Planning, Investment, Construction and Operation

of Rail Transit in Beijing Research conducted by

Dr. LIU Jian, Associate Professor of Urban Planning & Design

ZUO Xiaoxuan, Master of Urban Planning & Design,

School of Architecture, Tsinghua University

With the Sponsorship of IVM

2011

1. Evolution of rail transit construction in Beijing

As the first Chinese city in constructing an urban rail transit system, Beijing had compiled its first

subway system plan in 1957 with the objective of “combing civil and military uses.” The planned

subway system was composed of one loop line, seven radiating lines and 114 stations with a

mileage of 172 km. Yet, due to historical reasons, the subway construction was not started until

1965. When the first subway line, running from Ping-guo-yuan in the west to Beijing Railway

Station in the east with a mileage of 23.6 km and 17 stations, was partly completed in

October1969, it became the first subway line in Mainland China. That made Beijing even more

advanced than Hong Kong, Singapore, San Francisco, Washington and Seoul in terms of rail

transit development. This subway line was put into trial operation on 15 January 1971. However,

being classified as an engineering project for wars at that time, it was not open to the public for

civil use, and only the personnel who had an attestation from their institutions could make a visit to

it. Moreover, because of technical issues, accidents happened frequently in the following decade.

The trial run of the first subway line for more than ten years was ended on 15 September 1981

when it was officially opened to the public for civil use. Afterwards, on 20 September 1984, the

second subway line was also put into operation, which linked Fu-xing-men in the west to

Jian-guo-men in the east in the “n” shape, with a mileage of 16.1 km and 12 stations. On 28

December 1987, following the completion of new constructions, the two subway lines were

restructured to form two new lines, that is, Line 1 running from Ping-guo-yuan in the west to

Fu-xing-men in the east and Line 2 running along the inner city wall of the Old City of Beijing. Later

on, till 28 June 2000, Line 1 had been extended further eastwards to Si-hui Station.

During the period from 1965 to 2000, only 42 km of subways had been constructed in Beijing. But

after the subway lines were put into operation successively for civil use in the early 1980s, the

annual passenger transport volume had increased rapidly, from 72.5 million in 1982 to 558 million

in 1995.

Since 2001, Beijing has seen a rapid development of rail transit. In that year, in order to welcome

the 2008 Beijing Olympic Games, Beijing Municipal Government announced the construction of

200 km subways with an investment of more than 60 billion RMB. During 2002 to 2003, Line 13

and Batong Line were put into operation successively; later on, from 2007 to 2010, more lines

were put into operation one after another, including Line 5 in 2007, Line 10, Airport Line and

Olympic Line in 2008, Line 4 in 2009, and Yi-zhuang Line, Da-xing Line, Phase I of Fang-shan

Line, Phase I of Line 15 (i.e. Shun-yi Line) and Phase I of Chang-ping Line in 2010. As a result,

today, Beijing has a subway system composed of 14 lines of 336 km mileage (Fig. 1, Tables 1 and

2).

Figure 1: Subway lines in operation in Beijing till 2010

Source: http://img3.17zo.com/newImgs/bjsubway.jpg

Table 1. Technical indexes of Beijing’s subway lines by the end of 2008

Name

Annual point

fulfillment

rate (%)

Running

speed

(km/h)

Minimum

departure

interval (min)

Trains in

operation

(times/day)

Single-way

transportation

capacity (person/h)

Line 1 114.0 33.8 2.5 562 34,300

Line 2 90.0 31.4 2.5 485 34,300

Line 13 100.0 45.2 3.0 454 28,600

Batong Line 97.0 36.1 3.0 361 28,600

Line 5 110.0 32.7 3.0 420 28,600

Line 8 (Phase I) 6.0 38.1 7.0 436 11,700

Line 10 (Phase I) 92.0 32.5 3.5 462 25,000

Airport Line 32.0 64.8 15.0 144 1,800

Source: Transportation Research Institute of Tsinghua University. PPP: case study of Beijing

Subway Line. April, 2010.

Table 2: General information of Beijing’s five suburban subway lines by the end of 2010

Name

Planned status Operation status

Starting & ending

points

Mileage

(km) Stations

Starting and

ending points

Mileage

(km) Stations

Da-xing Line Gong-yi-xi-qiao –

Tian-gong-yuan 21.7 12

Gong-yi-xi-qiao –

Tian-gong-yuan 21.7 12

Yi-zhuang

Line

Song-jia-zhuang

– Yi-zhuang

Railway Station

23.2 14

Song-jia-zhuang

– Yi-zhuang

Railway Station

23.2 14

Fang-shan

Line

Guo-gong-zhuan

g – Su-zhuang 24.8 11

Da-bao-tai –

Su-zhuang 22.1 10

Chang-ping

Line

Xi-er-qi – Ming

Tombs 31.5 11

Xi-er-qi –

Nan-shao 21.2 7

Shun-yi Line

(Line 15)

Xi-yuan –

Feng-bo 45.4 22

Wang-jing West

– Hou-sha-yu 20.2 9

Total 146.7 70 108.4 52

Source: Beijing Municipal Commission of Communications. 12th Five-Year Plan for Transportation

Development of Beijing. 2011.

