2023-02-05-ADB-CostBenefit_Analysis_of_Spillover_Tax_Revenues_of_HighSpeed_Rail_in_TaipeiChina_19页_664kb

Summary

This ADBI working paper analyzes the cost-benefit of spillover tax revenues from high-speed rail (HSR) in Taipei, China, and proposes financing innovations to attract private investment. The paper addresses Asia's infrastructure investment gap, exacerbated by high government debt and pandemic-related challenges.

Key Concepts:

• Spillover tax revenues (indirect or secondary effects of infrastructure investments) are identified using difference-in-differences (DID) analysis and shared via a 50-50 split between government and private entities to enhance the internal rate of return (IRR).
• Floating infrastructure bonds and land trust schemes are introduced as tools to mobilize long-term financing, reduce land acquisition bottlenecks, and improve project viability.

Methodology:

• A case study of HSR in Taipei uses regional tax data and DID analysis to quantify spillover revenues.
• Cost-benefit analysis compares traditional financing with proposed schemes, showing improved financial outcomes for both public and private stakeholders.

Findings:

• Incorporating spillover tax revenues via shared mechanisms increases IRR significantly (up to 35%), making infrastructure projects more attractive to private investors.
• The net benefit for the public sector is positive, with savings on land acquisition and no additional fiscal burden post-construction.

Conclusions and Recommendations:

• Governments should implement floating-rate bonds and land trusts to share spillover revenues, thereby encouraging private financing and sustainable infrastructure development.
• Policy recommendations emphasize capturing spillover effects, setting caps on interest rates, and promoting innovative financing to address Asia's growth needs.