that it will be effectively

linked with the Trans European Networks and the free flow of passenger and goods is

safeguarded. In the framework of this general transport strategy the Government will

consider the matter of the establishment of a Regulator for the Transport Sector.

Transport has also been identified as a major contributor to environmental pollution.

Road transport, air traffic and the movement of hazardous goods pose great dangers to the

environment. In 2004 the Ministry of Communications and Works adopted some

measures for the encouragement of the sustainable use of energy in the transport sector.

21

Some of these measures are:

• A reduction of the excise duty for small and middle class volume engine vehicles;

• A 15% discount for the purpose of the excise duty for cars with CO2 emissions of

150gr/km or less and, at the same time, a 10% penalty on cars with CO2

emissions of 275gr/km or more;

• Excise duty and registration fees on electric cars were abolished and dual

propulsion cars (hybrids) are subject to half the registration and circulation fee;

• Five year programme for the promotion of energy saving, which will be

implemented as from 2006 onwards. The programme will be mainly financed

from the special fund for energy conservation and the promotion of renewable

resources. It includes a number of measures and among others those relevant to

transport sector, like:

o The provision of a subsidy on the excise duty of hybrid cars;

o Promotion of the use of bio fuels through the imposition of a zero excise

duty on bio fuels;

o Expansion of the use of the school bus;

The EIA (Environmental Impact Assessment) and SEA (Strategic Environmental

Assessment) Directives 97/11/EC and 2001/42/EC of the European Commission have

been implemented in Cyprus with the Law 57/I of 2001 and Law 102(I)of 2005.

The role of EIA and SEA in the prioritisation process is very important.

The respective laws are not only harmonising the legislation of Cyprus to EC legislation,

but on top of this pose more strict requirements and standards, as Cyprus is very sensitive

to environmental protection issues. An Environmental Impact Assessment (EIA) is

required for all major projects (i.e. infrastructure projects), according to the legislation in

force, which is in full compliance with the relevant EU Directive.

The law foresees the obligatory environmental impact assessment for the construction or

operation of projects defines the procedures for the impact assessment, the responsible

authorities, and the way of involvement of interested parties and forbids the approval of

building permits without the approval of the Environmental Protection Authority

22

2.5 Conclusions: SWOT analysis transport system

Strengths Weaknesses • Interurban road network mostly completed

• Area traffic management systems are implemented for traffic controlled junctions

• Small distances between cities and associated small costs of projects compared to other countries

• Geographical location in SE Med. appropriate for development of transport hub

• Well organised public administration

• Expansion of cities (after Turkish invasion) without a plan has resulted to limited space for road network and pedestrians

• Expansion of cities with low density obliges use of private car

• Limited funds of local authorities

• Low share of public transport

• Ageing fleet of buses

• Many authorities responsible for road network and public transport

• High accident / fatalities record

• No land connection to EU

• Embargo from Turkey

Opportunities Threats • Opportunity for funding of transport infrastructure

projects from EC funds growing

• Sensitivity of government and inhabitants to environmental issues and energy saving

• Implementation of ITS to fight congestion and accidents

• Saving funds with appropriate training and reduction of accidents

• PPP for airports and ports

• Toll roads

• Continuous urban sprawling limits available space for the development of transport infrastructures

• Increasing cost for battling accidents and traffic congestion

• Big cost for upgrading public transportation and obtaining increased share in modal split

• Difficulty to change the mentality of the public towards public transport use and road safety

• Development of competing hubs in the region

• Increasing car ownership

23

3 Accessibility analysis

3.1 Introduction

This chapter presents a more quantitative transport needs assessment on a regional level.

It complements Chapter 2 in which the current situation of the transport system is

described and potential deficiencies are addressed. The analysis on the current situation

together with the analysis of transport needs from a cohesion perspective forms a basis

for identifying possible investment priorities.

However, a quantitative needs assessment for a small island state has its limits. The

methodology developed for the strategic evaluation of transport investments for the

funding period 2007-2013 is designed for large countries with many regions. The analysis

is based on interregional accessibility. Intraregional transport links are not taken into

account. Cyprus, however, is an island and represented by only one region in the model,

so all road improvements are intraregional. Their quantitative evaluation would require a

detailed local traffic model. Therefore only a subset of the evaluation indicators

calculated for larger countries can be calculated for Cyprus.

In this chapter, first a description of the needs assessment methodology is presented.

Especially the determination of the composite Accessibility Problem Index (API), which

forms a central role in the approach, is explained. The higher the value of the index, the

higher the need for intervention. This approach has been labelled as the “red flag”

analysis.

This composite Accessibility Problem Index is a combined measure, which addresses

transport network quality, population density and regional disparity (a more elaborate

explanation is provided in Annex C). As such the accessibility analysis is much more

linked to cohesion policy than a more traditional accessibility analysis. Next, results of

the application for the specific country are illustrated and analysed. This analysis

identifies main areas for intervention in rail and road transport for the current situation

(2006).

3.2 Methodology: Accessibility Problem Index

To determine the need for transport investments, the SASI model has been used to assess

the present situation of the road and rail systems in each country without the national

transport projects to be examined later. For this the accessibility provided by the road and

rail systems in each country was evaluated from both a national and a European

perspective in order to identify regions with serious accessibility deficits that should be

24

addressed by European transport policy taking account of the stated EU goals

competitiveness and territorial cohesion. In the SASI model accessibility, which is

directly influenced by transport policy and investments, is judged to play a crucial role in

promoting the realisation of the cohesion objectives.

To determine the appropriate assessment of transport investment need from the cohesion

policy perspective an agreement on the indicator of accessibility to be used is required.

Traditional accessibility indicators are not useful for this. They measure the total effect of

both geographical location (periphery v. core) and quality of transport provided by the

transport system. As a result they always show a steep gradation in accessibility from the

core to the periphery. However, public policy cannot change the fact that some regions

are central and some are peripheral, i.e. provide the same level of accessibility to all

regions. Public policy can only alleviate disadvantages through unequal transport

provision.

This distinction is relevant for European transport policy. To invest only in transport in

the most peripheral regions with the lowest accessibility according to such an indicator

would benefit only the relatively few people living there and would ignore the needs of

the densely populated central regions to combat traffic congestion and so endanger the

competitiveness goal of the Lisbon Strategy of the European Union. On the other hand, to

invest only in transport in the most densely populated central regions with the greatest

congestion problems would not only lead to ever more traffic but also widen the existing

gap in accessibility between the central and peripheral regions and would so run counter

to the territorial cohesion goal of the European Union.

To avoid this dilemma, a new composite accessibility indicator was defined which

distinguishes between geographical location and quality of transport. This indicator

assumes that people in the peripheral regions cannot expect to enjoy the same level of

accessibility (measured in traditional terms) as the central regions but that they can

demand to be able to reach relevant destinations with the same travel speed ("as the crow

flies") as the people in the central regions. In addition the indicator recognises the

utilitarian principle of the happiness of the greatest number, i.e. that the transport needs of

densely populated regions should be given more weight than those of regions with only

few inhabitants. And finally, the indicator recognises that economically lagging regions

with severe deficits in accessibility may offer greater potential for stimulating economic

effects by transport investments than regions which enjoy already high accessibility.

These three principles avoid the pitfalls of both an extreme egalitarian view, which

postulates that all regions in Europe enjoy the same level of accessibility and a purely

efficiency-oriented view which postulates that accessibility in the already highly

accessibly central metropolitan areas should be further strengthened because they bring

the largest economic benefits. In other words, the three principles aim at a rational trade-

off between the stated EU goals of competitiveness and territorial cohesion. Annex C

gives a more elaborate description of the composite Accessibility Problem Index.

