# Transportation Deployment Casebook/2023/Shenzhen Metro
## Introduction to the Metro
### Technological Characteristics

Metros are exclusive, high-density, high-capacity urban rail systems covering various underground and above-ground rights-of-way in urban areas; most of their routes are underground and are highly automated with small headways; they have a high degree of travel time reliability and make frequent stops over short distances.
The metro has three main technical characteristics of speed, comfort and safety：

#### Speediness

Vehicles have high operating speeds, high starting and braking accelerations, most use high platforms, short metro stopping times, rapid and convenient boarding and alighting of passengers, and easy interchanges, thus enabling passengers to reach their destinations more quickly and shortening travel times.

#### Comfort

The vehicles and stations of the metro are generally equipped with air-conditioning, guidance devices, automatic ticketing devices and other equipment that directly serve passengers, so urban rail transit has better riding conditions and its comfort is better than that of public trams and buses.

#### Safety

As the metro runs on special tracks, there are no level crossings, it is not interfered with by other means of transport and has advanced communication signal equipment, so traffic accidents rarely occur.

### Advantages

* Land saving: As land in urban areas of metropolitan cities is generally expensive, placing the railway underground can save ground space and allow the ground to be used for other purposes.
* Noise reduction: By locating the railway underground, noise from the ground can be reduced.
* Disturbance reduction: As the route of the metro does not overlap or cross with other transport systems (e.g. surface roads), there will be less traffic disturbance and a lot of commuting time can be saved.
* Energy saving: In the face of global warming, the metro is the best means of mass transit. The steady speed of the underground saves a lot of time in commuting and makes people happy to take it, replacing much of the energy consumed by driving.
* Emission reduction: While ordinary cars use petrol or oil as an energy source, the metro uses electricity and does not pollute the environment as there are no exhaust emissions.

### Main Markets

The metro's main market is the city's residents, commuters, students and tourists. In today's accelerating urbanisation, more and more people are choosing to live, work and study in the city. As an important part of the urban transport system, the metro is able to provide efficient, convenient and comfortable travel services to meet people's travel needs to complete long distance travel in a short period of time. In addition, the metro is also a very important means of transport for tourists, providing easy access to various attractions and commercial centres in the city.Most of the listed companies in China's metro industry are located in Eastern and Northern China, where the economy is more developed and therefore there is more demand for metro construction.

## History
### Pre-Metro Modes of Transportation

The world's first underground system was proposed for London by city lawyer Charles Pearson shortly after the opening of the Thames Tunnel in 1843 as part of a plan to improve the city, while the Chinese underground was first proposed by the Beijing Municipal Committee in 1953 and opened and ran on a trial basis in 1965.Before the advent of the metro, the most common means of transport in urban areas were horse-drawn carriages, cars or trams. However, these modes of transport tended to be slow and unreliable, especially during rush hour when traffic congestion was heavy, so the metro was mainly used as an alternative to the busy road traffic in the city. In modern times, with increasing urbanisation and population growth, road traffic in cities is becoming more and more congested, leading to increasing problems such as traffic accidents, traffic pollution and energy waste. In addition, the metro can replace long-distance passenger transport in some cities, such as road passenger transport and railway passenger transport. In some cities, the metro system is already relatively well established and can provide high-speed, convenient and safe urban passenger transport services, facilitating the travel of city residents and tourists.

### Technological Evolution of the Metro Invention
#### The first stage: the era of steam locomotives (late 19th century to early 20th century)

The earliest metro systems were powered by steam locomotives, so coal and water supply pipes were laid in underground tunnels. Emissions and soot from steam locomotives polluted the air inside the metro and also caused sanitation and health problems.

#### The second stage: the era of electric drive (early 20th century to mid-20th century)

In 1900, the Paris Metro took the lead in adopting electric drive technology, replacing steam locomotives. The advantages of electric drive technology are high efficiency, environmental protection, and high safety, and it also provides better profit margins for metro operators.

#### The third stage: the era of metro signaling system (from the middle of the 20th century to the present)

The metro signal system is a vital part of the metro operation, which can ensure the safety of the train. After the 1950s, subway systems in various countries began to adopt electronic signal systems to replace manual operations.With the development of technology, the modern metro signal system has become very precise and complex, which can provide high safety and reliability for metro operation.

