2.1.3 The Public Role of Infrastructures and the Role of Public in Infrastructure Planning
Transport infrastructures represent the fixed component of the transport system (Button, 1982) and determine a wide range of scale and scope economies; therefore, as underlined by Rietveld (1994), they are usually supplied as a collective input into production. It is quite common that transport infrastructures serve a multiplicity of users—in Rietveld and Bruinsma (1998) this same characteristic of infrastructures is referred to as polyvalence. For instance, either passenger together with cargo or, in the case of transport of passengers, the same infrastructure is used for leisure travels as well as for commuting, etc. When infrastructure serves a specific user (as in the case of a port terminal serving an industrial plant), they are strictly managed to maximize the profit of the industrial plant and the magnitude of the external impacts is limited or even null. Therefore, in this book we will concentrate on common infrastructures. Terminal facilities serve a multiplicity of users too; even if some cases of dedicated terminals are more common to be found. This is the case of some port or air terminals dedicated to a specific segment of transport demand (such as containerized cargo or cruise passengers) or also some airports in United States, but also in these cases they rarely are dedicated to a single transport operator.
Transport infrastructures determine the accessibility degree of locations and regions, thus contributing to their differentiation in the localization decision process of firms and families. Both will be more attracted by regions and locations with a higher degree of accessibility due to the possibilities of transforming accessibility into value.
The two abovementioned characteristics contribute to generate agglomeration economies (Rodrigue, Comtois, & Slack, 2006); such economies attenuate rapidly with distance (Rosenthal & Strange, 2003). This results in the formation of clusters, thus an uneven regional distribution of the economic agents. In consequence, if transport infrastructure investments, in general, determine positive economic benefits, not all regions impacted by the same infrastructure receive the same benefit, in some cases the effects may be even negative (in terms of reduction of jobs, localization disadvantages, etc.) for some regions. This kind of consequences will be further discussed in Chapter 3.
It is also in relation to these characteristics that investment in infrastructure usually involves public capital, and governments have a high interest in controlling the level of supply. Even in periods of poor public finance, the leading role of governments in infrastructure providing remains strategic for several reasons. First of all, only governments have the necessary long-run vision to engage in projects that will have possible returns well far in time; moreover, only governments have the right size to afford the important financial efforts needed by most of the infrastructural projects. In addition, the relevance of the macroeconomics effects of transport infrastructures makes them a leading tool for the development of the economics and industrial national and regional plans.
Under an economic perspective, infrastructures in several cases behave as natural monopolies (i.e., the average cost curve is subadditive) or their “high cost of provision, longevity and scale economies (…) create tendencies towards monopoly control” (Button, 1982).
In spite of the just-mentioned features, governments proved to be not the best actors for the efficient management of transport infrastructures (Nijkamp & Rienstra, 1995). That is why the deregulating and privatizing processes that took place since the late 1970s in the transport service sector progressively interested also the management of the already existing infrastructure networks. This process began in the United States with the liberalization of air transport (Kahn, 1988) and went on in Europe, mainly under the forms of privatization and deregulation processes, interesting the railways and air transport sectors—and later on, the urban transport sector. Afterward, it progressively interested several other countries and world regions. These processes went hand in hand with the enforcement of regulations and the strengthening, in some cases the birth, of regulating agencies (Button & Keeler, 1993; Friebel, Ivaldi, & Vibes, 2010Button & Keeler, 1993Friebel, Ivaldi, & Vibes, 2010).
Moreover, the lack of public finance has forced the governments to find forms of private involvement in financing infrastructural project, such as project financing contracts or more in general public–private partnerships (PPPs). Although in the former the project's cash flow guarantees the financial provisioning and the government assumes some risks linked, for example, to the duration of the planning and adoption stage of the project, in the latter, PPPs represent multiactor forms of collaboration based on shared risks, competencies, and benefits between governments and private companies (Klijn & Teisman, 2003) even if this same concept assumes different country-based meanings (Roumboutsos, 2016).
All the above features founding the intervention of governments in the provision and management of infrastructure may be grouped into three, according to Annema (2013): market failures, equity reasons, and the generation of revenues.