The new accessibility

indicator recognises

transport network

quality, population

density and regional

disparity

25

3.3 Transport needs

The composite Accessibility Problem Index takes account of the transport system quality

(travel speed), population density and regional disparity. Figure 3.1 and 3.2 depict the

population density and the regional distribution of income in Cyprus, Greece and parts of

the Balkan countries (for mapping reasons Cyprus is not shown in its true geographical

position). In terms of population density, Cyprus as a whole compares with medium-sized

urban regions in Greece, but has much lower density than the Athens metropolitan area

(Figure 3.1). In economic terms, Cyprus is also similar to the secondary urban centres in

Greece (Figure 3.2).

Figure 3.3 shows the spatial distribution of the Accessibility Problem Index in the same

region from a European perspective for the current situation (2006). Only the

Accessibility Problem Index Road is shown as Cyprus has no rail lines. The colour scale

of the map resembles that of a traffic light: green shades indicate average interregional

travel speeds above the European average, yellow values indicate speeds slightly above

the European average and red shades indicate speeds significantly lower than the

European average.

Not surprisingly the road accessibility of Cyprus is much lower than the European

average indicated by its red colour. This is due to its island character, with long ferry

travel times slowing down average travel times. In addition, it is important to note that in

this analysis only ferries and short-sea shipping lines to and from European ports is taken

into account. The probably more important local connections between Cyprus and ports

in eastern Turkey and the Middle East are not considered as these countries are not part of

the analysis. The comparison with the much higher road accessibility of the regions on

Sicily and the Italian mainland makes it clear that for passenger travel to and from Cyprus

air transport, and for goods travel to and from Cyprus short-sea shipping are much more

important than road.

26

Figure 3.1 Population density (population/sqkm), 2006

Figure 3.2 GDP/capita (Euro of 2005), 2006

27

Figure 3.3 Accessibility Problem Index Road (European), 2006

29

Part B: Past transport investment priorities

30

4 Previous support programmes

4.1 National public funding for transport infrastructure

The total expenditures of the Cyprus government as well as the national expenditures

related to transport have stayed at about the same level from 1999 to 2003. Almost 3% of

the total national expenditures relate to road transport (about 95 million Euros per year).

About 1.65% of the total national expenditures have been spent for air-transport and

pipelines (about 53 million Euros per year). There are no governmental expenditures in

the maritime transport sector, since the Cyprus Ports Authority (a self-financing

Organisation that has the obligation to operate on a commercial basis and to be self

sustained) is responsible for development and operation of the maritime infrastructure in

Cyprus.

Table 4.1 Expenditures of the Central Government in Cyprus in total and related to transport (in million Euro)

1999 2000 2001 2002 2003

Transport &

Communication 161.23 161.97 164.01 164.01 164.01

- Road Transport 95.64 94.53 95.01 95.01 95.01

- Air transport

& pipelines 54.16 52.93 53.85 53.85 53.85

Total expenditures 3,067.00 3,440.79 3,814.19 3,244.54 3,244.54

Source: Statistical Service of Cyprus / Ministry of Finance

TEN-T Investment

The table below gives the distribution of TEN-T investments in Cyprus. Road transport

and air transport account for all investment in Cyprus.

Table 4.2 TEN-T investment in Cyprus (in million Euro, estimates from 2002 on)

Cyprus % EU15

Total Road Air Total Road Air

1996/1997 18.7 18.7 - 0.0 0.1 0.0

1998/1999 74.2 34.0 40.2 0.1 0.2 0.5

2000/2001 129.7 49.2 80.5 0.2 0.4 1.5

2002/2003 168.5 86.1 80.5 0.2 0.4 1.0

2004/2005 214.4 86.1 80.5 0.3 0.5 1.0

2006/2010 231.2 176.9 32.4 0.2 0.8 0.2

Total 836.7 451.0 314.1 0.2 0.4 0.6

Source: TEN Invest, 2003

31

4.2 EU funding

As the island does not have a rail network or inland waterways, road transport and

maritime transport account for the EU funding. Phare funding has been limited to one

institution building intervention for the maritime transport sector in 2002. The EU

contribution was 0.6 million Euro, of a total eligible value of 0.75 million Euro.

The cost of the design and construction of the primary road network (including

motorways) is covered by the Cypriot government with help of the Cohesion Fund: for

the period 2004-2006, € 55 million has been allocated by the Cohesion Fund for

infrastructure projects in the Transportation and Environment Sector. All available

Cohesion Fund funding for transport is absorbed by one project in the road sector, the

total construction-cost of a section of the “Upgrading of the Limassol By-pass Junctions”

project. The Cohesion-Fund will finance € 25 million Euro (62% of the total amount of €

41 million).

The Cyprus Ports Authority is currently going ahead with the design and construction of a

new passenger terminal in the Limassol port. The cost of this project (estimated to be €

17.5 million) will mostly be funded by the Cyprus Ports Authority; in 2004 1.6 million

Euros have been granted as co-financing by the TEN-Fund.

Trends in funding

In Cyprus the financing of infrastructure with help of EU funding has focused on the

improvement of the primary Road Network. The government of Cyprus choose one

project to finance with help of EU Cohesion Fund. The road sector has clearly been the

focus area in national and EU funding infrastructure projects. But also for the

construction of motorways, the policy of the government of Cyprus is focussing more on

public private partnerships, for example the construction of the Paphos-Polis motorway a

(210 million Euro project) follow the DBFO (Design-Build-Finance-Operate) method.

For financing the port infrastructure, the Cyprus Ports Authority (CPA) is a self financed

organisation and the only investor in ports. Government’s port policy is implemented

through this authority.

The Cyprus Ports Authority is currently attempting to transform Larnaca port into a

destination-port mainly for cruise ships. Via the DBFO-procurement-method, the private

sector will be invited to conduct the financing and operation of the port for a specified

period of time.

4.3 Other sources of financing

This section gives an overview of other sources of financing for transport infrastructure.

EBRD

EBRD has no direct involvement in Cyprus with loans in transport.

32

EIB

EIB involvement in Cyprus has been concentrated on the construction of new passenger

terminal buildings and associated facilities at Larnaca and Paphos international airports in

2002 (190 m€) and a loan for renewal and improving urban infrastructure in 2005 (90

m€).

PPP financing

PPP constructions for financing infrastructure projects are used by Cyprus. The BOT and

DBFO approach are used and public and private sectors cooperate in these projects.

BOT stands for Build, Operate and Transfer. The BOT Project approach is often used for

the development and construction of transport infrastructure: a BOT project is not an

independent commercial project, even though its developer is a public enterprise. A BOT

project is jointly carried out by the public and private sectors.

DBFO stands for Design, Build, Finance and Operate. DBFO Road Projects are an

example where state authorities contract the private sector with design, construction,

financing and operating of a certain road.

The two airports Larnaca and Paphos are currently in the process of privatization through

a BOT scheme involving the construction of new airport terminals. For further

development, expanding and modernisation of the two main airports of Cyprus, DBFO

projects are foreseen and form the basis of the development options for Cyprus' airports.

The financing of port upgrading or transformation (in case of Larnaca) is done by private

funds.

33

Part C: Future transport investment priorities

34

5 National Transport Strategy

5.1 Introduction

This is the first section of Part C which aims to determine transport investment priorities

at a strategic level. This chapter deals with the current national transport policy and

resulting investment priorities. In the next chapter these investment priorities are

confronted with an analysis of possible sources of financing, and other factors such as

their contribution to EU policy objectives, the administrative capacity of the country, the

socio-economic impacts in relation to the costs of the projects, and the extent to which the

projects contribute to the needs identified in Part A of this report. Finally the overall

impact of the proposed investment priorities is assessed.

