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Finnish National Road Administration (Finnra)
June 1998

Research program
Community Impacts of Transportation Planning

For further information please contact Ms. Anne Leppänen, Finnra, P.O.Box 33, FIN-00521 Helsinki, Finland, tel. +358 204 44 2411, telefax +358 204 44 2395, e-mail: [email protected]

Abstracts

Sikow-Magny C., Niskanen E.: Development of the Finnish Transport System from the Point of View of National Economy (Finnra Reports 80/1995 in Finnish)

In the modern society, decisions concerning road transportation are made by a number different decision-making units. individual citizens and private firms operating in different sectors of the economy make decisions concerning the use of transport on daily basis. On the supply side, other firms offer transportation services. The public sector makes decisions concerning fiscal taxation of transport, the supply of transport services, the conditions for use of transport networks and the supply of transport infrastructure.

The basic requirement for welfare-improving rational public sector decision-making is truthful information concerning the expected socio- economic impacts of the decisions in question. Here, the traditional welfare measure, GNP/capita, is not sufficient for it ignores several important qualitative factors, environmental effects, and distributional and equity considerations. in the public sector decision-making concerning the development of transport system, information of these various micro-level impacts is of crucial importance.

Roughly speaking, public sector decisions concerning the development of road transport system are made at three different levels: national- economic policy level, transportation policy level, and road policy level. Following to several recent developments, the national-economic policy and transport policy levels have gained more weight in comparison to the road policy level. Also, the international and global context of the development of the transportation system has become more important.

At the national-economic policy level, this study suggests further research on the following broad topics: economic modelling of the relationship of transport sector and national economic development, internalisation of term 'sustainable development' in the transport sector, and clarification of the role of transport in the public sector (fiscal taxation or road transport, the division of work between state and local municipalities).

At the transport policy level, the most important research areas are: formulation of a new' transport policy, implementation of marginal cost pricing, the issue of full cost coverage for different transport modes, and extension, deepening and application of socio-economic cost benefit analysis.

At the road policy level, the study suggests further research on the following questions: qualitative aspects of road network and their significance in actual policy making, option value of roads and external benefits of road transportation, and optimal organisation of the road production and management.
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This follow-up study of the Mikkeli bypass road continues the impact evaluation made in 1992. Interviews with inhabitants, business community representatives and planners, and a review of media debate on the project form the basis for this study.

The people of the city of Mikkeli unanimously approve of the project and give it an excellent rating. The bypass road is a forward-looking project, giving Mikkeli its own profile in a group of many towns.

The road's relation to the central area and urban structure 'm general is especially appreciated. For road policy, a conclusion of this project is that when a project makes other measures, such as central area renovation possible, they should also be implemented as part of the main project. This would give everyone a much more direct experience of the benefits of the project.

Planning, design and construction took almost 30 years, starting in the early 60's. Project proposals were generally based on cost-benefit assessments. At that time, other, more human aspects of impact assessment were not considered. Decisions on the project were made in close contact with the city master plan, which does seem to have been a correct approach.
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This study discusses the present situation of the strategic planning in the transportation sector and needs for its development. The decision-making situations, where the alignments decide the quality and the allocation of the impacts on the future traffic and transportation system, are called here strategic questions.

The organisations participating in the transport and highway policy making as well as the most important strategic plans and political documents are listed in this study. The issues have been discussed on the following levels: EU, national, regional and local.

Strategic questions have correspondingly been listed for the levels. In this context the local level has been excluded from the study, because the local organisations don't usually participate in the preparation of the national highway policy. In addition, the questions have been grouped according to the policy area (community structure, transport policy and highway policy) as well as according to the allocation of the actions (infrastructure, users and vehicles).

Among other things the essential strategic questions deal with the right level for financing and its collection, the focus on transport infrastructure development and maintenance, transport and highway projects' priorities, transport infrastructure pricing and the operating policy of the different highway sectors.

In the study, the strategic planning on the highway sector was found quite extensive, The quality of the planning has, instead, plenty of room for de- velopment. Strategic decisions are based on very different kind of studies. Transferring strategic decisions into the operational decision-making is of- ten difficult. The annual decision-making is political and it's difficult to commit to the long term alignments.
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This preliminary study considers means and strategies to reduce car use and the concepts of necessary and unnecessary traffic. The car use reduction policies of some countries are described, as well as the present situation and trends in Finland. Reducing traffic is difficult, because it is part of a complex society and its many functions. Traff ic also raises ethical questions.

Based on interviews made, the benefits of private car use in traffic can be expressed by the words comfortability and options. The reasons given for needing a car often concern providing for the family and weak public trans- port connections. Necessary traffic is a socially determined concept, defined through interest groups. It is thus not very suitable for use as a general characterisation. Unnecessary traffic was described as unjustified, improduc- tive, inefficient and non-targeted. Thus unnecessary traffic is something that can be substituted by other activities.

Internationally, economic policies are given an increasing role in influencing car use. Good results can, in the long run, be achieved through developing urban structure and integrating transport systems. Simultaneous action, influencing both mobility and spatial structure, is needed. Significant reduc- tions in traffic have been attained in city centres and in commuting projects, but the impacts in wider areas have so far been minor. In this context, simply avoiding traffic increase can be considered an excellent result.

