progress on many SKRL projects.7 Even projects on high-traffic rail routes have frequently needed subsidies in order to break even, and the low traffic forecasts for some sections of the SKRL make this project even more challenging from a financial viewpoint. The RoRo project, which is much earlier in its development, also faces some concerns around return on investment related to whether the network can deliver a more costeffective solution than existing alternatives (for example, air transport for passengers and goods). ii. Fiscal capacity (of ASEAN Member States). Many ASEAN Member States face urgent priorities around fiscal consolidation, which can reduce the capacity and incentive to invest in infrastructure projects. In this context, difficult choices need to be made between longer-term infrastructure investment and other immediate priorities such as education, healthcare, social services, and other welfare support. These are priority concerns in economies where the rising cost of living is a major issue.8 iii. Capital availability (from alternative sources). Given the size of the investment requirements of many projects and the constraints on ASEAN Member States’ budgets, there is a need to mobilise resources from other sources, whether these be multilateral funds, pension funds, bond markets, other governments, or the private sector. Despite rapid growth, domestic capital markets in most ASEAN Member States currently provide limited opportunities to source project finance for infrastructure projects, particularly outside Singapore, Thailand, and Malaysia. Some components of major ASEAN Connectivity-related infrastructure projects currently encounter challenges due to constraints in accessing capital, such as the AH15 route on the ASEAN Highway Network (a 132 kilometre road from Ban Lao to Nam Phao). Decision-making barriers iv. Prioritisation issues. This barrier arises when key decision-makers consider an issue to be of low priority versus other issues. For example, progress on infrastructure projects in ASEAN to date has been overwhelmingly linked to whether national policymakers have seen this as a national priority and hence in their interests to push.9 v. Agency issues. These relate to a misalignment of incentives between stakeholders. Some of the notable barriers include local residents resisting land acquisition for infrastructure projects, national regulators 7 ASEAN Connectivity: Building a PPP Pipeline, The World Bank Group, December 2014. 8 Lifting the barriers roundtable: Infrastructure, power and utilities, CIMB ASEAN Research Institute (CARI) and McKinsey & Company, 2013. 9 ASEAN Connectivity: Building a PPP pipeline, The World Bank Group, December 2014. 24 MASTER PLAN ON ASEAN CONNECTIVITY 2025