Sustainable Urban Transport Financing in China - Daniel Bongardt - GIZ China - Transforming...

Urban Transport Financing in China!

Transforming Transportation 2013!

!   Presented at Transforming Transportation 2013!

!   Daniel Bongardt!!   Project Director!!   GIZ China!

Type presentation title here 2/4/13

Transforming Transportation 2013, January 17th, Washington DC Daniel Bongardt, GIZ China

Urban Transport Financing in China

2/4/13

The Trillion RMB Question

How can urban transport funding in China become sustainable and trigger more green transport development?

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)

Existing National Funding

Urban Transport Finance in China 2/4/13

•  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)

Current Financing Issues in China


•  Land concessions

•  Debt accumulation in cities

•  No dedicated national fund

•  Tax revenues for highways

•  No land value capture

•  Fixed ticket fares

•  High subsidies for operation

Investments

Operation

Further challenges ...


Institutional Issues

•  Institutional complexity

•  Lack of co-ordination (horizontal)

•  Private sector involvement

Planning framework

•  Coordination between cities

•  Link to urban development

•  Focus on net-works rather than user and impact

Capacity at local level

•  Limited knowledge

•  Lack of overall manpower

•  Assessment of performance

•  Data access and availability

2/4/13

Urban Transport Finance Expert Workshop, November 1-3

International Experiences

2/4/13

A strong single authority for SUT

Assessment bodies

Funding for regions or city-clusters

Public-private partnerships

Co-financing of projects

Definition of criteria for funding

Using local revenues Projects need to be part of master plans to be eligible

Mandatory mobility plans that fulfil certain criteria

Linking transport & urban planning Coordination between cities Support for studies

Financial support for technical assistance

Training

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

Building blocks ... ... of sustainable urban transport financing in China


Guidance for cities

Comprehensive Mobility Plans

National Urban Transport Fund

More funding through TDM

Further concentration of responsibilities

National Local

Evaluate Performance

Move away from land concessions

Grants

Indp. mobility observatories

Fuel tax revenues

City dept management

Performance indicators

Parking, property tax, congestion charging, etc.

Private sector

Integrated Sustainable Transport Policies

(incl. TDM gen-erating revenues)

Compre-hensive Mobility Plans

National funding

Towards new urban transport financing in China

2/4/13

Remove system relying on sales of land concessions

Thank you! [email protected]

Back-up Slides


Source: KCW, 2010 2/4/13

Public transport financing in Germany (in billion €, estimation for 2008)

Tax reductions for PT Querverbundsvorteil, keine USt für Verkehrsverträge; ermäßigter MwSt-Satz

Public Investment in Rail BSchwAG-Anteil SPNV, zusätzliche Haushaltsmittel Länder/ Kommunen, LuFV-Anteil SPNV

Public Investment in Bus GVFG/Entflechtungsgesetz, zusätzliche Haushaltsmittel Länder/Kommunen, Bundes-GVFG

Operation Rail Verkehrsverträge (ohne Ausgleichszahlungen, inklusive Trassenpreise)

Revenues from operation Fahrgelderträge (ohne Tarifersatzleistungen; SPNV: 3,14; ÖSPV: 5,55), Werbung, Pacht

Subsidies for special tickets (social groups) (Sozialtickets, SGB IX, Schülerbeförderung, Verbundtarif-Förderung)

Operation Bus Querverbund, Verkehrsverträge, Betrauungen, freigestellter Schülerverkehr

5,34

1,85

2,78

3,05

2,17

8,99

0,43

24,61 Total public transport spendings

15,62 Share of public funding

Towards urban transport financing in China

2/4/13

Expenditures

•  Investment

•  Operation

•  Maintenance Sale of Land Consessions

National Urban Transport Fund

Creat new revenues on local

level (TDM)

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.

Group 2 – Mainstreamers Scale up innovative funding options for SUT

company presentation 2012 2/4/13

Local Level

Institutional reform towards a single authority managing urban transport

Establishing an integrated transport fund out of different sources of funding (national and local)

Funding priorities are integrated sust-ainable transport projects, integrated in urban development master plans

Defining citywide objectives on key performance indicators (e.g. mode share)

National Level

Allow local governments to create local sources of revenue

Dedicate national sources of funding for sustainable urban transport (e.g. increase fuel and or vehicle taxes)

Provide policy and capacity building support.

Coordinate guidance for sustainable urban transport under a single national authority

Next steps: Institutional mapping and further studies to be built trust

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

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.

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)


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

!   Questions? Comments? Contact us at [email protected]!!   Follow us on Twitter: @EMBARQnetwork!


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