Along with the rapid development of rail transit in Beijing, the record of daily passenger

transportation volume has been renewed rapidly (Table 3), even for eight times in 2010. A new

record was created on 29 April 2011, with the daily passenger transportation volume of the 12

lines owned by Beijing Subway Operation Corporation Limited rising up to 6.2 million person-times

and that of Line 4 and Daxing Line owned by Beijing MTR Corporation Limited reaching 1.04

million person-times, leading to the total daily passenger transportation volume of Beijing’s

subway system up to 7.25 million person-times (Table 4). Apart from the constant increase of

passenger transportation volume, the large-scale subway construction has also changed the

transportation structure of Beijing, with the percentage of public transportation increasing from

30.2% in 2006 to 38.9% in 2009, in which the percentage of rail transit increased from 13.6% to

29.0%.

Table 3: Operation status of Beijing’s subway lines during 2005-2009

Year

Passenger

transportation volume

(million person-times)

Trains in operation

(thousand times)

Running

distance

(million km)

Operation

Mileage

(km)

2005 680 467 114

2006 703 495 73.1 114

2007 655 575 87.9 142

2008 1,216 1,014 146.3 200

2009 1,423 1,207 177.1 228

Growth rate 109% 159% 100%

Source: Beijing Municipal Commission of Communications. 12th Five-Year Plan for Transportation

Development of Beijing. 2011.

Table 4: Operation status of Beijing’s existing subway lines in early 2010

Name

Minimum

departure

interval

(minutes)

Trains in

operation

(times)

Average daily passen-

ger transportation

volume (thousand

person-times)

Maximum

full load

section

rate

stations

Operation

mileage

(km)

Line 1 2’15” 52 1,070 117% 23 31

Line 2 2 39 951 70% 18 23

Line 4 3 37 608 98% 24 28

Line 13 3 40 465 115% 16 41

Batong Line 3 20 225 127% 13 19

Line 5 2’50” 37 660 129% 23 28

Line 10 3’30” 28 614 116% 22 25

Line 8 7 3 24 16% 4 5

Airport Line 15 4 16 49% 4 28

Total — 260 4,632 — 147 228

Source: Beijing Municipal Commission of Communications. 12th Five-Year Plan for Transportation

Development of Beijing. 2011.

2. Policy-making for Beijing’s rail transit development

2.1 Planning system concerning rail transit development In Beijing, the governmental departments involved in the policy-making of rail transit development

include Beijing Municipal Commission of Urban Planning, Beijing Municipal Commission of

Development and Reform, and Beijing Municipal Commission of Communications. Under the

direct guidance of Beijing Municipal Government, they are responsible for defining the

development policies and implementation measures of rail transit through a top-down planning

system.

City Master Plan of Beijing: compiled under the organization of Beijing Municipal Commission

of Urban Planning, it may define the principle regulations on the long-term development of rail

transit, including objectives, strategies and key index, in the chapters dedicated to

comprehensive transportation system planning.

Outline of Five-Year Plan for Socio-Economic Development of Beijing: compiled under the

organization of Beijing Municipal Commission of Development and Reform, it may define the

detailed requirements for the short-term development of rail transit, in particular the

construction programs, according to the actual demands of Beijing’s socio-economic

development.

Outline of Transportation Development of Beijing: compiled under the organization of Beijing

Municipal Commission of Communications, it may define the general objectives and planning

principles for the long-term development of rail transit.

Five-Year Plan for Transportation Development of Beijing: compiled under the organization of

Beijing Municipal Commission of Communications, it may, with reference to the relevant

regulations defined by the Beijing City Master Plan and the Outline of Five-Year Plan for

Socio-Economic Development of Beijing, deepen the general objectives and planning

principles for the long-term development of rail transit defined by the Outline of Transportation

Development of Beijing and detail them into specific programs for gradual implementation

phase by phase.

Annual Plan for Transportation Development of Beijing: compiled under the organization of

Beijing Municipal Commission of Communications, it may define the annual implementation

plan of rail transit construction based on the Five-Year Plan for Transportation Development

of Beijing.