Reducing car traff ic does not necessarily imply reduced mobility; extensive mobility can be supplanted by good accessibility. But a more efficient use of the traffic network is in conflict with traffic reduction objectives. Efficient reduction policies use broad total concepts, combine strict, focused parking policies with road user fees and internalize the external costs of transport through pricing mechanisms.

Different concepts should be tested in some average size town - life without a car, co-operation between employers and public transport companies, recreational traffic. Summer cottage traff ic should also be studied in depth.
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The target of the research is to describe the advantages and benefits that traffic and road networks have given to people's daily activities. The sub- ject has been approached from many different quarters both quantitatively and qualitatively.

In the research we have dealt with, as a literature observation, the model- ling of people's daily activities. This kind of modelling seems to be a de- manding and difficult task. Both the formation of the theory and the acqui- sition of the useful data causes difficulties. However, as early as the next few years the models, which are under development, can be expected to be of great use, mainly when predicting travel related to the regular and re- petitive activities.

People's daily activities have basically been the same through ages- from the Stone Age to the present time. Traffic together with communication and commerce has always formed an essential connective operation. The most important end point of the trips has been and still is the home. Finnish people have in this respect their own special feature, as the great part, in addition to the home owns a summer cottage as a weekend home.

An adult in a family with children spends over two thirds of the time at home respectively a single with over half of the time. The travelling ex- penses calculated per person do not differ between these groups in total amount but they do in direction so that the most money among singles is spent on leisure time travel whereas those with a family on travel to and from work.

The time spent on people's daily travel varies largely although the average time stays in a little over an hour. The development of overland traffic connections has extended the daily territory up to hundreds of kilometres. In practice the average daily cruising speed among people using overland traffic has stayed within 5 - 90 km/h. It is not until the usage of flight traffic that raises the daily cruising speed to a higher level than this.

When examining Finnish people's travelling from a historical viewpoint we can see a large revolution or turning-point with the generalisation of private cars: the trips which were made very rarely in the past are becoming daily or weekly.

The increase of speed of traffic is clearly what people have hoped for and what they are willing to pay for. Purely examining on the basis of econom ics the development of the road networks has been of an essential use.

When considering the traffic philosopher Cesare Marchetti's and Herman Knoflacher's thoughts about the benefits and advantages of traffic we conclude to very divergent results. Marchetti sees the increase of speed of traffic as a kind of unavoidable historical development without taking any attitude to the fact whether it is useful or useless, whereas Knoflacher re- gards modern traffic investments harmful especially in towns and cities but also elsewhere from the point of view of worthwhile existence life.
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Optimal speed of road traffic is the speed level which minimizes the social costs of transportation. Conventionally such calculations have been based on transport economical components (operating costs, value of time, accident costs and environmental costs including pollution and noise). This report has studied if more components are needed in the calculations and how they should be weighted. Can such calculation be used when choosing speed limits and levels?

Optimal speed depends on the point of view. Different road users have their own valuations. When policy decisions (in this case level of speed limit) are made, each party has its own optimum, and the final decision is often a compromise. In a theoretical calculation all possible cost components are summarized, and the expert has to decide their relative values (prices or shadow prices). That is why the result contains hidden weights. Therefore calculations should be performed with optional values to reveal their sensitivity to changes (for example accident costs).

Effects which are not used in typical calculations are either difficult to quantify or not objectively evaluated monetarily. Their time scale and spatial reach can also be obscure. Global environmental effects, predictability of transport times, route choice, comfort and stress, infrastructure investments, accessibility and networking are typical 'difficult' components to be considered. Though strict Scientific accuracy can not always be reached, the effects may often be calculated well enough with subjective judgement.

The ''new" components do not seem to change the results of the calculations very much. Even though, cost curves are quite gently sloping, and the minimum point is not always very exact. The conventional analysis is also sensitive to the prices of its components. As the characteristics of the road can vary often, an analysis for optimal speed limit has to be based on longer sections. Optimal speed depends also on time, weather and even single driver. Overall, a transport economic calculation, as it is nowadays understood, is not an adequate basis for defining speed level.
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The Finnish rural areas have recently seen great changes, among these the introduction of various non-traditional business activities, depending on the facilities available. Municipalities may offer different incentives. There has also been an increase in occupations undertaken in addition to farming.

The present study serves to assess these new entrepreneurs' needs for transportation and traffic communications in order to identify possible pressure from entrepreneurs on the services available. Special attention is paid to assessing the significance of the road network for enterprises in the rural areas as opposed to telecommunications.

The research indicates major variation between entrepreneurs as regards these needs, depending on the field of activity, and the location of the business within the municipality. Virtually all rural entrepreneurs, both in the central and remoter areas of the municipality have a relatively great need for transportation services. Transportation is generally implemented through the firm's own vehicles or then through a haulage contractor. This testifies to the importance to the entrepreneurs of the road network and its maintenance. There is also a need for transportation for marketing and customer relations. Taking care of these matters is restricted by the claims on the entrepreneur-farmer's time for attending to the farm.

