Mateu Turró, March 18, 2021

In the 5th series of our talks, Rebalance had the pleasure of speaking with Mateu Turró, engineer and economist and honorary assistant director of the European Investment Bank. He spoke about possible evolutions in the mobility and transport sectors, the demand for travel, the possible diaspora outside the cities, the re-evaluation of public and private space, technological advances and how the methodologies to evaluate certain issues mobility must adjust to our new reality.

Speaking about the effects the pandemic has had on mobility, Turró explained that we experienced, perhaps for the first time, a threat to our, “right to mobility.” He cited the 13th declaration of human rights which states that “everyone has the right to freedom of movement and residence within the borders of each State,” and that, “everyone has the right to leave any country, including his own, and to return to his country.” Thanks to the pandemic, Turró explained that we have witnessed the power of states to restrict this right. For Turró, we must be careful as biometrics and the capacity to identify people will become a reality in the future and something that we need to either accept or not, something we need to collectively decide in the future. Turró points out that, “we were very convinced that we were going in a path towards more rights and now we are finding that maybe we are not.”

When asked in what ways COVID has specifically had a lasting effect or an impact on the world, Turró notes two main points, globalization and e-commerce. He explained that the pandemic has shown that we cannot live alone, and that we need to learn to distribute a little bit better. He says that as the pandemic is universal, we have to see what will happen in other regions in the world. For example, he asked will Africa and South America stay on this path of economic growth or will the concept of globalization be revised? Further, how will digitization affect the distribution of production in Africa and South America? He then spoke about e-commerce, saying that it is directly linked to globalization, and that important aspects in globalization need to be revisited. He says, “it is not fair to have free shipping.” Furthermore, he stated that e-commerce will reduce some mobility, but induce changes in urban traffic management.

Important aspects in globalization need to be revisited, “it is not fair to have free shipping.” E-commerce will reduce some mobility, but induce changes in urban traffic management.

For Turró one of the most important effects of the pandemic on mobility and transportation is teleworking. He explained that teleworking allows for flexibility. Thanks to teleworking, we will not be bound by the same rigid schedule and we will have more freedom in how we arrange our day and our time. Instead of the classic organization of time and public transportation with ‘peak hour’ travel times there will be instead, “a diffused and constant flow of movement.”

Instead of the classic organization of time and public transportation with ‘peak hour’ travel times there will be instead, “a diffused and constant flow of movement.”

When asked about how long-distance travel will be affected in the future, he explained that due to teleworking, there will be less people flying for business. Turró explained that business travel has traditionally been covering a lot of the costs of airfare. A drop in business travel will increase the costs of long-distance leisure travel. For Turró the future will see the cost of airfare increase enormously. He believes that payment for pollution will have a certain effect on the cost of long-distance travel, however, he believes that the cost may also be reduced by technological progress. That being said, he also believes that leisure travel will explode again, as “people feel the need to enjoy life and tourism is becoming the main ‘consumer good’ for more people.”

When asked about the future of electric, autonomous vehicles, Turró explained that electric and driverless vehicles will slowly be replacing the present park, at least in the more developed countries. The effects on externalities (air pollution, noise) and on the capacity of infrastructure will be important and must be taken into account in our forecasts and therefore in the decisions of transport administrations. The two scenarios summarily described before (suburbanization vs. a “green and slow” urban core) must be seen in the light of technological developments, but we should be aware of what are the resources available. In the suburban model, based on private vehicles that will eventually be electric, autonomous and rather efficient, travelers could end up fully paying for infrastructure and their (reduced) externalities. On the other hand, the city “free of cars” involves important investments in public transport that are not recoverable. The most important companies are bound to sell cars and technology and push for the suburban model. Only very strong transport management could force the “green city” concept.

The most important companies are bound to sell cars and technology and push for the suburban model. Only very strong transport management could force the “green city” concept.