Annual Plan for Infrastructure Maintenance of Beijing and Annual Plan for Transportation

Industry of Beijing: compiled respectively under the organization of Beijing Municipal Road

Administration Bureau and Beijing Municipal Transportation Administration Bureau which are

subordinate to Beijing Municipal Commission of Communications, they may define the

regulations with respect to the construction and management of rail transit in more details.

The two Bureaus are also responsible respectively for supervising the implementation of the

two plans.

Generally speaking, the City Master Plan of Beijing, the Outline of Five-Year Plan for

Socio-Economic Development of Beijing, and the Outline of Transportation Development of Beijing

are of strategic plan with different characteristics. The City Master Plan of Beijing focuses on the

strategic perspectives for the medium and long-term urban development of Beijing in a

comprehensive way, thus the relevant regulations on rail transit are usually more in principle. The

Outline of Five-Year Plan for Socio-Economic Development of Beijing focuses on the strategic

perspectives for the short-term urban development of Beijing also in a comprehensive way, but the

relevant regulations on rail transit are more in details compared with the former. The Outline of

Transportation Development of Beijing focuses on the strategic perspectives for the medium and

long-term transportation development of Beijing, with more specified and deepened regulations on

rail transit. While in contrast, the Five-Year Plan for Transportation Development of Beijing and the

Annual Plan for Transportation Development of Beijing focus more on the implementation of the

relevant regulations on rail transit by deepening and detailing those that are defined in the above

strategic plans.

Within this top-down planning system, all the superior plans are instructive to the inferior ones,

while all the inferior plans should be in line with the superior ones. At the strategic planning level,

the City Master Plan of Beijing, Outline of Five-Year Plan for Socio-Economic Development of

Beijing, and Outline of Transportation Development of Beijing should be coordinated and

interconnected with each other (Figure 2).

Figure 2: Top-down planning system of Beijing concerning rail transit development

2.2 Actual policies of rail transit development in Beijing 2.2.1 Policies stated in City Master Plan of Beijing 2004-2020

In early 2005, the State Council of People’s Republic of China approved the City Master Plan of

Beijing 2004-2020 which articulates the objectives, strategies and indexes of rail transit

development of Beijing by the end of the planning period.

The development objectives are to establish a comprehensive passenger transportation system,

with public transportation as main body, rail transit as key factor, and various transportation modes

being coordinated by 2020, when the central urban area should be covered by a rail transit

network consisting of various transportation modes, such as subway, light rail and suburban

railway which links it to the suburban New Cities of Tongzhou, Shunyi, Yizhuang, Daxing,

Fangshan and Changping. The development strategies include accelerating the development of

rail transit and rapid bus transport, ensuring in priority the lands for various public transportation

facilities, adjusting and optimizing the structure and layout of public transportation network,

improving the transportation environment, and promoting the efficiency of transit exchange. The

key index of rail transit by 2020 include completing the construction of 19 rail transit lines of 570

km mileage, including 15 in the central urban area and four in the suburban area (Table 5),

planning the construction of 30 vehicle depots, 20 parking lots, and three repair shops and

reserving lands for them, ensuring that public transportation occupies no less than 50% of the total

passenger travel volume when the daily figure goes up to 52 to 55 million person-times by 2020,

and the rail transit and rapid bus transport occupy more than 50% of the passenger transportation

volume of public transportation.

Table 5: Schedules of rail transit development before 2020

Type No. Name Starting & ending points Mileage (km) Actual situation M

etro

1 M1 Ping-guo-yuan – Tu-qiao 51.2 In operation

2 M2 Xi-zhi-men – Xi-zhi-men 23.1 In operation

3 M3 Wu-lu – Dong-ba 26.9 In planning

4 M4 Long-bei-cun – Ma-jia-lou 28.7 In construction

5 M5 Tai-ping-zhuang-bei – Song-jia-zhuang 27.6 In construction

6 M6 Tian-cun – Tong-zhou 38.7 In planning

7 M7  West Railway Station – Lu-dian 28.1 In planning

8 M8  Hui-long-guan – Drum & Bell Towers 15.2 In construction

9 M9  World Park – National Library 18.0 In planning

10 M10  Lan-dian-chang – Song-jia-zhuang 32.3 In construction

11 M11  Fragrance Hill – Song-jia-zhuang 33.7 In planning

12 M13  Xi-zhi-men – Wang-jing-xi 32.9 In operation

13 M15 Dong-zhi-men – Shun-yi 32.0 Partially in

operation

Subtotal: 13 lines 386.2

Light

rail

14 L1 Dong-zhi-men – Airport 21.8 In planning

15 L2 Song-jia-zhuang – Yi-zhuang 20.8 In planning

Subtotal : 2 lines 42.6

Sub

urba

n ra

ilway

16 S2 North Railway Station – Chang-ping 34.2 In planning

17 S4 South Railway Station – Huang-cun 24.3 In planning

18 S5 South Railway Station – Liang-xiang 36.7 In planning

19 S6 Shun-yi – Yi-zhuang 44.5 In planning

Subtotal : 4 lines 139.7

Total : 19 lines 571.1

Source: Beijing Municipal Government. City Master Plan of Beijing 2004-2020. 2005.

