Sunday, August 26, 2012

Success of the Vasco da Gama Bridge?


Background:
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 

References
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.

Friday, August 24, 2012

What is the use of a bridge? The impacts of the Danube Bridge 2



Constantine’s Bridge, the largest bridge of the ancient times was built in the 4th century, under the reign of the Roman Emperor Constantine I the Great. It was also the first bridge in the Romanian-Bulgarian section of the Danube, followed by the Ruse-Giurgiu Bridge more than 1600 years later, in 1954, which was built under the initiative of Joseph Stalin.

Accordingly, when finished in November 2012, the Danube Bridge 2 will be the third bridge ever built in this section of the river in the past 2000 years. The total cost of the construction is estimated to be 226m from which 70m is covered by the European Union as a part of its regional policy. The bridge will be 1971 m long, and include road and pedestrian paths to both directions and a railway track connecting the towns of Calafat (Romania) and Vidin (Bulgaria).
The costs of the construction are clear, but how can one estimate the benefits of building such a bridge? According to the European Union, by integrating Bulgaria’s road and railway system into the European transportation network, the Danube Bridge 2 will be an important part of the European Transport Corridor IV, which runs from Dresden to Istanbul connecting Western and Eastern Europe. In terms of economic geography, the most obvious effect of the construction will be the substantial reduction of the transport costs. The two towns are now linked by a ferryboat for which it takes around 20 minutes to cross the Danube. The ferry has no schedule, and it takes off only when all of its six trucks are filled. With the bridge, the same journey will take only one and a half minute.

As it can be seen in the map, there are several smaller towns around Vidin, while the Romanian side is relatively drear. According to the core model of economic geography which assumes two sectors and mobile labour force in one of the sectors, the main beneficiaries of the construction will be the towns of Vidin and Calafat which will be directly connected by the bridge. The model suggests that the reduction of transport costs will induce agglomeration in the town with a production cost advantage. Since wages are considerably lower in Vidin, it will experience the largest growth in size (and therefore, in welfare), while Calafat will have only a modest benefit from the construction.
However, the model cannot account for several other factors which also affect the spatial distribution of economic activity: there might be other factors influencing the workers’ ability to migrate (e.g. differences in language as Bulgarian is a Slavic while Romanian is a Latin language), and the construction will undoubtedly attract investments from other parts of the country or even from other countries. In addition, the sectorial composition of the economy is much more complex in real life than in the model (e.g. industry, transport, agriculture etc.).
Nevertheless, some of the potential effects are predictable. Vidin is a main town in north-western area of Bulgaria with a population around 47 000. The region is borders Romania and the Danube to the north and Serbia and Montenegro to the west and south. During the Yugoslavian wars in the 1990s, the region suffered badly from the trade embargo against Serbia. As a result, in spite of its advantageous geographic and transport location, it is considered to be the most under-developed region in the country. The unemployment rate is twice as high as the country’s average, and young people either emigrate or move to other parts of the country. Because of the high unemployment, hundreds of people commute to Romania from Vidin every day. By inducing agglomeration, the bridge is expected to change this deteriorating trend: the construction already created 1000 jobs, and attracted foreign investments which have increased the real estate prices in the area. In addition, as the city has several famous landmarks, the bridge may attract tourists and create other employment possibilities.
In the Romanian side, the town of Calafat is considerably smaller than Vidin with a population around 16 000. Although they say that the bridge is not as important for them as it is for the Bulgarians (this was actually predicted by the model), the people of Calafat also expect positive long-term economic impacts from the construction mainly through new employment possibilities. The construction is expected to pump an estimated € 57m into the local economies on both sides.
Besides stimulating local economies, the bridge has key importance in strengthening the relationship between Romania and Bulgaria. In the past, in spite of their shared history the two countries were largely separated from each other by politics and language. The construction of the bridge can be considered as an evidence for the countries’ willingness to cooperate with each other. This is essential, given the fact that the countries’ border areas, like Vidin and Calafat have similar development problems that could be overcome only by common solutions.

Anna Trendl

References


History. (2010). 
New Danube bridge to speed up international traffic. (2010, January 16). from Regional Policy-Inforegio
The Romania-Bulgaria Cross Border Cooperation Programme. (2010). from Partnership for Active Cooperation and Encouragement in the Cross-border Region Silistra-Calarasi
Cost of 2nd Bulgarian-Romanian Danube Bridge Up EUR 26 M. (2012, January 27). from novinite.com - Sofia news Agency 
Two new bridges to be built over the Danube. (2012, February 11). from Europost - Weekly for politics, business and culture
Brunwasser, M. (2006, June 14). Bridge to a new era for Bulgaria and Romania - Europe - International Herald Tribune. from The New York Times
News on the construction of Danube bridge 2. (n.d.). from Vidin Estates
Sommerbauer, J. (2007, January 2). Danube II: bridging united waters. from cafebabel.com - The European Magazine
VIDIN - Geography and history. (n.d.). from Portrait of the Regions 

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