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Comment by a_square_peg | Hacker News Reader

This is correct - I think it's called R+P (Rail + Property). The government doesn't pay for the project at all and grants exclusive development right to the transit operator, which in case for Hong Kong is MTR. They then negotiate revenue sharing with commercial and residential developers on rent etc.

This works well and these transit operators make more money from real estate (about 2/3) than transit fare (about 1/3). The tricky thing (other than population density) is that the developer will have to assume the risk of the revenue forecast not panning out. I doubt that any transit operators in North America would be willing to do this.

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It is worth noting that the HK model only works because of artificially high land prices. Virtually all land in Hong Kong is leasehold and the government uses lease revenues to keep taxes low.

Hong Kong’s projects are also not immune to cost issues. Per km they have the same cost issues described in the article. Recent projects have had massive cost blowouts, and even before then scope was dropped from projects to save money. The recent Sha Tin to Central Link dropped a station in Central to save money, and the new stations were only built to handle 9 cars instead of the rest of the line’s 12 cars to save money.

> The recent Sha Tin to Central Link dropped a station in Central to save money, and the new stations were only built to handle 9 cars instead of the rest of the line’s 12 cars to save money.

One speculation is that, it is harder to move 12 cars uphill, than to move 9 cars uphill, after the train crossed the harbor.

The trains are multiple units, so each car has its own powered motors. (Other than trailer cars, but it's pretty trivial to just add more motors.)

The logic is pretty simple. Less train cars means less people per train, which means you can have shorter/narrower platforms, less escalators, fewer exits, etc. and significantly reduce the structure size.

So in this case, the project cost rise is born by MTR, rather than the government (aka tax payer) which would often be the case in North America. I think it would be much easier for public to back transit projects with setup such as this.

MTR can only afford to eat the cost because of the high land prices that drive its profits.

People say housing cost is the worst in San Francisco, where it is 12x house price to income ratio. Hong Kong has a ratio of 43.5x.

Vail Resorts uses this model of ski lifts on (generally) leased national forest land to drive the money making base area timeshare real estate development.

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