In addition, the City Master Plan of Beijing 2004-2020 states that, in the long-term, the rail transit

system of Beijing should consist of two systems, that is the subway system in the central urban

area and the suburban railway system in the suburban areas. The subway system will be

composed of 22 lines, including 16 metro lines and 6 light rail lines, with a planned mileage of 700

km and structured in a chessboard layout with two rings and several radiating ones, which should

serve the central urban area, the peripheral urban clusters, and the new cities nearby the central

urban area. The suburban railway system will be composed of six lines, with a planned mileage of

430 km and structured in a radial layout, which should serve the new cities and the zones between

the new cities and the central urban area (Fig. 3).

Figure 3: Rail transit system of Beijing in the long-term

Left: Metro system in the central urban area

Right: Suburban railway system in the suburban areas

Source: Beijing Municipal Government. City Master Plan of Beijing 2004-2020. 2005.

2.2.2 Policies stated in Outline of 12th Five-Year Plan for Socio-Economic Development of

Beijing 2011-2015

In early 2011, Beijing Municipal Government issued the Outline of 12th Five-Year Plan for

Socio-Economic Development of Beijing which articulates that the construction of complete

infrastructure should become a key measure for better adapting to the development of economy

and society and better serving the life of the citizens. Regarding the rail transit development, it is

stated that great efforts should be made to implement the strategy of giving priority to public

transportation through the gradual completion of a public transportation network that relies on rail

transit and rapid bus transport and is efficient in transit exchange, accelerate in priority the

construction of rail transit in the central urban area, in particular the construction of 561 km

mileage in the short term (Fig. 4), so as to raise the percentage of public transportation in the

passenger travel volume in the central urban area up to 50%, and promote the densification of rail

transit lines in the central urban area, so as to increase the mileage of rail transit in operation up to

660 km by 2015.

Figure 4: Rail transit system of Beijing by 2015.

Source: Beijing Municipal Government. Outline of 12th Five-Year Plan for Socio-Economic and

Development of Beijing. 2011.

Although the development objectives stated in the Outline of 12th Five-Year Plan for

Socio-Economic and Development of Beijing slightly differ from those stated in the City Master

Plan of Beijing 2004-2020 in terms of implementation schedule, they are basically consistent with

the later ones in terms of index.

2.2.3 Policies stated in Outline of Transportation Development of Beijing 2004-2020

In April 2005, Beijing Municipal Government issued the Outline of Transportation Development of

Beijing 2004-2020 which became a guideline for the formulation of transportation plans,

transportation policies and implementation plans during the planning period. Based on the

summarization of historical experience, the analysis on actual problems, and the perspective for

future development, it puts forward the objective of building a “new transportation system of

Beijing” and defines the strategic approaches, general policies and short-term action plans for

achieving this objective.

Regarding rail transit, the development objectives are to complete the construction of an urban

bus transport system which takes rapid and mass bus transport as core and integrates other bus

transport modes, accelerate the construction of a rail transit system consisting of suburban

railways, subways, light rails and tramways, and improve the traffic situation in the central urban

area, so as to form a powerful support for the urban development in the peripheral urban clusters,

and the new cities in the suburban areas as well. By 2010, the total mileage of rail transit should

be up to 250-300 km, with its daily passenger transportation volume increasing from 1.3 million

person-times in 2003 to four to five million person-times and its percentage in public transportation

increasing from 10% in 2003 to about 25%. The development strategies include distributing and

utilizing the resources of transportation facility in a reasonable way, in line with the requirements of

sustainable urban development and the principles of equality and efficiency, and giving priority to

the development of public transportation including rail transit in various aspects, such as land-use,

investment, finance and taxation, and the distribution of road rights. The construction program

includes the completion of the key rail transit construction projects before 2010, including Line 4,

Line 5, Phase I of Line 10, northern section of Line 8 (Olympic Line), Line 9, Airport Line, and the

rail lines linking the central urban area to the new cities, such as Yi-zhuang, in the suburban areas,

the technical renovation of Line 1 and Line 2, and the synchronic construction of transit exchange

facilities between rail transit and other transportation modes.

