VOL. 4, No. 3, September, 1996

Ton kilometerage	Road network 1970	Road network 1995	Difference 1995/1970	%
	591 mill. tkm/a	557 mill. tkm/a	-34 mill. tkm/a	-6%
Kilometerage	63,4 mill. tkm/a	26,2 mill. tkm/a	-37,2 mill. tkm/a	-59%
Transport costs	453 mill. FIM/a	222 mill FIM/a	-230 mill. FIM/a	-51%
Environmental costs	12 mill. FIM/a	7 mill. FIM/a	-5 mill. FIM/a	-44%
Accident costs	12 mill. FIM/a	5 mill. FIM/a	-7 mill. FIM/a	-59%

The study shows that the concentration of production and warehouses is a productive strategy in the brewing industry. Although transport costs increase, costs of production and delivery decrease in total. In this case the benefits caused by concentration correspond for about 1,3 % of the total costs of production and delivery. Another finding is that the higher standard of road network has made the concentrated production structure rnore feasible. If industry and business would still operate on the road network of the year 1970, the total costs would be higher in the concentrated production structure than in the spread-out structure. Table 2. Costs of production and delivery in four examples (million FIM/a).

Case enterprise (product volume 460 million litres/a)	Road network 1970 (million FIM/a)	Road network 1995 (million FIM/a)
Spread-out production structure	Example 1	Example 2
- production and warehousing costs	1398	1398
- transport costs	300	146
Total production and delivery costs	1698	1544
- environmental costs	7,9	4,4
- accident costs	7,8	3,2
Concentrated production structure	Example 4	Example 3
- production and warehousing costs	1309	1309
- transport costs	420	215
Total production and delivery costs	1729	1524
- environmental costs	10,2	5,5
- accident costs	10,2	4,2

The concentration of production increases ton mileage and thus also ges exhaust emissions and traffic accidents. In this case environmental costs would increase by 1,2 million FIM/a and accident costs by 1,1 million FlM/a. At the same time the annual business cost benefit would increase by 20 million FIM. If transport costs increased, for example because of higher environmental tax of fuel, the concentration advantage would become smaller. In this case a 30 % growth in the transportation costs would eliminate the business costs benefit caused by concentration. Table 3. Current Finnish road freight transport on road network for the years 1970 and 1995.

Total ton kilometeterage	Road network 1970	Road network 1995	Difference 1995/1970	%
	26 500 mill. tkm/a	24 100 mill. tkm/a	-2 400 mill. tkm/a	-9%
Ton kilometerage actuated by change of total vehicle weight	20 300 mill. tkm/a	18 400 mill. tkm/a	-1 900 mill. tkm/a	-9%
Average load, limited by -total weight -volumetric capacity	16,3 t 12,7 t	40,4 t 16,6 t	+24,1 t +3,8 t	+147% +30%
Kilometerage	2 219 mill. tkm/a	946 mill. tkm/a	-1 273 mill. tkm/a	-57%
Transport costs	18 900 mill. FIM/a	9 000 mill FIM/a	-9 900 mill. FIM/a	-52%
Environmental costs	584 mill. FIM/a	313 mill. FIM/a	-271 mill. FIM/a	-46%
Accident costs	401 mill. FIM/a	171 mill. FIM/a	-230 mill. FIM/a	-57%