The study shows that the basic rural infrastructure is in order, despite variations in the condition of roads. So far there have been plenty of entrepreneurs at the remote end of even the worst roads, but bad roads cause costs and wear and tear on vehicles. They are also slower. Entrepreneurs in the remote areas want better roads and better winter maintenance. They also want better signposts to guide customers to direct outlets selling farm produce. Maintenance plans taking account of entrepreneurs' needs within the municipality are therefore called for. A road which looks insignificant on a map may be a lifeline for a small businessman. More interaction between these and the road maintenance authorities are needed. Roads should not be seen as a value in themselves but as a value defined by those who need them.
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The purpose of the study is to analyse the planning and decision making of transport policy and road policy in Finland and to find out, if there are problems concerning these processes on national, regional and local level. The method of the study was based on elite interviewing. A total of 30 persons in the transport sector were interviewed representing political decision-making, ministries, different organisations of transportation, business, organisations and regional administration.

The study starts by analysing concepts of transport policy and road policy. The contradictory relationship to a common statement in Finnish transport dialogue that "there is not transport policy at all in Finland" can be explained by different kind of interpretations concerning transport policy and the politics of transportation. According to the interviewees the most remarkable problem concerning the processes of planning and decision-making of transport policy is that the polical direction of the processes is too weak. Political decision-makers are required a discourse concerning values and visions of transportation, a comprehensive view of transport policy and explicit order of relative importance of different means of transportation. Secondly, a common problem of the transport policy is seen in the shortsightedness of planning and decision-making processes, although farsightedness of these processes has been increased. Thirdly, a commonly mentioned problem is the lack of co-operation and coordination between different organisations of transportation. Fourthly, there is no transport policy on regional level in Finland. The coordination of sectoral guidance coming from central administration and the horizontal guidance coming from provinces need to be clarified on regional level.

The power structures of transport policy were also analysed. Actually, there are remarkable differences between the formal power structure and the informal power structure. The influence is centered more on producers of transport services than on consumers.
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In the impact assessment of the transportation sector projects, the indirect effects are often analysed in addition to the direct impacts. In highway projects these indirect effects are estimated with input-output models or with a macro model whereas in the railway sector scenario analysis is the used methodology. The results of the input-output analysis can be biased either due to deficiencies in the input data or because of the simplifying assumptions of the model itself. The main sources of the problems of the input data are the traffic forecasts, especially for heavy traffic, and the estimation and valuation of costs. However, the practitioners of the model do not consider these questions as essential; it suffices that the forecasts and estimations are based on equivalent assumptions.

Most of the problems of the input-output model are of a theoretical nature and they have been studied in the academic world for several years. Being both static (no technical change) and linear (constant returns to scale), the results of the model tend to be over-estimated as the study period most often covers 20-30 years. These problems can be overcome by bringing information on different sectors' technological change and economies of scale from outside the input-output model. As investments are treated as exogenous, both multiplier effects and bottlenecks are omitted from the results. When important projects are being studied, a comprehensive macro-economic model should be used in addition to the input-output model.

It is the different objectives of the use of the results that create the most important development themes. The results of the model are used in programme and project comparisons (cost-benefit analysis), in regional development studies and in analysing the employment effects of different public sector investments. Mechanically regionalized input-output tables can be considered as essential; their reliability can be considerably augmented by introducing information on the regional production structure and technology and other special features in the model. How this is best done necessitates further research. The benefits of regional trade models and inter-regional input-output models should also be assessed.

Because of the static nature of the model, time lapses between the investment (direct effect) and the indirect effects can be considerable in reality and the results thus over-estimated. The magnitude of the error and the economic adjustment process can be studied with comprehensive, inter-active models linking transportation demand and land use, with econometric models or with before-after studies.

In transportation project evaluations, most often only one future state is considered and a long term trend is used to predict changes in economic variables. This is by no means realistic, not to mention the rapidly changing Eastern Europe that presents such uncertainties that at least two different scenarios would seem reasonable. The benefits of scenario-technique and delfoi-analysis should be studied.

It is also important to further develop the cost-benefit framework so that national and regional objectives, when differing, can be assessed. The questions to be answered include regional equity and development prospects, the link between peripheral regions and public investments, the productivity of private companies and (public) highway and railway investments.
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This study is an analysis of the road project planning and decision-making process. The purpose is to present reasoned proposals for development in regard of project, as well as strategic, planning and decisions. Especially the arrangements for co-operation between different parties, planning organization and the relationship between different stages of planning and decisions are studied. The main study concerns planning and decisions for the main road 7 from Koskenkyla to Loviisa are a primary source. Expert interviews, project documents, road design development studies and assessments of other road projects form the basic material.

An essential problem seems to be the diffuse division of tasks between the stages of project planning and design and especially the stages of strategic planning. In project design, the role of the preliminary engineering plan should be emphasised. This stage should deal as a whole with the need for the road, its practicability, basic alternatives and general impacts of the alternatives. The legally mandated EIA procedure and extensive co-operation with different parties are normally connected to this stage. For long road stretches and road networks, the feasibility study should be developed. The need for and practicability of most individual projects is defined in these. The national strategic planning of the Road Administration could be grouped in three stages: long-range planning of road management, four-year action and objective planning, and annual budgeting. The long range plan could consist of the goals and main policies of road management, essential development needs of the main road network and a long-range development plan including project proposals.

The exchange of information on project experience should be developed, for instance through better co-operation between project managers. Routine and pilot projects need to be clearly differentiated. The roles of projects groups, road environment groups and of their members, should be clarified. Programming the planning process needs more attention. The design group and the project group should agree on objectives and methods of work immediately at the start of the project. At this stage, interested parties and their views should be surveyed and a program for participatory planning formed. Especially the need to deal with conflicts shifts the emphasis of planning and design to the beginning stages.