Obviously, compared with the general policies stated in the City Master Plan of Beijing 2004-2020,

the policies of rail transit development stated in the Outline of Transportation Development of

Beijing 2004-2020, including development objective, development strategies, and construction

programs, are more detailed with more focus on the implementation of construction projects.

2.2.4 Policies stated in 12th Five-Year Plan for Transportation Development of Beijing

2011-2015

In June, 2011, Beijing Municipal Commission of Communications issued the 12th Five-Year Plan

for Transportation Development of Beijing which, in the section on rail transit, summarizes the

general condition and actual problems of rail transit development in Beijing during the 11th

Five-Year Plan period from 2006 to 2010, analyzes the trends and challenges of rail transit

development in future, and then prescribes the fundamental concepts, general objectives and

detailed index and programs of rail transit construction during the 12th Five-Year Plan period from

2011 to 2015 based on the City Master Plan of Beijing 2004-2020, Outline of 12th Five-Year Plan

for Socio-Economic Development of Beijing, and Outline of Transportation Development of Beijing

2004-2020.

In detail, the fundamental concepts are enlarging the scale, increasing the capacity, improving the

efficiency, building a comprehensive transportation system, and promoting the sustainable

development of rail transit. The general objectives include densifying the railway network and

improving the subway accessibility in the central urban area, so as to ensure the key standing of

rail transit in the public transportation system and effectively alleviate the traffic jam in the central

urban area; extending the rail transit network to the new cities in the suburban areas, so as to play

the guiding and supporting roles of rail transit on the restructuring and optimization of the spatial

structure of urban development; promoting the refined management and improving the operation

level of rail transit with due focus on both construction and management; and building up a green

travel system centering on rail transit and coordinating various transportation modes. The

short-term programs are completing the construction of 10 rail transit lines, including Line 6, Phase

II of Line 8, Line 9, Phase II of Line 10, Phase II of Line 15, Line 7, Line 14, West Suburb Line, Line

S1, and Phase II of Changping Line (Table 6), initiating the network densification project with the

construction of Line 16 and Yanfang Line, and initiating the preliminary studies on the construction

of Line 11, Line 12, Line 3, Phase III of Line 8, Line S6 and Airport Contact Line (Table 7). It is

expected that, by the end of the planning period, that is the year 2015, the total mileage of rail

transit of Beijing would be up to 598 km, the minimum departure interval of the existing key lines in

rush hours would be two minutes and that of the new key lines would be three to four minutes, the

daily passenger transportation volume would rise up to more than 10 million person-times, and the

network density within the 5th Ring Road would be 0.52 km/km2 so that the average distance to the

nearest subway station would be no more than 1,000 m.

Table 6: General information about the rail transit lines of Beijing to be put into operation during the

12th Five-Year Plan period

Name Starting and ending points Mileag

e (km)

Number of

stations

Year in

operation

West Suburb

Line Ba-gou – Fragrance Hill 9.80 6 2011

Line 9 Guo-gong-zhuang – Bai-shi-qiao 16.85 13 2012

Phase II of Line

8

Ping-xi-fu – Olympic Forest Park

Bei-tu-cheng – National Art Gallery East Street 17.46 12 2012

Phase II of Line

10 Jin-song – Ba-gou 32.49 24 2012

Phase I of Line

6 Wu-lu – Cao-fang 30.10 19 2012

Line 7 West Railway Station – Coaling Plant 23.90 23 2013

Line S1 Wu-lu – Men-tou-gou 27.00 11 2013

Line 14 Chang-xin-dian-dong-he-yan-lu – Lai-guang-ying 46.30 34 2014

Phase II of Line

15

Xi-yuan – Wang-jing;

Nan-fa-xin – Chao-bai-he East 25.40 13 2014

Phase II of

Changping Line South Chang-ping - Miniature Park 16.70 6 2015

Phase II of Line

6 Cao-fang – Dong-xiao-ying 12.00 7 2015

Source: Beijing Municipal Commission of Communications. 12th Five-Year Plan for Transportation

Development of Beijing. 2011.