When asked about the value of time and the consequences of digitization Turró explained that the value of travel time savings in traditional demand models and in socioeconomic feasibility studies is based on the concept of uselessness of travel time and has no consideration for aspects linked to it. However, the value people assign to travel time depends on what is done during this time. We could argue that time has a basic value (related to the value of life?) that may be associated with sleep and time spent travelling should be added to the value of what is done (work, internet, enjoyment -sailing, skiing) and travel characteristics (comfort, exercise -comment on health issue). Behavioral models are, in theory, based on Willing to pay or WTP (which has changed a lot over time, so the typical values might need a revision). Besides, it is obvious from behavioral studies that travel time value has a distribution (lognormal) with substantial variance. The effects of changes in lifestyle (for instance, how people switch increased travel time for walking or cycling exercise) are not adequately incorporated in our demand models. When we analyze the socioeconomic effects of a project we must look at resources for society. Time savings are typically the main component of transport projects benefits. Adopting WTP means not considering the externalities (effects on society’s resources) involved. On the other hand, average values are often adopted, when any measure in terms of the value of the time resource for society leads to substantial variations. A new approach to valuation, which includes a proper relation with the value of life (and how it is considered in the health sector) is needed because VTT is critical for transport policy (planning and project selection).

Turró wrote a book in 1999 entitled, Going trans-European. Planning and financing transport networks for Europe. When asked about his reflections on European transport policy since writing the book, Turró explained that in general the fact remains that European projects have struggled to accomplish their plans and they often push too hard for rail transport. He said, “technology evolution goes against rail for long-distance, and the rail management system, with political intervention (and public companies even intervening in other countries’ markets), is not going to change it.” He went on to explain that, “the same biased view affects ports and air transport. In terms of infrastructure, the continuous globalisation will support the trend towards port concentration, as mega containerships reinforce the hub-and-spoke model, and to port specialisation. This will eventually lead to a more structural integration of main ports with basic rail links, notably if rail operations are taken over by major logistic players. Some dedicated investments will be needed. These rail improvements will not reduce, though, the potential of automated road transport, as it is more adapted to fast, resilient and reliable logistic chains. These chains will have, in any case, to optimise their overall performance taking into account that there would be payment both for infrastructure use and for the generated externalities. The logistic system will have to incorporate, in any case, a completely new model for the urban distribution of goods.”

Rail improvements will not reduce, though, the potential of automated road transport, as it is more adapted to fast, resilient and reliable logistic chains.

            Finally, when asked about the evaluation of transport projects, Turró explained that project appraisal methodology requires some profound revision. Feasibility is a complex combination requiring to look at efficiency (CBA), and also financial sustainability and objectives not included in CBA calculations (elements typically forgotten are redistribution effects). Problems exist with demand forecasts and valuation of key parameters (sensitivity analysis), so CBA is useful to understand what could be expected and to analyse risks, but is more a tool for detecting key issues and getting a comprehensive view of the project than for providing an indicator that is fool-proof. Finally, he stressed the importance of linking socioeconomic and financial components and to understand the intergenerational implications of the financial model adopted. For Turró, this is not a bureaucratic exercise, but a method for properly quantifying the expectations and getting to a conviction of the quality of the project.

Dr. Engineer, Honorary A. Director of the European Investment Bank (EIB), Professor (retired) of Transport Economics at Universitat Politècnica de Catalunya (UPC). Doctor Engineer by UPC (1979), Master of Science by the University of Michigan (1975) and Ingeniero de Caminos, Canales y Puertos (UP Madrid). Consultant/advisor on transport and urban development, focused on project appraisal, financing and PPPs. Chairman of the Advisory Council of CENIT (Centre for Innovation in Transport). Co-director of the professional course on cost-benefit and project appraisal organized by the Economists and Civil Engineers associations of Catalonia. Mateu Turró was Associate Director at the Projects Directorate of the EIB (1998-2009) and member of the Advisory Committee of Ministerio de Fomento (Spain) (2015-2019). He has been a reviewer of DGRegio «Guide to Cost-Benefit Analysis of Investment Projects»

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