If a project is expected to lead to conflicts, project personnel should be selected on the basis of ability and training for dealing with conflicts, and participatory methods appropriate to conflict resolution should be used, such as co-operative groups or negotiations chaired by a mediator. Especially in the preliminary engineering design of conflict laden projects and in the essential strategic planning stages, the use of co-operative groups should be developed. In strategic planning, such groups would be most important in feasibility studies for long road stretches, urban area transport system design and regional development planning. In these stages, strategic environmental impact assessment should also be developed. In strategic planning, co-operative groups could be set up as permanent advisory councils.

A clear division of work between the stages of planning and design, as well as clear guidelines will help to improve the process. But road projects are very dissimilar, and often matters arise during the planning process that were not or could not be expected. Thus the planning process should be as flexible as possible. The stages of planning and design of an individual project should take account of its characteristics. It should be possible to take up new aspects that arise during planning or, if necessary, to return to matters already dealt with in earlier stages. The participatory system should also be applied as different projects and changing circumstances demand.
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Exportations and logistical needs of the exporting companies were the main areas of this paper, as the Finnish economy and the national competitiveness very much depend on these factors.

Due to the dispersed structure of the Finnish economy, exports are much transported in small units. On the other hand, concentration on the industry could be relatively difficult, as the capacity can not be easily replaced. However, according to the Scottish case, a peripheral location does not necessarily mean a lack in competitiveness.

According to the Swedish case it is important to consider the interaction between the infrastructure and society. Transports should be also in their opinion more concentrated and national transport-policy improved. The Norwegian case shows, as the Scottish, that a peripheral location can be compensated with a direct financial (regional) support to that particular area or company. This can also be understood as the main conclusion on this study: Finland's remote location is not as big problem as it is usually considered to be.

The Finnish transport-policy has changed drastically during the latest years being now part of the Common Transport Policy of the European Union. However, there has been only few consequences to the transport itself.
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The passenger traffic in the rural areas of Finland is largely dependent on the use of private vehicles. An adequate level of accessibility and necessary transportation services for the rural communities require sufficient maintenance of the low-volume road network.

The objective of the study is to evaluate the impact of the low-volume road network improvements on the viability of villages and the development of rural communities. In addition, the purpose of the study is to examine the applicability of the used modeling and survey methodology in evaluating the impacts of minor road network improvements.

The study introduces a village viability model for assessing the impacts of individual road improvements on the viability of rural communities and a market potential model for assessing the impact of road improvements on retail sales of villages. Furthermore, interviews and surveys were conducted with the representatives and residents of selected villages to assess the benefits and adverse effects of improving the main access roads to villages.

The impacts of alternative road improvement measures or their combinations are assessed on the speed and travel time on the access road to villages. This has a direct impact on the accessibility of villages and thus reflects the change in the village viability induced by the alternative road improvement measures.

As a result of the study minor improvements in low-volume road network do not have significant measurable impacts on the rural community development. Also, according to the interviews and surveys, the road condition and travel time on the access roads to villages are not the most important factors affecting the village development.

The rural community development is dependent on the structural changes in population, 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 both major and minor road network will support this development but are not the critical factors for the progress of rural development.
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Finnish and Swedish road transportation planning have faced remarkable changes since the beginning of 1980's. Planning has developed from prioritization of road investments towards total evaluation of all road agency activities.

This study gives an idea on the differences between Finnish and Swedish transportation planning as well as it provides an outlook on the planning history and process along with political guidance in both countries. A ten-year transportation plan was finished in both countries in 1994.

In Sweden there seems to be more political guidance than in Finland. In Sweden government has initiated preparation of the plan and government and parliament have made several political decisions during the planning process. In Finland the road agency (Finnra) has itself initiated the planning process and all the decisions have been made by the Ministry of Transport. Finnish government or parliament have not discussed the plans prepared by Finnra.
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Effects of road network improvements in Finland on transportation and regional economics were appraised in two cases: the Finnish main road network as a whole and the main road network in the city of Tampere. Brewing industry was selected as an example and transport costs for the 1993 road freight transport needs were estimated using both the 1970 network and the 1995 network. Calculations were done by making use of simulation models and road freight transport data.

Improvements on the main road network had led to a 50 % decrease in transport costs of brewing industry which is about 9 % of the total production and delivery costs. 84 % 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 highest allowed total weight of a freight vehicle had increased from 32 tons to 60 tons during the reference period.

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 the total annual cost savings of the road freight transport system were estimated to be roughly 10 billion FIM.

Improved standard of road network has favoured concentration of production. 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.
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The development of the vitality of built-up areas and villages is strongly lin- ked to their attraction to residents and businesses in the vicinity of fluent and safe transport connections. On the other hand, the diminishing number of local services is a development trend caused by improved traffic network and increased car ownership.

The objective of the study is to examine the impacts of a new, rapid rural road on the development of vitality, on the location of residences and other activities as well as on the distribution of trips in the area of influence of the road. The road between Lahti and Orimattila was selected as an example. The vitality analysis includes the assessment of the changes in the socioe- conomic development of the impact area induced by the new road and imp- roved accessibility. The market potential analysis evaluates the impacts of improved accessibility on the retail sales and on the distribution of shop- ping trips. Furthermore, interviews and surveys were conducted to examine the general development trends and the role of the improved road connec- tion in promoting or restraining the development of the impact area of the road.

