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Economic solutions


VIFG is working on solutions that will focus on efficiency. In doing so, the economic consideration is equally as important as the project profitability at the procurement level.


Economy


Mobility: An efficient network allows for the quick and safe transport of passengers and goods. Well-functioning transport enables more efficient organisation of production processes, which leads to economic growth and employment. In other words: Investment in infrastructure create jobs (short term and long term).

Link between GDP and transport services: Recent studies have confirmed the link between the economy and transport services. One can assume that insufficient capacities in transport infrastructure impede growth. Conversely, growth effects can be achieved through investment in this sector.


Practical examples: Long-term growth effects


Empirical studies confirm that public investments in infrastructure (IS) positively affect the economic growth of a country. The output elasticity indicates by how many percent the overall economic output grows with an increase in IS capital stock of 1%: IS capital stock +1% » GDP + 0.08 to 0.1%.

(Source: Bom / Lighthart, 2008: Meta-study of 76 empirical studies; Bom / Lighthart, 2011: Meta-study of 68 empirical studies; RWI 2010, Transport infrastructure investments - growth aspects of a formative financial policy. Research project commissioned by the Federal Ministry of Finance)


Procurement


VIFG is committed to an economic division of labour in the production and management of infrastructure in the transport sector. The public sector ensures that functioning transport infrastructure is provided - and private providers plan, construct, operate, finance and maintain. Productivity can be increased when each actor is able to focus on their field of expertise.


Practical examples: Economic feasibility study (EFS)


Before a project is awarded, the option of conventional realisation (Public Sector Comparator, in short: PSC) is compared with the PPP method by means of an economic feasibility study. This study projects and compares all costs arising during the life cycle of both projects and all benefits.

Different tools have already been developed for the economic feasibility studies of PPP projects. VIFG continues to develop them for a wider range of applications. This includes primarily tools for

  • preparing and examining investment decisions,
  • recording life cycle costs,
  • the quantification and assessment of risks and for the
  • preparing economic feasibility studies in compliance with the Federal Budget Code (BHO)

A detailed look at regarding the economic feasibility studies and the use of various tools can be found on the following pages.