#### The fourth stage: the era of autonomous driving (21st century)

Autonomous driving technology is an important development trend of metro technology in recent years. Many new metro systems, especially in China, use self-driving technology. Autonomous driving technology can greatly improve the efficiency and safety of metro operations, while also reducing the dependence on human resources.

## Birth Stage of Shenzhen Metro Development
### Early Market Development

Shenzhen is one of the most rapidly developing cities in China after the reform and opening up of the country, with rapid urbanisation starting in the 1980s. As urbanisation accelerated, Shenzhen's population and economy expanded rapidly, and the pressure on urban traffic increased. Traditional road transport could not meet the needs of the growing population and vehicles, so more efficient and faster transport modes were needed to relieve traffic congestion. In 1983, Liang Xiang, then secretary of the Shenzhen Municipal Party Committee and mayor, led a team to visit Singapore. Upon returning to Shenzhen, the government decided to leave a 30-metre green belt on each side of Shennan Avenue and to reserve 16 metres in the middle of the green belt in Shennan Avenue for the future construction of the city's light rail.In 1988, after only ten years of construction, Shenzhen proposed a passenger rail transport plan to build a light rail transport between Luohu Railway Station and the airport, with a total length of about 39 kilometres. It was not until 1992 that the State Council and the State Planning Commission approved the construction of light rail (metro) transport in Shenzhen.

### Policy In the 'Birth Stage'

As early as 1984, the Municipal Government's "Shenzhen Special Economic Zone Master Plan (1985-2000)" pointed out that with the continuous growth of Shenzhen's traffic, it is necessary to build light rail (metro). This policy proposed the future development direction of Shenzhen Metro. In 1992, the Shenzhen Municipal Government established the Shenzhen Metro Planning Headquarters and began to plan and construct Shenzhen's metro system. Due to the small traffic volume of the light rail, it cannot meet the needs of Shenzhen's rapid development. Therefore, the government decided to move the light rail line underground and replace it with a metro line with a larger traffic volume, and re-study the feasibility and rail network planning. In 1994, the government formulated the "Shenzhen Passenger Rail Transit Network Master Plan", which was included in the "Shenzhen Urban Master Plan (1996-2010)" after review. The city's metro rail network consists of nine lines, three of which are existing commuter rail lines and six are underground and light rail lines to be built, with a total length of about 270 km. Three railways are Guangzhou-Shenzhen Railway, Pingnan Railway and Pingyan Railway, which have been transformed into commuter trains. This planning policy established the basic framework of the Shenzhen subway network.

## Growth Stage of Shenzhen Metro Development
### Relevant Policy Issues

In December 1995, the General Office of the State Council of China issued the "Notice on Suspending the Approval of Urban Underground Rapid Rail Transit Projects", suspending the approval of rail transit projects in cities other than Beijing, Shanghai, and Guangzhou. The Shenzhen Metro project was temporarily suspended.

### Public Sector Contribution

In order to proceed with the construction of the Shenzhen Metro, the Shenzhen Government applied to the State Planning Commission in 1997 for a metro project, which was approved in May 1998.The project was then formally established and renamed as "Shenzhen Metro Phase I Project".The construction of Phase I started in 1998 and the feasibility study was approved by the State in 1999. The project lasted 6 years, and on December 28, 2004, the first phase of the project was put into trial operation. After the opening of the first phase of the subway project, the Shenzhen subway network did not continue to expand immediately. In 2003, the Shenzhen Municipal Planning Bureau formulated the "Shenzhen Urban Rail Transit Construction Plan (2005-2010)", proposing the second phase of the project, planning to add three new subway lines and extend two main lines. The construction plan was approved by the National Development and Reform Commission in March 2005 and completed in 2011. The completion of the second phase of the subway project provided a good transportation service guarantee for the 26th World University Games held in the same year, and improved the overall transportation capacity of Shenzhen. The proportion of rail transit in Shenzhen to public transportation has also risen from 6% before the opening to 29%. In 2010, the Shenzhen Municipal Planning and Land Resources Commission compiled the "Shenzhen Urban Rail Transit Short-term Construction Plan (2011-2016)", proposing a construction plan from 2011 to 2016 (the third phase of the Shenzhen Metro Project), and in April 2011 Monthly approval by the National Development and Reform Commission.The third phase of the Shenzhen Metro project includes the construction of Line 6, Line 7, Line 8, Line 9, and Line 11, a total of 5 lines. Since 2016, the operation of new lines has been opened successively.