The new, rapid road connection has significantly reduced the actual travel time and the extra time reserved for the trip due to e.g. extreme weather conditions. Moreover, the role of the city of Lahti at the other end of the new road connection as a major attractor for shopping trips has improved. The new road connection has promoted the existing development of suburbanization in the vicinity of the border of the city of Lahti. The greatest impact has occurred in the middle part of the road segment. A significant part of the commuter and shopping trips have shifted from the smaller city of Orimattila to the major commuting center of Lahti. Commuting from villa- ges located south of Orimattila to Lahti has also increased due to the new, rapid road connection.

The new road has had major contribution in promoting traffic safety. This is supported by decreasing number of traffic accidents. Furthermore, the new road has increased the number of private vehicle trips, especially shopping and leisure trips.
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The optimal length and standard of the road network, which refers to ac- cessibility and to the technical standard and the level of maintenance of the road network, is examined is this study separately by road district and road types. The calculations include both marginal and total cost effectiveness. According to the results, it can be stated, that marginal cost effectiveness is achieved in every road district and for the different parts of the road network. As to total cost effectiveness, when examining the functional classes of ma- jor roads (main roads and trunk roads) versus minor roads (regional and connecting roads) and minor roads versus private roads, it can be argued, that costs of maintaining major roads should be reduced. This can be achie- ved by reducing the standard on those road segments which have an ADT of less than 1 500 vehicles. Contracting out 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 ar- gued for.

The evaluation of cost effectiveness does not exclusively determine the need for a road segment or the optimal length of the road network in diffe- rent parts of the country. Changing of the length or the standard of the road requires marginal analysis. This change can be argued for if cost savings in road maintenance exceed additional costs for the road users, external ef- fects taken into account. The same principles apply in optimizing 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 ratio) taking into account distributional impacts and equity goals bet- ween citizens and regions. These goals include equal opportunities for mo- bility in different parts of the country, reasonable costs of transport in diffe- rent 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, distributio- nal 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 level almost exclusively deal with efficiency in resource allo- cation.

Transport efficiency is the usual starting point for determining the optimal extent of the road network and the transport system generally. Recently, the limited environmental sustainability and different national goals with regard to equity have increased the demand to explicitly take these factors into consideration in the transport sector decision making. Models, which optimi- se economic profitability and assist in actual decision making, do not gene- rally exist. The only application is the so-called CMS model (capital mana- gement system). The HIPS submodel, which optimises the condition of the road network, is already in use in the Finnish Road Administration.
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In Finland low-volume rural roads are either public roads or private roads. Public roads are administered by the Finnish National Road Administration. Property owners are responsible for construction and maintenance of private roads. Total length of the Finnish rural low-volume road network is about 350 000 km which is some 97 % of all roads in the country. The most com- mon goods transported on these roads comprise raw wood, farm products, gravel and peat in some areas. The most common problems include slippe- riness, poor geometry, poor smoothness of road surface and frost.
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Tapio, Juha: Impacts of Major Transportation Projects on Urban development (Finnra Reports 40/1996 in Finnish)

The interaction between transportati on investments and development of cities and surrounding rural districts was studied with the use of a questionnaire sent to the local authorities of each area. The statistical data concerning economical, industrial, and demographical development was also made available. The study consisted of 19 Finnish cities and the 62 surrounding rural districts. The transportation sector projects included in this study consist of main road network projects as well as railway and airport projects.

According to the results of the questionnaire, the impact of the transportation sector projects on economic development has been mainly positive. However, some of the surrounding rural districts reported negative impact from the abolition of railroad connections. Even by-pass roads, which are usually opposed by local authorities, seem to be acceptable in the long run. Over-dimensioning of the projects was not acceptable. Maintenance of the present road system was emphasized.

To indicate possible interaction between transportation investments and economic development, statistical analyses were executed. Increases in the populations of cities seemed not to be affected by transportation projects. However, continuous increases in the populations of surrounding rural areas in the 1980's has raised the need for better traffic connections in those areas.

Transportation sector projects have increased the number of employees in industry in cities 10 to 15 years after their implementation. Projects built up in the 1980's have strengthened the rationalization of commercial and service industries in a five to ten year time span. The amount of employees in the commercial and service industries has decreased in the cities and increased in surrounding rural districts. As well, the number of labourers in the transport industry has increased, and the tax rate has decreased in surrounding rural areas five to ten years after the implementation of transportation sector projects.

The impact of transportation investments has only come forward after a long period of time, which has hampered the determination of interaction. Particularly, information about road investments in Finland is quite inadequate for this kind of econometric modeling; therefore, if more detailed results are desired, more accurate statistics are needed. The economic statistics should also be compiled more frequently than every five years.
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The research studies Finland's commercial and industrial structure, private sector transportation and road maintenance. The original idea was to use existing literature. However, it was subsequently found necessary to interwiev leading representatives of related companies and other interest groups. This was done to determine the prerequisites for road maintenance and to gain a description of logistical chains

Finland's commercial and industrial sectors is based predominatly on the forestry and related industries and metal industry. Their growth is stable and very transport intensive. Whilst, the traditional labour intensive food production and construction industries remain depressed, the telecommunication industry, and especially the telecommunications cluster, is set to proliferate. The method of transportation is dependent upon the charasteristics of the freight company, the merchandise and the available transport options. A11 transport modes have their strengths and weaknesses and thus they have established their own markets. Transport modes do not always compete with each other but complement each other.