5.2 Long term National Transport Strategy and Planning

According to the National Lisbon Programme of Cyprus, which has references about the

policy priorities and initiatives in the transport sector, one of the key challenges for

Cyprus is the expansion and upgrading of basic infrastructures. The current and foreseen

objectives of the national transport policy are described briefly by transport sector.

Road transport

Regarding the Road transport sector, the Ministry of Communications & Works proposes

the following broad guidelines for the new Planning Period 2007-2013:

• Less emphasis on new infrastructure projects and more emphasis on road network

maintenance.

• Less emphasis on intercity infrastructure projects and more emphasis on

completion of the urban infrastructure

• Discouragement of excessive use of private vehicles and encouragement of the

use of mass transport systems, promotion of urban public transport system

• More emphasis on the secure and comfortable movement of pedestrians and

cyclists in a more attractive and environmentally friendly urban environment

• Implementation of the Strategic Action Plan for Road Safety for the period 2005-

2010.

Since Cyprus has constructed a very dense first-class road network within the last 25 years,

there is almost no need for new roads. Priority is given to road bypasses of large urban

centres and to the connection of the national road network with the ports and airports.

Another priority is to link the motorways in the Greek and the Turkish part of the island.

35

Maritime Transport

Regarding the Maritime sector, the Department of Merchant Shipping pursues the

following long term objectives as part of the relevant general national policy:

• The qualitative upgrade of the technical, administrative, legal and financial

infrastructure of Cyprus in the maritime sector, in co-operation with other

Government departments and private organisations.

• The improvement of the quality of both the ships registered in Cyprus and the crew

employed on them.

• Improvement of safety standards and conditions of living and work of seamen on

board Cyprus ships in accordance with International Conventions currently in force.

• The establishment of economic and other incentives aiming to attract more Cypriots

to the merchant shipping professions.

• The establishment of maritime training facilities in Cyprus, for both officers and

ratings.

• Further development of Cyprus in the area of merchant shipping, promotion of

Cyprus as a base for international shipping activities and enhancement of the

international reputation of the Cyprus flag as a maritime flag.

The planned further development of the quality of the Cypriot maritime transport sector

will help to secure and expand Cyprus’ position within the global maritime market, and

thus contribute to economic growth in Cyprus. The major policy priority in the area of

ports is the modernization and upgrading of the port infrastructure, its effective link to the

Trans-European Networks and the transformation of Cyprus´ ports into the gateways of

Europe in the region.

Air transport

It is the objective of the Cypriot transport policy that air transport is growing in a

controlled way and sufficient airport capacity is developed. Therefore it is necessary to

further develop, expand, and modernise the two main airports of Cyprus. For the time

being there is some congestion during peak periods due to the small capacity of the

terminals. However, with the planned expansion under a BOT project, the capacity will

increase and will be able to accommodate future growth.

Additionally, the Government is in the process of revamping the whole Air Traffic

Control system. It is anticipated that by year 2007 the new Air Traffic Management

system will be in place.

5.3 Operational programme 2007-2013

Currently Cyprus does not have an Operational Programme Transport and it is not

foreseen to have one in the new period 2007 - 2013 because the transport projects are so

limited in number and in budget. Cyprus will most probably have an Operational

Programme for CF/SF which will include an Axis for transport. There is a possibility to

have a programme for infrastructures generally. The Operational Programme CF/SF is

under preparation and no draft was available by the time this report is written.

36

The Government of Cyprus has prepared a report on the “National Lisbon Programme of

the Republic of Cyprus” which has references about the policy priorities and initiatives in

the transport sector. We use this document for a brief description of the priorities.

5.4 Priorities in OP by sector

The island of Cyprus is situated far from the geographical EU mainland, but plays an

important role with its ports and airports in international corridors between EU and Asia

and Africa. The port and air connections with the world are vital for economic growth of

Cyprus. Tourism and transport are important sectors for the economic development

Cyprus facing strong competition of countries in the region and the global market and

therefore it is important to improve Cyprus’ connections within EU.

The separation of Cyprus in northern and southern part of the island makes it difficult to

compete and strengthen its position within EU. In view of the political pressure for a re-

unification of the island and free movement of goods and people between the southern

and northern part of the island, the government is considering to link the existing

motorways in the northern and southern part of the island.

Domestically, the island character of Cyprus favours the development of ports and

airports, on the one hand to cater tourism development in the country and on the other

hand to facilitate freight transport (especially through the ports to and from Asian and

African countries). An adequate network system which connects the sea and airports to

the inland road transport system is essential in this respect. Connecting the key ports in

Cyprus to the rest of Europe by the motorways of the sea project, Cyprus’ position within

the global maritime market will expand and thus contribute to economic growth in

Cyprus.

The transport system of Cyprus is totally relying on roads. The focus of Cyprus in

improving the road transport system should be on strengthening of more environmentally

friendly transport modes (public transport, cycling, and walking), making the urban

environment more attractive. To improve road safety, developing high-quality urban

transport with improving public transport systems and more emphasis on secure

movement of pedestrians and cyclists it will help to increase the quality of live for the

inhabitants. At the same time it will help to preserve the nature in Cyprus and make the

island attractive for tourism with respect for measures of a sustainable transport system.

5.5 Towards future investment priorities

The government of Cyprus has focused on a few infrastructure projects of which some

are with EU funding. Priority should be given to a limited scheme of possible investment

projects and themes. Sustainable development of the transport system can contribute to

the economy of Cyprus now and in future and keep the island attractive for its inhabitants

and visitors.

On the basis of the preceding assessment the following areas for investment priorities in

Cyprus are foreseen in the coming period:

37

• Improve road and transport safety by support measures of the Strategic Road

Safety Plan through actions on the human factor (training and education),

vehicles and the road environment.

• Stimulate sustainable development of the transport system in Cyprus, especially

within the urban environment by developing innovative transport systems.

• Develop interconnections of the main ports of Cyprus within EU or between EU

and Africa and Asia and focus port investments at ports which serve as main

nodes in interconnecting Cyprus with the rest of Europe (freight);

• Develop high quality public transport to improve the quality of service in

passenger transport and to reduce private car transport.

Finally in the “Analytical working document for the priority actions in Transport 2007-

2013” the following measures and actions are included which could be co-financed by the

Cohesion Fund:

The basic strategy in transport sector is to improve and develop the transport

infrastructure of airports, ports, roads and connect it to TEN-T:

• Indicative Actions for land transport for 2007-2013 include:

- upgrade motorway Lefkosia - Ag. Varvara

- road connecting Limassol ports with the Limassol - Paphos motorway

- Lefkosia perimetric (ring) motorway

- New motorway connecting Paphos and Polis Hrisohous with PPP

- New motorway Kokkinotrimithia - Astromeritis

- Road (dual carriageway) Lefkosia Palaiohori

- Motorway Limassol - Platres (Saitas)

- Roads Lefkosia - Palaiohori, Limassol - Platres

- Implementation of Road Safety Plan 2005-2010

• Indicative actions for Air transport:

- Upgrading of Larnaca and Paphos airports with PPP

• Indicative actions for Maritime transport:

- New passenger terminal for Limassol port

- Transform Larnaca port to a tourist port for cruise vessels with PPP

- Additional investments for the Limassol port to turn it to a freight transhipment hub

and inclusion in SSS and motorways of the sea initiatives

• There are also various actions for the development of Pubic Transport in Lefkosia in

order to relieve congestion which includes necessary road works, park and ride

facilities, renewal of bus fleet, bus terminal, etc.

