The development of urban mega-projects in China: A case study of Nantong’s metro project

Abstract

Since there has been a huge amount of transport infrastructure projects being proposed, planned and constructed over the past decades in China, this article aims to reveal the substantial dynamics of China’s rapid development of urban mega-projects. It analyzes Nantong’s metro project to use it as a case study – how it was being justified, approved and implemented, and what were the key driving forces within the whole process through official justifications and key informant interview materials. The urban metro system is supposedly an approach to achieve urban development objectives, a tool for growth and a way to a better urban life. We find inter-city competition as an underlying driving force that initiates such urban mega-projects with certain weight given to economic indicators in project appraisals within a largely local government-led and public-invested process. Furthermore, domestic economic performance and changing policy interventions also exert significant influence on project approval and long-term project development. Our findings echo some Western literature on mega-projects development and urban competition, while revealing other features and emerging issues relating to project initiation, proposal examination and implementation specific to the Chinese context.

Keywords

Urban mega-projects metro development elite interview project motivation China qualitative research

Introduction

Urban mega-projects (UMPs) are large-scale urban infrastructure projects, public facilities and even new districts developments that require great investments to bring short-term and long-term influences on urban development. They are ‘privileged particles of the development process’ intended for ambitious changes (Hirschman, 1995: Vii, Xi), yet with no single model for their developments (Pal, 2015). As valuable devices to engage in wider political battles, UMPs are primarily driven by local and national elites (Santamaría, 2013), over long periods of negotiation and bargaining (Altshuler and Luberhoff, 2003), and with the lack of transparency and democratic control (Vento, 2017).

From the perspective of public investment politics, Altshuler and Luberhoff (2003) have examined four waves of mega-project developments in the US, which reflected interplays between the demands for and the oppositions to such projects. From perspectives of project stakeholders and advocators, Flyvbjerg (2014) concluded technological, political, economic and aesthetic drives to stimulate the booming mega-project developments in Europe. ‘Technological sublime’ describes positive reception of technology as engineers and technologists tend to push the boundaries beyond what technology could do, which can be effective for the mega-project boom during the 19th and early 20th century (Barker and Miller, 1966; Flyvbjerg, 2014). ‘Political sublime’ is proposed to understand the politicians’ desire to initiate mega-projects, often accompanied with unit monumentality, historical importance, public attention and an air of pro-activeness, etc, to help them get re-elected (Flyvbjerg, 2012). Next, ‘economic sublime’ identifies the creation of additional jobs and revenue from mega-project development, with a huge capital flow around the bankers, investors, developers, etc. (Flyvbjerg, 2014). Lastly, ‘aesthetic sublime’ is the designers’ and people’s appreciation of grand buildings and infrastructures (Flyvbjerg, 2014). Altogether, they make up the four drives to ensure a strong coalition of stakeholders who benefit from the mega-projects, and thus will initiate, promote and work for them.

Project promoters value the potentials in wider economic growth and positive urban changes, in terms of increases in land and property prices (Ahlfeldt, 2013; Gatzlaff and Smith, 1993), commercial pattern transformation (Zhang, 2012), comparative advantaged enlargement (Lever, 1993; Yang and Lew, 2009), and most frequently, job and gross domestic product (GDP) creation (Zhou et al., 2018). However, various research findings indicated unsatisfactory performances of mega-projects in realizing their ambitious goals statistically as judged over time, due to inaccurate evidence in project appraisals, especially in traffic forecasts for rail projects (Altshuler and Luberhoff, 2003; Flyvbjerg et al., 2003; Gonzalez-Navarro and Turner, 2016; Merrow et al., 1988). Those miscalculations and obliviousness to difficulties ahead in ex-ante project evaluations were key ‘creative errors’ to establish several historically important mega-projects (Sawyer, 1952: 199). Similarly, Altshuler and Luberhoff (2003) argued that the projections systematically erred in the direction for purely political reasons instead of intrinsic difficulties in forecasting.

Cities often compete in various ways and forms (Gordon, 1999; Head and Ries, 1996). Entrepreneurial approaches to urban governance, aiming to attract inward investment and enhance local economy, were common in Western economies after 1970s (Hubbard and Hall, 1998). The administrative and fiscal decentralization has allowed localities to maintain a significant portion of local revenue, thus stimulate the localized urban governance to use institutional innovation to address administrative constraints, to enhance governance capacity, to mobilize investment and to maximize the local wealth (North and Alt, 1990; Qian, 2011). The establishment of UMPs also contributes to improved built environment and a global appeal to attract inward investments, professionals and tourists in the tide of urban competition (Lever, 1993; Yang and Lew, 2009; Yeoh, 2005). In both developed and developing economies, mega-projects are often developed to facilitate urban renewal and regeneration (Hall, 1992; Cochrane et al., 1996), to solve social development issues (Hiller, 2000), and to deliver planned urban transformation (e.g. develop transportation infrastructure project to achieve transit-oriented development, known as TOD) (Yang and Lew, 2009; Zhang, 2012). Upon facing the growing competitive pressures, cities deploy all sorts of devices and resources, including developing transport networks to improve their distinctiveness, competitiveness and prosperity (Turok, 2009). In the case of Bus Rapid Transit projects sweeping South African cities, peer pressure and peer-to-peer learning were specifically recognized as necessary driving factors (Wood, 2015). We see that the mega-project development, in fact, has become a tactic for localities to practice urban policy initiatives, to market the city as an attractive place, to increase comparative competitiveness and to boost the local economy.

