Research On The Pattern Of Urban Infrastructures Investment And Financing

In the process of urbanization, the supply of enough urban infrastructures is vitally important. Capital plays a critical role in the supply of these infrastructures. Traditionally, municipal government provides most of the capital needed in supplying these infrastructures.Government alone can not suffice the need for capital. In order to acquire enough capital for the development of infrastructures, the municipal government must design a new investment-financing pattern for urban infrastructures development. This new investment-financing pattern consists of three strata, namely, the stratum of municipal government, the stratum of the urban infrastructures investment company, and the stratum of the infrastructures project. To achieve a sustained development of urban infrastructures, each participant in urban infrastructures investment-financing activities should perform proper functions in the right way. The municipal government should endeavor to build a favorable legal and policy environment for investment in this area. Besides its environment building function, the municipal government must optimize urban planning and infrastructures construction planning so as to exert active influence at the very beginning on the construction cost of certain infrastructures projects. The municipal government must also invest directly in some infrastructures that have been sorted into public goods in economics. Finally, the municipal government should take proper measures to adjust the externality associated with certain infrastructures, to transfer the external benefit of those infrastructures into the infrastructures project itself. The urban infrastructures investment company must optimize its organization and management mechanism in order to accomplish its mission to work as the platform for the government to finance infrastructures development. On the third stratum, that is the stratum of infrastructures project, the urban infrastructures investment company must divide infrastructures project into three general categories, those don't incur any incoming cash flow, those do have incoming cash flow but can't realize financial balance, and those have enough incoming cash flow and can make some profit. The urban infrastructures investment company should adopt different financing method for the three kinds of urban infrastructures projects.