38

6 Prioritisation of Transport Investments

(2007-2013)

6.1 Introduction

This chapter intends to identify the main areas for transport investments that would merit

EU funding in the period 2007-2013. It should be emphasized that this is based on an

analysis that has been carried out at strategic level. Although the areas identified are

expected to result in high potential projects they should still be subjected to the regular

cost-benefit analysis at a project level before being finally selected.

Community Strategic Guidelines

The context for identifying strategic investment priorities is set by the Community

Strategic guidelines. In accordance with the draft Council Regulation (article 23), the

Council establishes Community Strategic Guidelines for cohesion policy to “give effect

to the priorities of the Community with a view to promote balanced, harmonious and

sustainable development”3.

These Strategic Guidelines form the basis for identifying investment priorities, which are

then be elaborated in National Strategic Reference Frameworks at the Member State

level, which are subsequently further detailed in Operational Programmes (OPs) for

thematic areas. A Commission proposal on these Strategic Guidelines was published in

July 20054. In parallel, Member States have already started preparations for their

National Strategic Reference Frameworks and OPs.

Additional factors influencing investment priorities

As indicated the Strategic Guidelines form the context in which investment priorities for

Community financing should be identified. In addition to these strategic guidelines a

number of other factor shape the eventual establishment of transport investment priorities.

These other factors include:

• Cost-effectiveness of projects;

• Availability of other sources of funding;

• Appropriateness of transport policy

• Administrative capacity to adequately absorb and manage funds.

3 COM(2004)492 4 COM(2005)299 Cohesion Policy in Support of Growth and Jobs: Community Strategic Guidelines, 2007-2013.

39

In the next section the Strategic Guidelines and the other factors are elaborated in more

detail leading to a proposed prioritisation of areas for funding from Cohesion and

Structural Funds.

6.2 Community Strategic Guidelines

The (draft) Community Strategic Guidelines set the scene for any future transport

investment financed as part of the Commission’s cohesion policy. According to the

communication of the Commission (COM(2005)299) the guidelines with respect to the

expansion and improvement of transport infrastructures for the period 2007-2013

determine clear guidelines for action (see text box 6.1)

Box 6.1 Community Strategic Guidelines: Guidelines for action

The Community Strategic Guidelines distinguish the following guidelines for action:

• Member States should give priority to the 30 projects of European interest, located in Member States and regions eligible under the Convergence objective5. Other TEN projects should be supported where this is a strong case in terms of their contribution to growth and competitiveness. Within this group of projects, cross-border links and those overseen by the specially designated European co-ordinators in the Member States merit special attention. Member States should make use of the co-ordinators as a means of shortening the time that elapses between designation of the planning of the network and the physical construction

• Complementary investment in secondary connections will also be important in the context of an integrated regional transport and communications strategy covering urban and rural areas, in order to ensure that the regions benefit from the opportunities created by the major networks.

• Support for rail infrastructure should seek to ensure greater access. Track fees should facilitate access for independent operators. They should also enhance the creation of an EU-wide interoperable network. Compliance and applications of the interoperability and the fitting of ERTMS on board and on track should be part of all projects financed.

• Promoting environmentally sustainable transport networks. This includes public transport facilities (including park-and-ride infrastructures), mobility plans, ring roads, increasing safety at road junctions, soft traffic (cycle lanes, pedestrian tracks). It also includes actions providing for accessibility to common public transport services for certain target groups (the elderly, disabled persons) and providing distribution networks for alternative vehicle fuels.

• In order to guarantee the optimum efficiency of transport infrastructures for promoting regional development, attention should be paid to improving the connectivity of landlocked territories to the Trans-European network (TEN-T) (…). In this respect, the development of secondary links, with a focus on inter-modality and sustainable transport, should be promoted. In particular, harbours and airports should be connected to their hinterland.

• More attention should be paid to developing the “motorways of the sea” and to short-sea shipping as a viable alternative to long-distance road and rail transport.

In addition the Guidelines give specific instructions with respect to the territorial

dimension of Cohesion policy in stressing that Member States should pay particular

attention to prevent uneven regional development and improve territorial integration and

cooperation between and within regions.

5 Decision n°. 884/2004/EC of the European Parliament and of the Council, 29 April 2004.

40

6.3 Additional factors for the prioritisation of transport investments

As indicated in the introduction a number of other factors determine the eventual

prioritisation of transport investment priorities under the Commission’s cohesion policy

instruments. These will be subsequently elaborated.

Cost-effectiveness

Cost-effectiveness or value for money stands at the core of any sound investment

programme. It is also fully embedded in the procedures and structure of the cohesion

policy of the Commission in which cost-benefit assessments of proposed projects are

standard procedure. Also EIB applies CBA as standard assessment methodology before

granting new loans.

The cost-effectiveness criterion is especially important if budget resources are limited. In

this case cost-benefit analyses can be used to phase foreseen transport investment in time

or to seek alternatives with a similar functionality that offer a higher value for money.

Availability of other sources of financing

A can be observed from the previous investment programmes other sources of finance

should not be overlooked with respect to future transport investments Apart from public

financing by the country itself important potential sources are:

The Commission recently reached an agreement with the EP on future TEN-T financing.

Total budget available is 7 billion € for the coming programming period. Financing can

be up to 20%. It should be noted however that this financing is only a fraction of total

cohesion financing (e.g. Cohesion Fund financing for transport approximates 45 m€),

while TEN-T funds are valid for all EU members. It is expected that TEN-T funds will be

focused on cross-border TEN-T projects.

EIB financing is another source of financing available for transport investment.

EIB involvement in Cyprus can be used for the renewal and improving of urban

infrastructure and the development of sustainable transport system in the main cities.

The only restriction for EIB financing is the government debt ratio of 71%.

There has been no involvement of EBRD for transport issues, but in future it can be used

for regional and urban projects that contribute to the environment and sustainable

development of Cyprus for its inhabitants and visitors.

PPPs are explicitly mentioned in the Community Strategic Guidelines as a possible

appropriate method of financing investment when there is significant scope for involving

the private sector. Apart from the financial leverage positive impacts are expected on

implementation and management of projects.

PPP for transport infrastructure is high priority for Cyprus. For example the new airport

of Larnaca will be constructed under a PPP scheme without the need of EU funds. Also

the ports will be upgraded with financing from their income or in partnership with the

private sector and without the need of EU funds. The current business climate in Cyprus

TEN-T budget

EIB

EBRD

PPPs

41

is expected to be sufficiently open not to hamper PPPs. The BOT and EBFO approach are

used for airport and port infrastructure projects.

Both EBRD and EIB can also get involved if PPP constructions are considered through

direct equity participations.

In summary, other financing sources are expected to relevant for the following areas:

Table 6.1 Potential financing sources and expected destination of funding

Source Destination

TEN-T TEN project SSS, motorways of the sea

EIB Urban Transport

EBRD Sustainable transport systems

PPP & private capital Income generating transport investments: ports,

airports, logistic centres

Appropriateness of the transport policy

The improvement of the accessibility of Cyprus is focused on the sustainable

development of mobility, both for freight and passenger transport and reducing the

environmental effects of transport. The ports and airports of Cyprus are the main

international connections for Cyprus and links to the Trans-European Network. The

actions on the Motorways of the Sea, short sea shipping and modernization of the airports

are very important for the transformation of the ports and airports of Cyprus into the

gateway and transit hub of Europe in the region. The use of PPP for transport

infrastructure, especially airport and port infrastructure is a high priority.

Cyprus has no road pricing or congestion charging but is considering implementing tolls

on certain roads and evaluating its policy. Also the government has plans for the design

and implementation of Intelligent Transport Systems and consider the possibilities for

electronic charging.

