Funding and financing sustainable mobility Paul Curtis Vectos CREATE Final Conference, 22-23 May 2018

Funding

Parking revenue Vienna parking management system First district introduced 1993 and has expanded five times since to include more districts Provides revenue which is invested in public transport and traffic safety Sends positive message to citizens that public transport is priority

Road charging London congestion charge Weekdays, £11.50 per day Net income £160m per year boosting budget of the Transport Authority TFL Source: City Metric– TfL Statement of accounts

Land Value Capture LVC mechanisms seek to capture a proportion of land value gains to fund the transport infrastructure which causes them Copenhagen land closest to metro line and stations is majority-owned by the municipality raises funding through the increase in land and property value. London LVC being considered review of historic land value increase resulting from new transport infra shows large potential.

Private Investment Copenhagen sees a growth in private investment for large schemes EG the pedestrian and cycling harbour bridge by MAERSK via a charitable fund. Twenty per cent of funding for cycle infrastructure, in the last few years, has come from private sector sources forming important PPPs. Exploit Corporate and Social Responsibility opportunities

Local Taxation Paris Versement Transport is a hypothecated transport tax private companies (10 staff or more) pay a tax revenue ring fenced for transport investment makes up 65% of the regional transport authority (STIF) budget. Vienna local payroll tax has contributed to the cost of extending the metro

Public funding through smart justification Transport for London advocates walking and cycling schemes to apply HEAT and SART in appraisals Health Economic Assessment Tool measures monetised value of reduced mortality of users of new infrastructure Sickness Absence Reduction Tool Applies the research proving that physically active employees take 25% fewer absence days, hence increased business output Royal College Street scheme, Camden 2012: cost £475k vs SART + HEAT benefit value £441k Skopje cycle infrastructure justified as reduced road space (and hence demand) for cars

Developer contributions to local infrastructure Developers in Tallinn funded infrastructure improvements as part of new residential / retail centres. Shopping centre bus service connects with the port In London “Section 106 agreements” are made obliging developers to invest in congestion mitigation measures: cycling, public transport, car sharing

CO2 quotas Estonia sold unused CO2 quotas to Spain to fund electro-mobility programme: National EV charging network in Estonia has 300 EV charging points and 500 EVs for social workers. Romanian Ministry of Environment gained €10m from the selling GHG certificates. Funded bicycle lanes in Bucharest city centre,

Sponsorship Businesses funded new bus stops in Amman (offered free advertising in return)

Sponsorship / PPP Private sponsorship of bike share scheme Tallinn (SIXT) Launched November 2016 (100 bikes and 10 locations initially) The city has made available free locations and advertising. Similar business model as London Cycle hire scheme

Financing (Lending)

Financing Precedent for loan financing from main institutions in following S1cities for urban infrastructure and PT fleets Municipal services Skopje – World Bank PT upgrade, street refurbishment Tallinn – EIB €100m SUMP training Tallinn - JASPERS SMART Romania Programme - EBRD Loan financing to bring forward SUMP measures in Romanian cities Upgrading public transport e.g. low emission buses in Sibiu and road infrastructure SUMP development Bucharest-Ilfov – EBRD and JASPERS BRT and TMMP in Amman - French Development Bank

EBRD Green Cities Programme Set up 2016 to support governments, municipalities and private companies to improve quality of life in cities. €250m total budget for more than 30 cities Eligible cities >100k population and must initiate a ‘trigger’ project in municipal infrastructure addressing climate change. €5m loans available Pilots already being delivered in Georgia, Armenia and Moldova. Stage 1 cities could therefore introduce a CREATE Stage 3 measure, as part of a wider plan, therefore unlocking €5m loan

Funding + Financing blending The EU and donor agencies advocate blending of funding and financing instruments, EG: EU + EBRD / EIB Financing component can act as match funding for EU grants Reasons why financing not fully exploited credit rating insufficient need for urban transport plan need for de-centralised public services administrative burden high risk / not mitigated weak business case, ROI

Summary

Summary of main sources to reach and consolidate Stage 3 status Central Grants Government shares national tax revenue Local Taxes Employer contributions Property Taxes Rates, levies Direct Income Fares, commercial activities Borrowing From commercial sources or IFIs Convergence Ahead

Findings Cities use innovative ways of financing and funding sustainable urban mobility Cities with SUMPs are able to unlock funding and financing more quickly as they show long term vision and low risk investment Some cities do not exploit financing options until funding has been exhausted Possible to combine the two to accelerate journey to stage 3

Findings Successive ROPs have become more geared towards sustainable urban mobility and moving away from car centric priorities. This shows the transition from stage 1 and stage 3 within EU programmes, as cities develop their base infra. CAUTION! Different investment sources can pull cities in opposite directions since mobility priorities vary at different levels (Stage 1 vs Stage 3) Local / National / Private / EU / EBRD / EIB

EBRD priorities for lending Mixture of Stage 1, 2 and 3 priorities infrastructure investment (S1) on-street parking schemes improve road network via asset management PT investment (S2) urban trains, trams, trolley buses, bus fleet renewal (Diesel, CNG) eTicketing and traffic management Green Cities Programme (S3) ..’ to meet env’tl challenges and improve people’s quality of life in cities’

Thank you ! http://www.create-mobility.eu