Second and third line subway investment boom

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					Second and third line subway investment boom
"Oriental Outlook" press Xiao Qiang / Beijing reports
"You subway yet?"
"Of course."
This is probably a recent event in Wuhan, Xi'an, Chongqing, Chengdu,
Harbin, Changchun, Shenyang, Hangzhou, Suzhou, Ningbo, Wuxi, Changsha,
Zhengzhou, Dalian, Nanning, Fuzhou, Nanchang, Dongguan, Kunming and other
cities, Mayor dialogue.
   Large-scale construction of an affluent cities sweep the subway. According to the
National Development and Reform Commission introduced Wang Qingyun, director
of basic industries, according to the State Council approved the construction of three
metro indicators (urban population of 300 million or more, that is, GDP 1000 billion
yuan, local fiscal income of 10 billion yuan more than the general budget) to measure ,
nearly 50 cities across the country are equipped with the needs and conditions of
subway construction. Forthcoming from the State Council has approved and the
approval of urban rail transport planning point of view, involving a total of more than
20 cities. 2020, rail transport investment will be more than 1 trillion yuan, mainly
subway investment.
In 2009, is entirely self-financing by the Chinese, surveying, designing, construction
of Beijing-Zhangjiakou Railway construction opened on the 100th anniversary, is also
China's first subway - Beijing Subway Line 1 opened the 40th anniversary
of operations. The State Council issued a document by the end of May the city rail
transit project will be the registered capital of the gold standard reduced from 40% to
In 2009, metro, such as earthworms, river north and south of the city is rapidly
(Subhead) Metro "red"
Nanning Railway Company Vice President Rong Xianheng the "Oriental
Outlook Weekly" talk about thing subway station in Nanning on
passionately: "7 years ago, the construction of subway in Nanning have
moved. Four years ago, on the establishment of Nanning Leading Group of the rail
transportation. "
"The state revised light rail and subway station requirements are different,
light rail to subway construction standards only 60% on the line. Nanning can only
reach the building the original light of the standards, so we have a light newspaper.
However depending on the economic situation this year, end of the year, we build a
subway compliance requirements. "Rongxian Heng said the three most
important indicators of the local general budget revenue," We are 90
billion last year, more than 10 billion yuan this year, no problem. "
Therefore, "although they are still reported by light rail, but on the 1st line
is the combination of subway and light rail."
Rong Xianheng confidence "in the national approval level is no
problem" because "Nanning has been included in the national
second list of the city rail transit go up." Rong Xianheng introduced in
June last year, the State Development and Reform Commission has been the
assessment of the metro project in Nanning, housing construction in January this year
the Department assessment, environmental assessment department is the end of April.
At present, the planning report was submitted to the State Council approved in June
may be down. Approval from the planning approval to the project about to be 3
months, so in October in Nanning subway project feasibility report can be approved,
on Nov. 1 line can begin.
   February 18, 2009, Nanning subway test section prior to start.
   Network planning by Nanning, Nanning, to build a total of six subway lines, total
length of 173.5 km, planned completion in 2030. "May need to add a line
of argument is now online network." Rongxian Heng said.
Metro's approval to Bi Nanning Nanchang number later.
   Nanchang urban rail transit construction leading group and track accomplishing
stand in September 2007.
   Nanchang Railway Yanming Zhi, deputy director of the company office to the
"Oriental Outlook", said in 2003, the city of Nanchang in
practice when the revision of master plan included construction of five rail transit
planning. "The current plan of two lines to be completed in 2009 ~ 2016. 1,
line length of 28 kilometers, I hope to start construction this year is expected to open
to traffic in 2015; 2, line 22 km, probably 2011 or 2012 start construction opened to
traffic in 2016; five lines total length of 168 kilometers, finally opened to traffic is
2050. "
2008 October 16, Nam Cheong MTR Corporation was formally established.
State regulations for the construction of indicators of the subway, Nanchang,
"just over the threshold." In 2008, the Nanchang resident
population of urban planning area is 3.089 million, the city's GDP was 166
billion yuan, the local general budget revenue was 10.21 billion yuan. "We
want better Bi Nanning, Nanning, forget some of the financial income is transfer
payments." Yanming Zhi said: "Nanchang up the 2008 Annual
Report, the approval process without completing it."