Implementation of traffic safety actions is also of high priority and the government has

presented a strategic plan for road safety in Cyprus. The plan focuses on the road

environment, drivers’ behaviour, cars and incident management. Therefore the

improvement of the urban infrastructure and measures to improve the quality of urban

transport and services are necessary. Viable public transport networks should be a priority

including networks for cycles and pedestrians in cities.

Administrative capacity

The Ministry of Communications & Works is the main authority for transport matters. It

is structured in four departments of Public Works, Merchant Shipping, Civil Aviation and

Road Transport. For the road projects there is technical and administrative capacity to

manage CF Funds. The Cyprus Ports Authority, which is a semi-government

organisation, is responsible for the administration and operation of the Cyprus ports. The

port and aviation organisations have experience with public private consortiums of large

(financial) projects.

42

The focus on the improvement of the technical and administrative capacity is the

interaction of the government with the municipalities for the development of the urban

infrastructure and services. Also priority should be given to evaluate the programme

2007-2013 so lessons can be learned for the management of SF/CF funds.

43

7 Assessment of Impacts

7.1 Introduction

This chapter assesses different scenarios with respect to their impacts on three different

(EU) policy objectives:

• Economic competitiveness

• Territorial cohesion

• Environmental sustainability

In addition the impacts are assessed on the Accessibility Problem Index (see Chapter 3).

However, just like the needs assessment in Chapter 3, a quantitative impact assessment

for a small island state has its limits. The methodology developed for the strategic

evaluation of transport investments for the funding period 2007-2013 is designed for

large countries with many regions. The modelling is to a large degree based on

interregional accessibility. Intraregional transport links are not taken into account.

Cyprus, however, consist of three islands, so all road improvements are necessarily

intraregional. Their quantitative evaluation would require a detailed local traffic model.

Therefore only a subset of the evaluation indicators calculated for larger countries can be

calculated for Cyprus.

First the methodological approach is described, including the SASI model that has been

used to assess the impacts. Next the scenarios are described, followed by a presentation of

the impacts.

7.2 Methodology

The SASI model

The impacts are assessed with the support of the SASI model. The SASI model is a

recursive-dynamic simulation model of socio-economic development of 1330 regions in

Europe. The model was developed to assess socio-economic and spatial impacts of

transport infrastructure investment and transport system improvements. Is has been

applied and validated in several large EU projects including the IASON and ESPON

projects.

The SASI model differs from other forecasting models of regional development by

modelling not only production (the demand side of labour markets) but also population

(the supply side of labour markets). Regional production by industry is forecast by

regional production functions containing production factors capital, labour, regional

44

endowment and accessibility. Regional population is forecast by a demographic model

including fertility, mortality and migration.

The SASI model is specifically relevant for projects that serve a function on a European

level (e.g. the TEN projects). Such projects cannot be adequately evaluated using

traditional cost-benefit analysis on a national scale, since they are less able to capture the

international effect and the indirect effects occurring in non-transport sectors6.

Figure 7.1 Main structure of the SASI model

SASI Model

The reference network

To assess the impacts of new transport investments a reference scenario has been

prepared. This mainly implies an adjustment of the transport network in the SASI model7.

The dynamic network database of SASI is based on highly detailed pan-European

transport networks with respect to:

• Roads (including short-sea shipping)

• Rail (including ferries)

• Air (including regional airports).

Network calculations are based on travel times or generalised costs including border

waiting times and (political, economic cultural and language) barriers.

6 See e.g. Rothengatter, The relevance of Transeuropean Transport Networks for Integration and Growth in the Extended

European Union. 7 Which relies on the trans-European transport network database developed by IRPUD (2003) and now maintained and

further developed by RRG (2005)

45

The reference network has been updated based on the most recent information from the

countries on implementation schedules and alignment with respect to TEN and national

transport projects (also information on toll is included). The reference network includes

all projects that are already under construction and will be operational in at latest 2007.

In addition the reference scenario assumes the further development of the European

integration with the accession of Bulgaria and Romania to the European Union in 2007.

Further European integration results in reductions in waiting times and lower barriers

between countries.

7.3 Scenarios

As indicated, the road projects of the policy scenarios for Cyprus are all intraregional and

they cannot be modelled with the SASI model. The only projects in the policy scenarios

for Cyprus that affect the travel times and travel costs between Cyprus and the rest of

Europe are the improvements of passenger terminals and container ports in Limassol and

of the passenger terminal in Lanarca.

Therefore only one policy scenario could be modelled with the SASI model for Cyprus:

The Port Scenario assumes that

• the travel times of passenger and lorry ferries between the Greek ports and

Limassol and Lanarca on Cyprus are reduced by 30 minutes through the

improvement of passenger terminals

• the container transshipment times in the port of Limassol are reduced by one hour

through improvements of the container facilities.

It should be stressed that these are assumed effects of the projects. In reality the effects of

the port projects may be different.

7.4 Impact assessment

The impacts of the Port Scenario are measured as differences between the Port Scenario

and Reference Scenario in 2031. These impacts are evaluated with respect to the strategic

objective of economic competitiveness (efficiency) only. The territorial cohesion

objective could not be evaluated because the selected indicators, primacy rate and Gini-

coefficient, are not meaningful in a two-region country. The environmental sustainability

objective could not be evaluated because the selected indicator, share of interregional rail

trips, cannot be calculated for Cyprus.

The following indicators have been identified to describe the impact on the economic

efficiency objective:

46

Table 7.1 Strategic objective economic competitiveness and related indicators

Objective Indicator Level

Average speed of interregional road trips (kph)

National, regional average Economic competitiveness

GDP per capita (Euro) National, regional average

It should be realised that these spatial impacts are long term effects, as:

• Location decision of firms result in changes in economic activity and

employment only after some time;

• Secondary effects of economic activity (i.e. attraction of other firms) take even

longer.

This is accounted for in the SASI model by time delays of one to five years. In order to

take due account of the long-term spatial impact of transport infrastructure investments in

the period 2007-2013, the target year for the model simulations is set at 2031.

Table 7.2 presents the impacts of the port improvements on the above indicators. For each

indicator the table shows the value of the indicator in 2006 and the indicators values of

the Reference Scenario and the Port Scenario in 2031. The numbers in italics are the

differences between the indicator values of the Port Scenario compared with those of the

Reference Scenario in 2031 in percent.

Table 7.2 Strategic objectives and related indicators (2031 impacts)

Scenarios

Reference Port

Objective

Indicator 2006 2031 2031

Average speed of interregional road trips (kph)

11.80 11.85 11.96 +0.93%

Economic competitiveness

GDP per capita (Euro)8

18,192 33,668 33,670 +0.01%

Table 7.2 indicates that the port improvements of the Port Scenario increase the average

speed of road trips from Cyprus, including ferries or short-sea shipping, by less than one

percent. The economic impacts of this for Cyprus are negligible. According to the model

forecasts, GDP per capita in Cyprus will almost double by 2031, but only very little of

this growth can be attributed to the port improvements of the Port Scenario.

Figure 7.2 shows the spatial distribution of GDP per capita in 2031. Because of the

general growth in GDP per capita, a different colour scale than in Figure 3.2 had to be

used. It can be seen that Cyprus's GDP per capita has grown faster than most Greek

regions. Figure 7.3 show the effects of the Port Scenario on GDP per capita as percentage

differences in GDP per capita between the Port Scenario and the Reference Scenario. The

more intense the green shade, the higher the impact. The positive effects of the port

improvements are restricted to Cyprus and have no effect on other regions.

