Financing methods applied to urban infrastructures. An application to Milan metro system

The paper discusses the topic of the so-called “innovative” financing methods, applied to urban infrastructures. A range of methods is, or is supposed to be, available to policy makers to partially or fully finance transport infrastructures. In general, these methods are claimed to be the solution to financing problems, but in reality they have been seldom applied and the experience on the actual effects is then limited. Methods range from traditional public procurement to land value capture, passing by the taxes of scope and project financing. The paper is structured as follows. After an introduction, a review of the available traditional and innovative methods is provided in section 2 and 3, both from the theoretical and applicative point of view. Some literature examples are given in section 4, stressing the main outcomes of some applications around the world. The following section is dedicated to a cross-methods comment. Section 6 is proposing an exercise application to Milan new metro line 4 financing. Some “innovative” funding methods are commented, focusing on the application of a simple land value capture scheme, including an exercise calculation of the possible revenue. Conclusions draw a general comment on the topic, its limits and the motivations of the success among policy makers.