On the Financial Viability of Mass Transit Development: The Case of Hong Kong

Document Type

Journal Article

Publication Date

2010

Subject Area

mode - bus, mode - rail, mode - mass transit

Keywords

Transit operating agencies, Transit lines, Rail transit, Public transit lines, Private sector, Private enterprise, Mass transit lines, Intracity bus transportation, Hong Kong (China), Financial analysis, Case studies, Bus transit

Abstract

Mass transit services are largely provided and operated by the public sector. Hong Kong is one of the few exceptions in that all mass transit services are commercially operated. Both rail and bus services in Hong Kong are renowned for their quality and profitability. This study investigates the factors contributing to this success. The quality of transit services provided by Hong Kong over the past two decades is analyzed. Then, an in-depth analysis is conducted of the account books of the two leading railway and bus operators in Hong Kong in order to understand their financial viability. Their operational and financial efficiency are compared. The findings indicate that although the success of Hong Kong in providing mass transit services via the private sector can serve as a benchmark for new projects, its success can be attributed to many favorable demographic and economic conditions, as well as transportation and land use policies, that may not be present for other cities.

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