HYPOTHETICAL BUSINESS CASE

Caveat Emptor:

This is an empirical tabulation, not an engineered version, tabled for discussion purpose only.
This is a business case for operational business case for transit systems. Not capital works.
The tabulation does not take into consideration the detail cost of ticket, actual no of ridership for particular station, etc.

The Hong Kong Model

Fig. Business case illustration

Background

Let's take out our pencils and yellow trace, scratch out a business case for a mass transit system, let's say it is Hong Kong.

Here are the factors we know.

We know the population of HK
We know the modal split of the territory
We know the development parameter for land development in Hong Kong.
We know that the MTR in HK is solvent, (Does not need subsidy from the government)

Broad Brush Tabulation

Using a catchment area of 1KM diameter, we have an area of 786,000M2.
New town development potential as per HK planning guide gives a GFA of 1.5million m2.
From the top right parameters, population of this new town MAY be 75,000 people.
HK Modal split for mass transit is ~50%
So total daily passenger is ~37,500 passengers

HK has, say 100 Nos. MTR stations
~ Daily ridership - 4.5 million
Therefore 4.5passenger/100 Station = 45,000 passenger per station.

Inference:

45,000 passenger per station will make the system solvent - simplistically put.
The above is for HK, where operationally the system is solvent and needs no subsidy. You can tabulate the datas for your own cities, from the datas that you can get.
New town has a passenger number of ~37,500 passenger.
- However new town, that may be further from city center may have a higher modal split of passenger for the MTR
- The model split of MTR from other forms of transport is supposed to increase due to sustainable goal initiatives of the government.

Based on the above, other parameters, the new town development has a potential for a mass transit that can be financially solvent for the operation side of the system.

Testing this logic to other system

It is important to note that business case in other countries and cities are very different.

If you take the example of Singapore.

Ridership. Say 3.2 million
# of stations 140

In their MRT, a patronage of ~23,000 passengers per day, per station would support this system, operationally, if no subsidy is offered by LTA to the two operators?

Disclaimer: This section presents a simplified version of the business case for mass transit systems, intended to spark discussion. While it may not meet the standards of scholarly research, these ideas can be applied to analyze real financial data from transit systems.

For example, we could review their existing financial statements, focusing on the percentage of revenue generated by retail space compared to passenger fares. This analysis could help us determine the feasibility of expanding retail space within stations and its potential impact on offsetting operational expenses. It might also be worth considering how increased retail might affect ridership.

Page updated

Google Sites

Report abuse