Financing Rail Rapid Transit System: A Comparison Between Chicago and Shanghai

Detailed financial information of a rail rapid line project is often unavailable to the general public until a project has been completed for a couple of years and even for decades. This is especially true in the Chinese context. Based on available information, this paper compares four aspects of the financing of two rail rapid lines that were built almost simultaneously in Shanghai of China and Chicago of the US. The author finds: first, the central governments had the greatest impact on the capital investment in both lines; second, the formation of transit and financial plans in two cities both involved complicated political processes which were shaped by certain political figures and unforeseeable events; third, in the longer term, it was more expensive to maintain a rail rapid line than to build a new line in both countries; and finally, mainly depending on foreign loans and bonds, Shanghai faced greater challenge in offsetting the financial deficit. But this situation was improved as the Shanghai rail rapid system expanded and matured.