8 The GDP per capita value for 2006 is not an official statistic but a result of the SASI model based on regional GDP per

capita statistics for 2001 by Eurostat.

47

Figure 7.2 GDP per capita (in 1,000 Euro 2005), Reference Scenario, 2031

Figure 7.3 Impact on GDP per capita, Port Scenario, 2031

48

Finally the impacts of the Port scenarios on the composite Accessibility Problem Index

Road (see Chapter 3) are shown to examine in how far the transport projects contribute to

solving the accessibility problems identified in the red-flag analysis. As it was noted in

Chapter 3, road accessibility in Cyprus is much lower than the European average due to

its island character (Figure 3.4).

Table 7.3 summarises the effects of the Port scenario on the Accessibility Problem Index

Road from a European perspective: index values above one indicate accessibility

problems, whereas index values below one indicate above-average performance.

Table 7.3 Accessibility Problem Index, Cyprus, 2031

Scenarios

Reference Port

Mode

Level 2006 2031 2031

Road European 4.325

4.161 4.104 -1.4%

The high value of the problem index in 2006 reflects the insular isolation of Cyprus.

There is a significant improvement in road accessibility between 2006 and 2031 already

in the Reference Scenario through the effects of European integration, in the form of

reduced waiting times and other barriers. There is only little further improvement through

the port improvements in the Port Scenario. The final value of the problem index signals

that the accessibility of Cyprus remains very poor compared to the European average.

Figure 7.4 shows the Accessibility Problem Index Road 2031 in the Port Scenario from a

European perspective. The comparison with Figure 3.4 shows that despite of this

accessibility has improved in many regions due to the ongoing European integration,

which has led to shorter border waiting times and reduced trade barriers.

However, despite the port improvements, European road accessibility of Cyprus remains

much below the European average.

The small effect of the reductions in travel time through the port improvements is no

surprise. The average travel time by car or lorry between Cyprus and central Europe,

including ferry or short-sea shipping, is in the range of three days. Even from mainland

Greece it is no less than two days. Compared to these long travel times, a time saving of

30 minutes for ferries and one hour for short-sea shipping is not a great change.

49

Figure 7.4 Accessibility Problem Index Road (European perspective), Port Scenario, 2031

50

7.5 European effects

The effects of transport infrastructure improvements are not confined to the country in

which the construction work actually occurs but reach across borders into neighbouring

countries. The SASI model forecasts these effects.

Figure 7.5 demonstrates this using average interregional road speed as example. The map

is a difference map showing the percent difference in average interregional road speed

between the Port Scenario and the Reference Scenario: the darker the green the larger the

difference. The impacts of the port improvements in Cyprus on average interregional road

speed, though marginal, spread into all of Greece and event southern Bulgaria.

No similar effect can be seen for GDP per capita in Figure 7.3, where the effects of the

port improvements in Cyprus are confined to Cyprus itself.

Figure 7.5 Average speed of interregional road trips: European impacts, Balanced Scenario, 2031

51

8 Conclusions on investment priorities

8.1 Introduction

Based on the previous analysis the main areas for transport investments that would merit

EU funding in the period 2007-2013 have been identified. It should be emphasized that

this is based on an analysis that has been carried out at strategic level. Although the areas

identified are expected to result in high potential projects they should still be subjected to

the regular cost-benefit analysis at a project level before being finally selected.

8.2 Transport investment priorities 2007-2013

The identified priority areas are described per sub-sector. These sub sectors are assessed

on a number of criteria:

Table 8.1 Priority areas for investment

Sub sector

Co

st-

effe

ctiv

en

ess

Accessib

ility

Su

sta

inab

ility

Territo

rial

Co

hesio

n

Safe

ty

Oth

er s

ou

rces

of fin

an

ce

Roads

- completion missing sections motorway network

(port and airport connections TINA network)

- reconstruction / maintenance regional roads

+

+

+

+

-

-

0

0

0

0

0

+

Ports

- developing motorway of the Sea

- passenger terminals Limassol and Larnaca

+

+

0

0

0

0

0

0

0

0

+

+

Urban Transport

- road safety

- developing urban public transport system

0

0

0

0

+

+

0

0

+

0

+

+

Airport

- upgrading Larnaca and Paphos airports

+

0

0

0

0

+

Legend: + positive score; 0 neutral score; - negative score on criterion

52

Roads

Cyprus needs a further expansion of the primary road network in urban and inter-urban

areas. The deficiencies relating to the connection of the national road network with the

ports and airports have impact on freight and passenger transport in Cyprus. The

upgrading and construction of highways to and from Larnaca and Paphos airports,

Limassol and Larnaca ports and the capital Nicosia are important. Priority is

recommended with respect to completing the missing links in the motorway network.

Also the government of Cyprus should be focused on the maintenance of the regional

roads and improve the accessibility between the regions. For the regional projects and

also for some national projects it is not expected that traffic volume fully merit these

investments in the coming programming period. This should be revealed by cost-benefit

analyses. Priority in the main network will only have impact on the Cypriot economy

itself. The program of the road network can be financed under CF/ERDF conditions.

Ports

The ports are very important for the economy of Cyprus. The main objective of the

Cyprus Government is the development of Limassol port as a safe and efficient place for

transporting goods (containers) and passengers within the framework of inter-European

transport networks and the development of Larnaca port mainly for passengers. The

financing of port upgrading or transformation (in the case of Larnaca), is financed from

private funds. Also the promotion of Cyprus as a base for international shipping activities

is a main objective in shipping policy. Cyprus is actively participating in the priority

project ‘Motorway of the Sea of South East Europe’, connecting the Adriatic Sea to the

Ionian Sea and the Eastern Mediterranean, including Cyprus by 2010.

Although the impact of the port investments is small in terms of reductions in travel time,

for Cyprus the ports are the gateways to Europe.

Urban transport

Traffic congestion in the urban areas because of a rapid increase in the use of private cars

and the low utilization of public transport are big problems for Cyprus now and in future.

Priority should be given for the development of a public transport strategy. The system of

public transport should be more integrated and promoted. Measures should be formulated

for the renewal bus fleet, bus priority schemes, parking strategies and pedestrian

infrastructure. The public transport strategy should improve the quality of service in

passenger transport and encourage a modal shift from cars to public transport.

Also the implementation of the Cyprus Strategic Action Plan is of high priority for

increasing road safety with measures for the three road accident factors i.e. the human

factor, the vehicles and the road environment.

The program for measures in the field of urban transport and road safety can be possibly

financed under EBRD conditions.

Airport

The growth of air transport in Cyprus is vitally important for the economy of Cyprus

because of its role in the growth of the tourism sector. The further expansion and

modernization of the terminal capacities of the two airports of Larnaca and Paphos is

important for the strategic geographical location of Cyprus as an important link of the

Trans-European Networks. The airport upgrading is financed from private funds and will

make use of the BOT (build, operate, transfer) method.