### Private Sector Contribution

In July 1998, Shenzhen Metro Co., Ltd. was registered and established. Shenzhen Metro has been exploring and innovating investment and financing models, including combinations of financial leases, medium-term notes, medium-term bonds, syndicated loans, and short-term loans, and has studied and planned listing financing. The first phase of the Shenzhen Metro project is only over 20 kilometers long. 70% of the construction funds come from government finances, and the remaining 30% comes from bank loans. The second phase of the project has a total length of 155 kilometers. The financing pressure is huge, and the proportion of government funding has been reduced to 40%. 60% will be self-financed by Shenzhen Metro Co., Ltd. From the third phase of the project, the Shenzhen Municipal Government will no longer provide direct capital investment. 50% of the total investment of Line 7 and Line 11 mainly comes from the rail transit coverage and land development income along the line. Other funding came from bank loans in China. When the land income cannot meet the demand, the municipal financial funds will be invested. In addition to traditional bank loans, Shenzhen Metro has successively carried out a number of financing projects. For example, in 2011, Shenzhen Metro Group issued medium-term notes worth 10 billion yuan.
The Shenzhen government has been using the Build-Transfer (BT) model for metro construction on a large scale since the second phase of the project, that is, the successful bidder will advance the capital for construction first and the government will buy it back after three years.This is to ease the financial pressure and speed up construction progress. Line 5, with a total investment of RMB 20.6 billion, is the world's largest BT mode urban rail transit project. Line 7, Line 9 and Line 11 of the three phases of the project are all built using the BT model, with the cost of the project within the BT scope reaching 48 billion yuan.
Line 12 and Line 13 are the first metro lines in Shenzhen to be operated under the Public-Private Partnership (PPP) model. The construction of the PPP project includes vehicles, signals, automatic ticketing systems, electromechanical equipment and track laying works.Through public tender, Shenzhen Metro Group and CEC formed a project company to operate Line 12, and MTR (Shenzhen) and China Railway Electrification Bureau formed a project company to operate Line 13. The two project companies are responsible for the whole process of managing the investment and construction, operation management and maintenance, asset renewal and additional investment of the project.

## Mature Stage of Shenzhen Metro Development

In 2016, the second phase of the Shenzhen Metro project was completed and opened for operation one after another.The increase and expansion of lines means that the development of Shenzhen Metro has officially entered a mature stage. In order to adapt to the ever-changing market, competition conditions and policy value models, Shenzhen Metro has made the following attempts:

### Continuously Expand the Metro Line Network

Shenzhen Metro was mainly oriented to the city's central business district and residential areas in the early days of its establishment. With the continuous expansion and development of the city, Shenzhen Metro has gradually expanded to the suburbs and surrounding cities of the city. For example, Shenzhen Metro Line 4 extends to Longgang District, and Shenzhen Metro Line 9 connects Shenzhen city center and the airport.Through continuous expansion of metro lines, Shenzhen Metro can better meet the travel needs of citizens and at the same time improve its competitive advantage in the urban transportation market.

### Adopt Innovative Fare and Service Strategies

The Shenzhen Metro has been introducing innovative fare and service strategies to improve its competitiveness. For example, Shenzhen Metro has introduced a "Metro + Bus" joint ticket, which allows people to switch between the metro and the bus easily. In addition, Shenzhen Metro has introduced different types of tickets and concessions, such as student tickets, senior citizen tickets and holiday discounts, to attract more people to use the metro and increase its market share.

