Abstract

Being market-oriented, the supply-side reform starts from enhancing the quality of goods and services and its ultimate goal is to achieve a dynamic balance between supply and demand. Theurban rail transitindustry in Chinese mainland is undergoing a grand development never seen before. As the Chinese economy continues to grow, the development of urban rail transport industry will continue to accelerate as well. How to capture these valuable opportunities and develop efficient and high-quality rail transit system to meet the rising demand generated by the growth of cities and the higher expectation of citizens on urban transport is a priority issue which requires prompt solution. Therefore it is definitely a necessity to promote supply-side structural reform in the urban rail transport sector.

Based on its experiences, the MTR Corporation Limited (hereinafter referred to as MTR) would like to make the following suggestions on the supply-side structural reform of urban rail transport sector.

First, we should make rational planning and build high-quality network so that urban rail transit system can enhance its efficiency and play a bigger role in urban development and the betterment of people’s life.The product that urban rail transit industry produces is rail transit system. The key for an urban rail transit system to be effective and efficient is how the system is planned and built. Therefore in the supply-side structural reform the first element to be improved is the planning and construction of rail transit network.First and for most, we need to design the network in a rational and forward-looking way. The layout and planning of urban transport network must cope very closely with the layout and planning of the overall urban development so that we can make a maximal use of the capacity and efficiency provided by urban rail transit network. Next, we shall improve engineering quality by leveraging best practices and newest technologies. Urban rail transit system often involves huge financial investment as most projects are permanent works and will be used for decades or even centuries. It could be very difficult and costly to upgrade or renovate urban rail transit lines. Therefore we shall also raise the bar at a faster pace to ensure that our works will stand for centuries while accelerating the construction process.

Second, we should enhance service quality and make urban rail transport a more preferred and competitive option.Services involved in urban rail transit are very sophisticated and all-encompassing. Different groups of consumers have different demands on the services and apply different service standards. But in general, comfort, convenience and speed are the three core elements.Fundamental cause to some serious problems is that those who develop and manage urban rail transit system do not place sufficient importance to service as the nature of rail transit. As a result people are reluctant to choose rail transit system when they travel and hence rail transit system cannot acquire an absolute advantage in the competition with other transport means and cannot play its due role in urban development. So one of the priorities in the supply-side reform is to improve the quality and awareness of service and highlight it at each and every stage of urban rail transport development.

Third, we should deepen the market-oriented reform, strengthen the management capability of the operator, and pursue the virtuous and sustainable development of urban rail transit industry.Currently, the operating companies in many cities in Chinese mainland are limited by the current commercial models, such a fact results in the low level of rail transit network management, low degree of traveler satisfaction, and low chance of virtuous and sustainable development of the sector. On top of that, fast development of rail transit network puts local governments under mounting pressure of financing for construction and operation. The failure in addressing financial imbalance during the construction and operation of rail transit system will create hidden risks for the further development of urban rail transit system.Therefore in urban rail transport sector it is imperative to achieve overall, lasting financial balance through deepening market-oriented reform and strengthening the management capability of operators.

MTR has developed and run multiple urban rail transit projects in several cities of Chinese mainland and all the project shave achieved remarkable economic and social benefits.MTR, based on its abundant operation experiences and successful business models in the urban rail transit industry, will continue to contribute to the development of the rail transit systems of Chinese mainland.