1. Financing of Transportation Investment: A Macroeconomic Perspective Timo Välilä (EIB) Tomasz Kozluk (EUI) Aaron Mehrotra (EUI)

2. Outline 1.Introduction 2.Evolution of public transportation investment 3.Determinants of public transportation investment 4.Significance of PPPs in roads sector 5.Conclusions

3. Public Investment to GDP Source: OECD %

4. Public Transportation Investment to GDP Source: Eurostat %

5. Determinants of public transportation investment:Model specification gfcf t = α + β 1 y t-1 + β 2 r t-1 + β 3 debt t-1 + β 6 currec t-1 + β 7 curdis t-1 +u t

6. Determinants of public transportation investment:Estimation results

7. Signed value of PPPs to public investment (“apples vs. oranges”, average 1995-2003) %

8. Signed value of road PPPs to total transportation investment (“apples vs. oranges”, average 1995-2003) %

9. Public transportation investment has defied the long-term downtrend in overall public investment as it has not reacted to fiscal sustainability concerns. Public transportation investment is chiefly determined by national income (GDP). Privately financed infrastructure in roads sector remains systemically insignificant, except for the UK and Portugal. All in all, there has been no major structural change in the financing of transportation (road) infrastructure. Conclusions