54

Annex A: TEN-T priorities

Table A.1. TEN priority projects and major Swiss projects

No. TEN project Completion

1 Railway axis Berlin-Verona/Milan-Bologna-Naples-Messina-Palermo

- Halle/Leipzig-Nurnberg (2015)

- Nurnberg-Munich (2006)

- Munich-Kufstein (2015)

- Kufstein-Innsbruck (2009/2012)

- Brenner tunnel (2015)

- Verona-Naples (2007)

- Milan-Bologna (2008)

- Rail/road bridge over the Strait of Messina-Palermo (2015)

2015

2 High-speed railway axis Paris-Brussels/Brussels-Cologne-Amsterdam-London

- Channel tunnel-London (2007)

- Brussels/Brussels-Liege-Cologne (2007)

- Brussels/Brussels-Rotterdam-Amsterdam (2007)

2007

3 High-speed railway axis of south-west Europe

- Lisbon/Porto-Madrid (2015), including:

- Lisbon-Porto (2013)

- Lisbon-Madrid (2010)

- Aveiro-Salamanca (2015)

- Madrid-Barcelona-Figueras-Perpignan (2009)

- Perpignan-Montpellier (2009)

- Montpellier-Nimes (2015)

- Madrid-Vitoria-Irún/Hendaye (2010)

- Irún/Hendaye-Dax (2015)

- Dax-Bordeaux (2020)

- Bordeaux-Tours (2015)

2015

55


4 High-speed railway axis east

- Paris-Baudrecourt (2007)

- Metz-Luxembourg (2007)

- Saarbrücken-Mannheim (2007)

2007

5 Betuwe line 2006

6 Railway axis Lyon-Trieste-Divača/Koper-Divača-Ljubljana-Budapest-Ukrainian border

- Lyon-St Jean de Maurienne (2015)

- Mont-Cenis tunnel (2018)

- Bussoleno-Turin (2011)

- Turin-Venice (2011)

- Venice-Ronchi Sud-Trieste-Divača (2015)

- Koper-Divača-Ljubljana (2012)

- Ljubljana-Budapest (2015)

2018

7 Motorway axis Igoumenitsa/Patra-Athens-Sofia-Budapest

- Via Egnatia (2006)

- Pathe (2008)

- Sofia-Kulata-Greek/Bulgarian border (2010)

- Nadlac-Sibiu motorway (branch to Bucharest and Constanza) (2007)

2010

8 Multimodal axis Portugal/Spain-rest of Europe

- Railway La Coruňa-Lisbon-Sines (2009)

- Railway Lisbon-Valladolid (2015)

- Railway Lisbon-Faro (2006)

- Lisbon-Valladolid motorway (2010)

- La Coruña-Lisbon motorway (2005)

- Seville-Lisbon motorway (completed 2001)

- New Lisbon airport (2015)

2015

9 Railway axis Cork-Dublin-Belfast-Stranraer completed 2001

10 Malpensa Airport completed 2001

11 Öresund fixed link completed 2001

56


12 Nordic triangle railway/road axis

- Road and railway projects in Sweden (2015)

- Helsinki-Turku motorway (2009)

- Railway Kerava-Lahti (2006)

- Helsinki-Vaalimaa motorway (2015)

- Railway Helsinki-Vainikkala (Russian border) (2015)

2015

13 UK/Ireland/Benelux road axis 2013

14 West coast main line 2008

15 Galileo (not included in reference scenario, only mentioned here for consistency) 2010

16 Freight railway axis Sines/Algeciras-Madrid-Paris

- New high-capacity rail axis across the Pyrenees (2020)

- Railway Sines-Badajoz (2010)

- Railway line Algeciras-Bobadilla (2010)

2020

17 Railway axis Paris-Strasbourg-Stuttgart-Vienna-Bratislava

- Baudrecourt-Strasbourg-Stuttgart (2015)

- Stuttgart-Ulm (2012)

- Munich-Salzburg (2015)

- Salzburg-Vienna (2012)

- Vienna-Bratislava (2012)

2015

18 Rhine/Meuse-Main-Danube inland waterway axis

- Rhine-Meuse (2019)

- Lanaken lock (2011)

- Vilshofen-Straubing (2013)

- Wien-Bratislava (2015)

- Palkovicovo-Mohács (2014)

- Bottlenecks in Romania and Bulgaria (2011)

2019

19 High-speed rail interoperability on the Iberian peninsula

- Madrid-Andalusia (2020)

- North-east (2020)

- Madrid-Levante and Mediterranean (2020)

- North/North-west corridor, including Vigo-Porto (2020)

- Extremadura (2020)

2020

57


20 Fehmarn Belt railway axis

- Fehmarn Belt fixed rail/road link (2015)

- Railway for access in Denmark from Öresund (2015)

- Railway for access in Germany from Hamburg (2014

- Railway Hannover-Hamburg/Bremen (2015)

2015

21 Motorways of the sea

- motorway of the Baltic Sea (2010)

- motorway of the sea of western Europe (2010)

- motorway of the sea of south-east Europe (2010)

- motorway of the sea of south-west Europe (2010)

2010

22 Railway axis Athens-Sofia-Budapest-Vienna-Prague-Nürnberg/Dresden

- Railway Greek/Bulgarian border-Kulata-Sofia-Vidin/Calafat (2015)

- Railway Curtici-Brasov (towards Bucharest and Constanta) (2013)

- Railway Budapest-Vienna (2010)

- Railway Břeclav-Prague-Nürnberg (2016)

- Railway axis Prague-Linz (2017)

2017

23 Railway axis Gdansk-Warsaw-Brno/Bratislava-Vienna

- Railway Gdansk-Warsaw-Katowice (2013)

- Railway Katowice-Břeclav (2010)

- Railway Katowice-Zilina-Nove Mesto n.V. (2015)

2015

24 Railway axis Lyons/Genoa-Basel-Duisburg-Rotterdam/Antwerp

- Lyon-Mulhouse-Mülheim (2018)

- Genoa-Milan/Novara-Swiss border (2013)

- Basel-Karlsruhe (2015)

- Frankfurt-Mannheim (2015)

- Duisburg-Emmerich (2015)

- 'Iron Rhine' Rheidt-Antwerp (2010)

2018

25 Motorway axis Gdansk-Brno/Bratislava-Vienna

- Gdansk-Katowice motorway (2011)

- Katowice-Brno/Zilina motorway (2010)

- Brno-Vienna motorway (2013)

2013

58


26 Railway/road axis Ireland/United Kingdom/continental Europe

- Ireland road/rail modernisation (2010)

- Road/railway axis Hull-Liverpool (2020)

- Railway Felixstowe-Nuneaton (2014)

- Railway Crewe-Holyhead (2012)

2020

27 Rail Baltica axis Warsaw-Kaunas-Riga-Tallinn-Helsinki

- Warsaw-Kaunas (2010)

- Kaunas-Riga (2014)

- Riga-Tallinn (2018)

2018

28 Eurocaprail on the Brussels-Luxembourg-Strasbourg railway axis

- Brussels-Luxembourg border (2012)

- Luxembourg- French border (2013)

2013

29 Railway axis of the Ionian/Adriatic intermodal corridor

- Kozani-Kalambaka-Igoumenitsa (2012)

- Ioannina-Antirrio-Rio-Kalamata (2014)

2014

30 Inland waterway Seine-Scheldt

- Navigability improvements Deulemont-Gent (2016)

- Compiègne-Cambrai (2016)

2016

CH1 Gotthard axis

- Zimmerberg tunnel (2011)

- Gotthard tunnel (2015)

- Ceneri tunnel (2015)

2015

CH2 Lötschberg tunnel 2015

Source: EC (2005) Trans-European transport network: TEN-T priority axes and projects 2005;

Spiekermann & Wegener (Swiss projects)

59

Figure A.1. The TEN priority projects

60

Annex B: Accessibility “red flag” analysis

To determine the need for transport investments, the SASI model was used to assess the

present and future situation of the road and rail systems in each country without the

national transport projects to be examined later. For this the accessibility provided by the

road and rail systems in each country was evaluated from both a national and a European

perspective in order to identify regions with serious accessibility deficits that should be

addressed by European transport policy taking account of the stated EU goals

competitiveness and territorial cohesion. In the SASI model accessibility, which is

directly influenced by transport policy and investments, is judged to play a crucial role in

promoting the realisation of the cohesion objectives.

