Study in Finland shows infrastructure is a good investment

VTT Technical Research Centre of Finland, the University of Oulu and Aalto University in Finland have analysed the financial statements for 2002-2009 of companies, public utilities, and municipal units that own infrastructure, including water services, as well as road, port, airport, railway and electricity networks. Owning infrastructure is relatively risk-free. The most profitable is the energy sector where the return on investment was about 13%. The average annual return on investment of ports was 10%. T
March 28, 2012 Read time: 2 mins
RSS814 VTT Technical Research Centre of Finland, the University of Oulu and Aalto University in Finland have analysed the financial statements for 2002-2009 of companies, public utilities, and municipal units that own infrastructure, including water services, as well as road, port, airport, railway and electricity networks. Owning infrastructure is relatively risk-free. The most profitable is the energy sector where the return on investment was about 13%. The average annual return on investment of ports was 10%. These figures are explained by the stable demand for energy and the local monopoly position of ports. Also water and traffic networks are good investments, but these are starting to deteriorate for lack of investments in renovation and repair.

According to researcher Pekka Leviäkangas, there is no need to change the ownership of basic infrastructure in Finland as service networks are generally natural monopolies, and thus well suited for public ownership.

Meanwhile, Finland’s government has announced it will, for the first time, provide higher funds for railways than roads. The Government will grant US$1.33 billion for transport investments, half of which will go in rail traffic.

According to Finland's minister of transport, Merja Kyllönen, the package will secure the development of rail traffic and decrease the sensitivity to disturbances. Moreover, the Government has also made a decision on the implementation of the Pisara railway loop in Helsinki. The most extensive rail projects will primarily concern the main railway in the South.

In road infrastructure, investments will target the vicinity of the eastern border. For instance, more than US$330 million will be invested in the motorway section to be built from Hamina to the Vaalimaa border crossing point.

For more information on companies in this article

VTT

Related Content

  • Inland waterways can de-stress city roads
    March 17, 2016
    David Crawford looks at an under-utilised solution for city-centre deliveries. The use of rivers and canals for moving freight is a well-established mode in North Western Europe, where it can take advantage of an intensively developed network. In the Netherlands, 40% of the total volume of goods transported internally goes by water; the figure for Flanders (the neighbouring Dutch-speaking region of Belgium) is 11.5%.
    Read More
  • Rural roads ‘critical to moving people and goods’
    June 25, 2015
    In his opening statement at the US Subcommittee on Highways and Transit Hearing on Meeting the Transportation Needs of Rural America, chairman Sam Graves said that even today, 71 per cent of all lane-miles of public roads and 73 per cent of all of the nation's bridges are located in rural areas. In his home state of Missouri, the role of rural roads is even more pronounced: 82 per cent of the public roads and 81 per cent of bridges are in rural areas, and these roads carry over 40 per cent of all travel in
    Read More
  • Transport problems need ''strong action from policymakers”
    June 7, 2012
    Taking advantage of the attendance of the heads of ITS Asia-Pacific, ITS America, Ertico – ITS Europe, and ITS Malaysia as the host nation of the recent 12th ITS Asia-Pacific Forum in Kuala Lumpur in April, ITS International initiated a round table discussion on the big ITS issues confronting the individual regions. For such a diverse collection of advanced and emerging nations spanning the globe, in terms of the advancement of ITS, a common single issue emerges above all others
    Read More
  • Connected car solutions to exceed 350 million by 2017
    May 24, 2012
    OEM and aftermarket connected car systems in use are expected to grow from 66 million in 2012 to 356 million in 2017, according to a new report from ABI Research. While OEM solutions are gaining momentum rapidly across the globe in the US, Europe, Japan, and China, aftermarket solutions will continue to be used for applications such as stolen vehicle tracking, insurance telematics, infotainment, and road user charging.
    Read More

Highlighted Content