Urban Transport in the OIC Megacities
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difficulty to assess the impacts of projects and policies, it is also becoming difficult to understand the
synergies and clashes between them, which hinders the effective shaping of future actions.
Last but not least, one of the major problems of the transport sector in the developing world
megacities is the focus on short term impact, prestigious or highly profitable projects. Concepts such
as “cities are engines of economic growth” and the concept of linking economic well-being with GDP
growth have had a major impact on national and urban policies in many cities and megacities of the
developing world. The increasing involvement of international corporations to the building and
maintenance of infrastructure and the type of infrastructure that has been built has weakened the
economies of developing countries and marginalised even further the poor who have limited capacity
to respond to such interventions. Mega infrastructure projects for megacities have traditionally lacked
a multimodal planning approach, favoured private cars and dislocated or separated poor communities
(Hasan, 2009).
3.8. Urban Transport Infrastructure Financing
3.8.1. Introduction
As transport demand increases with the rapid increase in population and per capita income of
megacities, so does the need for expansion in transport infrastructure capacity. As stressed in the
previous sections, it is necessary to focus on mass transit and demand management as well as in
building a stable institutional framework that manages the transport system. Nevertheless, evenwhen
other issues, such as environmental and community impacts of new infrastructure, are managed,
finding adequate sources of finance continues to figure prominently in both the developing and
developed worlds. Infrastructure financing is particularly difficult because of the separation of road
infrastructure from operations and because of the multiple objectives that public authorities are
pursuing in urban transport policy (Zegras, 2003).
The capacity of cities and megacities’ plan and fund their own infrastructure, as well as the sources of
their funding, vary across the world regardless of their level of wealth. While city governments tend
to lead on small and medium scale public infrastructure initiatives – such as public space
improvements, cycle paths, footpaths and smaller roads – large scale infrastructure tends to be
controlled by state and national governments, often requiring substantial external investments. Both
highway infrastructure and operations and rail-based transport are the most centralised transport
subsectors, mainly led by national government. On the other hand, the main difference between
developed and developing countries is the consistency of financial arrangements within the overall
urban strategies. In the case of developed countries, this consistency means that both taxation income
and private investments can be secured to a certain extent. On the other hand, in developing countries,
the lack of consistent financial arrangements means that funding sources and models need to be
employed on an individual project basis, often undermining the cohesion of urban strategies (UCL
Cities, 2014; World Bank, 2002).
3.8.2. Urban transport infrastructure financing in developed world megacities
Developed countries benefit from existing funding mechanisms and regulations which allow them to
create highly profitable opportunities for private sector investments and capture the full benefits of
new infrastructure. Since the 1970s, in Organization for Economic Cooperation and Development
(OECD) countries, privatisation and public sector expenditure constraints have given rise to a
substantial reduction in public sector investment and to an alteration of the respective importance of
the private and the public sectors in infrastructure investment. At the same time, privatisation of a
number of public enterprises has taken place, and a number of new private infrastructure investments
have been realised (Short and Kopp, 2005; Debande, 2002).
In order to stimulate investment, public authorities have sought to involve the private sector in the
creation of new infrastructures. Various structures can be used. For example in concession schemes
the recourse to private capital for projects are undertaken at the initiative of the public authorities,
but the private sector is in charge of providing the capital assets as well as the services. With