Improving Transnational Transport Corridors
In the OIC Member Countries: Concepts and Cases
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Article 136 of the Treaty on the functioning of the European Union contains the above authority. The
procedures necessary to govern the euro-zone economically still need to be put into place—by means of a
reinforced cooperation. These procedures must anticipate the potential need for speedy and urgent decision-
making, and even the possibility of delegating authority to the Commission—with a control by the Parliament
and the Council in hindsight.
For a transport corridor, the minimum institutional structure necessary is the corridor
authority or secretariat. So much the better, for that is what has happened in the EU and
elsewhere, that funding is and was tied to international commitments to facilitate trade.
For national governments it is not easy, having to balance on the one hand the call to protect
vulnerable indigenous industries from global competition and on the other hand, wanting to
participate in the world of commerce and trade. They know very well that tariffs put on
imports from another country will be reciprocated. This is why globally trade tariffs are
gradually falling and governments are seeing the wisdom of deriving revenue from sources
other than customs duties. However, it is to non-tariff-barriers that Governments must pay
attention. These are listed in Appendix 1. The way forward with such long list is to categorize
them in MUST, SHOULD, and COULD be done. In Europe, most of those NTBs have gone. Hard
work in countless thousands of meetings and, as Jean Monnet said, doing things step by step.
(Hope and Cox, 2015) point at the importance of financing, as corridor development is not a
single project. Hope and Cox (2015) describe it as “a complex combination of hard and soft
infrastructure projects with different durations, often overlapping and interacting, throughout
the stages of a corridor’s evolution.” Because of this complexity there is no ‘one size fits all’
financing solution. Financing solutions must be tailored for each set of circumstances during
the corridor’s evolution, taking into consideration the capacity of the host government(s) to
enter into financing agreements with donor agencies, private investors, and specific
combinations of debt and equity.
In the case of TEN-T corridors the aspect of finance has full attention. Financing is one of the
spearheads of TEN-T. The Connecting Europe Facility (CEF) aims to blend public and private
finance. Blending, in the context of the CEF Call, is the combination of CEF grants with finance
from the EIB, notably the EFSI, or with finance from National Promotional Banks or private
investors. The public funding is needed to achieve “flagship transport infrastructure on the
TEN-T network, with special focus on cross border projects. Combining public funds with
private finance helps projects having high economic and societal impact and help closing the
financing package. A targeted component of CEF grant enables the financial case to be
established.
The CEF calls are successful, as every year they are oversubscribed. Projects that are selected
for funding have a positive cost benefit ratio, are likely to generate revenues and make up for
the shortfall of revenue.