EFFECTS ON TRANSPORTATION ECONOMICS The effects of road improvements on the Finnish road freight transport sector as a whole have been appraised by calculating the transport costs of 1993 road freight transport needs in two cases using network for the years 1970 and 1995. The calculations have been made by using transport simulation models and statistical data of road freight transport. The improved road network has generated considerable cost savings in the Finnish road freight transport sector. Based on an analysis of the structure of the Finnish road freight transport, the total annual cost savings of the road freight transport system were estimated to be roughly 10 000 million FIM. In addition, emission and accident costs caused by freight transport have decreased totally by 500 million FIM/a. The annual expenditure of the Finnish National Road Administration in 1970-1994 have varied between 4 644 and 6 394 million FIM (in 1994 cost revel). If annual cost savings are related to annual expenditure, benefits in the Finnish road transport sector are over 1,5 times higher than the investments of the state. CONCLUSIONS Transport economics benefits caused by road improvements implemented during the period 1970-1 993 are mainly due to the better bearing capacity of the network. Because of the lack of expenditure resources and EC's intentions to harmonise the weights and dimensions of trucks there will be no possibilities to increase the bearing capacity in Finland in the future. Current development in production structure - horizontal concentration together with vertical disintegration through just in time way of thinking - requires fluent traffic conditions on the main roads. Demand for basic road management and congestion reduction will be emphasized by these logistics needs. On the other hand, the transport needs of forest industry, especially in raw wood transportation, is requiring as high bearing capacity as possible also on the lower road network. For further information please contact the author of this article at Tampere University of Technology, fax int. + 358-3-3653447, e-mail: jarmo. [email protected] REFERENCE: Finnra Report 12/1996 (in Finnish). Would the Road Network of the 70's be Good Enough for the Current Transportation Needs? Effects of Road Improvements on Transportation and Regional Economics. Mr. JARMO JOUTSENSAARI, Tampere University of Technology top ROAD NETWORK IMPROVEMENTS AND RURAL COMMUNITY DEVELOPMENT The construction of a new, rapia road connection will significantly promote rural development, whereas the improvement of the road network will support the development, but is not a critical factor for the progress of it. This is the main conclusion of two studies dealing with road network improvements in the context of rural community development. Low-volume road network improvements and the related rural community development in Finland is examined in two separate studies. The objective of the studies is to examine the impacts of alternative road improvement measures or the construction of a new, rapia road connection on the accessibility of villages and the changes in the village vitality in two selected rural areas in southern Finland. IMPROVED VILLAGE VITALITY These studies introduce a village vitality model for assessing the impacts of individual road improvements on the vitality of rural communities in Finland. The total village vitality index is calculated as a weighted average of 34 individual indicators. The indicator categories include populalion structure, education, income, employment, entrepreneurship, service supply, occupati onal efficiency, building stock and accessibility. Road condition has a 0rect impact on the ratail sales of village stores. The results of the village vitality model show that villages having a remote location off the major road network will benefit most from the low-volume road improvement measures, as far as the total village vitality index is concerned. The increase in the total village vitality index induced by extreme road improvement measures is about 7 %. No major impacts of road improvements can be discovered on the development of rural communities located in the immediate vicinity of small and medium sized cities. A new, rapia road connection will significantly reduce the actual travel time and the extra time reserved for the trip due to e.g. extreme weather conditions. The maximum increase in the total village vitality index induced by a new road connection is 30 %. RETAIL SALES DEVELOPMENT Furthermore, a market potential model, which expresses the probability of selecting an alternative as a function of the utility of the alternative in relation with the competing alternatives, is introduced. This is usea to assess the impact of road improvements or the construction of a new road on the retail sales of villages. The market potential model shows that significant road improvement measures on the access roads to villages, which minimize the extra travel time reserved for the trip, will result in the decrease of retail sales of the village stores. The greatest impact (50 % decrease in annual retail sales) is estimated to occur in villages which have a remote location from the major road network. There is a corresponding increase in retail sales of the stores located in the nearby built-up areas. A new, rapid road connection across rural areas will redirect retail shopping trips from small village stores to large urban retail units. According to the case study, as a result of a 50 % decrease in a travel time to a nearby city due to a new road connection, a share of about 23 % of the retail shopping trips was redirected having the destination in the large shopping centers of the nearby city. ROAD CONDITION AND RURAL DEVELOPMENT Finally, interviews and questionnaire surveys were conducted with the representatives and residents of ten selected villages of different type in southern Finland, to examine the existing problems and evaluate the impacts of improving the access roads to villages. The attraction factors of villages include the availability of inexpensive lana and environmentally desirable living milieu. The condition of the access roads to villages is emphasized, as commuting from villages to nearby cities has become more common and an increasing share of the part-time summer residents in villages have become full-time residents. A new road connection will, however, promote the already existing development of suburbanization to the immediate vicinity of the road. Furthermore, a new road connection will have a major contribution in promoting traffic safety, while it will also leaa to an increasing number of private vehicle trips, especially shopping and leisure trips. On the other hand, the improvement of the access roads to villages will increase driving speeds and through traffic, lower traffic safety and have a negative effect on the cultural landscape and uniqueness of the village as a rural community. According to the interviews and questionnaire surveys, the length and type of pavement on the access roads to villages make a difference as far as village vitality and driving comfort on the access road are concerned. The most disturbing problems on the gravel access roads to villages include road surface damages, spring thaw as well as snowy and slushy road conditions. Slippery and snowy road conditions together with surface damages are regarded as most problematic on paved access roads. Fig. 1. Most requested road improvements on the access roads to villages. Surveys show that the most requested road maintenance measures on gravel roads, which also havethe greatest impact on village vitality, include the paving of gravel roads and improvements related to spring shaw. The most requested road