November 05, 2012

ITDP Promotes New Direction for Urban Transport Funding in China

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ITDP Managing Director for Global Policy Michael Replogle met with international and Chinese transport finance experts last week in Beijing to explore new prospects and directions for China’s national urban transport financing.

At an expert workshop organized by the China Urban Sustainable Transport Research Center, GIZ, and EMBARQ from November 1st to 3rd, Replogle and the director of the China Sustainable Cities program, He Dongquan, worked with officials from the National Development and Reconstruction Commission as well as leading Chinese Universities to outline plans for a China National Public Transport Fund. Following a review of current institutional and financial arrangements in China for urban transport and related international experiences, these experts are developing new recommendations for China’s unique transport opportunities. Specifically, how a dedicated transport fund might provide new resources and new incentives for innovation. Their recommendations will be refined and presented to key government officials in the coming months.

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Recommendations will include the value of redirecting a portion of motor fuel consumption tax and motor vehicle tax revenue to help cities and states improve their capacity for planning, data collection, monitoring, and reporting. They will also include support for public and non-motorized transport investments consistent with the goals of China’s “12th Five Year Plan”. That Plan gives priority to the development of urban public transportation systems and sets goals for increasing the share of travel by public transport. It calls for more urban rail and bus rapid transit systems, with stronger management of private motorized transport and promotion of non-motorized transport, and seeks to optimize the functions and layout of transfer centers and increase transport efficiency.

Implementing these transport elements of the 12th Five Year Plan will require both reforms in central government transport system funding programs and a strengthening of both local institutional capacity and central government capacity to supervise and monitor progress. The workshop also discussed potential reforms in financing transportation, such as reducing dependence on land transfers to finance transportation, and increasing use of parking and time-of-day road user charges, vehicle quota systems, and other sources of revenue, debt financing, value capture, or taxation.

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