Table 7: General information about the planned rail transit lines of Beijing during the 12th Five-Year

Plan period

Name Starting and ending points Mileage

(km)

Situation in the 12th

Five-Year Plan Period

M16 Yong-feng Science & Technology Park –

Feng-tai Science & Technology Park 45.3 Initiation of construction

Yan-fang Line Liang-xiang – Yan-hua 11.8 Initiation of construction

Line 11 Shou-gang - Chemical Plant II 36 Initiation of studies

Line 12 Si-ji-qing – Jiu-xian-qiao 24 Initiation of studies

Line 3 Tian-cun – Dong-ba 20 Initiation of studies

Phase II of

Line 8 Wang-fu-jing – Nan-yuan 16 Initiation of studies

S6 Shun-yi – Fang-shan 98 Initiation of studies

Airport

Contact Line Beijing Capital Airport - New Airport 71 Initiation of studies

Source: Beijing Municipal Commission of Communications. 12th Five-Year Plan for Transportation

Development of Beijing. 2011.

3 Investment and financing of Beijing’s rail transit construction

3.1 Investment composition In Beijing, the investment of rail transit construction covers the costs for preparatory studies,

facility constructions, mechanical and electrical equipments, rolling stock purchase and others. In

detail, it concerns 16 aspects including planning and design, station, sectional depot, rail, vehicle

base, building, communication system, signal system, electric power supply and electrification,

environment control and ventilation, disaster prevention and alarm, equipment control system,

automatic ladder and elevator, automatic ticket selling system, water supply and drainage and fire

prevention system, rolling stock and others. Based on the analysis on the investment composition

of Subway Line 4, 5 and 10, the investment composition of rail transit in Beijing is roughly 16-18%

for preparatory studies, 40-45% for facility constructions, 15%-18% for mechanical and electrical

equipments, 9-14% for rolling stock purchase, and 14% for others. It can be seen clearly that, in

this composition, the investments for facility constructions and mechanical and electrical

equipments occupy a high percentage of over 70% (Table 8).

Table 8: Investment composition for the construction of Subway Line 4, 5 and 10 of Beijing

Line 4 (%) Line 5 (%) Line 10 (%)

Preparatory studies 17.45 15.88 15.68

Facility constructions 39.90 41.21 44.93

Mechanical & electrical equipments 16.69 14.89 17.17

Vehicle purchases 12.40 14.25 8.72

Others 13.56 13.77 13.49

Total 100.00 100.00 100.00

Source: XU Lili and WANG Yuanfeng. Analysis on the investment composition of rail transit in

Beijing. 2006.

3.2 Investment and financing modes In the past half century, following the changes of the socio-economic development of China,

Beijing has adopted various modes of investment and financing for its rail transit construction

(Table 9).

Table 9: Various investment and financing modes of rail transit construction in Beijing

Name Total investment (billion RMB) Investment and financing mode

Line 1 4.0 Direct governmental investment

Line 2

Line 13 6.7 Governmental investment by statutory

representative Batong Line 3.4

Line 5 12.0Governmental investment as key and

enterprise loans as supplement Phase I of Line 8

Phase I of Line 10

Olympic Line 2.5 Build and transfer

Line 4 15.9 Public-Private Partnership

Line 9 6.7 Design- Build- Finance- Operation

Source: Transportation Research Institute of Tsinghua University. PPP Case Study of Beijing

Subway Line 4. 2010. Slightly changed by the authors.

During the period of planned economy, as well as in the early stage of reform and opening-up,

Beijing adopted the government-based integrated mode of investment-build-operation-supervision

for the construction of its first two subway lines, i.e. Line 1 and 2. All the construction fund was

appropriated from the financial revenue of the Central Government and all the construction,

operation and supervision were planned and managed by the Municipal Government. Under the

condition of planned economy, the local government could make the decision of building rail transit

according to the demand of socio-economic development of Beijing, without any consideration on

the issue of investment return or benefit.

In the early 21st century, the traditional integrated investment mode was continued in the

construction of Line 13 and Batong Line. However, in line with the new changes following the

development of market economy, the mechanism of statutory representative was introduced. In

July 2001, Beijing Subway Corporation Limited, transformed from the original Beijing Metro

Corporation who was in charge of the construction of the first two subway lines, was established

by Beijing Municipal Government, becoming the main player in charge of the investment,

construction and operation of subway lines. At that time, the investments of rail transit came

mainly from governmental investments, bank loans, in particular from China Development Bank

and foreign banks, and a few amounts of investment from state-owned enterprises.

Afterwards, along with the constant development of market economy, the investment and

financing for rail transit construction was gradually separated from the construction, operation and

supervision of rail transit, such as what happened in the construction of Line 5, Phase I of Line 8

and Phase I of Line 10.

In November 2003, Beijing Subway Corporation Limited was further transformed into Beijing

Infrastructure Investment Corporation Limited according to the Corporation Law of People’s

Republic of China, with the funding coming from Beijing Municipal Commission of State-Owned

Assets Supervision and Administration. As a corporation funded uniquely by the state, Beijing

Infrastructure Investment Corporation Limited is in charge of the capital operation of rail transit of

Beijing and its funding sources include governmental investments, stocks and bonds, bank loans,

and so on.