Figure B.1 Main structure of the SASI model

SASI Model

To determine the appropriate assessment of transport investment need from the cohesion

policy perspective an agreement on the indicator of accessibility to be used is required.

Traditional accessibility indicators are not useful for this. They measure the total effect of

both geographical location (periphery v. core) and quality of transport provided by the

transport system and so always show a steep gradation in accessibility from the core to

61

the periphery. However, public policy cannot change the fact that some regions are

central and some are peripheral, i.e. provide the same level of accessibility to all regions.

Public policy can only alleviate disadvantages through unequal transport provision.

This distinction is relevant for European transport policy. To invest only in transport in

the most peripheral regions with the lowest accessibility according to such an indicator

would benefit only the relatively few people living there and would ignore the needs of

the densely populated central regions to combat traffic congestion and so endanger the

competitiveness goal of the Lisbon Strategy of the European Union. On the other hand, to

invest only in transport in the most densely populated central regions with the greatest

congestion problems would not only lead to ever more traffic but also widen the existing

gap in accessibility between the central and peripheral regions and would so run counter

to the territorial cohesion goal of the European Union.

To avoid this dilemma, a new accessibility indicator was defined which distinguishes

between geographical location and quality of transport. This indicator assumes that

people in the peripheral regions cannot expect to enjoy the same level of accessibility

(measured in traditional terms) as the central regions but that they can demand to be able

to reach relevant destinations with the same travel speed ("as the crow flies") as the

people in the central regions. In addition the indicator recognises the utilitarian principle

of the happiness of the greatest number, i.e. that the transport needs of densely populated

regions should be given more weight than those of regions with only few inhabitants. And

finally, the indicator recognises that economically lagging regions with severe deficits in

accessibility may offer greater potential for stimulating economic effects by transport

investments than regions which enjoy already high accessibility.

These three principles avoid the pitfalls of both an extreme egalitarian view, which

postulates that all regions in Europe enjoy the same level of accessibility and a purely

efficiency-oriented view which postulates that accessibility in the already highly

accessibly central metropolitan areas should be further strengthened because they bring

the largest economic benefits. In other words, the three principles aim at a rational trade-

off between the stated EU goals of competitiveness and territorial cohesion.

The Accessibility Problem Index

The indicator to be developed should have a number of properties to make it easy to

understand and communicate to policy makers and stakeholders:

- It should be a "problem indicator", i.e. high values should indicate large deficiencies in

regional accessibility, whereas low values of the indicator indicate above-average levels

of accessibility.

- It should be standardised in order to be comparable between regions and countries, i.e.

should not reflect the size or affluence of regions or countries.

- It should be independent of the arbitrary or historically subdivision of the territory into

regions, i.e. its magnitude should not change if a region is subdivided into two or more

regions or if two or more regions are consolidated to one region.

- It should be scalable, i.e. it should be possible to vary the impact of the weighting by

population and inverse GDP to reflect different political priorities.

62

- It should allow to measure the development of accessibility over time.

Based on these requirements, an indicator called Accessibility Problem Index was

developed. The calculation of the Accessibility Problem Indicator proceeds in three steps:

Average regional airline speed

The first step in the development of the Accessibility Problem Index is the calculation of

average regional airline speed. Average airline speed vrm of all trips frsm from a region r to

all other regions s in Europe by mode m in year t is defined as

[ ]

[ ]∑

∑

−

−

=

s

rsmrsms

rs

s

rsms

rmtctftP

dtftP

tv60/)()(exp)(

)(exp)(

)(β

β (1)

where Ps(t) is regional population in year t, crsm(t) is travel time in minutes between

regions r and s by mode m in year t, β is the impedance parameter and drs is airline

distance in km between the central cities in regions r and s calculated from their

geographical coordinates xr, yr and xs, ys by

( ) ( )22

rsrsrsyyxxd −+−= (2)

Standardisation

Next average regional airline speed, regional population and regional GDP are

standardised as fractions of the average of all regions in the country (national perspective)

or the average of all regions in Europe (European perspective). To neutralise the effect of

region size, population is replaced by population density and GDP is replaced by GDP

per capita. The benchmark for the standardisation of average regional airline speed is

always the average of the base year t0 = 2006 to show changes in accessibility:

)()(

)()(

)(00

0

tPtv

tPtv

tvr

r

rm

r

rrm

rm

∑

∑=′ (3)

∑

∑=′

r

rr

r

rr

rtPA

AtP

tp)(

)(

)( (4)

∑

∑=′

r

rr

r

rr

rtGtP

tPtG

tg)()(

)()(

)( (5)

where Ar is the area of region r and Gr(t) is the GDP of region r. The v'rm(t), p'r(t) and

g'r(t) then are the relative airline speed, relative population density and relative GDP per

capita of region r in year t, respectively. Values below one indicate below-average airline

63

speed, population density and GDP per capita and values above one indicate above-aver-

age airline speed, population density and GDP per capita of the region.

Index

With these relative indicators, the Accessibility Problem Index qrm(t) of region r by mode

m in year t can be formulated:

[ ] [ ] [ ]γα −−

′′′= )()()()(1

tgtptvtqrrrmrm

(6)

where α and γ are weights indicating the relative importance of population density and

GDP per capita, respectively. Note that average regional airline speed and GDP per capita

have negative weights, i.e. the Accessibility Problem Index expresses deficits in average

regional airline speed relative to the national or European average weighted by population

and economic weakness. The index has the following properties:

- The higher the index the more severe is the deficiency in accessibility.

- The influence of weights of population density and GDP per capita can be changed by

changing α and β: values below one imply less influence, zero no weighting.

- Regions with average airline speed, population density and GDP per capita have an

index value of one.

- Index values are independent of region size and are therefore comparable between

regions and countries.

- The index shows improvements in airline speed over time (and not only relative shifts

between regions).

Sensitivity tests with different values of α and γ showed that α = γ = 0.05 gave the most

plausible results and a reasonable level of responsiveness of the Accessibility Problem

Index to changes of accessibility due to European integration and European transport

projects over time.

The application of the Accessibility Problem Index for the evaluation of accessibility

deficits in the country policy briefs use these values of α and γ throughout. The regions

analysed were the NUTS-3 regions or equivalent regions in the 25 countries of the

European Union plus the accession countries Bulgaria and Romania. The overseas

regions of France and the island regions of the Azores and Madeira of Portugal and the

Canary Islands of Spain were excluded from the analysis.

The spatial distribution of the resulting values of the Accessibility Problem Index are

presented in maps using a colour scale resembling that of a traffic light: green shades

indicate average regional travel speeds above the national or European average, yellow

values indicate speeds slightly above the national or European average and red shades

indicate speeds significantly lower than the national or European average. Regions

shaded in red are the targets of the "red-flag" analysis.

For each country first for road and then for rail the national and the European perspective

are presented for the current situation (2006) and for 2016. The situation in 2016 is based

64

on a base scenario of the SASI model without the national projects, i.e. only with the

TEN priority road and rail projects and selected transport projects in Switzerland. The

assumed opening times of the individual projects are those of the 2004 TEN guidelines

(European Union, 2004) which in a few cases differ from the dates notified by the

individual countries (European Commission, 2005).

References:

European Union (2004): Decision No 884/2004/EC of the European Parliament and of

the Council of 29 April 2004 amending Decision No 1692/EC on Community guidelines

for the development of the trans-European transport network. Official Journal of the

European Union L 201 (Corrigendum to L 167), 1-55.

European Commission (2005): Trans-European Transport Networks. TEN-T Priority

Axes and Projects 2005. Luxembourg: Office for Official Publications of the European

Communities.

transport investment priorities under structural …transport investment priorities under structural...

Documents