Speeches: Jan Burnewicz, Professor, Gdansk University, Poland

7th IRU East-West Road Transport Conference Budapest, 15-16 May 2003 Budapest Congress Centre (BCC), Alkotas u. 63-67 - 1123 Budapest, Hungary

Panel 2: Passenger and Goods Transport Growth 2015

Jan Burnewicz
Professor, Gdansk University, Poland

Road transport as a means to boost economic and social development in transition countries

What are the factors which boost economic and social development? The answer is quite simple: they are the factor inputs whose more intensive use serves to accelerate GDP and employment growth. The strong and continuous road transport demand implies that this transport mode is generally acknowledged as a growth factor, despite certain environmental drawbacks. Road transport can boost growth by reducing production and distribution costs, optimising the geographical locations of economic activities, facilitating access to new markets and creating new demand (especially the demand for new technologies in the road transport industry and services), etc.

The EU 15 statistics show that over the period 1990-2000, road haulage became an increasingly major production factor: whereas in 1990, each 1000 USD share in GDP was dependent on the performance of 148 tonnes-km by road, in 2002, this dependence increased to 172 tonnes-km (67% of the total consumption of transport services). The interrelationship between road haulage and GDP in the EU 15 is graded according to countries (c.f. Figs 1 and 2), however the trend is obvious: we need less and less tonnage to be carried by road (a drop from 1.61 to 1.56 per 1000 USD share in the GDP) and more and more road transport kilometres (increase from 92 to 110 km). Over the same period, GDP growth in the EU 15 was fairly modest at 1.98% per annum. It is likely that, under more favourable conditions (less road congestion, cheaper drivers, lower tax burden on road transport, etc.), road transport would yield more economic activity and a GDP growth +0.05 to 0.10% higher per annum.

The analysis of the macro-economic role of the road transport sector cannot restrict itself to road haulage services for hire or reward. One must also take into account road haulage on own account, passenger transport by bus and coach, private cars and auxiliary services. In 1999, according to estimates, the total value of all road transport operations in the EU 15 was € 760,200 million, amounting to 9.5% of GDP. Employment in all these forms of road transport and in services linked to private motoring was approximately 6,020 thousand persons, i.e. 3.9% of all jobs in the EU 15. These figures show that the policy of "a significant decoupling of transport growth and GDP growth", as launched by the European Community in 2001, is likely to lower GDP growth and significantly reduce job openings. In practice, this policy implies the need for a reduction in road transport distances, which is contrary to the objectives and impact of European integration.

Main factors of fast development in the road transport sector (infrastructure, institutions, legislation, etc.)

In XXIst century European countries, some development factors in the road transport sector are uniform, while others are specific, as determined by the macro-economic structure, geographical conditions, the availability of a sound road network, the intensity of road transport demand, the trends of national policy, the activities of the green lobby, etc. The most stable, uniform and significant factor of such development are the assets of the road transport mode, which dictate its supremacy over other inland transport modes: speedy delivery, spatial accessibility, the diversity and flexibility of services offered and acceptable costs and prices for the customers. These assets can hardly be created artificially in rail or inland waterway transport. And let us not forget a fundamental factor, albeit sensitive to world events: fuel prices. As these are low, they promote growth in road transport.

The assets of road transport are almost universally lessened by the under-capacity of infrastructure, the implementation of certain political objectives by public institutions and by the restrictive system of market regulation. In Europe, road construction always lags behind traffic growth, thereby increasing the share of the road network affected by congestion: in 2001 in the EU 15, congestion plagued 7,500 km of the A-road network (10% of the network) . From 1990 to 2000, the density of goods transport by road (tonne-km over 1 km of the network) increased by 39.6%, while the increase was only 4.2% on the railways. Without investing into the road network, beyond 2010 Europe will experience such a paralysis in traffic that it will curb growth.

An example of public institutions' activities which create adverse conditions for road transport development is the EU's financing policy for trans-European networks: there are but few good reasons to restrict the share of funding for sound road projects to 25%. Fig. 3 proves that the European road network must be better taken into account as part of the policy to eliminate bottlenecks. Improving the quality of the road network serves to reduce external unit costs, particularly by lowering fuel unit consumption and strengthening road traffic safety.

Current legislation on road transport is generally adverse to the development of this mode (both in the Community acquis and in national legislation). Most restrictions arise from the need to eliminate market pathologies and to ensure order on road networks. However, solutions are lacking to modernise the road sector, improve staff qualifications, better manage these networks and increase company productivity. Road transport SMEs (over 80% of the sector) are still deprived of any legitimate and efficient aid on the part of the public authorities. The rules of fair competition will be thwarted if, in order to survive, small family firms have to infringe working time or maximum load regulations, etc. The main shortcoming in the legislation governing road transport is the lack of harmonisation in applicable regulations. It is extremely difficult to adequately assess candidates to the occupation of road transport operator when the transport acquis and the texts of conventions, international agreements and national legislation amount to over 10,000 pages! These texts must urgently be consolidated, checked and clarified, while eliminating contradictions and pointless restrictions.

The case of Poland: developments in transport markets during the 1990s and prospects for the years to come for passenger and goods transport

In Poland, the road transport sector (2001) is made up of some 53,500 companies employing 309,960 persons. Over the period 1990-2001, the sector experienced significant growth: +5.7% per annum measured in tonnes-km and +4.6% per annum in passenger-km. This growth was made possible by a decrease in rail transport (-4.9% per annum in tonnes-km and -7.1% per annum in passenger-km). Growth prospects are more likely in international transport (further to accession to the EU and to the liberalisation of access to markets), however growth factors are lacking in domestic transport. Poland's accession to the EU will transitionally (2002-2004) increase the operating costs of road transport undertakings engaged on the domestic market: obtaining authorisations and certificates of professional competence will increase the cost of 1 vehicle-km from PLN 2.15 to 2.40. Then, thanks to the elimination of foreign authorisations, equipment productivity will increase and international road transport operations will become less expensive: a drop in costs is expected from PLN 3.36 to 3.25 per vehicle-km. Fig. 4 illustrates the forecasts for the sector.

Following accession, the Polish road transport sector will be no threat for the companies of the EU 15 member states. The strength of Polish competition is often exaggerated by Community analysts. The only annoying difference for the companies of the EU 15 is the labour costs: € 4/hour in Poland and almost € 30/hour in Germany (2002). However, the turnover of the Polish transport market represents but a small percentage of the EU 15's turnover: in 1999, the turnover of the EU 15 transport sector was € 739,646 million, while in Poland it was only € 11,545 million (1.6% of the EU 15's turnover). The weakness of the Polish transport sector is the extremely low rate of productivity (1999): a mere € 17,800 per person, versus € 114,700 in the EU 15 (6.4 times higher). The price for road transport services in Poland in 1999 was € 0.08 per tonne-km, which is lower than in the EU 15 (€ 0.13 per tonne-km).

Accession to the EU will be a historical opportunity to accelerate investments into road and railway networks in Poland. Over the period 2000-2008, thanks to financing from PHARE, ISPA, ERDF and the Cohesion Fund (approx. € 5,764 million, including 25% of national resources), it will be possible to build 356 km of motorways, 216 km of expressways, to modernise 799 km of A-roads, 1,400 km of local roads and 981 km of railway lines. These investments may generate, beyond 2008, an increase in transport demand of over € 1,500 million per year, while lowering the share of external costs in the value of services from 51% to 42%. And besides, the works financed through these investments will provide approximately 40,000 jobs, thereby reducing the unemployment rate.

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