Sunday, August 26, 2012

Success of the Vasco da Gama Bridge?

The constructions of the Vasco da Gama Bridge, in Lisboa, Portugal started in 1995 and after 3 years of work it was opened to the traffic in March, 1998. This is the longest bridge in Europe with its length of 17,2 km. The two goals of the bridge - clearly declared before this project - were accepted.
1. First, it aimed for the decongestion of the other bridge of Lisbon. The 25th of April Bridge was built in the sixties and the traffic has heavily increased since then, thus some measures needed to be taken.
2. Second, it meant to create the north-south connection around the capital city.
After the first bridge went into use, many inhabitants and firms moved to the other side of the river Tejo opting for a further location. However, it led to an increased congestion cost for those who traveled from Spain in order to trade or who decided to commute instead of living in the central business district. To sum it up, the goals of a new bridge were focused on lowering both transportation costs and congestion.

Theory: What is expected according to the theory?
As the Vasco da Gama Bridge is not the first connection between the north and the south side of the river Tejo (Tagus), the main goal was the reduction of congestion on the 25th of April Bridge. In our analysis we should ignore the impacts of the first bridge and focus on the second one. According to the theory, the bigger the city is (that means a larger number of firms), the higher the congestion costs are. If there are many companies in the city, congestion acts as a spreading force that stimulates firms to move from the central business district to the periphery zone, where traffic is lower.
The core model of new economic geography (congestion is not included) says that if transport costs are low then agglomeration is the stable equilibrium. Adding congestion to the theory, spreading equilibrium becomes more general and agglomeration is only an exception. According to the two-region core model (Brakman et al.), even a small change in congestion can easily lead to a new long-run equilibrium. As transport costs start to decrease, first partial then total agglomeration will develop. The further shrinking of costs result in spreading as a stable equilibrium again.
Although in Lisbon’s case it is not about cities. Decreasing congestion is the main aim of the bridge. So, based on this theory, the new equilibrium after the opening of the bridge depends on the previous balance in Lisbon. Assuming that building the 25th of April resulted in spreading equilibrium, the Vasco da Gama Bridge should foster agglomeration and at the same time reduce congestion on the other bridge.

Reality: What had happened?
As for the decongestion of the 25th of April, traffic experts agreed that this aim can be reached without building a new bridge. Another, even better solution could have been achieved with focusing on the significant improvements of the railways and public transport connections between the two banks of the river. However, the Vasco da Gama Bridge was built.
According to a document from 1994 it had been estimated in advance that the new bridge would stimulate traffic above the annual transport growth rates without having too much impact on the other bridge. As we see on the table below, the expectations came true.
Source: Melo, J.
As data shows, after opening the Vasco da Gama Bridge the total amount of vehicles grew dramatically while the traffic of the 25th of April Bridge did not represent significant decrease. Why? A new bridge always generates urban and traffic growth, as we can see in our case.

So, can we explain these empirical evidences with the transport coming from the East in order to trade with the Centrum of Portugal? As they do not have to either be in the traffic jam or bypass the whole river in order to get into the city, it should be the appropriate solution to reduce transport costs. Interestingly, according to a paper (Melo, J.), these traders prefer to use the bridge in Carregado that is about 30 km from Lisbon to the North and was built after the Vasco da Gama Bridge. This latest bridge seems to have become the main part of the north-south connection...

To sum it up, decreasing this level of congestion theoretically drives agglomeration forces. As the bridge did not stimulate so far development in the south, the theory seems to be confirmed on this side. However, we cannot observe any significant reduction in congestion on the 25th of April Bridge either. So, the Vasco da Gama Bridge does not seem to reach its initial goals, although it has clearly positive effects in other areas.
Noémi Szabó 

Brakman et al. (2009). The New Introduction to Geographical Economics. Cambridge University Press, New York.
Melo, J. (2000). The Vasco da Gama Bridge on the Tagus Estuary: A paradigm of bad decision making, but good post-evaluation. World Transport Policy & Practice, 6(2). 20-30. p.


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