Public value capture in connection with large infrastructure projects

Abstract

Public value capture (PVC) is an essential phenomenon to improve the refinancing of public infrastructure and keep the necessary budget for other important duties like education, health and social care. An important but little explored aspect is public value capture in connection with large infrastructure projects such as major transport infrastructure. International best practices have indicated that governments typically employ recurring tax and fee-based mechanisms. However, non-recurring forms became more and more important over the past 20 years and contract-based value capture are among the most evolved value capture techniques available today. All instruments presented in this article require data for the calculation of payments. Unfortunately, it is not possible to give general numbers for the impact of new infrastructure. An individual analysis is required for each development. The tools presented share the idea that those who have an advantage from the new infrastructure should be targeted for funding. However, the rational is different in detail. In general, there are several well established non-recurring tools for funding the project, if the public sector owns the land or the public sector can offer development rights in exchange for financial contributions of the developers.