Procuring urban rail transit infrastructure by integrating land value capture and public-private partnerships: Learning from the cities of Delhi and Hong Kong

Worldwide, the private sector has actively participated in delivering transport infrastructure assets in cities. Typically, Private Participation in Infrastructure (PPI) approaches have been used to deliver urban rail transit (URT) systems. Public-Private Partnership (PPP) agreements or variants thereof have been the procurement method of choice by governments. However, PPPs have been unable to provide governments with value for money and concessionaires with sufficient operating revenues. The corollary, in this case, has meant that governments have been drawn to consider alternative forms of financing to procure and support the economic viability of a city's URTs. Land value capture (LVC) has been identified as a potential finance mechanism that can be integrated with a PPP to ensure its economic success. There are, however, only a limited number of cities that have integrated LVC with a PPP to successfully their URT projects. In this paper, an exploratory case study approach is used to learn from the experiences of Delhi Airport Metro Express and Hong Kong's Mass Transit Rail. Consequently, we develop a conceptual model that integrates land value capture and PPPs that can assist policymakers with the procurement of their rail infrastructure. The implications of our developed model for procurement policy are presented.

Automated summary

Worldwide, the private sector has actively participated in delivering transport infrastructure assets in cities. However, Public-Private Partnerships (PPPs) have been unable to provide governments with value for money and concessionaires with sufficient operating revenues in the delivery of urban rail transit systems. Land value capture (LVC) has been recognized as a potential finance mechanism that can be integrated with PPPs to ensure economic success. This paper presents a conceptual model developed through case studies of Delhi Airport Metro Express and Hong Kong's Mass Transit Rail to assist policymakers in procurement of their rail infrastructure and discusses the implications for procurement policy.