Ex post analysis of the regional impacts of major infrastructure: the Channel Tunnel 10 years on.

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Ex post analysis of the regional impacts of major infrastructure: the Channel
Tunnel 10 years on.

Alan Hay, Kate Meredith and Roger Vickerman¹²

Centre for European, Regional and Transport Economics

University of Kent, Canterbury, UK

Paper for the 44^th European Congress of the Regional Science Association, Porto,
August 2004

1. Introduction

The regional impact of transport infrastructure investment has achieved considerable
attention across Europe in recent years. The construction of major bridges and tunnels
to overcome natural barriers and the development of the trans-European networks has
led to large volumes of research on the likely economic impacts of such investment on
neighbouring regions. Most of these studies are ex ante studies undertaken as part of
the decision process into the investment, either on the part of the project promoter or
the affected regions. At the same time there has been a continuation of interest in the
broader question of the wider economic benefits arising from transport improvements
at a more aggregate level; whether and under what circumstances such benefits do
arise, and if so how they can be incorporated in any evaluation. As a recent study by
Flyvbjerg et al (2003) has shown, the claims made for the returns on major projects
have tended to be exaggerated, both in terms of underestimates of likely costs and
overestimates of potential direct traffic benefits. This paper provides a relatively rare
example of an ex post study of what impacts one of the major recent infrastructure
projects has had on the local and regional economy by looking at the experience of the
Channel Tunnel after its first ten years of operation.

The paper reviews the methodological issues in carrying out an ex post study and
assembles evidence related to traffic, labour market, investment and development
impacts compared to the ex ante expectations. The main methodological issue is in
establishing the counter-factual position of how the regional economy would have
developed in the absence of the tunnel. A substantial volume of traffic would have
continued to have passed through the region’s ports using the ferries which would
have required continuing investment over this period. This has been a period also in
which major changes have occurred in the EU economy with the move to completion
of a Single Market. Many of the driving forces of the regional economy come from
the adjacent London metropolitan region. The approach adopted has been to examine
trends in the regional economy relative to those in the wider regional and national
economies in both the UK and France. There are two basic questions: to what extent
would traffic have continued to grow at the rate experienced in the absence of the

¹ This paper is based on material from a research project funded by Eurotunnel and Kent County
Council. The current paper contains the views of the authors and should not be taken as representing
the views or policies of either Eurotunnel or Kent County Council. We are grateful to a large number
of individuals that have assisted us in this study, in particular Daniel O’Donoghue, Cheryl Mvula, and
officials of Kent County Council, Locate in Kent, and Eurotunnel.

² Contact author: email [email protected]

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