As one part of the privatization policy, funding public infrastructure projects with private capital is an important strategy of economic development of Taiwan’s government to achieve internationalization and liberalization. The goal of the strategy aims to reduce government’s financial burden, downsize talents in governmental organizations and enhance the efficiency and service quality of public infrastructure to achieve the ultimate goal of enhancing national economic and social development, especially reduce government’s financial burden. However, results for the promotion of the policy have fall short of expectations, as the operations for part of the public infrastructure is in great deficit that results in doubts over the expected effects of privatization or public-private partnerships theory. Therefore, this paper conducts a case study on PFI (private finance initiative) hospitals in Japan to analyze the myths and restrictions of funding public infrastructure projects with private capital, further offering Taiwan for further reference. Research findings indicate that funding public infrastructure projects with private capital may give rise to restrictions on five dimensions (1) The conflicts in organizational culture; (2) Enhance operations management efficiency of public infrastructure; (3) Reduce government’s financial burden; (4) Risks of long-term contracts, and (5) Business characteristics. This research suggests that clarifying the attributes and distinguishing characteristics of public infrastructure projects first will be the priority to reduce restrictions on funding public infrastructure projects with private capital, avoiding the condition that related problems may occur subsequently.