And Nanning, Nanchang, compared Qingdao relatively hard in the three indicators
gas. Planning Office, Yang Shaoyu Qingdao Corporation to "Oriental
Outlook," explained that there are 3.8 million urban population in Qingdao
last year's GDP is more than 4400 billion yuan, "not to mention
revenue." Thus, although only reported in September in Qingdao last year
by 54.7 km of subway construction plan, but Yang Shaoyu confidence in the planning
approval and Yanming Zhi Rong Xianheng more than enough.
In the survey of correspondents of four metro cities in the preparation, the conditions
of Lanzhou weak. Construction Committee in Lanzhou section of the public transport
Director Ting-chi did not mention the city's GDP and fiscal revenue last
year, but his introduction to the correspondents, Lanzhou city now has 220 million
people. Even so, he also said "a number of conditions that we are basically
able to achieve. In fact, better built than in the south metro north, the south there are
groundwater and sand it."
Ting-chi said paragraph, Lanzhou has only now begun to do pre-network planning,
have not reported up.
(Subhead) Why do Metro "red"
The Corporation is also rare in the world profitable cases, the 20 cities in several cities
have subway rush repair necessary?
"The current traffic in Nanchang, mainly in the development of the old
town south Chang. The old town there is no planning, so road conditions are very
poor. Now people can feel, whether it is South Ye Hao Chang, Changbei Ye Hao,
traffic has indeed reached a very critical stage. Cheong Nam, Changbei across one on
the Gan River. the 21st century, Nanchang Changbei developed, and now popular
enough Changbei Wang, a major problem is poor because of the traffic channel. Many
people hope they will develop underground space, the entire city of Nanchang City to
conduct a quality upgrade. "Yanming Zhi said.
   Sinorama reporters in four cities MTRC or be responsible for the preparation of
people are all called city traffic jam.
   As for the "urban quality", Rongxian Heng said:
"Although the city of Nanning is not, but it is the Association of Southeast
Asian Nations to face the need to establish an international image."
In addition, Yan Mingzhi also believes that urban transport should also be considered
a forward-looking questions. "We have to study other cities found that the
later subway construction, demolition costs higher. Hangzhou earlier granted time to
the subway station, but it did not move for a long time has finally led to demolition of
an alarming rise in the cost. In addition, during the metro construction, increased
traffic chaos throughout the city, a mess. So, Hangzhou Subway of cultivation now
feeling really too late. Nanchang is in the economic take-off phase of the subway
station is ready to get back. "
"China's urbanization process is very fast, has been beyond our
imagination. In the next 10 years, this trend did not see the possibility of down Shui,
which allow the development of urban traffic, when we had to the former see. you see
abroad, there are several city traffic jams? because people have a little size city
subway. "big Yue Jin Yongxiang, general manager of the consulting firm,
said correspondents.
However, Yan Mingzhi admitted, "but we still caught up with this train,
there is no financial crisis, the city would not be so much speed to do this
In order to facilitate a number of investment projects launched as soon as possible,
May 25, 2009, in "The State Council on Adjusting the ratio of capital
investment in fixed assets Notice" (Guo Fa 〔2009〕 27) in urban rail
transit project has registered capital of gold standard reduced from 40% to 25%.
Investment adviser in the transport industry analysts Tuition policy changes on very
familiar. He said that years ago, China's subway construction has occurred
on blind comparisons, indiscriminate investments and rising construction costs and
other issues, the state approved the project in the metro cards also have more strict.
But into the second half of last year, China put forward the policy of expanding
domestic demand and maintain growth, the government efforts to further increase the
infrastructure, so a large number of cities began to build subway.
   Tuition that subway construction along the promotion of economic development
indeed very obvious. From Beijing, Shanghai, Nanjing and other cities in Metro
precedent of view, there are certain commercial basis in the subway station exit, will
form a series of radiation is not the scope of small business district. These values to a
certain extent, the existing business structure will stretch from the ring-shaped strips.