China leads the world in mega-infrastructure investments. Despite the potential heavy fiscal burdens for developments, developing urban metro system was becoming more popular in those top developed metropolitans or regional capitals, even ordinary prefectural-level cities. The immediate approvals for plans and constructions of UMPs embodied the enthusiasm from both the state and local governments’ growing urban rail projects, especially metro stations. However, Deng (2011) warned for the ‘Great Leap’ of developing metro projects in competition. Here, issues of slower population growth, smaller economic power and overestimated metro ridership, all indicate risks of being unprofitable and even unsustainable. There is thus a clear need to delve into these UMP motivations in the context of China’s rapid urbanization.

This study aims to have a closer look at the rapid yet controversial rise of China’s UMPs with empirical evidences. Metro project is a typical and popular UMP in Chinese cities. To this end, we did a case study in Nantong, a typical Chinese prefectural-level city in the Yangtze River Delta and the 37th Chinese city that was approved to develop its urban metro system officially. The empirical material includes 12 semi-structured interviews with key actors and informants of Nantong’s metro project (conducted separately between June 2015 and March 2018). We selected the interviewees from local leaders and officials, project investors and experts in both planning and developing, who are influential, prominent and well informed in this project. After reviewing the published planning documents, policy materials, emerging issues, relevant literature and socio-economic data, we designed the interview questions and tailored them to each interviewee depending on their specialties, administrative positions and roles played in this project.

The rest of this article is structured to bring in the recent urban metro developments and relative policies in China. The Nantong case study starts with case identification and continues to expand further with three major analytical aspects – the metro plan and its official justifications, its development process, and key driving forces in project development. This paper ends with critical discussions and future perspectives as conclusion.

Background：Recent urban metro development and policies in China

Thomson (1978) pointed that if a metropolitan city wishes to become a predominant centre, it must have a developed urban rail transit network. In China, operating metro is usually a symbol of local strength, quality of life and level of modernization of a city (an important character of a metropolis). It is also a key component to deliver TOD by flattening the urban population density and thereby influencing the urban development pattern (Yang and Lew, 2009). The number of Chinese cities with operating metro lines has grown rapidly, and more cities are implementing or preparing their metro plans in the 21st century. By the end of 2017, 3976.9-kilometre metro lines were in operation in 34 mainland Chinese cities (Ministry of Transport, 2018).

The National Development and Reform Commission (NDRC) of China set up several principles for starting an urban metro project in its official policy document – The Announcement of Strengthening the Development and Management of Urban Rapid Rail Transit Project (Document No. 81 of 2003). According to this policy document, cities were required to meet three basic quantifiable criteria to initiate their metro projects:

a local fiscal revenue of over 10 billion (CNY) and a local GDP of over 100 billion (CNY);

a total population over 7 million (with at least 3 million in urban area) and

a projected one-way peak-time metro ridership per hour over 30 thousand trips (General Office of the State Council, 2003).

In 2004, the city of Suzhou in Jiangsu province received the first metro approval in Chinese prefectural-level cities. Admittedly, some of the requirements set up in 2003 were no more restrictions for a few Chinese cities at present. In 2013, the State Council delegated the authority to examine and approve the design and feasibility reports of urban metro projects downwards to provincial government, and only kept the authority to approve the planning proposals. The NDRC further published another official document with some qualitative requirements in 2015 to emphasize the principles: to develop orderly and according to local capabilities.

In China, a metro project is mainly financed by local state instead of central government, shifting the burden of failure from the centre downwards (Zhou et al., 2018). It usually costs 600 to 900 million (CNY) per kilometre to construct a metro project, relying mainly on local finance. Even in Beijing, which is the first city to have its urban metro line and also one of the most congested metropolises in China, its metro system is far from profitable. Per data from the Beijing Subway Co., the local government of Beijing has offered diverse financial subsidies of 22.1 billion (CNY) in total from 2007 to 2013 (The Beijing News, 2014). For those other cities with smaller population and economic scales thereby cast more doubt over the delivery of such a public good, indicating a potentially heavier fiscal burden to local governments. In 2017, the fact that the State Council halted the development of Hohhot and Baotou’s metro projects, concerning about excessive debt risk of local governments, to some extent, has set off the alarm bell to avoid financially risky consequences and implied the policy tightening trend in making new metro approvals.

