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Transport Infra-Financing

Freight logistics and intermodal integration in a framework of co-modality are often underestimated, but of very high relevance for the liveability of cities and metropolitan areas.

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Inter / Intra-city & multi-modal interfacing

The World is rapidly urbanizing. In 1950, 30% of the world’s population was urban. Currently, 54 % of the global population lives in urban areas. By 2050, 66% of the world’s population is projected to be urban. However considerable regional differences are observed in urbanization patterns across the globe. Currently, Northern America and the Latin America and the Caribbean region are most urbanized with 82% and 80% of their populations respectively living in urban areas. 73% of the population of Europe lives in urban areas. Africa and Asia are the least urbanized with 40% and 48% of their populations living in urban areas, but these are the regions where urbanization is growing at the fastest rate and by 2050, the percentage of people living in urban areas is expected to become 56% and 64% respectively.

Urbanization has been linked to the growth of GDP and is indeed an engine rather than an outcome of development. However, the rise of motorization, various macroeconomic and social factors and the growth of transport infrastructure in the 20th century has led to the wide dispersal of populations giving rise to sprawl which contributes to high energy consumption and greenhouse gas (GHG) emissions- currently, over 75% of total global energy generated is consumed in cities which account for over 70% of global GHG emissions.

Growing Need for Sustainable Transport System: Infra-Financing

  • There is growing recognition of the need for seamless, affordable, economically viable, socially acceptable and environmentally sound transport systems and connections within and between cities and urban-sub-urban- national-regional and international networks and services. An important issue is the inter-modal integration between different modes of public transport systems (e.g. metro/ light rail transit (LRT) and surface transport [bus, tram etc.]), as well as between public transport and non-motorized transport (cycling and walking). Non-motorized transport should be given much more priority and re-defined more positively as ‘Active Transport’ and always considered as a part of an integrated transport system. There is a growing need for connecting airports and passenger port terminals with city centres not only by road, but also by rail and public transport.
  • As cities expand into hinterlands, urban areas often cross multiple administrative boundaries – coordination across these boundaries on transport and spatial development issues is hard but critical for improving mobility/accessibility outcomes; the boundary between intercity/intracity infrastructure and the city and hinterland is becoming increasingly blurred – creating in particular road safety hazards.
  • The expansion of international trade in goods and services has resulted in an unprecedented demand for transport infrastructure and services to support the increased movement of goods and people, both within and across national boundaries. Pressure on land transport modes is likely to increase as inter-regional trade and investment flows, coupled with rising land and labour costs in coastal areas, directs more productive activities inland. The diversification and growth of the economies of landlocked developing countries will also raise demand for cross-border land transport.
  • The twenty-first century city is a city of intense flow of people, material and information. Goods transport accounts for 10 to 15% of vehicle equivalent kilometres travelled in urban areas and has been linked to the externalities of congestion and air and noise pollution. Evidence indicates that a high-income city in Europe generates about 300 to 400 truck trips per 1000 people per day and 30 to 50 tons of goods per person per year. Freight movement is largely driven by diesel powered cargo vessels, trucks, and trains and while diesel engines are more energy efficient than petrol, they contribute significantly to GHG emissions and other short-lived climate pollutants, particularly black carbon, thus impacting public health.

With growing urban congestion crippling many cities and draining the economy, the concept of ‘Green Freight’ has emerged in recent years. It involves policy makers, business leaders and civil society working voluntarily together to improve the energy and environmental efficiency of freight movement. This approach reduces costs and can make businesses more competitive, while also reducing emissions and benefiting public health.

Transport strategies in the increasingly contested urban landscape have not received adequate attention and it is essential that the close interactions between urban land-use and goods transport is considered in framing policies and strategies that can ensure the economic benefits of efficient goods transport while reducing its environmental, health and social impacts.

