Economic Bulletin , News of 12 October 2013

Transport Infrastructure: Higher Investments Needed to Preserve Assets

Martin Kosa (Copyright)  Baustelle Baustellen Bau
Copyright: Martin Kosa

by Uwe Kunert and Heike Link in: DIW Economic Bulletin 10/2013.

A quantitatively and qualitatively efficient transport infrastructure is a fundamental requirement for the success and prosperity of the German economy, with its high degree of labor division, its many exchange relationships, and its central European location. The transport infrastructure represents a considerable economic capital stock with gross fixed assets of 778 billion euros. This corresponds to six percent of the gross fixed assets of all economic sectors in Germany. Despite the importance of this sector for the economy, there is a serious lack of investment in the maintenance and quality assurance of the transport infrastructure. Against this backdrop, a brief survey on the transport sector has been developed for this article based on an ex-post comparison of replacement demand and replacement investment made from 2006 to 2011. The analysis shows that, in the past, there has been an investment shortfall of almost four billion euros for the maintenance of the transport infrastructure. Assuming that this investment gap will need to be closed in order to maintain the transport infrastructure in coming years, and if the cumulative result of years of neglect is also taken into account, the additional annual investment requirement is likely to be at least 6.5 billion euros. There are also additional investment requirements for vehicles and selective network and capacity expansion that are difficult to estimate.

Transport Infrastructure: Higher Investments Needed to Preserve Assets | PDF, 0.58 MB