Over the past few decades, Spain has invested a large amount of resources in improving the provision of transport infrastructure. A large number of projects have been implemented and the Spanish authorities have developed strong technical capacities in project execution. Spanish infrastructure projects are supported by robust preliminary feasibility studies. However, there is consensus among the Spanish authorities and other relevant stakeholders on the need to improve the decision-making process, to ensure that investments take into account economic, social, and environmental costs and benefits, and thus provide adequate value for money for the Spanish economy. Furthermore, there appears to be a move, supported by recent institutional and policy reforms, towards a structured transport policy focused on inter-modality and mobility that addresses both current and future socio-economic and environmental needs. While the ambition is clear, well-defined processes are needed to ensure adequate implementation of these policies.
The Spanish institutional setup and legal framework is fragmented across various modes of transport, making strategic planning, needs assessment, and prioritisation unnecessarily complex. Furthermore, lines of accountability for infrastructure investment could be better defined and monitored. This report focuses on five key areas: the Spanish legal framework for transport infrastructure, the development of a long-term strategic vision for infrastructure, the appraisal and prioritisation process of transport investment, the budget process for capital investment, and monitoring of infrastructure assets.
Trends in transport infrastructure investment
Before the 1990s, Spain lagged behind the rest of Europe in the provision of transport infrastructure. Efforts to close this gap brought rapid growth in transport infrastructure investments until 2008, after which investments drastically dropped off in the country. Throughout the last decade, public spending on road infrastructure in Spain has declined steeply. Indeed, investments have been heavily biased towards the railway sector and although the density of railway lines is lower in Spain than other Eurozone countries, rail services are generally more efficient in Spain than in the benchmark group. Despite having high levels of quality transport infrastructure, Spain still faces inter-modality challenges in freight and passenger transportation, particularly when compared to the rest of the Eurozone countries.
The Spanish legal framework for transport infrastructure
There is no general transport statute that sets homogeneous or standardised rules on infrastructure investment across sectors. Recent sectorial laws (e.g. road infrastructure law (2015), railway infrastructure law (2015), seaport infrastructure law (2011)) establish procedures that differ for each mode of transport. The regulation of technical aspects such as preliminary studies have not been updated since the issuance of these sectorial laws, and there are regulatory gaps, especially in terms of supervision by independent authorities, strategic planning and project prioritisation, that could be addressed by a more coherent legal setup.
Long-term strategic planning
Like most OECD countries, the Spanish government has an established practice of infrastructure planning. However, planning documents are linked to the serving administration, and so a change in government may result in a change of plan. The political nature of infrastructure planning thus makes it difficult to develop a stable long-term infrastructure vision for the country.
Government ministries have adapted their approach to planning over time. However, infrastructure plans have been consistently overambitious and the criteria for selecting a pipeline of projects remains unclear. Furthermore, infrastructure planning is not linked to resource allocation. Projects are identified without considering competing expenditure priorities or the sustainability of the proposed infrastructure.
Project appraisal and prioritisation
There is no standardised procedure nor criteria for prioritising infrastructure investment in Spain. These decisions are made at a high political level, based on the government’s strategic plan and other considerations that may or may not be defined. Decisions as to which projects to prioritise and pursue among the projects listed in the Infrastructure, Transport and Housing Plan 2012-2024 (PITVI) are based on political bargaining and budgetary negotiations between the Ministry of Transport, Mobility and Urban Agenda (MITMA), the infrastructure administrators and the Autonomous Regions (CCAA). Unlike the majority of OECD countries, Spain has no process for identifying a short-list of priority projects. The criteria for project prioritisation are a mix of political and socio-economic factors that do not always include financial considerations or the relative benefits of competing proposals.
A territorial component has historically influenced the prioritisation of infrastructure investments at the national level. A demand for equal distribution of infrastructure projects across the Spanish autonomous regions has led to investments that do not necessarily meet efficiency and value-for-money criteria. Moreover, there are no multilateral negotiations with regions, and dedicated infrastructure meetings with local authorities have only taken place three times over the past ten years.
Prioritised projects undergo robust preliminary feasibility studies, including an assessment of the most suitable pathway according to cost-benefit and multi-criteria analyses (e.g. environmental viability, demand forecasts, and socio-economic and technical considerations). However, assessment criteria included in cost-benefit analyses are not public and appear relatively narrow when compared to those in other OECD countries. Ex post, reviews and evaluations are infrequent and those that do take place do not appear to inform future decisions.
Budgeting for capital investment
Budgeting for capital investment, and the limits on central government debt, appear to be the two tools that the Ministry of Finance can use to enforce fiscal discipline on infrastructure investment. The Ministry of Finance sets the investment ceiling for the Ministry of Transport, Mobility and Urban Agenda and sets limitations on the budget, including the allocation of resources to comply with existing appropriation and investment commitments.
The Ministry of Transport, Mobility and Urban Agenda has extensive sway over the allocation of the budget envelope for investment projects, modes of transport and decentralised entities. The Ministry of Finance has oversight of public debt and deficits of state-owned enterprises and companies partially owned by the State, however, it is mainly concerned with the national level of debt, not the viability or sustainability of individual projects. In this regard, there is little oversight by the Ministry of Finance on the investment decisions taken by the Ministry of Transport, Mobility and Urban Agenda.
Monitoring
The Government of Spain has been effective in delivering a large share of infrastructure assets in recent decades. Between 1985 and 2010 the real net capital stock in transport infrastructure tripled in Spain. However, there are relatively few processes in place to ensure that infrastructure is delivered as initially planned. There is therefore limited information on project implementation in terms of cost, timeliness, and specification of infrastructure. This, in turn, reduces the amount of information available to inform the design and implementation of infrastructure investment proposals in the future.
