How to Define the Optimal Level of Public-sector Infrastructure Development? A Conceptual Model for Decision-making in Infrastructure Projects

Abstract

Debates with respect to financial problems of public-sector infrastructure developmentincreasingly focus on ways to improve value capturing. Two issues play a crucial role in thisdebate: how much value can be captured and how can we maximize the value to be captured? Inthis paper a conceptual model is presented that enables defining the optimal level of public sectorinfrastructure development—combining a social and financial perspective. Using the model, it is possible, in principle, to define the maximum level of value capturing. Additionally, the paper provides empirical evidence of the potentials of value capturing in three Dutch case studies. Thecase studies show that the potential value to be captured as a result of investments in rail infrastructure is substantial, but also that it is unknown whether value capturing would be higherin case of alternative investment levels. It will be argued that the conceptual model might be useful to define the optimal level of investment in accessibility in each case study.