Major Challenges

  • The tendency to equate transport with the means of travel, particularly with travel by private motorised means has led to increasing motorisation and a propensity to build and expand urban roads. In 2010, there were 1 billion motor vehicles worldwide (excluding two-wheelers). Data from 2005 indicates that almost half of all trips in cities were made by private motorised modes. This proportion continues to increase. By 2035, the number of light-duty motor vehicles (cars, sports utility vehicles, light trucks and minivans) are expected to reach 1.6 billion and by 2050 this number will exceed 2.1 billion. Most of the increase will be found in Asian Countries, especially China and India.
  • From a regional and also an international perspective of adjoining countries, the main challenge is to strengthen regional transport connectivity in the most economically, environmentally and socially sustainable way. Given that at present the vast majority of freight movements by land are moved by road, priority needs to be accorded to enhancing the role of railways and inland waterways for long-distance freight, as well as international trade. However, due to both technical and institutional factors, the regional railway networks remain underutilized. Different gauges of the regional network and ‘missing links’ mean that goods must be transhipped en route, thereby reducing the time and cost advantages held by railways. Furthermore, lack of maintenance and investment in rail tracks, locomotives and rolling stocks in some countries have contributed to the deterioration of their railways.
  • More significantly, however, institutional obstacles make the railways and inland waterways less attractive to freight companies. For railways, some major common challenges include delays at border & remote stations, partly due to inspections on both borders, and lack of harmonization in processes and documents; different technical standards for rolling stock, power supply, braking systems and signalling systems; different operating rules and tariff structures; and a lack of qualified manpower to operate cross-border trains. As the cost advantages of railways are derived from volume, the lack of consolidation centres also prevents them from operating regular and/or profitably services.
  • Road transport still plays a critical role in countries where alternative modes to not exist, as well as in linking remote and rural areas to cities. Roads connect production and consumption centres within countries, and for some landlocked developing countries provide the most efficient transport option for transit to maritime ports. In low-income countries, road transport is often the only competitive mode for both agricultural and industrial producers to link to domestic and international markets. But regional road transport services in some regions (e.g. Africa and Asia) are less efficient, both economically and environmentally, than in other regions. Poor maintenance of roads, weak enforcement of traffic rules and regulations concerning axle-loads, weights and speed, and numerous non-physical barriers to cross-border movement of vehicles and drivers add to the time and energy used for transport, while aging vehicles and the lack of professional standards for drivers add to the environmental and safety toll, particularly of trucks.
  • Economic growth and expanding trade also means that road and transport infrastructure, including intra-city and intercity roads, are subject to increased loading. Poor design, construction and maintenance often result in the rapid deterioration of such infrastructure. This in turn leads to vehicular damage in addition to causing congestion and safety hazards.

‘Transportation Corridors’ which are made up of one or more primary transportation facilities that constitute a single pathway for the movement of goods and people within and between activity centres should also link with land-use patterns and street networks in adjoining areas.

But often, ‘corridor development’ emphasises inter-city connectivity and the movement of goods and people without adequate consideration of land-use patterns and urbanization pressures generated alongside the nascent corridors. This presents a missed opportunity in the sense that the increasing value of land is not tapped in systematic ways for developing public infrastructure and services such as better roads, connectivity, water supply and sewage in the newly urbanizing areas.

For example, appropriate tax regimes can be considered for housing developments close to such corridors, with the additional revenues being directed to improvements in basic services. Supply-side corridor management and the lack of integrated and inter-jurisdictional planning also constrain accessibility to the corridors, cause safety hazards and disrupt community linkages (e.g. links between settlements on two sides of an intercity super highway).

A number of issues are associated with expanding city boundaries and inter-modal connectivity, for example:

  • While a regional perspective may prioritize compact structure of urban growth based on public transport, outlying municipalities in the periphery may have financial incentives (tax base) to encourage sprawl;
  • Smaller municipalities may have limited capacity and legal authority to actively guide spatial development causing sprawl; and
  • National/provincial agencies manage/build intercity infrastructure and local government manages municipal level infrastructure and the lack of coordination between these spheres of governance leads to bad planning (e.g. big intercity highways but ineffective connection to inadequate local road network);
  • Public transport integration is a problem impacting investments, operations, service integration and user side integration (fares and tariff policy).

