To realize, it depends on well-organized city planning policy by the local government in terms of zoning system and development density control, which can induce and organize all economic activities produced by private sector.
Now, I would like to discuss several issues on financial and organizational matters for the realization of projects. Project financing has two different aspects. One is financing at the beginning; this is a kind of initial resources or how can you find money at the beginning. The second point is how can you return the money; this is the final resource. We should define these two things clearly.
There are many ways for financing at the beginning. Bond or stock issuing, direct investment from private firms, banks, central and local government, subsidies from central/local government, and other various contributions of developing subjects: official development assistance, international banking, or land provision, facility provision by some sectors. You must combine some of them, based on your case.
However, the most important point is to make the projects financially attractive to investors, and it depends on whether the final source is reasonable and feasible or not.
So we have to focus again on the final resource. There are many ways for final resources: income from direct user pay or passenger pay, income from related commercial activities by the transport sector, like shops, hotels, commercial centers and so on; income from property, taxes from commercial activities and so on.
At first the rail system or transport development gives you the development effects or development benefits. That will raise the value of the land. That means the taxes from and use will increase. And the local and central government then will have money. And if you do this for the transport development, things will become better. And sometimes the transport system can attract people, and governments receive tax from people. And the transport development or rail development gives you some social effects like environmental betterment. That means general taxpayers have some responsibility to pay for that.
One of the requirements to do this is that you must establish a strong and very well organized institutional system.
Due to the time constraints, I will only focus on recommendations for the realization of urban rail system as follows:
First, competitive operation and marketing by private firms.
We have to utilize private firm ability as much as possible; strong environment of relating business; initiatives of public sector for planning, coordination and supervision; contribution of infrastructure by public sector; and initiatives of public sector for development of station area, this is a key issue in Japan right now.
