Options for financing and funding transportation infrastructure

  • There is a growing interest in building urban transportation infrastructure across the developing world. Many policymakers are currently drafting ambitious transportation plans that implement new systems and build infrastructure.
  • A key hurdle to the implementation of major transportation projects is funding which often costs billions of dollars and requires policymakers to decide how a piece of infrastructure is funded.
  • This brief provides an overview of the three most important policy questions associated with transportation finance and project delivery: How is transportation infrastructure paid for? Do transportation projects make money? What are the financial implications of inaccurate cost and revenue forecasts?
  • The author concludes that these questions require careful consideration in order to prevent infrastructure never being built or saddling governments with long-term debt that can result in future budget crises.