Finland's transport infrastructure is concentrated in the southern half of the country and the coastal zones. Road networks connecting inland industrial areas and the harbours are logistically important. The increase in freight tonnage is most notable on the main roads in southern Finland and on timber transport networks.

The spatial concentration of industry and its distribution requirements emphasises the need for a proficient road network. Freight transportation is mainly focused on the major roads. Development of the road network and logistics are two separate processes. The road network is a precondition for logistical changes. The condition of the road network influences the way in which freight is packaged to avoid damage in transportation. Thus this influences packaging costs, i.e. logistical components.

The condition and load capacity of the major roads is of a good standard with problems mainly occurring due to adverse winter conditions. Transport security is becoming increasingly important as transportation is part of the production process in many fields. In such cases the importance of winter maintenance cannot be under estimated.

The most significant users of the 'lower' road network are the forestry and related industries. To service the forestry and related industries timber is harvested throughout Finland. Another significant user of the 'lower' road network is the food production industry. The transportation of the food production industries raw materials has put additional pressure on the 'lower' road network. This is a result of price competition brought about by the EU, which has increased the need for improved logistics. Therefore, the focus should be on the mobility of large volumes , which can be transported over the entirity of the road network.
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Tapio, Juha: Survey of international experiences on strategic transportation planning. (Finnra Reports 61/1996 in Finnish)

Recent changes in transport policy towards strategic planning are common to all industrial countries. This report look further into the state of the strategic planning in Europe and the USA. The tension between the need for a transport infrastructure to support competitiye business and the inevitable environmental disruption which the construction of such an infrastructure brings is common to all industrial countries. The aim to control public spending has become a general feature of governments. Generally speaking, there is an ever-growing need for a more strategic approach to improve transport links.

The main issues in strategic planning are transport and economic development, sustainable mobility, enviromental objectives, integration of different transport modes, consensus on policy objectives, managing the demand for transport, and appropriate roles of private and public sectors in transport infrastructure provision.

The Netherlands and Germany have the most explicit policies to accommodate the forecast increase in traffic associated with economic growth in a sustainable manner. To see and develop a transport network as an integrated whole is also more advanced in these two countries.

Building consensus on policy objectives is the process through which the different stakeholders in society - national and local Government, business, the general public - all feel that they are taking part, in meaningful way, in the identification and selection of policy choices. Seeking consensus is important also on an international level. Public consultation on important policy issues is also recommended. In many countries, the concept of subsidiarity has given local authorities greater autonomy on transport issues.
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This report summarizes decision-aid methods available for road agency personnel working with strategic planning issues. Decision aid tools are useful in various road transportatien planning related decision-making situations: e.g. ranking road investments, preparing winter maintenance policies or allocating funds for different road agency activities (constructing new roads, rehabilitation, maintenance, traffic safety improvements etc.). Methods are useful for comparing decision alternatives, collecting and sorting of backround information as well as for forming alternatives. They can atso help find compromises or conclude which are the applicable alternatives when certain values prevail.

Decision-aid tools enable simultaneous examination of all aspects needed in decision-making: alternatives, impacts, different values and uncertainties. Various expert and group techniques are availale for collecting scattered information and ensuring that all the different views and opinions of the interest groups are taken into account. Procedures making use of elimination of crieria are not recommended for selecting alternatives. The final solution should be chosen by using methods which do not limit the number of criteria, e.g. totally or partially aggregative multicriteria methods. However, usefulness of these methods in road agency strategic planning vary.
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The asset value of the national road network of Finland, and current maintenance and rehabilitation policies to preserve this asset value ere discussed in this study. Two methods ere usea: (1) standard asset value and depreciation calculations, and (2) utilisation of road and bridge condition management system-q.

Utilisation and comparison of inforrnation from both methods enables more pr ecise analy sis of a ss et value pro gress and neede d maintenance and rehabilitation actions. The use of management-q systems also enables better estimation of rehabilitation needs due to road network deterioration. Road asset value calculation parameters (e.g. depreciation time, salvage value) ere calibrated in order to equalise depreciation with rehabilitation needs. This calibration leeds to better estimation of road network asset value.

Annual road rehabiliation needs ere in most re c ent analy sis estimate d to be about 1.8 ... 2.0 Billion FIM, and the total asset value of the road network is about 86 ... 91 Billion FIM (at 1995 budget revel). Finnra's activites have established at the total annual funding revel of about 4 Billion FIM, of which maintenance and rehabilitation activities meet about 3 Billion FIM. Annual rehabilitation and maintenance funding needs ere at the revel of 1.5 ...1.7 billion FIM, if daily routine maintenance activities ere omitted. This estimate is, however, slightly inaccurate, due to classification difficulties between bo th maintenanc e and rehabilitation and between rehabilitation and new investments.

Most recent analysis of road condition progress, however, supports the assumption tinat the current budget revel is not quite sufficient to upkeep the current condition of the road network. The condition of the minor road network will deteriorate slightly, and weaker maintenance and rehabilitation actions has also to be implemented on the main road network.

