Beijing subway set to hike prices

"Is this transportation really for the public," cried Yan Zhijiang, a 33-year-old white-collar worker who lives in Beijing. Yan is far from alone in his outcry when the topic of subway price hikes is brought up. In a city that runs on long-distance commutes, Yan and numerous others feel themselves falling victim to the so-called public transportation.

Living more than 20 kilometers away from his company, Yan has to squeeze onto an overcrowded subway car for the one-hour ride to his office each day. "The furthest a bus trip can take you is Guomao station on Line 1, which already takes an hour because of the awful traffic jams along the way. There is no way I can give up the subway," Yan told the Global Times.

Last year, Yan moved to Tongzhou, a suburban district of Beijing to the east of the city center, to cut down on rent payments. His monthly rent, which used to be 10,000 yuan ($1,623.4), is now 3,500 yuan. Subway price hikes, in his eyes, feel like a further jab at non-native Beijingers like him. "This is just a rent hike in another form. People making less money are bound to suffer."

There is no final draft for the price hike plan as of yet, but the Internet is rife with speculation, agitating many people like Yan. As the capital city braces for a fifth price adjustment, analysts are urging reform beyond price hikes to improve the city's public services.

Public vs profit

Beijing ended its open call for public opinions on public transportation reform drafts on July 20. A public hearing will be organized before the final price change, according to the Beijing Municipal Commission of Development and Reform.

"Government investment will not be cut, and public transportation's price advantage [relative to other forms of transportation] will be maintained," said an official with the commission. "We will also make sure that students, senior citizens and other special groups of passengers continue to enjoy preferential pricing treatment. We will also put policies in place to benefit the commuting population."

The city's last price change was in 2007, when the municipal government reduced the price for bus tickets to one yuan and subway tickets to two yuan, the cheapest in China.

"Annual operating costs rose from 134 million yuan to 533 million between 2007 and 2013, while ticket prices fell from 3.25 yuan to 2 yuan," an anonymous supervisor with the Beijing Subway was quoted as saying by the Xinhua News Agency, while the city's traffic control center revealed in July that the city's subway operating cost per person is 7.9 yuan, indicating a nearly 6 yuan deficit for every passenger it carries.

Meanwhile, statistics from Beijing's finance bureau showed that the city spent 20 billion yuan subsidizing public transportation in 2013. The figure was 17.5 billion yuan in 2012, more than the city's subsidy for public health care, according to Ma Boyi, a spokesperson for the Transportation Administration of Beijing.

Zhang Guohua, dean of the Comprehensive Transportation Research Institute at the China Center for Urban Development, said that the increasing amount of investment in public transportation is not sustainable as a part of public finance, while inadequate revenue from the Beijing subway makes it difficult for the government to continue improving the system.

"A rational ticket price difference between bus and subway can provide leverage effects, so that short-haul passengers can choose bus, while subway serves longer trips," Zhang said. Current daily bus capacity in Beijing is about 17 million people, while actual passenger flows are around 13 million, according to media reports.

Root of all traffic jams

However, traffic problems might remain a headache even after the price hike. Luo Yameng, a Beijing-based urban planning expert, said that the return of underground passengers may instead worsen above-ground traffic, which is already notorious.

"Especially for residents living in 'sleeper towns' like Changping or Tongzhou, this price hike will definitely increase their travel costs, since they don't have any other convenient options available. Against the background of the integration of Beijing-Tianjin-Hebei region, the price change also feels like a way to drive some of the low-income non-local populations out of the city," Luo noted.

The city's current traffic problems are the result of failed urban planning, Luo emphasized. Too much of Beijng's urban functions are concentrated in downtown, while "sleeper towns" lack employment opportunities and public services.

"To actually bring down the total demand [for transportation], it is crucial to create more jobs in outlying areas," Zhang added.

A Beijing subway employee surnamed Xu shared a similar observation, saying that a slight price hike would not lead to a pay raise for him. Nor would it change overcrowding at almost all stations during rush hours. "But it might help change the investment and debt picture," Xu said

Another way to do business

However, Xu noted that there is in fact one subway line in Beijing that makes money with each passenger. "MTR employees are paid a little more each month [than we are]," Xu said. Beijing MTR Line 4 is owned and partially operated by Hong Kong MTR Co, the company that oversees Hong Kong's public transport network.

In contrast with other subway lines, Line 4 has poured 10 billion yuan back into the municipal government's coffers, according to Yi Min, MTR's chief executive.

"Apart from subway operation, the MTR is also responsible for high-end property management along its subway lines, which helps it make more profits. This could serve as a good example for Beijing and other cities to learn from," Zhang noted.

MTR is expanding the number of lines under its management, moving from Line 4 to the newer Line 14 and the Daxing suburban feeder line.

In 2013, MTR's total investment in the mainland reached HK$ 8.82 billion ($1.1 billion). Of the subway lines it runs, only Line 1 in Zhejiang province's capital city of Hangzhou runs a deficit, as it has yet to properly tap into income streams from property development along the line.

Yao Zhan, an urban planning officer at Hong Kong MTR, said that the land development rights the company enjoys in Hong Kong are not as easily accessible in the mainland. "We need to go through the entire bidding process, competing with other developers for our projects, which increases the cost of land purchases. We need a more innovative system for our future projects to reach their full potential," Yao was quoted as saying by the China Economic Weekly.