The investment and financing mode of PPP, i.e. Private-Public Partnership, was firstly applied in

the construction of Line 4 which was put into operation in 2009, and then Daxing Line as well

which was put into operation at the end of 2010. Among the construction investment of 15.3 billion

RMB for Line 4, 70% came from Beijing Municipal Government via Beijing Infrastructure

Investment Corporation Limited, while the other 30% came from the concession company, i.e.

Beijing MTR Corporation Limited.

At present in Beijing, the funding sources for rail transit construction include mainly direct

governmental investments by way of either financial appropriation or buying a share, subsidies or

interest discount from governments of various levels, bank loans, self-owned funds, issuing bonds

and stocks, direct foreign investment, and so on.

3.3 PPP mode applied in Line 4 As the first foreign invested cooperation company in urban rail transit sector in mainland China,

Beijing MTR Corporation Limited was established in January 2006 with a joint investment of 49%

from Beijing Capital Group, 49% from Hong Kong MTR Corporation Limited, and 2% from Beijing

Infrastructure Investment Corporation Limited. According to the Concession Agreement on

Operation of Subway Line 4 of Beijing jointly signed by Beijing Municipal Government and Beijing

MTR Corporation Limited, the later was responsible for the construction and operation of Line 4

through Public-Private Partnership and endowed with the concession rights of developing other

relevant business for 30 years upon the completion of the whole project. The Concession

Agreement also clarified the responsibilities of Beijing MTR Corporation Limited for the investment

of mechanical and electrical equipments and the operation of the rail transit line, as well as the

detailed regulations on the construction and operation standards of the line, the handover of the

facilities at the end of the concession term, and so on.

According to the Concession Agreement and the budget, the total investment of Line 4 of 15.3

billion RMB is divided into two parts. Part A, being about 10.7 billion RMB accounting for 70% of

the total investment, is funded by Beijing Infrastructure Investment Corporation Limited to mainly

cover the costs for land requisition, civil construction (including subway stations, tunnels, vehicle

deposits and parking lots), rail construction, civil defense engineering construction; while Part B,

being about 4.6 billion RMB accounting for 30% of the total investment, is funded by Beijing MTR

Corporation Limited, as concession company under the PPP term, to mainly cover the costs for

purchasing and installing rolling stock, automatic ticket selling and checking systems, signal and

communication systems, air-conditioning and ventilation systems, water supply and drainage

systems, fire prevention system, automatic ladders and elevators, control devices, power supply

facilities, and so on, as well as for renting the tunnels and structures of Part A.

Moreover, according to the Concession Agreement, some assets of Part A owned by Beijing

Infrastructure Investment Corporation Limited, in particular the tunnels and structures, would be

leased to Beijing MTR Corporation Limited for operation after the construction is completed. Thus,

in the early stage of operation, the symbolic leasing price can be a guarantee for Beijing

Infrastructure Investment Corporation Limited to achieve a reasonable return of governmental

investment; while in the mature stage of operation, it can also help to avoid the excessive profit of

Beijing MTR Corporation Limited through reasonable increase or decrease (Fig. 5).

Figure 5: Investors and contract relationships of Beijing Subway Line 4

Source: Transportation Research Institute of Tsinghua University. PPP Case Study of Beijing

Subway Line 4. 2010. With slight changes by the authors.

4 Implementation of rail transit construction projects in Beijing

At present in Beijing, the rail transit construction projects are mainly programmed by Beijing

Infrastructure Investment Corporation Limited according to the statutory plans mentioned above,

and then entrusted via contracts to Beijing Rail Transit Construction & Management Corporation

Limited for implementation. It means that Beijing Rail Transit Construction & Management

Corporation Limited, as a state-owned company funded by Beijing Municipal Commission of

State-Owned Assets Supervision and Administration following the approval of Beijing Municipal

Government, is the key organizer of Beijing’s rail transit construction who is responsible for the

full-process management on the rail transit construction projects, including preliminary design,

construction design, purchase biding , rail and civil constructions, interior decoration, equipment

installation, and the system design, commissioning, launching, acceptance and delivery of new

lines. The implementation of rail transit construction projects requires a series of application and

approval by the governmental departments, which can be roughly divided into the examination

and approval before the construction and the examination and acceptance after the construction

(Table 10).

