Transportation Deployment Casebook/Shanghai Metro

Introduction of Shanghai Metro
Shanghai Metro refers to the urban rail transit system of Shanghai. Shanghai is the third city in Mainland China to have passenger subway lines, following Beijing and Tianjin. The Shanghai Metro system started very recently, but it has become one of the fastest developing systems of the world. As of 2012, there are 11 metro lines in operation. The total mileage by the end of 2011 reached 454.1 km (282.2 miles), making it the world’s longest system. The daily ridership increases rapidly too, from around 240,000 in 1995 to 2.23 million in 2007, and 5.76 million in 2011. The record high daily ridership of 7.55 million was on October 22, 2010 during the 2010 Shanghai World Exposition period. The annual ridership of 2011 exceeded 2.1 billion.

The Birth of Shanghai Metro
Prior to the Shanghai Metro system, the urban public transit modes included buses, airport shuttles, ferry, and taxi. Their limitations started to appear with the city’s fast urban development, population growth, and intra-city transit demand. The city of Shanghai covers and area of 6,340.5 square kilometers (2448.1 square miles). The total population is more than 23 million, equaling 9,589 people per square kilometer citywide. Half of the population lives in the central districts which constitute only 10% of the total land, making the downtown highly crowded, with a population density of 16,828 people per square kilometer, which is 2.4 times of Tokyo, 3.5 times of London and 4.8 times of Paris.

The large size of the city makes intra-city travel very difficult, even without congestion. For example, a trip from one district to another district can easily take one or two hours even without traffic congestion. In comparison, a trip by train to another city nearest to Shanghai may only take 30–40 minutes. The increasing population, ownership of automobiles, and high-density development of the central city have posed great challenges for urban transportation. The congestion was so bad that taking a bus to the nearest airport of the city (which is only 10 km from the central city) from downtown would easily take up 2–3 hours. The situation of crowding buses and low reliability of the public transit modes need to be solved. Besides regulations limiting the purchase of cars, an underground system of public transit was brought up as a potential solution.

The preparation for subway construction started as early as 1958. Shanghai is situated on saturated soft ground, which made tunnel construction very difficult. Some experiments were made to test the feasibility of tunnel construction. For example, the experiment in 1963 tried the structure method using steel reinforced concrete inner lining. In the late 1970s an experimental tunnel was constructed using underground diaphragm wall with concrete structure (which was later used for metro line 1). After that shield method was used for the following lines. In May 1989, China and German formally signed the loan agreement for 460 million marks Subway special fund of. In March 1990, the State Department of China officially approved the project. The first line (Metro Line 1) opened in 1995.

The Impact of Shanghai Metro
There were discusses and arguments for and against the construction of subways. However, since the system has already been built and is still expanding, now that we look at it, we do see huge changes it brought about that greatly shaped the city development and people’s travel behaviors.

The Shanghai Metro lines promoted development. The plan and development process borrowed experiences from other places such as Tokyo to maximize the potential for development. The stations are planned to integrate with existing buildings or future building plans. The interchange hubs and many subway stations attract large amount of passengers and show great potentials for commercial activities. Real estate companies invest in projects along the lines and use languages such as “right next to Line 10 station” to promote their housing to the public. Many residents also depend on the Shanghai Metro plans to make their housing decision.

The Shanghai Metro significantly improved the public transportation of the city. For the crowed central city, the current subway system provides high level of service. For at most 700 meters there will be a subway station. Once a passenger gets in a station, s/he can literally go anywhere and be confident about the time the trip is going to take. Besides the high reliability, the metro line is usually faster than ground transit. For example, a trip by bus from the central city to the railway station usually takes 40–60 minutes. The time is reduced to 20 minutes using the metro.

The metro not only makes travel faster but easier. The subway station is the best place to go when you get lost. Once you find a subway station, you can easily find your way back. There are lots of Shanghai tourism guidebooks that centered on subway lines.

The metro system is also easily connected to other transit modes. Each station usually has several or tens of connecting bus lines. Transfer is easy thanks to the transit card, which can be used for taxi, maglev train, ferry, light rail, subway, and buses.

