Prospect of Using Rail-Plus-Property Model for Transit Financing in China

Hong Kong, as a special administrative region of China, has utilized the rail-plus-property (R+P) model, as a special form of value capture strategy, to successfully finance its railway development and operation. Hong Kong Mass Transit Railway (MTR) Corporation becomes one of the very few profitable railway companies in the world. MTR has also been cooperating with the Shenzhen government to implement the R+P model in financing Shenzhen’s subway expansion. This is considered the first experimentation of R+P model in mainland China. The objective of this paper is to shed light on the prospect of using R+P model in China by conducing comparative case studies of Shenzhen and Hong Kong. The two case cities are selected to give a comparative picture of how R+P model works. The comparison will focus on how the model works in the two cities given different urban contexts and regulation frameworks. The paper will conclude with policy implications and recommendations for the possibility and challenges of applying R+P model in other Chinese cities.