Journal of Engineering, Project, and Production Management, 2011, 1(1), 36-45
Cost-Benefit Analysis of High-Speed Rail Link between Hong Kong and Mainland China
R. Tao1, S. Liu2, C. Huang1, and C. M. Tam3
1PhD Student, Department of Building and Construction, City University of Hong Kong, Hong Kong SAR.
2PhD Student, Department of Building and Construction, City University of Hong Kong, Hong Kong SAR. E-mail: shalau2@student.cityu.edu.hk (corresponding author).
3Professor, Department of Building and Construction, City University of Hong Kong, Hong Kong SAR.
Project Management
Received February 17, 2011; received 1st revision April 11, 2011; received 2nd revision April 15, 2011; accepted April 15, 2011
Available online June 25, 2011
Abstract: The Legislative Council in Hong Kong has approved a funding of USD$8.60 billion to build the high-speed rail (HSR) line linking mainland China. HSR is a break-through technology that allows trains running at a speed over 250 km per hour. The most controversial part of the HSR investment is whether its cost could be compensated by the social benefits. In this study, a cost-benefit analysis of the Hong Kong to mainland HSR (HKM-HSR) line is carried out. First, all the direct and indirect costs, and social benefits are defined; then, monetary equivalents are assigned to these elements; third, all the future values are discounted into present values and aggregated. The results show that the project has a positive net present value (NPV) up to USD$2,068.49 million, which proves that the investment is worth. In addition, other transport alternatives, i.e. the existing roadway and conventional railway, are examined and compared with HKM-HSR, which unveils that HSR has the largest positive NPV among these three passenger transportation modes because of its excellent performance in ticket revenue, travel time savings and safety improvement.
Keywords: High-speed rail, transport alternatives, cost-benefit analysis, net present value.
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Citation: Tao, R., Liu, S., Huang, C., and Tam, C. M. (2011). Cost-Benefit Analysis of High-Speed Rail Link between Hong Kong and Mainland China. Journal of Engineering, Project, and Production Management, 1(1), 36-45. DOI: 10.32738/JEPPM.201107.0005
DOI:
10.32738/JEPPM.201107.0005
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