2018 Theses Master's

A Policy-focused Comparative Study for Urban Rail PPP Development Between Japan and China

Du, Jiaohong

Compared to other developed countries, China is considered a latecomer in urban rail transit public and private partnership (PPP) because traditionally the country’s urban infrastructure is mainly provided and funded by the public sector through municipal revenues and governmentbacked bank loans. Facing mounting municipal liabilities and huge demand for construction, China has been exploring many innovative financing modes for urban rail infrastructure, and PPP is one of the mostly practiced ones. This thesis studies the differences between China’s and other developed countries’ policy contexts for urban rail PPP adoption, with the goal to contribute to the discussion on what has been impeded China from fostering its current urban rail PPP projects. To shed light on possible answers, this thesis uses Japan as a case study and conducts a comparative analysis from two aspects: policy goals and policy outcomes formed by a combination of PPP policy and land value capture schemes related policies in these two countries. This thesis concludes that urban rail PPP is sensitive to policy environment provided by the government at both the city and national levels. Besides differences in land ownership and land transfer system, compared to Japan, China lacks an inadequate legal basis and an effective land-value capture scheme to effectively invite more stakeholders in the PPP projects to undertake the risks and share the benefits. These factors contribute to unfavorable policy contexts for urban rail PPP projects to fulfill their contract goals of long-term partnership, joint risk undertaking, and benefit sharing, and thus, the financing performance of China’s PPP projects is weakened.