Currently, it is evident that transport spending in both developed and developing countries is being constrained by various factors. Fiscal constraints and revenue collection problems often mean that such projects, with their long pay back periods, are becoming increasingly difficult for governments to finance. This trend is particularly seen in countries of the former Soviet Union and Latin America. At the same time, the trend in the provision of pension benefits has been moving towards their compulsory funding, and the encouragement of voluntary savings through the adoption of various incentives. This means that we will continue to see large levels of contributions that will be invested over a long period to provide a fund for the individual at retirement. Such contributions need to find appropriate assets to invest in. The paper shows that there is a great opportunity for facilitating the matching of long term supply and demand of money. By the use of transport modelling techniques in forecasting revenue streams and pension fund valuation considerations, we will show that such a proposal is not only a theoretical possibility, but a practical reality too. Transport models assess the benefits arising from a project together with an assessment of the risk involved, pension fund models in turn forecast the likely availability of contributions and the constraints on their use. Ultimately the paper assesses whether such transport infrastructure projects are a viable and attractive investment opportunity for pension funds, either acting alone or with the involvement of other financial institutions or Governmental bodies.
Abstract