Consider yourself an investor going abroad...on a business trip...what would you think when you see high rise buildings, transport system, mega road projects etc....first impression would definitely be, these ppl have potential. Now consider Delhi, Mumbai, Shanghai, Beijing, Tehran, Riyadh etc. These cities are the economic hubs of their respective coutries. Point is, major cities are the face of a country and development there surely helps in pulling foreign investment
Fuel costs are one the biggest recurring expense for any non oil producing country. Imagine smooth flow of traffic...hundreds of cars getting stuck in traffic and the fuel lost...road projects eventually help in cutting state expenses and money/fuel saved can be used elsewhere, power generation for e.g.
Metro bus kind of projects are short term projects....they finish in a yr or so and couple of such projects can help a political govt in expanding/retaining their vote bank