ABSTRACT
Infrastructure deficit is huge in developing countries in Asia, crippling its development potential. In more developed countries in Asia, fiscal constraints are hampering the efforts to maintain past investments in a sustainable manner. How to fund infrastructure development and maintenance is a common issue throughout Asia and in many other parts of the world. This chapter aims to serve as a practical reference on key concepts and ideas about financing transport infrastructure and services. After touching upon basic economic concepts (such as public goods, externalities, and monopoly) that are important for understanding transport financing, it presents key features of transport financing mechanisms in terms of: (1) sources of funds (direct users and/or broader beneficiaries); (2) institutional arrangements (public, private, or their combinations); and (3) financing methods (sovereign, sub-sovereign, or non-sovereign; corporate or project). It then discusses these features in representative cases from developing Asia. Finally, it gives a brief overview of the areas where further research is warranted.
