The only way that investment makes any economic sense is for it to either pay for itself in the long term, or avoid the necessity of paying a greater sum for something else.
In the case of investment in transport infrastructure, for example a new road, the reason for doing it is that it will make it easier to do business. As a result the businesses affected will make more profit and/or employ more people; and perhaps new businesses will be set up or relocate from elsewhere in order to do the same.
When the public sector makes the decision to build a new road, it will (unless it is a toll road) aim to recoup the money borrowed to build it through an increase in tax receipts. If the companies affected are more profitable, the government will get more corporation tax. If the companies affected employ more people, the government will get more income tax and national insurance. If the people these companies take on were previously unemployed, the government will save money by no longer having to pay them benefits.
These are the ways in which public sector investment can pay for itself. It's a question of doing the sums to see what those benefits might be, and balancing them against the cost of the investment. If the sums add up, fine. If they don't, there is no economic justification for building the road.
Now let's look at the specific case of a new road in Wales. The Welsh Government might well be granted borrowing powers that would enable it to pay for a new road, but how can it expect to recoup the cost of that investment? Any extra corporation tax will go to ... the Treasury in London. Any extra income tax and national insurance will go to ... the Treasury in London. Any money saved by no longer having to pay benefits will be kept by ... the Treasury in London.
The Welsh Government pays, but all the benefits go directly to the Treasury in London.
The current Welsh Government is working itself into a frenzy of excitement because it is likely to be given powers to borrow. But in terms of paying that money back, it is relying on a handful of minor taxes like aggregate levy, stamp duty, landfill tax and air passenger duty (and it could only do that by increasing those taxes, even though the indications are that they would reduce stamp duty and air passenger duty).
Yet, at the same time, it has turned its back on devolution of corporation tax, income tax, and the benefits system. To the extent that the Welsh Government was willing to take responsibility for these things it would get an economic return on any wise investment that it made. If it took control of 50% of income tax, it would get 50% of any increase in income tax that came as a result of the investment. If it took control of 66% of corporation tax, it would get 66% of any increase in corporation tax that came as a result of the investment.
Like an 18 year old who is about to get their first credit card, the current Welsh Government can see what it wants to buy and has worked out that it will just be able to pay the interest out of the receipts from a few minor taxes. But it doesn't have the foresight to realize that the far larger additional income stream that could and should be used to pay off the debt and result in greater prosperity for Wales is going to be channelled straight into the coffers of the Treasury in London instead, to be shared across the UK as a whole.
This is why borrowing powers must be linked to taxation powers. It's not only about being able to afford the interest payments; it's about whether the investments we make will be of overall economic advantage to Wales. An arrangement under which we pay 100% of the cost of an investment but only get 5% of any return on that investment is economic madness.