The poor often live in the periphery and are particularly affected by this lack of integration since they may need to change multiple modes. As intercity roads traverse through small urban areas and approach larger urban areas they create some of the most hazardous conditions. Residents of these peri-urban areas treat the space as streets – with a strong pedestrian/cyclist user population crossing frequently. Drivers treat the space as fast roads. Good solutions have been difficult to design.

Freight logistics and intermodal integration in a framework of co-modality are often underestimated, but of very high relevance for the liveability of cities and metropolitan areas. This is particularly true for megacity agglomerations. The potential of complementarity of public/passenger and freight transport should be further analyzed (e.g. conjunctive use of rail/tram infrastructure). Efficient logistics dictate the use of large trucks on intercity routes while urban considerations often require restrictions on size and timing.

In port cities restrictions on truck traffic can have a deleterious effect on the entire logistics supply chain. Planning of transfer terminals is another problem – these are expensive investments and as cities expand a terminal located in what used to be the urban periphery becomes a terminal inside the city affected by restrictions and thus of much less functional value. Taking a broader regional perspective, the main challenge emerges as the need to strengthen regional transport connectivity in the most economically, environmentally and socially sustainable way.

A more organised solution & recommendation for sustainable development

  • Generally, a focus on the means of transport – vehicles and roads, bridges and flyovers has dominated policymaking and planning. There needs to be a fundamental shift in this paradigm. The goal of all transportation is access – access to opportunities, services, goods and amenities. Accessibility and sustainable mobility is to do with the quality and efficiency of reaching destinations whose distances are reduced rather than the hardware associated with transport. Accordingly, sustainable urban mobility is determined by the degree to which the city as a whole is accessible to all its residents, including the poor, the elderly, the young, people with disabilities, women, children and women with children. This move from a “transport” bias to a focus on accessibility opens up the possibilities of better linking landuse planning, urban design and transport planning and laying the foundation for compact, walkable and more ‘connected’ cities.
  • The coordination between land-use and transport planning needs to be promoted at the highest level through national urban policies which are developed as statutory instruments that provide a vision for sustainable urban development while also defining the roles, responsibilities and relationships amongst different sectors, agencies and stakeholders. Such policies can also support a regional vision for coordinated land-use and transport (e.g service integration of public transport in a metropolitan region). Some good examples indicate the way forward. For instance, in Auckland, New Zealand, ‘Auckland Transport’ was created in 2010 to function under the city council.
  • The new organisation amalgamates the functions and expertise of eight local and regional councils and the Auckland Regional Transport Authority and all transport functions now fall under the domain of the new organisation. The underlying assumption behind this transformation is that the Auckland Council with its multiple roles and responsibilities is not able to provide the required level of specialisation and focus on transport related matters. Auckland Transport now is responsible for planning and delivering local “roads and footpaths, parking and train, bus and services”. It is also responsible for preparing the Auckland regional land transport programme, which sets out the transport projects.
  • In Stockholm, Sweden, to deal with urban growth, the Storstockholms Lokaltrafic was created as a single regional transport body to take over the responsibilities that had been earlier shared amongst different municipalities. In another example, encouraged by potential investments in transport infrastructure, the five “county governments” that make up the Greater Nairobi Metropolitan Area have agreed on a collaborative framework for transport planning and operations by signing a “Memorandum of Understanding” as a precursor to the establishment of the proposed “Nairobi Metropolitan Transport Authority” to oversee transport development in the Greater Nairobi Metropolitan Area.

With reference to transport corridors, instead of supply-side corridor development responses (e.g. building frontage roads; curb-cut restrictions), corridor–level growth management plans that link land use to new improvements can be developed. Coordinated, strategic and long-range planning keeping in view a dual vision of infrastructure development for transport and land-use development can maximise the gains from new investments.