If the annual funding for maintenance and rehabilitation is lower tinan the estimated depreciation, the road network asset value will decrease. This should not, however, be mixed with the asset value increase due to new investments.
(Note: 1 USD = 4.7 FIM (11/96))
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The Commission of the European Communities submitted for discussion a Green Paper 'Towards Fair And Efficient Pricing in Transport' in the end of the year 1995. It is suggested in the Green Paper that marginal cost pricing, i.e. polluter pays principle is adopted in transport and total cost coverage by mode is required. In this study, the economic principles of marginal cost pricing, as presented in the Green Paper, are analysed.

The pricing proposal of the Green Paper will considerably change the present pricing of transport which is based on fiscal objectives. The application of marginal cost pricing will decrease total costs caused by transport and therefore increase society's welfare. This is due to the fact that currently in times and at places too high prices prevent beneficial traffic. On the other hand, in times and at places too low prices induce unnecessary traffic. As congestion and environmental damage caused by transport are more severe in Central Europe than in Finland, also the necessary changes in transport pricing will be bigger there.

In Finland, the socio-economic costs of road transport vary between 13-27 billion FIM in 1996, following different assumptions. The valuations currently used by the Finnish National Road Administration give a result of 16 billion FIM. The special taxes collected from road transport will be 18-20 billion FIM in 1996. Since taxes on average cover costs, it can be assumed that the proposal in the Green Paper will not set a great pressure on raising variable taxes of road transport in Finland, with the exception of the heaviest vehicles. The total cost responsibility of road transport is not achieved as well as the marginal cost responsibility. This reflects the importance of fixed costs in road maintenance and construction. The result supports the intuition that Finland's main concerns in implementing the suggestions of the Green Paper stem from fixed costs of road production caused by long distances and low traffic volumes, and the principles for covering them.

The impacts of changing the pricing of road transport are studied numerically by assuming fuel price to be raised by 50 % or lowered by 33 %. According to model analyses, the variable charges for long distance passenger car traffic are slightly (0,04 FIM/km) high. Due to the local costs of pollution and congestion, the variable charges for urban vehicle peak and off peak traffic are 25-30% (0,15-0,20 FIM/km) and 15% (0,10 FIM/km) too low, respectively. In the long run when land use adapts, the variable charges for urban vehicle peak traffic can be raised by more than 50 % (> 0,35 FIM/km) to obtain the socio-economic optimum. The prices for goods transport on roads are correct on the average. Generally, the changes in transport pricing will change the distribution of income; road transport will benefit from lowering the prices while the raising of prices will harm it.

Prior to the implementation of the Green Paper, the following subjects need to be studied in more detail: the distribution of costs and benefits, the definition of costs to be covered, the principles of the allocation of fixed costs to different user groups, the operationalisation of marginal cost pricing, and the role of institutions in the decision making process.

The objective of the study is to evaluate the impacts of low-volume road improvements in different parts of Finland. Furthermore, the contribution of different road maintenance measures to the village development is assessed at the national ievel. The study introduces a village vitality model for evaluating the impacts of low-volume road network improvements on the vitality of rural impact areas. Interviews and surveys of the selected villages, which represent the local views and opinions, provide another method for assessing the impacts of low-volume road improvements.

According to the interviews and surveys, the improvement of gravel roads of poor quality, which lead to villages located in the peripheral rural areas especially in the regions of Lappi, Northem Karelia and Southern Savo, will be of significant importance. The condition of these low-volume roads can also be a critical factor affecting the development of rural communities. According to the village vitality model, the improvement of gravel roads in these regions will improve the village vitality by 18 % at the maximum.

The improvement low-volume roads of relatively good quality leading to the villages located in the peripheral areas of towns in the regions of Häme and Southern Pohjanmaa, will not be a significant factor affecting the development of rural areas. According to the village vitality model, extreme road improvement measures will improve the village vitality only by 7 % at the maximum.

The different levels of road improvement are of minor significance to the vitality of villages locating along paved low-volume access roads. Furthemmore, there are no major regional differences at the national level. Usually, the gravel road improvements have a greater impact on the development of rural areas, while the greatest impacts will be obtained with stronger road improvement measures (e.g. paving of gravel roads) on gravel roads of low significance. On the other hand, a moderate contri bution to road maintenance by a permanent improvement of the structure of gravel roads will provide significant improvements in the village vitality of the peripheral rural areas of Lappi and Southern Savo.

The primary road improvement measures within every region should, however, be directed to those road segments which are of poor quality in regard to their level of significance. This will guarantee maximum benefits to the vitality of rural areas with regard to the level of low-volume road improvements and maintenance.

The kilometrage of road freight transport is 1315 million vehicle km on the main roads and 645 million vehicle km on the low-volume road network. The Finnish National Road Administration does not compile statistics on ton kilometrage of road transport. According to the Finnish road transportation statistics in 1995 total ton kilometrage was 22,3 billion tkm. The most remarkable groups of goods were raw wood (3,25 billion tkm), products of food industry (2,82 billion tkm) and products of forest industry (1,65 billion tkm). The longest average transport distance was in products of chemical industry, 150 km. The highest average load was in raw wood transportation, 39 t.

