Infrastructure financing and cost recovery options : international experience applicable to Thailand

As a sister study to "Infrastructure, Property Tax Mechanisms, and Regulatory Instruments for Growth Management," this working paper is one of several inputs by PADCO and the Land Institute Foundation under NESDB"s Study of Options for Financing Infrastructure Expansion (SOFIE). The SOFIE will identify how fiscal and non-fiscal measure could be used by the Bangkok Metropolitan Area and other local governments in Thailand to deliver infrastructure to priority areas. The paper identifies several alternative financing methods used in developed countries that could be utilized in Thailand, including integrated tax structures, bonded debt, special districts, and property taxes based on market value. The primary criteria for ultimately selecting the top 19 methods were efficiency, equity, and implementability. However, since these methods reflect prevailing conditions and circumstances in the countries where they were used, the paper underscored the need for some modification of these methods prior to their being transferred to Thailand. In addition, the paper founded that the effectiveness of these methods could be enhanced when linked with decentralization, privatization, and overall resource management policies and processes. The working paper contains three sections. Section 1 defines the current international experience and the predominant trends associated with infrastructure financing and cost recovery. Section 2 categorizes and descries 19 specific infrastructure financing and cost recovery options that have been used throughout the world and which are candidates for implementation in Thailand. Finally, Section 3 contains a recommended list of infrastructure financing and cost recovery options over the short, medium and long-term for consideration by NESDB as policy inputs to the Seventh Plan. (Author abstract, modified)