What’s the background?

About a year ago we referred to a report published by urban researchers from Griffith University that introduced a concept called the VAMPIRE model (‘Vulnerability Assessment for Mortgage, Petrol and Inflation Risks and Expenditure’). What this model demonstrated was how certain areas within urban boundaries are more vulnerable to a decline in values and livability as things such as increased petrol prices and higher mortgage rates (or slumping real estate markets) combined together to create a flight from the suburbs. There are now a lot of indicators globally that the VAMPIRE is about to bite - but perhaps on an ever wider scale than envisaged in this model.

What are some of those indicators?

The impacts of rapidly rising fuel costs on private vehicle users and haulage operators.

• A move towards rail and public transport systems.
• The escalating costs of air travel.
• The number of deaths exceeding births in mature cities.

How are escalating fuel costs impacting?

• People who live in suburbs are downsizing vehicles or looking at ways to car pool so that they can reduce the cost of lengthy commutes to work.
• Truckers in the US are going out of business at a rate never seen before. Over 3% of the nation’s truck fleet has gone off the road in the past year. 935 trucking operators have gone out of business in the first quarter of 2008.
• More trailer units are being shipped by rail.
• Subway, rail, and bus use is surging in major metropolitan areas with increases of up to 10 - 15% over the past year in some large US cities

And air travel costs?

• Most major airlines are struggling to cope with the rapid rise in jet fuel costs. Qantas recently put up the price of airfares. American Airlines is retiring 85 aircraft during 2008 and reducing seat numbers by 11 - 12% during the third quarter of 2008 - on top of a 6% reduction in seat numbers a few months ago.
• The costs of checking in and on-board meal services are rising - by 100% or more. So it seems the airlines are expecting to see the higher costs of air travel impacting negatively on future passenger numbers.

And death numbers greater than births?

Pittsburgh in the USA is a good example of one of many medium sized cities that are shrinking in a number of countries. It has lost 25% of its population since 1980. School roles have plummeted from 70,000 twenty years ago to about 30,000 today. The city has to adapt to functioning with fewer people who are getting older.

What does this mean for the infrastructure sector?

All of these trends are having a major and quite quick impact on urban infrastructure needs and balances. The VAMPIRE effect will see less car use and greater demands for public transport. More freight and people movement is moving onto rail and public transport systems. And the need to expand airport facilities might become much less urgent than it was thought - even just 6 months ago.

Useful links:VAMPIRE Mass Transit Benefiting Toll on truckers Dying cities

What do you think? Are some of the currently planned infrastructure projects around the world in danger of being shelved?