The Shanghai Metro is having an increasing share of ridership among all public transportation modes. In 2006, the mileage of Shanghai Metro was 140.2 km (87.1 miles). There were 944 bus routes, 17,000 buses and 48,000 taxies in operation. The annual ridership for all public transit was 4.471 billion. Shanghai Metro accounted for 14.6% (0.656 billion).

Mode Share of Shanghai Metro
The Shanghai Metro is having an increasing share of ridership among all public transportation modes. In 2006, the mileage of Shanghai Metro was 140.2 km (87.1 miles). There were 944 bus routes, 17,000 buses and 48,000 taxies in operation. The annual ridership for all public transit was 4.471 billion. Shanghai Metro accounted for 14.6% (0.656 billion). In 2011, the mileage of metro increased to 454.1 km (282.2 miles). The annual ridership for all public transit was 6.09 billion, and Shanghai Metro accounted for 34.5% (2.101 billion). In comparison, the number of buses decreased from 2006 to 2011, the absolute number of bus ridership increased only slightly, and bus share decreased from 61.3% to 46.2%.

Finance and Policy
The construction costs for the whole system is 300-500 million yuan/km. The total construction costs by 2010 was 238 billion yuan ( around 38 billion dollars). 210 billion more will be need for the expansion to reach the planned 880 km in 2020.

There is two sources of funding. 40% of the capital is provided by the government, and the rest 60% is from bank loans, issuing bonds, liquidizing remnant assets, etc. The government’s role is changing in the process, from the major investor (investing 95% and 96% for line 1 and line 2 respectively) to a leading role in forming project company and promoting commercial financing. Shanghai Shentong Metro Co., Ltd. was formed. As a comparatively new transit mode in the city, the development and operation of subway learned from existing modes. The construction and management learned from the railroads, such as trains, track, and capital investment. It more importantly learns from the operation of buses, which is another mode of intra-city transit mode. The Shanghai Metro Operation Management Center is in charge of the overall network operation, while the 11 lines are operated by four operating companies, each of which is responsible for their lines and facilities. The management mode is similar to that of the bus operation. Also the metro fare is based on the number of stations travelled, which is also similar to the bus fare in the past (now most of the bus routes charge a fixed price for a single trip).

Life Cycle of Shanghai Metro
The daily ridership data for Shanghai Metro is retrieved from the Shanghai National Economy and Social Development Public Bulletin for each year from 1995-2011. An S-Curve model is developed using the existing data to examine the birth, growth and estimate the maturity of the system. The data is shown in the table below



The data is used to estimate a three-parameter logistic function:

S(t) = K/[1+exp(-b(t-t0)], where: S(t) is the estimated mileage, t is time (year), t0 is the inflection time (year in which 1/2 K is achieved), K is saturation status level, b is a coefficient (the slope for regression)

To do this, K and b needs to be estimated. K is set to be 500, 600, 700, etc. For each K value, calculation is conducted for each year using the equation: Y=LN(Length/(K-length))



Then a regression between Y and year is performed to decide which K value fits the real data best. The largest R-square means that the model best explains the real data. From the table below, when K=1200 km the R-square is the largest. So the K value is estimated to be 1200.



The regression result for K=1200 is shown in the table below. The result shows that b=0.2537, intercept is -510.57. So the t0 (year in which 1/2 K is achieved) is 2012.49507, which means half of annual ridership of saturation is reached just months ago.



Since K and b value are both known now, the daily ridership for each year can be estimated using the model. The graph below shows the relationship between the estimated data and real data.



The S-Curve fits the real data pretty well. Before 1995, there was no metro line in operation. During the year 1995-2011, the network mileage was growing at an increasing speed. According to the S-Curve model, the year 2012 is the year when 1/2 K is achieved, which means that the system will still grow, but the rate is probably slowing down. Around 2030 the mileage will start to level off at around 1200 km. However we need to pay attention to this S-curve too. The network growth of Shanghai Metro so far is following the metro plan pretty well. According to the plan for next phase, the mileage is going to increase to 880 km in 2020. But on the S-Curve the estimated mileage for 2020 is higher than 1000 km already.