Seven Steps to Examine Urban Transport Finance with Spillover Effects from the Master Plan Stage

As a result of population growth, the capacity of transportation infrastructure is becoming tighter, causing urban problems such as chronic road traffic congestion and air pollution.

Key Points

• Due to rapid urbanization and chronic traffic congestion, urban transport, such as railways, is key for urban development in Asian countries. International development institutions support urban transport development from the master plan stage.
• However, an enormous amount of funds is required for the construction and operation of urban transport. Effective finance measures for the priority projects proposed in the master plan are a challenge. Furthermore, these finance measures should be examined from the master plan stage.
• Finance with spillover effects is one option to boost the financial sustainability of urban transport in Asian developing countries.
• Although the master plan formulation by international development institutions in cooperation with recipient governments is generally carried out by consultants, the standard workflows in the master plan have not yet been clarified.
• This policy brief proposes seven concrete steps to examine the financial scheme with spillover effects at the urban transport master plan to promote the practical application of the financial method.