Because of the lack of reliable traffic data at the regional level, it is difficult to evaluate how the needs of freight transport is taken into account in different regions of Finland. However, some conclusions can be made from the statistical data. The funding of maintenance measures is directed to regions on account of the length of road network and the vehicle kilometrage. Although the heavy traffic constitutes a part of total kilometrage, the freight transport should be taken into account by using ton kilometrage together with length of road network and the total vehicle kilometrage. Volume of freight traffic is better indicator for the transport needs and the strain caused to the road structure by vehicles. The current system underestimates the needs of freight transport on low-volume road network in the Eastern and Central Finland, which are the most important zones of raw wood supply.

The effects of road profile on transportation economics have been evaluated by simulation models. These models have been developed by Mr. Olavi H. Koskinen. According to the results of simulations, design of vertical road geometry has an impact on fuel consumption of heavy vehicles. However, current road design guidelines do not pay attention to transportation economics from that perspective.

The Finnish National Road Administration has decreased the funding of low-volume road network maintenance. This policy can cause some problems in raw wood transportation because of lower winter maintenance standards and more difficult frost damage periods on the gravel road network.

This study was designed to investigate how car and lorry drivers assess the development needs of different items in the road traffic system. More specifically, the drivers assessed different items of typical trips that are more than 20 km in length. The items were differentiated by season (winter and summer) and road type (main and secondary road). In addition, the bicycle exposure was requested, as well as the willingness to conduct certain trips by bicycle instead of car. The final set of questions concerned negative effects of road traffic. The car drivers (n=964) were interviewed at home and the lorry drivers (n=329) in rest areas.

According to car drivers the development needs on the main roads focused on the following items: separated routes for pedestrians and bicyclists, repair of ruts in the pavement, improvement of winter maintenance, and widening of shoulders. Overall, lorry drivers indicated more substantial development needs than the car drivers. In addition to the above-listed items, they emphasized the following improvements: vehicle queues should move without stops, main roads should be less curvy and hilly in order to facilitate overtaking, and secondary roads should be less dusty in summer.

In comparison to other drivers, the drivers in Southern Finland emphasized the improvement of traffic flow and the development of traffic information. The drivers in Northern and Eastern Finland emphasized winter maintenance, maintenance for road surroundings and rest areas, as well as the overall development of the secondary roads.

The drivers with the highest annual exposure stressed the fluency of traffic and improved lateral visibility (for easier detection of elks and deer). However, the most important items indicated by these drivers included condition of the road surface, winter maintenance and separate pedestrian and bicyclist paths. In general, young drivers (less than 26 years) and female drivers emphasized greater development needs than others. For example, the female drivers emphasized the promotion of easier driving conditions (e.g. de-icing and road lighting) more than male drivers.

Sixty-eight percent of the drivers indicated that they ride a bicycle. Ten percent of the drivers also rode a bicycle in winter. The most frequently suggested improvement to increase cycling was the winter maintenance of routes. In addition, building of separate bicycle routes and road lighting were mentioned. In summer, 61% of the drivers were willing to conduct some trips by bicycle instead of car if the cycling conditions were improved as they suggested. The corresponding proportion for the trips made in winter was 47%.

From the driver's peronal point of view, the most significant negative effects of road traffic were accidents, noise and dust. From a societal point of view, air pollution, accidents and noise were considered most harmful.

After the Second World War the condition of the Finnish road network was very poor. Many improvements took place in the 1950s but the development of the roads (including the surfacing) in large scale began not until in the 1960s. At that time also the demand for road transport began to increase rapidly.

It can be said that in the following decades up to the 1990s the condition of the road network did not prevent the growth of the transport intensive industrial sectors in Finland.

The funding for road management from the 1960s onwards was in good balance with the demand of the transport. But in the beginning of the 1990s the state expenditures for roads was cut substantially. Transport on the main roads is not affected but on the lower road network this means some problems especially in the winter time.

In the past few years the preconditions for trade and industry have been emphasized by The Ministry of Transport and Communications in Finland. Savings in trade and industry influence competitiveness of companies and the whole national economy. A well functioning transportation system can be seen as a prerequisition for the logistic processes of trade and industry. This study covers the effect of road network maintenance on transportation economics and business. Special attention has been paid to importance of transport schedules and predictability of load size to trade and industry.

In improving the cost-effectiveness of companies in the 90's the attention has been focused on physical actions like transportation. In the future the cost-effectiveness will be improved for example by raising the operating ratio of transport equipment. Level of service will be improved in various ways. When information systems are developed logistic chains will be more accurate and open to watch over. The significance of road conditions to the functioning of logistic chains is becoming more emphasized. Logistic systems and operations models presume that road conditions do not deteriorate in any case.

Variable costs of road freight transportation can be affected by road maintenance. 64,5 % of the variable costs of Finnish road freight transportation resulted on main road class I in 1996. 13,5 % was resulted on main roads class 11, 9,5 % on regional roads, and 12,5 % on other routes. The research of the assignment of road freight transport underlines the importance of main roads. Almost 80 % of ton kilometerage and variable costs results on main roads. Main roads are very important for freight transport in Southern, Western and Northern Finland. Also in Eastern and Central Finland the road freight transportation takes mainly place on main roads, but the low-volume network is more important there than in other parts of the country.

The highest variable costs classified by commodity resulted from transporting food products (460 million Finnish marks in 1996) and products of woodprocessing industry (305 million marks).

The requirements for punctual deliveries are common when perishable food products are transported. The amount of variable costs emphasizes the importance of road conditions to food product transportation. In addition to food product transportation, reliability is appreciated especially in transportation of building materials and products of chemical industry.