Quality Infrastructure Investment: Ways to Increase the Rate of Return for Infrastructure Investments
Yoshino, Naoyuki; Hendriyetty, Nella; Lakhia, Saloni | March 2019
Abstract
Private–public partnerships in infrastructure have been advocated for many years. Investors currently receive a low rate of return on infrastructure investment. This is because the main sources of revenue from infrastructure investment are user charges. For example, user charges for a water supply cannot be increased since water is a necessary good for everyone. However, a water supply can help to develop regions. For example, new apartments can be constructed, and new businesses can be created in the region where the water is supplied. From this, property tax, corporate income tax, and income tax revenues will rise. In the past, these increased tax revenues have gone to the government rather than being returned to infrastructure investors. If these increased tax revenues were to be returned to investors, the rate of return would rise significantly. Hometown investment trust funds can also provide financing for start-up businesses along with the new infrastructure investments.
Land acquisition creates huge difficulties for completing infrastructure investment. Land trusts will solve the issue of owners not wanting to sell their land by giving them the option to keep it and instead lease the land to infrastructure companies and receive long-term rent income, for example for 99 years. In this way, land trusts will smoothen the use of land and transfer the usage rights to infrastructure companies.
Citation
Yoshino, Naoyuki; Hendriyetty, Nella; Lakhia, Saloni. 2019. Quality Infrastructure Investment: Ways to Increase the Rate of Return for Infrastructure Investments. © Asian Development Bank Institute. http://hdl.handle.net/11540/9769.Keywords
Urban Development Finance
Trade Finance
Small Business Finance
Rural Finance
Roundtable on International Trade and Finance
Regional Development Finance
Public Service Finance
Public Finance
Project Finance
Private Finance
Nonbank Financing
Non-Bank Financial Institutions
Municipal Finance
Local Government Finance
Local Currency Financing
Limited Resource Financing
International Financial Institutions
Infrastructure Financing
Industrial Finance
Government Financial Institutions
Government Finance
Financing of Infrastructure
Financial Sector Development
Financial Regulation
Development projects
Physical infrastructure
Soft infrastructure
Infrastructure finance
Infrastructure bonds
Transport infrastructure
Roads
Highways
Railways
Ports
Airports
Pipelines
Water supply
Power production
Power transmission
Power distribution
Telecommunications
Infrastructure connectivity
Cross border connectivity
Taxation
Public Accounting
National Budget
Municipal Bonds
Local Government
Local Taxes
International Monetary Relations
International Financial Market
International Banking
Central Banks
Business Financing
Capital Resources
Budgetary Policy
Capital Needs
Corporate Divestiture
Capital Instruments
Pension Funds
Insurance Companies
Banks
Portfolio Management
Fiscal Administration
Economics of Education
Development Banks
Use tax
Taxing power
State of taxation
Tax-sales
Tax revenue estimating
Tax planning
Spendings tax
Special assessments
Tax administration and procedure
Sales tax
Real property and taxation
Progressive taxation
Effect of taxation on land use
Effect of taxation on labor supply
Intergovernmental tax relations
Inheritance and transfer tax
Energy tax
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Citable URI
http://hdl.handle.net/11540/9769Metadata
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