1. Urban Transport Financing in China!
! Presented at Transforming Transportation 2013!
! Daniel Bongardt!
! Project Director!
! GIZ China!
Transforming Transportation 2013!

2. Urban Transport Financing
in China
Transforming Transportation 2013, January 17th, Washington DC
Daniel Bongardt, GIZ China
2/4/13 Type presentation title here Page 2

3. The Trillion RMB Question
How can urban transport funding
in China become sustainable
and trigger more green transport
development?
2/4/13 Page 3

4. Background: Increasing
Costs of Urban Rail
• 29 subway projects in 22 cities
approved
• ca. 1 trillion RMB total investment
in 2012
• 1 km subway costs about
0.7-1.0 billion RMB
• 4 billion RMB of subsidies annually
in Beijing
Source: China Daily (January 10, 2013)
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5. Existing National Funding
• Transit fuel subsidy (50 billion RMB/year)
• Pilot Transit Metropolis Programme of MoT
(still tbd. around 0.5 billion RMB/year)
• Low Carbon Urban Transport Pilot City Programme of MoT with 26
pilot cities (250 million RMB in 2011, 500 million RMB in 2012, over
700 million RMB in 2013)
• Comprehensive Passenger Transportation Hub Programme to
connect different transport modes (100 Hubs planned during the 12th
FYP, subsidy to each hub is 30-50 million RMB)
• 200 logistic centres during the 12th FYP (30-50 Mio. RMB per centre)
• Low carbon city programme under NDRC (transport share unknown)
2/4/13 Urban Transport Finance in China Page 5

6. Current Financing Issues in China
• Land concessions
• Debt accumulation in cities
Investments
• No dedicated national fund
• Tax revenues for highways
• No land value capture
Operation
• Fixed ticket fares
• High subsidies for operation
2/4/13 Urban Transport Finance in China Page 6

7. Further challenges ...
Institutional Planning Capacity at
Issues framework local level
• Institutional • Coordination • Limited
complexity between cities knowledge
• Lack of co- • Link to urban • Lack of overall
ordination development manpower
(horizontal) • Focus on net- • Assessment of
• Private sector works rather performance
involvement than user and • Data access and
impact availability
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8. Urban Transport Finance Expert Workshop, November 1-3
2/4/13 Page 8

9. International Experiences
Funding for regions or city-clusters
Co-financing of projects A strong single authority for SUT
Financial support for technical assistance
Training Assessment bodies
Support for studies
Coordination between cities Linking transport & urban planning
Mandatory mobility plans that fulfil certain criteria
Definition of criteria for funding
Projects need to be part of master plans to be eligible
Using local revenues Public-private partnerships
2/4/13 Page 9

10. Innovations for urban transport finance
Participants were working in
4 breakout groups:
1. Local Empowerment
Increasing options for local funding
of sustainable urban transport
2. Mainstreamers
Scale up innovative funding options
for sustainable urban transport
3. New Transport Fund
Using national funding to catalyze
sustainable urban transport
4. Long March to Structural Reform
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11. Building blocks ...
... of sustainable urban transport financing in China
Further concentration of responsibilities
Private
Indp. mobility Performance sector
observatories indicators
Guidance Evaluate Comprehensive
Performance
for cities Mobility Plans
City dept
Grant
s management
National Urban Move away from land More funding
concessions
Transport Fund through TDM
Fuel tax Parking, property
revenues tax, congestion
National charging, etc. Local
2/4/13 Type presentation title here Page 11

12. Towards new urban
transport financing National
funding
in China
Compre-
hensive
Mobility
Plans
Integrated
Sustainable
Transport
Policies
Remove system (incl. TDM gen-
erating revenues)
relying on sales of
land concessions
2/4/13 Page 12

