VOL. 4, No. 3, September, 1996

Quarterly Newsletter of the Finnish Highway Transportation Technology Transfer Center, FinnT2
Address: Finnish National Road Administration, FinnT2, P.O. Box 33, 00521 Helsinki, FINLAND
Fax Int. 358 204 44 2675. E-mail: [email protected] Editor: Arto Tevajarvi, Tel. Int +358 204 44 2032
Editor-in-Chief: Jarmo Ikonen, Tel. Int. 358 204 44 2118

Contents

NUMBERS OF WIN MEMBERS AND NODES INCREASED

THE PREVIOUS FINNCONTACT ISSUE WAS DEVOTED TO THE SEMINAR ON ROAD AND TRAFFIC TECHNOLOGY TRANSFER ARRANGED IN HELSINKI AT THE TURN OF MAY AND JUNE THIS YEAR, AND THE WORLD INTERCHANGE NETWORK (WIN).

TO REVERT BRIEFLY TO THE SEMINAR RELATED MATTERS, HERE ARE FIGURES CONCERNING THE CURRENT WIN MEMBERS AND NODES, ALONG WITH THE POST-SEMINAR REASONING FOR THE FUTURE DEVELOPMENT OF THE OPEPATION OF WIN NODES.

According to the by-laws of the Corporation, the members are persons accepted by the WIN Board of Directors. The General Assembly of Members is normally held once a year. At the time of the Helsinki Seminar, WIN had a total number of 105 members. The distribution of these members by continent was as follows: Africa 14, America 35, Asia 15, Europe 39 and Oceania 2.

Knowledge and information transfer in actual practise is carried out by the nodes. The latest WIN Directory of Nodes, brought up to date in August, consists of 42 nodes in 28 countries from all continents. Closer examination reveals that there were, regrettably, only a few nodes on the African continent and in South America so far.

The international road community has ranked the Helsinki Seminar very high. The objectives set were reached to a great extent. Here is a brief list of suggestions for the future development of nodes operation:

  • Diversity of the existing technology transfer centers (nodes) would be made good use of.
  • A meeting for the responsible persons of nodes would be arranged at next stage.
  • Approach for quality assurance system of nodes operation would be prepared. -
  • The 5th Seminar on Road and Traffic Technology Transfer would be hela in a developing country or country in transition. -
  • Could international institutions like the Organisation for Economic Cooperation and Development, World Bank and European Union be strongly involved in the operation of WIN?
JARMO IKONEN


Contents:

COMMUNITY IMPACTS OF TRANSPORTATION PLANNING

EFFECTS OF ROAD IMPROVEMENTS ON TRANSPORTATION ECONOMICS IN FINLAND

ROAD NETWORK IMPROVEMENTS AN RURAL COMMUNITY DEVELOPMENT

LENGTH AND STANDARD OF ROAD NETWORK WITH REGARD TO COST COVERAGE

REPORTS PRODUCED BY COMMUNITY IMPACTS OF TRANSPORTATION PLANNING RESEARCH PROGRAM


COMMUNITY IMPACTS OF TRANSPORTATION PLANNING

"Community Impacts of Transportation Planning" is a research program which aims at developing decision-making in the road transportation field. The program will be implemented between 1995 and 1997 with an annual budget of around five to six hundred thousand U.S. dollars. Processing of the research program started in late 1993 and took more than one year. During that period several preliminary studies were drafted and comments from experts in the field were solicited.

Information produced by the research program will be usea in road transport policy-making. There are three research themes:

  • 'Efficient Pricing in Transport',
  • 'Road and Traffic Conditions' and
  • 'Low-Volume Minor Roads'.

The last year of the program, 1997, will be devoted to implementation of research results. This will be achieved by preparing a development plan to deal with the issues of each theme.

Some 50-60 % of the individual researches have been completed by now. This issue of FinnContact summarizes some interesting findings so far. Abstracts in English of all the studies are available on Internet.

Mr. JUHA PARANTAINEN, Finnra

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EFFECTS OF ROAD IMPROVEMENTS ON TRANSPORTATION ECONOMICS IN FINLAND

Improvements on the Finnish main road network have led to a 50 % decrease in transport costs of brewing industry which is about 9 % of the total production and delivery costs. Eighty-four % of the costs decrease was due to improved bearing capacity of the network and the remaining 16 % due to better accessibility in terms of higher speeds and shorter distances.

