Applying Creative Business Model To Chongqing Rail Transit System

Relying on the advantages of large-capacity, fast speed, high safety, andpunctuality urban rail transit (URT) plays an important role in urban transportation.Chongqing, as a typical fast developing mega city in China, has large pressure todevelop its urban rail transit system. However, the huge financial demand ofinvestments and operational costs are the biggest challenges facing cities requiring URTdevelopment. Therefore, summarizing relevant theories and practical experiences ofurban rail business model best practices in home and abroad seems very important toChongqing, as well as additional fast developing cities in China.Hong Kong Mass Transit Railway (MTR) system is famous for its successfulfinancially operation. Hong Kong is a city that has one of the most developed publictransport system in the world, and public transport plays a key role in Hong Kongcitizens’ daily life. In recent years, Hong Kong has accelerated its public transportconstruction, especially in mass transit rail, to meet the increasingly higher demand fortransportation. What is more, Hong Kong MTR system is the rare case which urban railtransit projects are making a profit in the world. By applying ‘Rail+Properties’business model, Hong Kong MTR integrates land-use with transport planning andgenerates high incomes from properties which subsidize rail operation and maintenance.Through applying ‘Rail+Properties’ business models, Hong Kong MTR has beenprofitable for the previous16years. In addition, Hong Kong MTR Corporation isdeveloping urban rail business in Beijing, Shenzhen and Hangzhou by applyingdifferent rail business models such as PPP, BDOT. Different rail business models havebeen applied in different cities, and all projects are reaching higher patronage levelsthan initial forecasts.On the urban planning side, Hong Kong and Chongqing have several features incommon. They both have high population, similar topography resulting in densepopulation and lack of suitable land for development. By utilizing rail transit as a keymethod to develop new zones and link all parts Hong Kong aims to achieve high levelsof urban sustainability. However, different land use policy and transport planningstrategies from Hong Kong cannot be fully copied to the Chongqing market. Thereforeanalyzing the key successful factors of Hong Kong MTR business model and theirfeasibility in Chongqing can be of great benefit Chongqing’s urban rail transit development.The study’s primary focus is on MTR Corporation’s metro business model in HongKong, and its joint venture metro cases in Mainland China. It analyzes the key factors ofimplementing R+P model and additionally the reasons that MTRC chose not to applythe same business model in mainland China. Then the study compares the Chongqingrail transit situation to finally identify the most suitable business model for Chongqing’scircumstance.This study combines case study methodology with PEST analysis. Afterperforming comparative analysis of the of different business models and how theywould operate under Chongqing’s circumstance, it identified the feasibility of applyingPPP in Chongqing, as well as cooperating with MTR Corporation in an integratedrailway and urban planning system.