"In general, in urban areas, away from the subway exit 500 to 1000 meters,
3000 meters suburban 2000 have driven the price effect, the MTR urban housing
prices will increase around 10% to 20%, 30% rural areas will be pulled up 50%. to
Beijing, for example, No. 1 subway line as extended to the east Tongzhou District,
Tongzhou the price quickly raised 3,000 to 5,000 yuan / square meter. "
"House prices rise, land sell, the Government's revenue higher.
There is no local government to stimulate the real estate market of the subway station?
Should be there. But I think, is to promote local economic development. Transport
facilities , economic development, and improved living conditions, benefit, or the
people. "Jin Yongxiang said.
(Subhead) where the money comes
Metro are large amount of investment. Rongxian Heng said the total investment of
Nanning need 80 billion yuan subway ~ 100 billion yuan. "Subway
construction will always be some unexpected circumstances, the budget is always on
the increase. 1 line with our original budget was 10 billion yuan, increased 13.7
billion yuan now."
Yanming Zhi said the total investment calculations Nanchang Metro was more than
80 billion yuan, the first two lines of the estimated investment is 274 million,
"the budget is certainly to be exceeded."
Money come from?
Corporation executives in Nanning, Rong Xianheng in charge of financing. Jung said,
Nanning registered capital of 25% of metro mainly from three aspects: first municipal
financial allocation (15%), regional and national financial funds (estimated at no more
than 5%), land transfer along the Subway (5 %).
The remaining bulk of bank loans, accounting for more than 65%. "In the
current more relaxed monetary policy, the case of the banking sector more
welcome." In addition, Nanning Metro is trying to engage in financial
leasing, financial leasing companies bought through costly in equipment, MTRCL
lease the use of annual rent payment of about 10%, 10 years later, these devices all the
property owned by the Corporation.
Yan Mingzhi introduction, Nanchang, capital of Metro One source of the financial
level of direct funding, the second is the local government debt, "the
specific ratio has not decided upon, because the ratio of local debt have not been
For debt capital, "to sound a little more, the key planning is syndicated
loans, banks are scrambling to want to do, so this 75% is not a problem."
Yanming Zhi said.
Nanchang Metro has a unique place the financing, that is, the MTR Corporation has
been allowed to operate along the land.
"The city government hopes to play two roles Metro: One alleviate urban
traffic congestion; second leading urban planning, and guide land use development.
City Metro have brought hope to the land premium to stay in such a small
Corporation plate, rather than many cities, real estate land premium was largely taken
away. according to our ideas, in the land of immature, we have to be developed in
advance by the official signs on the land to get the company linked to name, side of
the development side of the subway station. Another scenario is that we have good
discussions with the Land Reserve Center, the first virtual land to land seized, and
value-added after the direct transfer, transfer of the premium back to our company, we
continued to build subway . This is a rolling development of ideas.
"Yanming Zhi said.
"To bring it to direct development, is relatively simple if you only do
purchasing and storage, we would like the second the nature of the land reserve center,
because the vertical management of land, so there are a number of policy barriers,
operational details are still not completely finalized. "Yan Mingzhi said,
Nanchang Metro did so in the hope that the company" enhanced
hematopoietic function, to achieve profitability. "
Nam Cheong MTR owned management rights for land along the Nanning Rong
Xianheng envy. "We also apply to the municipal government, or give us
land, we engage in a development or land reserve center to pay the land transfer fee
after municipal finance, municipal finance then the money allocated to us."
Investment flows for the subway full swing, the National Development and Reform
Commission Wang Qingyun, director of basic industries stressed over should be
"within our capabilities." "To solve the problem of
public transport is only one indicator to judge, is the city's public transport
demand and the corresponding of the Government's financial ability to
pay." "The capacity and capability Du 一样 circumstances,
Xuan Yong subway is more luxury of. Fazhan subway to carefully should first
consider the construction of the ground; the ground to die, where many people
consider elevated line into the city center and then drill down to go. really need to
address the task of ground transportation, and also consider the tram.
"Wang Qingyun said.
Wang Qingyun, at present, these three kinds of track transportation costs vary
considerably: Subway construction cost 500 million yuan / km, light rail construction
cost 200 million yuan / km, tram construction cost would be 2000 ~ 30 million yuan /
   "I feel the need to have the subway built, but the economy really can not
afford, many cities may become still more difficult, and no money to build
what?" Jin Yongxiang said.