The improved standards of the road network has made concentration of production feasible. Benefits caused by concentration account for about 1,3 % of the total costs of production and delivery. If industry and businesses were still using the 1970 road network, concentrated production would have higher costs compared with the spread out one.

The improved road network has generated significant cost savings in the Finnish road freight transport sector. Based on an analysis of the structure of the Finnish road transport system the total annual cost savings were estimated to be roughly 10 000 million FIM.

INTRODUCTION

Diverse sectors of community demand for better arguments for the allocation of scarce public resources. So far the public sector systems have been comprehensively appraised only a little or not at all. The importance of the transport system is indisputable - the development in Finland from the 1960's agrarian community to 1 990's service and intormation community has been made possible by utilizing infrastructure systems such as transport networks.

The conditions of freight transport in Finland are different from those in Central Europe: distances are longer, volumes of goods are lower and the industria! structure is more fragmentary. Inter-regional road network is in a crucial position from the point of view of industry and business. The purpose of minimizing logistics costs often leeds to concentrated production structure. This development sets higher requirements for the transport systems.

There has been remarkable investments on the transport networks during the last decades. New main roads along with other road improvements have increased the length and quality of networks to a higher revel. For example, the bearing capacity of the road network has increased considerably. The highest allowed total weight of a freight vehicle has increased from 32 tons to 60 tons during the years 1970-1993. Also in practice the weights of freight vehicles have followed these changes in total weight regulations.

This study offers some answers to the question: how have road improvements affected transportation economics in Finland? Although we can not completely separate the importance of transport networks from other components which have also had an effect on the development, it is possible - with some restrictions - to study whether the road net- work of the 1970's would be sufficient enough to satisfy current transportation needs from an economical perspective.

EFFECTS ON BUSINESS ECONOMY

The effects of road improvements on transport costs have been studied by assigning the current product volumes of Finnish brewing industry (about 650 million litres/a) on the road network for the years 1970 and 1995.

According to the case study, the transport costs of the brewing industry have decreased by approximately 50% due to the improvements of the main road network. Eighty-four % of the costs decrease was due to the improved bearing capacity of the network and the remaining 16 % to the better accessibility in terms of higher speed and shorter distances. Environmental costs have decreased by 44 % and accident costs by 59 %.

The effects of road improvements on the production structure have been assessed with the help of a case study. In the case study the production and delivery costs of the case brewing enterprise have been evaluated in four examples. The case enterprise is concentrating on its production: in 1992 it had 7 production plants and 17 warehouses and in 1998 there will be 3 plants and 12 remaining warehouses. The studied examples were as follows:

    1. Road network of the year 1970 and spread out production structure,
    2. Road network of the year 1995 and spread out production structure,
    3. Road network of the year 1995 and concentrated production structure,
    4. Road network of the year 1970 and concentrated production structure.

Table 1. Product delivery of the Finnish brewing industry on the road main network for the years 1970 and 1995.

Ton kilometerageRoad network
1970
Road network
1995
Difference
1995/1970
%
591 mill. tkm/a557 mill. tkm/a-34 mill. tkm/a-6%
Kilometerage63,4 mill. tkm/a26,2 mill. tkm/a-37,2 mill. tkm/a-59%
Transport costs453 mill. FIM/a222 mill FIM/a-230 mill. FIM/a-51%
Environmental costs12 mill. FIM/a7 mill. FIM/a-5 mill. FIM/a-44%
Accident costs12 mill. FIM/a5 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 1Example 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/a24 100 mill. tkm/a-2 400 mill. tkm/a-9%
Ton kilometerage actuated by change of total vehicle weight20 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%
Kilometerage2 219 mill. tkm/a946 mill. tkm/a-1 273 mill. tkm/a-57%
Transport costs18 900 mill. FIM/a9 000 mill FIM/a-9 900 mill. FIM/a-52%
Environmental costs584 mill. FIM/a313 mill. FIM/a-271 mill. FIM/a-46%
Accident costs401 mill. FIM/a171 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

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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 MERILÄINEN,
LT-Consultants Ltd

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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 METSÄRANTA, LT-Consultants Ltd

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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.


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