A good example of public-transport oriented corridor development is provided by the city of Stockholm, Sweden, where strategic regional planning has created regional settlement and mobility patterns that have reduced car dependency. The city planners deliberately created a balance between jobs, housing and retail activities along rail-based axial corridors producing a so-called “necklace of pearls” form of development, where a number of mixed-used neighbourhoods are interspersed by lower density development and open spaces.

This has reduced trip lengths and a high share of trips take place within self-contained subregional corridors. Traffic congestion has reduced and there is more even distribution of traffic between peak and non-peak hours. Curitiba, Brazil provides another land-mark example, where a lower cost option bus rapid transport system was introduced in conjunction with a land-use policy that promoted increasing intensity of land-use progressively with proximity to the BRT corridor demonstrating planning for people approaches rather than the planning for car paradigm.

It is important to consider the complementary roles of freeways and railway systems. For example in the suburbs of Munich, Germany, motorways and suburban trains are physically integrated to allow for motorists to switch to trains. Similarly, better pedestrian and cycling paths feeding into suburban railway stations, bike-sharing and rental schemes where such stations function as a node can improve accessibility in the wider metropolitan regions and should be prioritised in large urban agglomerations. A similar experiment has been done by CMRL (Chennai Metro Rail Corporation) for Chennai Metro Rail in India where efforts for inter-modal and last-mile connectivity has been prioritized with equal focus with the development of the metro in various phases.  

Good examples of modal integration have emerged in Asian and Latin American Cities. In Guangzhou, China, the BRT system which serves 800,000 passengers daily is integrated with the city’s bicycle lanes and bike-share systems, thereby ensuring access to public transport and extending the reach of public transport. Sao Paolo and Curitiba in Brazil, Bogota in Colombia and Santiago in Chile have also taken measures toward such integration.

Hence, governments need to take a comprehensive approach and develop integrated national transport plans and policies in coordination with national urban policies, which encourage the most efficient use of different modes of transport, especially in the third world and developing countries.

For example, for long-distance freight, national policies may help the railways and inland water transport service providers to compete with road. The development of high-quality intermodal facilities such as dry ports would also encourage the use of railways, as it would allow for safer consolidation and smoother transfer between modes. Additionally, regional cooperation in road and railway facilitation could help address the various institutional issues which affect cross-border movements of goods and people. In this regard, the application of information and communications technology (ICT) can help improve the efficiency of border-crossing procedures and logistics. For the movement of people, the railway has many environmental and, within certain distances, economical advantages over aviation. High-level political commitment and private sector interest are required to overcome the deadlock of government bureaucratic procedures.

Some good practices have emerged on freight distribution in urban areas. These include rationalisation of delivery and consideration of ‘reverse logistics’ (i.e. removal of waste and modal adaptation), but much more focused research is required on integrating freight distribution as an integral part of sustainable urban mobility. Challenges of (transfer) terminals and logistics centres might be reduced if they move away from road dependency and towards intermodal terminals with rail access. Freight logistics and intermodal options require more attention from policy and decision-makers, especially, as mentioned above, regarding decision making for terminal location and integration (e.g. long-distance railway network often goes beyond administrative city boundaries.

Seeing the fast transforming global mobility pattern it is imperative to state that more efforts need to put in at all levels to instigate more action towards sustainable mobility and multi-modal interfacing. Any collective effort or modal shall represent a repertoire of emerging good practices, and guidance in terms of the key steps governments can take in this regard. It should also seek to inform the various sectors on how the goal of sustainable mobility can be a multiple win for people, businesses and for the planet.


The above topic ‘Transport Infra-Financing’ is one of the many topics which will be covered in the InnoMetro event. This 2-day event is an insightful expo and conference on the metro and rail industry and would definitely open doors of possibilities.

To join the 2nd edition of InnoMetro to be held from 23rd-24th May 2022 at The LaLit, New Delhi, click on the links below.

Join as a delegate: https://bit.ly/3uihjkd

Join as a Speaker: https://bit.ly/3N7lcRj

Join as a Partner: https://bit.ly/3widL3Y

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