13. Thank you!
daniel.bongardt@giz.de
Page 13

14. Back-up Slides
2/4/13 Urban Transport Finance in China Page 14

15. 0,43 Public transport financing in Germany
Public Investment in Rail (in billion €, estimation for 2008)
BSchwAG-Anteil SPNV,
zusätzliche Haushaltsmittel Länder/ 2,78
Kommunen, LuFV-Anteil SPNV
Tax reductions for PT
Querverbundsvorteil, keine
1,85 USt für Verkehrsverträge;
Public Investment in Bus GVFG/ ermäßigter MwSt-Satz
Entflechtungsgesetz, zusätzliche
Haushaltsmittel Länder/ 8,99
Kommunen, Bundes-GVFG
Revenues from operation
Fahrgelderträge (ohne
5,34 Tarifersatzleistungen;
Operation Rail SPNV: 3,14; ÖSPV: 5,55),
Verkehrsverträge Werbung, Pacht
(ohne Ausgleichszahlungen,
inklusive Trassenpreise) 2,17
Subsidies for special
3,05 tickets (social groups)
Operation Bus (Sozialtickets, SGB IX,
Querverbund, Verkehrsverträge, Schülerbeförderung,
Betrauungen, freigestellter Verbundtarif-Förderung)
24,61 Total public transport spendings
Schülerverkehr
15,62 Share of public funding
2/4/13 Source: KCW, 2010 Page 15

16. Towards urban transport
financing in China
Expenditures
National Urban • Investment
Transport Fund
• Operation
Sale of Land
Consessions • Maintenance
Creat new
revenues on local
level (TDM)
2/4/13
Page 16

17. Group 1 – Local Empowerment
Increasing options for local funding of SUT
1. Private investments and efficient operation through private sector
involvement
2. Analyse, shift, add, prioritize – focus on add on local level (e.g.
parking fees, license plate auctioning, road charging, company tax
to support public transport (see French example), land value
capture, ticket fares
Next steps: Analyse the current revenue status and develop future
revenue options for pilot cities.
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18. Group 2 – Mainstreamers
Scale up innovative funding options for SUT
Local Level National Level
Institutional reform towards a single Allow local governments to create local
authority managing urban transport sources of revenue
Establishing an integrated transport Dedicate national sources of funding for
fund out of different sources of funding sustainable urban transport (e.g.
(national and local) increase fuel and or vehicle taxes)
Funding priorities are integrated sust- Provide policy and capacity building
ainable transport projects, integrated in support.
urban development master plans
Coordinate guidance for sustainable
Defining citywide objectives on key urban transport under a single national
performance indicators (e.g. mode authority
share)
Next steps: Institutional mapping and further studies to be built trust
2/4/13 company presentation 2012 Page 18

19. Reform China Transport with New Fund
Using national funding to catalyse urban transport
• Comprehensive Mobility Plans that meet National Planning
Requirements
• Establishment Urban and Provincial Mobility Observatories for
independent data collection and monitoring
• Competitive grants for investment in public transportation that meet
CMPs
• The Fund could be funded by shifting a portion of the national fuel tax
and vehicle tax revenues
Next steps: Informal discussions to prepare an in-depth proposal followed
by establishing effective capacity building, administrative, and enforcement
mechanisms
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20. Long March to Structural Reform
• Align administrative structures with the functional urban area so that
there will be one agency, coordinating transport policy
• Cautious de-link urban revenue from land concessions and allocate
more funding to SUT (including TDM, land value capture)
• Coordinated national urban transport program at national level as a
framework for revenue mobilization
• Establish benchmarking and performance indicators.
• Develop a reporting mechanism (that takes developmental differences
within China into account)
• Carefully allow cities to take on debt
Next steps: Institutional pilot project for funding urban transport (e.g.
bundling pilot programmes tied in with the development of a strategic plan
and experiment with local revenue generation such as property tax.
2/4/13 Type presentation title here Page 20

21. Eight Recommendations
1. Unifying responsibilities (national and local)
2. Consistent policy guidance in a national urban transport policy (national)
3. Creating a Chinese National Urban Low Carbon Transport Fund (national)
4. Strengthen local debt management (local)
5. Develop new revenues for sustainable urban transport (national and local)
6. Develop urban comprehensive mobility plans (local)
7. Improve public-private partnerships (local)
8. Pilot programme to test new approaches to urban transport funding
(national)
2/4/13 Type presentation title here Page 21

22. Transforming Transportation 2013!
! Co-organized by EMBARQ and The World Bank!
! More information at:!
! EMBARQ.org!
! worldbank.org/transport!
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Transforming Transportation 2013!