### Promote Smart and Green Travel

Shenzhen Metro continues to promote smart and green travel to adapt to market and policy changes. For example, the Shenzhen Metro has introduced intelligent payment methods such as mobile phone scanning code payment to facilitate citizens to purchase tickets.In addition, Shenzhen Metro also vigorously promotes the concept of green travel, encouraging citizens to use public transportation and bicycles to travel, so as to reduce the impact of car use on the environment.

## Future Prospects of Shenzhen Metro Development

The current latest Shenzhen Metro line network planning is the "Shenzhen Rail Transit Line Network Planning (2016-2035)" issued by the Shenzhen Municipal Planning and Land Resources Commission in 2017.It is estimated that there will be a total of 33 urban rail lines (No. 1-32 Line and the branch line of Line 6), with a total length of 1,265 kilometers, including 8 urban express lines and 24 normal speed lines. In order to better meet people's needs for subways in the future, Shenzhen Metro has a long way to go, and there are many areas for improvement:
* Further expand the metro network: Although Shenzhen's metro network is well developed, as the city continues to expand, the metro network needs to be further expanded in order to better serve citizens and tourists.
* Improve the convenience and comfort of facilities: More convenience facilities need to be provided in metro stations, such as more vending machines and more seats, as well as improving the comfort of the carriages, such as better ventilation systems and more comfortable seats.
* Improve service quality: The metro staff need to provide more efficient and friendly services, such as helping passengers solve problems and providing necessary information.
* Improve security measures: The safety measures of the metro need to be further enhanced, such as more surveillance cameras and more police officers, to ensure the safety of passengers.Shenzhen Metro network map

## Quantitative Analysis

Based on the relevant data provided by the Shenzhen Bureau of Statistics, the annual passenger volume of the Shenzhen Metro from 2005 to 2022 was obtained and these data were fitted and analysed to determine the three stages of the development: birth, growth and mature. The three-parameter function fitted to the data is:
$S(t)={\frac {K}{1+exp(-b(t-t_{i}))}}$
Where:
* $S(t)$ is the status measure (e.g. Passengers)
* $t$ is time (years)
* $t_{i}$ is the inflection time (year in which${1 \over 2K}$ is achieved)
* $K$ is the saturation status level
* $b$ is a coefficient
Due to the limited time available for the data used, estimation using Ordinary Least Squares Regression is required for K and b. The coefficients were estimated using the following formula:
$Y=bX+c$
Where:
$Y=\ln(Passengers/(K-Passengers))$
$X=Year$
Shenzhen Metro model results :
| Variable | Description | Value |
| $K$ | Saturation Status Level | 2500000 |
| $b$ | Coefficient | 0.3291 |
| $r^{2}$ | R-squared | 0.9328 |
| $t_{i}$ | Inflection Time | 2016 |
The Shenzhen Metro officially opened to traffic in December 2004, so the data is collected from 2005. The predicted results of the growth stage of the development of Shenzhen Metro are very consistent with the actual situation. Shenzhen Metro entered the mature stage of development in 2016, which coincides with the inflection point time; in 2020, due to the epidemic, the annual passenger traffic will drop sharply, but it will recover in 2021 the following year Peak, annual passenger traffic shows signs of steady decline from 2022. Since the Shenzhen Metro has not been developed for a long time, there is no obvious recession period.

## Conclusion

The development of the metro in China has not taken long compared to Western countries. The completion of Beijing Metro Line 1 in 1969 marked the official introduction of metro technology in China. At that time, China's metro construction cycle was long and slow due to multiple factors such as the international situation, technical reserves and talent conditions. It was not until the 21st century that China's economy opened up further to the outside world, greatly stimulating economic growth and laying the economic foundation for metro construction, when Shenzhen opened its metro at the end of 2004 in order to meet the travel needs of the society, and after more than ten years of development, the Shenzhen Metro has now entered a mature stage of development. During this period, Shenzhen Metro was built through the BT (Build-Transfer) model and PPP (Public-Private Partnership) model, and payment methods such as code payment and bank card swipe payment were continuously improved for metro tickets. In August 2022, Shenzhen released the fifth phase of its urban rail project plan. It is planned that the metro network will cover areas far away from the city and areas with little metro coverage to improve public access to rail travel. It is believed that the Shenzhen Metro will be developed more and more in the future.

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