Infrastructure development

Infrastructure — transport, energy, water, communications and social facilities — is the skeleton on which production and daily life hang. It has public-good features (non-excludable networks), huge upfront costs, long lives and strong spillovers, which is why governments plan, finance or regulate it even when private firms build and run parts. Worked example: a highway costing 1000 that cuts freight costs by 100 a year for 20 years returns 2000 in gross savings — but the case depends on traffic forecasts, maintenance and the discount rate, which is why appraisal must be careful.