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On the financial viability of mass transit development: the case of Hong Kong

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Abstract

Mass transit projects are often a top contender of many cities to meet their increasing demand for travel. Despite the global trend of privatization, mass transit services, as public goods, remain largely being provided and operated by the public sector. Hong Kong is one of the few exceptions that all mass transit services are commercially operated. Both rail and bus services in Hong Kong are reputable for their quality and profitability, often serving as benchmarks for new projects. In this study, we investigate the factors contributing to this success. In particular, we ascertain the quality of transit service provision by the private sector over the past two decades. Then, we conduct an in-depth analysis of the account books of leading railway and bus operators in Hong Kong so as to shed light on their financial viability. Through this study, we hope to present crucial factors for providing financially viable private transit services.

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Notes

  1. MTR was privatized and became a listed company in October 2002.

Abbreviations

HCM:

Highway Capacity Manual

KCR:

Kowloon Canton Railway

KMB:

Kowloon Motor Bus

MTR:

Mass Transit Railway

PCS:

Profit Control Scheme

pcu:

passenger car unit

phpd:

per hour per direction

TKO:

Tseung Kwan O

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Acknowledgment

The constructive comments from the anonymous referees and the Editor are gratefully acknowledged. The study was partially supported by the Competitive Earmarked Research Grant #617105 from the Research Grants Council of the Hong Kong Special Administrative Region.

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Authors and Affiliations

  1. Department of Civil and Environmental Engineering, The Hong Kong University of Science and Technology, Clear Water Bay, Hong Kong, People’s Republic of China

    Siman B. Tang & Hong K. Lo

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  1. Siman B. Tang
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  2. Hong K. Lo
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Correspondence to Hong K. Lo.

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Tang, S.B., Lo, H.K. On the financial viability of mass transit development: the case of Hong Kong. Transportation 37, 299–316 (2010). https://doi.org/10.1007/s11116-009-9251-7

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