Investments in rails versus roads : is there a competition? : experience from transport planning in Norway

The debate on investment in infrastructure and the allocation of public funds between rail and road projects is a longstanding one. From an efficiency point of view, transport investment either in road or rails should be considered for investment only if the net present value is positive. Also, whenthere is a scarcity of resources, the project with the highest benefit-cost ratio should be chosen. However, previous studies have shown that projects within the rail and road systemare competing ones. These projects are rarely examined to identify which ones are the most profitable. Instead, decision-makers often allocate funds to these two sectors under the assumption that there is little competition between rail and road. In cases where there is competition, a proper framework that can make comparisons are lacking. The aim of this paper is to contribute further to this debate by considering the assessment of projects in the Norwegian National Transport Plan (NTP) which recently has been released. First, we give an overview of the plan process itself. Then we consider the assessment of rail and road to confer whether the methodologies arecomparable. Third, we investigate the data base to find out the extent to which rail and road projects compete against each other, and whether assessments were done to find which oneto choose. From these observations we draw some conclusions with respect to the question above. Our findings are: (1) theprocedures for assessing rail and road projects are slightlydifferent but compatible and thus with few modifications, projects can be compared across modes, (2) among projects that were assessed to enter the NTP only a few of rail and roads could be characterised as competing projects, and (3) no sufficient attempts were made to compare them to find their meritsagainst each other, despite that the methodologies are comparable. A most surprising finding is that, although the term National Transport Plan is used, the contents of the governments' document remind more of various sector plans banded together. Thus, our conclusion is that the lack of cross mode comparisons, especially in cases where there is competition between modes, may have led to the inappropriate allocation of scarce government funds.