Transport network – something old, something new, something borrowed, something blue

The transport network, a central physical part of society, has been built over the centuries. Many parts of it have even been repaired several times. Waterways have been mapped, ports have been constructed, and access from lake Saimaa to the sea has been leased from Russia. Roads and railways have also been built by the past generations. Even now, significant new projects are being planned, especially in the rail network.

Regardless of its usefulness, the transport network usually appears as a money pit in central government finances. Investments in it often involve enormous amounts of money, and the transport network does not function if large amounts are not spent on its maintenance and repair. In the budget proposal for 2021, appropriations for the transport network amount to more than EUR 2 billion.

Building new sometimes means less maintenance of the old

Investments in the transport network arouse interest in the public debate especially when something new is built or when large-scale development projects are planned for the existing network – especially the road or rail network. Ring roads and direct railway lines are of particular interest. However, most of the state funds go to daily maintenance and repair of the existing transport network. Of the total amount of EUR 2 billion, the share of development projects is “only” about EUR 430 million.

In addition to new construction projects, the transport network also arouses interest when it is in poor condition. Even this applies to the road and rail networks, in particular. It is easy for everyone to pay attention to the number of potholes in the road or to curse the train for being late.

The balance between building new and maintaining the old network is a key question in the lifecycle management of the transport network. Unfortunately, finding the balance has not always succeeded. Usually even decision-makers have been more interested in planning and building new infrastructure, and therefore they have invested more in it.

However, the big question during the previous decade was the condition of the transport network, i.e. the repair backlog, and particularly the growth of the repair backlog. By measuring the repair backlog, it was possible to show that the transport network was in poor condition. In other words, measures were only taken when the issue had been defined in greater detail and a new indicator, i.e. the repair backlog, had been introduced.

The repair backlog made it easier to understand that the condition of the transport network has to do with money. The present and the previous Government have clearly shifted the focus of transport network funding towards repair and maintenance. Calculations have shown that the repair backlog has stopped growing, and thus the condition of the transport network as a whole is no longer deteriorating.

This balance between development and maintenance should also be achieved in the long term. This is challenging, for instance because of the way our budget is drawn up. Development funds are defined separately, and therefore their amount is safeguarded by the decision taken on them, whereas the appropriation for the maintenance of basic transport infrastructure allocates a lump sum for daily maintenance, patching and repair.

The transport network must function in any weather. Therefore, a weather-wise challenging year consumes the funds allocated for network maintenance, leaving less money for repairs. Unfortunately, the number of challenging years will increase in Southern Finland, and thus the problem is unlikely to diminish. The resources left for repair work may be too scarce, as a result of which the transport network will decay, and the repair backlog will grow.

No reason to increase future expenditure by stimulus measures

In the 2010s, the focus of funding shifted towards the repair of the transport infrastructure. In any case, interest in building new infrastructure has remained. At present, focus in the management of the coronavirus-related financial crisis and in the planning of new rail projects is on building new infrastructure.

A stimulus measure during a financial crisis is naturally investing in the transport infrastructure. In this connection, it should be kept in mind that building new infrastructure will usually increase expenditure in the future, whereas repairing the existing network may even save costs in the future. It has already become evident that it will be necessary to cut public expenditure after the current stimulus need. If the focus of the stimulus measures is on building new infrastructure, it will probably make it difficult to achieve savings in the future.

No decisions have yet been made on the new rail projects that are being planned. In these projects, as well, it is not only the costs and benefits of the investment that count but it is also important to commit to long-term maintenance. Moreover, the new projects have an impact on the utilization of the existing rail network. It is uncertain whether it would be possible to save in the maintenance costs of the existing railway lines even if traffic on them decreased.

New investments are likely to continue to arouse more interest than repairing the old infrastructure. Therefore, it would be important to increase awareness of the costs and benefits. In the case of new investments, attention should be paid not only to construction costs but also to their impact on the need for appropriations for the maintenance of basic transport infrastructure in the coming years. These aspects should be more closely interlinked.

In repair projects, in turn, it would be important to look into their benefits in relation to their costs in greater detail. At present, the ratio of benefits to costs (cost-benefit estimate) is calculated in the case of any investment project. If the benefits exceed the costs (i.e. the ratio is more than 1), the project can be considered profitable. In the case of repair projects, this ratio is not calculated. Thus, it is not possible to compare repair projects with each other in the same way as investments. Nor can repair projects be labelled directly as profitable in the same way as new investments, which is another reason for why they may remain in the background.

Achieving a balance between building new and repairing old infrastructure is a problem that will certainly persist. However, the 12-year transport system plan that is being prepared may offer part of a solution. All parties that are represented in Parliament are currently drawing up a maintenance and development plan that extends beyond the government term. It is naturally impossible to commit fully to a plan that spans three parliamentary terms. In any case, the plan increases awareness of the issue, and the different groups drawing up the plan will commit to longer-term activities than before. From the perspective of a human life-span, the transport network develops over time but is in any case everlasting.