(Subhead) market grafting public welfare
"In recent years, local government use of bank loans the development of
urban rail transit more. In fact, the loan is a last resort, not too much to promote.
Lending model is, after all modern money, to future generations to repay . Rail
transport construction, operation and Guan Li, should adopt more market operation
contact 办法. the Government itself is too expensive to manage. we expect yes, less
money the government the most effective companies use to manage Hu operating.
"said Wang Qingyun.
Investment adviser in the transport industry analyst Cai Jianming, also said the
government loans and financial investment by subway construction, leading to the
biggest problem is more intense around the available funds, not even money into other
livelihood projects. The development of the MTR from foreign investment and
financing and operating practice, the Government led, private sector participation,
investment diversification and market-oriented mode of operation has been widely
used. Tuition introduced market-oriented mode of operation include:
   1, BOT model. The model has construction, investment privatization, franchising,
and some basic characteristics of monopoly.
   Second, TOT (Transfer-Operate-Transfer) model, that "the transfer -
operate - transfer" mode. That the Government signed a franchise
agreement with the investors after the operation has been put into public infrastructure
projects can be proceeds handed over to private investors to operate the facility with
the proceeds in the next few years, one-time financing from investors was the hands
of a fund; franchise expires, investors, then the facility free of charge transferred to
the government.
   Rong Xianheng introduction, Nanning, Metro will select several sites for TOT and
BOT mode of trial.
Third, PPP (Public Private Partnership) model, that the government, for-profit
businesses and non-profit enterprise formed a project-based cooperation model. The
partners involved in a project, the Government is not the responsibility of all of the
project transferred to the private sector, but by the participation and cooperation of all
parties share the responsibility and financial risk. The first application of the UK PPP
model. Since then, Chile, Portugal, Brazil and other countries have the infrastructure
in the field and has introduced a successful PPP model.
   May 31, Beijing Metro Line 4 for the first time across the board test. This is the
first building and use of PPP, the success of infrastructure projects.
As a Beijing Metro Line 4 project financing municipal government consultant,
general manager of a large consulting firm Yue Jin Yongxiang organizations,
participated in the Line 4 project investment and financing program development.
"If the money to finance state-owned enterprises, state-owned enterprises
and from bank loans to build up the subway, there is the transmission of the disease
and waste too much, metro a wasted investment funds that about 20% to 30%. In
addition, the Government itself cast into the hundreds of million, to recover a penny
from the state-owned enterprises can not. such a waste that no one person, but rather a
constitutional issue. Therefore, the core question is how to improve efficiency, save
costs, only the introduction of market mechanisms to do this. "Jin
Yongxiang said.
Beijing Metro Line 4 the total investment of more than 150 billion yuan.
"The government is responsible for public welfare part of the investment
(100 billion), social investors for profit-making part of the investment (Hong Kong
MTR and Capital Group invested nearly 50 billion), by which is responsible for
construction and 30 years of operation, maintenance . 30 years later, the two
companies should be free of charge to Metro Line 4 to the Government. if, when they
are also willing to continue to do so, to the Government a certain sum of money, they
can continue to do so. "Jin Yongxiang said.
 ?"After the implementation of the new model, companies need and the
government signed a franchise agreement, the agreement details the
company's responsibilities, rights and interests, the Government is
responsible for monitoring. If the thing which is not required to do business, the
government will punish. Enterprises must a sum of money should be taken into
custody, the government here, assuming you do not follow the agreement of the
Subway maintenance, the Government Take to protect your deposit. maintenance is
over, you have to make up the money, if not fill, deposit spend, you gone. In the new
model, changes in government functions, from investors and regulators become the
owner. "
   So Jin Yongxiang deeply regret that other cities are also trying to engage in PPP
mode, but only made Beijing Metro Line 4 has. Where is the resistance? Jin
Yongxiang said: "The one million items, are very oil and water, you get a
few hundred million project, and take it to improve efficiency, it is not broken, do
some people's way of getting money? Moreover, some Tier Financial is not
short of money, which has become an excuse for them against the market.