W. K. Lis
Superstar
Great Mass Transit Doesn't Have to Cost a Fortune
Read More: http://www.slate.com/blogs/moneybox/2013/11/12/hong_kong_mtr_costs_great_transit_at_low_cost.html
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MTR does things other than Hong Kong transportation operations, but their Hong Kong transportation division spent 7.82 billion Hong Kong dollars in 2012. By contrast, the Washington Metrpolitan Area Transit Authority had $2.13 billion in 2012 operating expenses. At the current exchange rate of 7.75 Hong Kong dollars per U.S. dollar, that means MTR is spending less than one-half of what WMATA spends.
- Now, of course there's nothing wrong, per se, with spending a lot of money on your city's transportation system in order to obtain better transportation. But if you compare the level of service MTR delivers to Hong Kong with what WMATA delivers for D.C., I think you'd find it hard to make the case that what we're getting is twice as good. MTR has excellent train frequencies, about the same number of train stations, and over five times as many riders as WMATA. The only downside is that MTR's operating hours are a bit more restrictive than WMATA's. Beyond that, they're spending less money and delivering a better service—a valuable reminder that cost effectiveness counts for something.
- I've heard it said by U.S.-based transit activists that the success of MTR in providing a high level of service without ongoing operating subsidies is attributable to the fact that the company is also a substantial real estate developer and landlord around rail stations. It's true that they do those things, but it's simply not the case that landlording is subsidizing the transportation operations—the transportation is profitable on its own terms.
- Conversely, I've heard it said by U.S.-based conservatives that the success of MTR is due to it being a private for-profit firm rather than a government agency. But while it's true that MTR is company listed on the Hang Seng Stock Exchange, it's also true that over 70 percent of the shares in the company are still held by the Hong Kong government.
- MTR is cost-effective because the Hong Kong government demands cost-effective transit. Conversely, I bet MTR isn't nearly as good a place to work as WMATA or other American transit agencies for rank-and-file employees. But whatever the case may be about this, whatever MTR is doing with its workforce isn't undermining its ability to hire enough people to run an effective transit system.
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Its also nice that the transit agency OWNS buildings at its stations. It gets rental (both residential and commercial) income. The TTC may own some of its buildings, but rents offices scattered around the city. The TTC should OWN buildings at its stations, both for its offices but more for the income.