Table 10: Procedure of declaration, approval and implementation for rail transit construction

projects

Steps Administrator Administration items

Exa

min

atio

n an

d ap

prov

al b

efor

e co

nstru

ctio

n

1 Beijing Municipal Commission of Development & Reform

Approving or verifying the construction investment

2 Beijing Municipal Commission of Urban Planning (Infrastructure Planning Department)

Checking and issuing the Planning Position Paper on Project Location

3 Beijing Municipal Bureau of Land & Resources (Land Use Department)

Primarily examining the land utilization

4 Beijing Municipal Committee of Communications (Transportation Planning Department)

Examining the design scheme

Beijing Municipal Commission of Urban Planning (Transportation Engineering Department)

Fire Protection Authority, Beijing Municipal Public Security Bureau

Beijing Municipal Civil Air Defense Office

Beijing Municipal Bureau of Landscape & Forestry

Beijing Municipal Environmental Protection Bureau

Beijing Municipal Earthquake Bureau

5 Beijing Municipal Commission of Urban Planning (Transportation Engineering Department)

Checking, ratifying and issuing the Planning Permit of Construction Land

6 Beijing Municipal Bureau of Land & Resources (Beijing Land Utilization Center)

Checking, ratifying and issuing the Certificate of State-Owned Land Utilization

7 Beijing Municipal Construction Committee (Office of Construction Management)

Checking, ratifying and issuing the Construction Permit

8 Beijing Road Administration Bureau Checking, ratifying and issuing the Permit of Occupying, Excavating & Deviating Roads

Che

ck a

nd a

ccep

tanc

e af

ter c

onst

ruct

ion

9 Beijing Municipal Commission of Urban Planning (Law Enforcement Supervision Division)

Checking, accepting and recording the completed construction projects in line with urban planning terms

Traffic Enforcement Authority, Beijing Municipal Public Security Bureau

Checking, accepting and recording the completed construction projects respectively in line with specific terms

Fire Protection Authority, Beijing Municipal Public Security Bureau

Beijing Municipal Civil Air Defense Office

Beijing Municipal Bureau of Landscape & Forestry

Beijing Municipal Environmental Protection Bureau

Beijing Municipal Earthquake Bureau

10 Beijing Municipal Urban Development Archives Filing

Source: LIU Jian and MAO Qizhi. Balanced Development of Land-use & Transportation. China

City Planning Review, Vol.17, No.1, 2008, P52-61.

5 Operation management and supervision of Beijing’s rail transit

Currently in Beijing, there are two operating organizations of rail transit, Beijing Subway Operation

Corporation Limited and Beijing MTR Corporation Limited. The former is responsible for the

operation and management of Line 1, Line 2, Line 5, Line 8, Line 10, Line 13, Line 15, Batong Line,

Airport Line, Changping Line, Yizhuang Line and Fangshan Line, while the later is responsible for

the operation and management of Line 4 and Daxing Line. Their business includes running of

vehicles, passenger transportation, electrical power dispatching, power supply, communication

signal, mechanical and electrical circuit, as well as others related to rail transit such as vehicle

manufacturing, engineering supervision, design, study and consulting, advertisement,

underground communication, cultural industry, commerce and business, tourism and recreation,

education and training, building and installation, property management, and so on. Beijing

Municipal Transportation Administration Bureau subordinate to Beijing Municipal Commission of

Communications is responsible for supervising the operation of the 14 rail transit lines.

Bibliography: 1. Beijing Municipal Government. City Master Plan of Beijing 2004-2020. 2004.

2. Beijing Municipal Government. Outline of 12th Five-Year Plan for Socio-Economic

Development of Beijing. 2011.

3. Beijing Municipal Government. Outline of Transportation Development of Beijing 2004-2020.

2005.

4. Beijing Municipal Commission of Communications. 12th Five-Year Plan for Transportation

Development of Beijing. 2011.

5. Transportation Research Institute of Tsinghua University. PPP Case Study of Beijing Subway

Line 4. 2010.

6. LI Jinghua and LI Qiming. Analysis On Economic Risks In Rail Transit Under PPP Mode In

China: A case study of Beijing Subway Line 4. Construction Economy, 2007 (10), P23-26.

7. LIU Jian and MAO Qizhi. Balanced Development of Land-use & Transportation. China City

Planning Review, Vol.17, No.1, 2008, P52-61.

8. XU Lili and WANG Yuanfeng. Analysis On Investment Composition of Rail Transit of Beijing.

Railway Engineering Cost Management. 2006 (11), P1-4.

9. HAO Cheng and LI Jing. Comparative Analysis On Urban Rail Transit Investment and

Financing Modes of Beijing, Hong Kong and New York. Urban Rail Transit. 2009 (1): P15-20.