maintenance measures on paved access roads include improvements in winter maintenance (snow plowing, de-icing of road surface). ROAD IMPROVEMENTS OR NEW ROADS? To summarize, the vitality of villages and rural communities is largely dependent on the structural changes in populalion, economic life and manufacturing. Promotion of entrepreneurship, small and medium-sized industry, new forms of agriculture as well as tourism will have the most significant effect on the future development of rural areas. The improvement of low-volume road network will support this development, but is not the critical factor for the progress of rural development. On the other hand, the construction of a new, rapia road connection across a rural area will significantly improve the accessibility in the nearby areas and thus improve the vitality, specifically with regard to the development of populalion and entrepreneurship. Mr. ANTTI MERIL�INEN, LT-Consultants Ltd top LENGTH AND STANDARD OF ROAD NETWORK WITH REGARD TO COST COVERAGE Reducing the standard on low-traffic major roads by contracting out the maintenance of ow-traffic minor roads in Finland can be argued for. This is a preliminary conclusion in a study focusing on the optimal length and standard of the Finnish road network with regard to cost coverage. BACKGROUND Pricing and cost coverage within the transport sector have been controversial topics of discussion for years. EU's Green Book Towards Fair and Efficient Pricing in Transport is the official attempt to formulate a consistent and sustainable transport pricing policy for the Common Market, which has aroused opposition, for example among motorista and road hauliers. An often heard claim is that although tax income from road transport is rising, the development of road network is hardly keeping up with the growth of motorisation - a rather explicit impression of two assumptions: 1. tax income from road users exceeds social costs of road transport i.e. public expenditure on roads and external costs 2. the extent of present road network is inadequate. The study focuses on both of these assumptions by examining the length and standard of road network with regard to cost coverage. EFFICIENCY AND EQUITY Length and standard of road network refers to accessibility and to the technical standard and the revel of maintenance of the road network. Optimising length and standard of the road network is a dynamic process. On one hand it is about outlining the aims of transport policy within lO to 30 years' time, on the other hand it is about temporal and regional allocation of resources in terms of developing and maintaining the existing road network. Transport efficiency is the usual starting point for determining the optimal length and standard of the road network and the transport system generally. Therefore marginal cost coverage is considered a rational approach to the subject. The issue of equity between road districts and between road types can be examined through total cost coverage. Fig. 2. Total cost responsibility by road type and ADT class in Finland in 1995. ACHIEVING COST COVERAGE The cost coverage of the Finnish road network is examined in the above mentioned study separately by road district and by road types. The calculations including both marginal and total cost responsibility were based on statistics of vehicle kilometres travelled, accidents and public expenditure on road transport during 1990-94 and tax income from road transport in 1995. According to the results, it can be stated that marginal cost coverage is achieved in every road district and for the different parts of the road network. When comparing the functional classes of major roads (main roads and trunk roads) versus minor roads (regional and connecting roads) and minor roads versus private roads, it can be argued, that the costs of maintaining major roads should be reduced. This can be achieved by reducing the standard on those road segments which have an ADT of less than 1500 vehicles. Contracting out the maintenance of minor roads with ADT less than 200 vehicles to private entrepreneurs (competitive bidding in maintenance and changing the road class to private road) can also be argued for. OPTIMAL ROAD NETWORK? The cost coverage calculations are not, however, sufficient to determine the need for a road segment or the optimal length of the road network in different parts of the country. Changing of the length or the standard of the road requires marginal analysis. The change can be argued for if cost savings in road maintenance exceed additional costs for the road users, external effects saken into account. The same principles apply in optimising the length and standard of the road network as in all decision making regarding the allocation of national resources, i.e. efficiency in resource allocation (cost-benefit ratto) taking into account distributional impacts and equity goals between citizens and regions. These goals include equal opportunities for mobility in different parts of the country, reasonable costs of transport in different parts of Finland or the vitality of different regions. The optimal extent of the road network, like that of other sectors of society, can be defined only in relation to other sectors and their extent as well as in relation to citizens' valuations (willingness to pay). Furthermore, distributional factors affecting the optimal extent of the transport system and road network are given different emphasis at different levels of decision making. When factors of equity between citizens and regions are given special emphasis in the decision making at the level of national economic policy, the questions concerning the optimal length and standard of road network at the road policy revel almost exclusively deal with efficiency in resource allocation. For further information please contact the authors of this article and the preceding article at LT-Consultants Ltd, fax int. +358-9-61581430; e-mail: [email protected], preceding article: [email protected] Ms. CATHARINA SIKOW-MAGNY AND Mr. HEIKKI METS�RANTA, LT-Consultants Ltd top REPORTS PRODUCED BY COMMUNITY IMPACTS OF TRANSPORTATION PLANNING RESEARCH PROGRAM TIEL 3200355 Development of the Finnish transport system from the point of view of national economy A framework for the Finnish transport network related decision making is developed and future research needs are surveyed. TIEL 3200353 Strategic transportation planning in Finland Present state and development needs of strategic transportation planning. TIEL 3200367 Is traffic reduction possible? A survey of international experiences on reducing passenger car use. TIEL 3200352 Optimizing speeds of road traffic How should we calculate an optimal road speed? Can we define speed levels on roads by using this kind of calculation? TIEL 3200347 Analysis of the Finnish transport policy and its implementation Interview study of a total of 30 persons representing political decision-making, ministries, business, regional administration and different organizations in the transport sector. What are the basic problems in the Finnish transport policy-making? TIEL 3200259 Developing usage of input-output models in transport sector impact assessment Input -output analysis is often used when estimating indirect impacts of road network improvements. How reliable is this kind of an analysis? TIEL 4000135 Freight transportation on the Finnish rural low-volume roads Total length of the Finnish low-volume road network (public and private) is about 350 000 km which is some 97% of all the roads. TIEL 3200309 Comparison of long-range road transportation planning in Finland and Sweden The study reveals that in Sweden there is more political guidance compared with Finland when preparing long-term road transportation plans.