- How does investment in highways impact regional development and connectivity between urban and rural areas?
Investment in highways is undoubtedly one of the great tools for the development of a country and its regions, having an immediate impact on society and the local population, with the following consequences stemming from such relevant infrastructure work:
- Local Development: Growth of local small and medium-sized enterprises, with an effective and sustainable contribution from the economy, in addition to the furtherance of sustainable development;
- Access to Markets: Improvement in the flow and access to markets for agricultural produce of rural areas, benefiting producers, enabling production, and increasing income generation to the communities affected by the work;
- Reduction of Regional Differences: Decrease in local disparities and facilitation of the flow of people, goods, and services between the various urban areas and regions of certain locations;
- Improvement in Logistics: Efficient highways facilitate the transport of goods between urban and rural areas, which boosts trade and reduces logistics costs, with a consequent stimulus for economic development;
- Development of Agricultural Industry: Enables faster access to agricultural inputs, technologies, and information on the segment for rural producers, with effective consequences on production and product quality;
- Attraction of Investments and Generation of Jobs: With better access owing to highways, there is greater interest from investors in the regions served, which enables local investments and greater generation of jobs, including owing to the installation of industries, which need conditions to improve the flow of products;
- Improvement in Basic Services to the Population: Roads with efficient infrastructure improve access to basic health and education services in rural areas, with immediate effects on the population’s standard of living;
- Boost of the Tourism Industry: Efficient highways with good infrastructure favor tourism, since they connect users in a safe and agile way to the country’s regions, including rural areas, which raises jobs and income in the locations;
Despite all these benefits, it is necessary to remember that the positive impacts of the implementation and improvement of highways depend on efficiency in management, especially when it comes to preserving the environment and the needs of each region.
What is more, there should be strict control of highway safety, including a focus on periodic maintenance of pavement and user service.
- What are the main challenges that arise when planning and making highway investments?
The following challenges can be listed for planning and making investments in highways:
- Risk Management: Various climatic events and geotechnical conditions may pose risks to the development, in addition to requiring greater investments;
- Financing and Budgeting: High costs involved from construction to periodic maintenance;
- Planning: Conducting studies to ascertain and establish the sustainability of project, especially considering environmental factors, traffic, and economic benefits to the agents involved. In addition, planning should take into account the integration of the highway with other means of transport, as well as with the local community;
- Regulatory and Political Aspects: The construction of highways implies several peculiarities and difficulties, particularly in the regulatory aspect, since it is mandatory to comply with several government rules, which often hinder the progress of works. Political volatility is another problematic factor, as there may be changes in ongoing projects owing to changes in governments;
- Environmental and Social Impacts: Road projects may have relevant impacts on the environment, so that compliance is important to prevent damage while works advance. In the social field, the construction of highways can result in conflicts with local communities since it is often necessary to vacate invaded areas or even expropriate them;
- Technology: Incorporating innovative technologies into the project, such as traffic monitoring systems and pavement preservation/durability;
- Private Initiative Involvement: Involvement of large companies to carry out the projects, especially by granting stretches to the private initiative through the collection of long-term tolls.
- Which are the most effective strategies for financing and managing projects to improve or build new highways?
There are some strategies used in Brazil that have proven effectiveness over the years, such as:
- Road Concessions: Existing legal doctrine that enables the transfer of a highway to the private sector for a certain time through the collection of tolls from users and other extraordinary revenues stemming from the use of the highway. In the concession period, the Concessionaire is expected to invest in the construction, maintenance, and service of the users of a given highway;
- Public-Private Partnerships (PPP’s): PPP’s boil down to a type of contract between public authorities and the private sector in which the management (sponsored or administrative) of services aimed at society by any company is allowed. The partner’s revenue derives exclusively from the public treasury or is “split” with that coming from users/citizens, characteristics that set it apart from a typical concession agreement, since it results from tolls;
- Public Funding: Some governments make the option of funding projects through loans from international financial institutions, such as the World Bank, or through the issuance of securities in the financial market. There is also direct funding with the use of government funds to finance the entire or part of the project;
- Infrastructure Funds: This is a type of investment fund intended to disburse funds to infrastructure projects, such as energy, transport, highways, sanitation, and telecommunications.
- What is the expected long-term return for a country that invests substantially in its road infrastructure?
In the long run, it can be said that investment in infrastructure projects has a relevant impact on the country and its regions, mainly because it generates economic growth for cities, with an increase in income, jobs and people’s own quality of life, since they have safe roads at their disposal.
Moreover, good quality highways enable a better flow of goods and services between the various regions of the country, with a decrease in costs and an increase in revenue for those involved in the economic segment.
Lastly, this type of investment improves connectivity between regions, facilitating access to remote areas and promoting regional integration, which helps in the equitable development of people and reduction of the differences that may exist between the different cultures of the country.
Available at: https://brasil61.com/n/investimento-em-rodovias-de-sp-gera-21-mil-oportunidades-de-trabalho-bras2310139
Autor: Edyen Valente Calepis • email: edyen@ernestoborges.com.br • Tel.: +55 67 3389 0123