In March 2018, a new policy was proposed by NDRC, which pushed to improve the economic criteria to initiate metro project to a local fiscal revenue of over 30 billion (CNY) and a local GDP of over 300 billion (CNY). In addition, to control the debt ratio of local government, strictly no metro development with huge debt through the mode of Public–Private-Partnership (known as PPP) is allowed. Among the current 43 cities, which already had or approved to have their own metro systems, 14 of them do not meet even a single condition set in the new policy.

With huge public resources tied up and various uncertainties involved in UMP development, decision-making becomes more crucial. We therefore wonder the possible justifications for the approved plans even without meeting the national criteria, the crucial drives to the metro project boom as described earlier and the reasons behind the attractiveness of those UMPs to decision-makers. Our case study explores answers to the above queries.

Case study: The metro project development in Nantong

Sharing similarities with other 42 cities in project justifications, changing macroeconomic context and emerging issues, Nantong’s metro project represents an intriguing yet typical case. At the same time, as one of the 14 cities to start metro projects without matching all the NDRC’s requirements, this case is ideal to analyze the essential features of justification, initiation and implementation of such UMPs, as well as the key driving forces in the whole process.

Nantong is a prefectural-level city in Jiangsu Province, one of the three richest provinces in China, besides Guangdong Province and Zhejiang Province. Located on the northern bank of Yangtze River, the city currently has 7.3 million residents, 2.3 millions of whom live in the main urban area made up of the four urban districts¹ (Municipal Statistic Bureau of Nantong, 2017). It has a local government fiscal revenue of 59.1 billion (CNY) and a local GDP of 773.5 billion (CNY) in 2017 (Municipal Statistic Bureau of Nantong, 2017). The city plans to improve its regional competitiveness by enhancing its transportation infrastructure with urban metro system as a significant local development project (City Council of Nantong, 2014). The urban metro project was initially studied in 2005, planning only started in 2010 with a conclusion in 2012, and approved by NDRC in August 2014 officially. Thereafter, its implementation postponed for more than three years for some reasons.

The metro plan and its official justifications

The planning of Nantong’s urban rail transit system completed in 2012 proposed four urban metro lines and four suburban rail transit lines in its vision. In August 2014, the State Council approved Nantong’s Urban Rail System Planning Proposal Plan (2014–2018) to develop the first phase of Metro Line No.1 and No. 2 (hereinafter referred to as Metro Plan). The Metro Plan plans to start the construction of the first two metro lines (59.55-kilometre in total), with two transfer stations in traditional central urban area (the Chongchuan District), connecting the three newly developed urban districts (Figure 1).

Figure 1.

Map of the Nantong Metro Lines No.1 (first phase) and No.2 (first phase) in Metro Plan (City Council of Nantong, 2014).

The objectives of metro development go beyond the simple improvement of transportation infrastructure, but rather to guide transformation of urban spatial patterns, to deliver public transportation priority policy and to bring wider economic effects. Justifications of this urban metro project thereby lie in three fronts: to facilitate the planned urban expansion, to contribute to local growth and to deliver sustainable development.

An approach to urban development objectives in Masterplan. To achieve the urban development objectives are vital and official arguments to promote the metro project. As proposed in the Masterplan (Nantong’s current local urban development plan for 2011–2020), the city plans to decentralize its central urban functions of Chongchuan District to the other three districts, to facilitate future economic growth and urban expansion in a spatial structure of ‘4 axes – 4 districts – 5 belts’ (City Council of Nantong, 2011). Per Metro Plan, the proposed first two metro lines will make the inter-district traffic and resource interactions more convenient, indicating more developmental opportunities in urban outskirts and better coordination among the four urban districts (City Council of Nantong, 2014). On one hand, the metro system will contribute to planned expansion of traditional centre by directing the spatial structure from current ‘T-shape riverside’ pattern to future spatial pattern. On the other hand, by decentralizing the population in traditional urban centre and providing a ‘greener’ choice of transportation, it will reduce environmental deterioration caused by road construction and car use, which are also important for historical town conservation.

A tool for economic growth and revenue maximization. To enhance local economic strength is one of the most prioritized development objectives in plenty municipal official documents and sector plans including the Metro Plan, which also explains local government’s motives to start this project. As Nantong focuses on economic growth, the city has placed great faith in the metro project to produce more opportunities for local businesses, economic and tourism development and bringing much larger investment when compared to the present-day Nantong.

Households value rail accessibility largely when compared to other local amenities (Gibbons and Machin, 2005; Shyr et al., 2013). Regarding the coming metro system in Nantong, some public property websites have predicted the future rise of local real estate market: ‘With the development of the metro system, property projects around the metro stops will benefit from the increasing competitiveness’ (see, e.g. house.qq.com, 2015). During the first phase of interviews, five interviewees affirmed the potential value rise for the land and property around the metro stations. Only two experts were relatively conservative and queried the supposed huge value increase in property market (Interview with the director of the railway institute,² 13 July 2015; interview with the Chief Engineer of Local Planning Authority,³ 15 June 2015). Yet, better inner-city rail accessibility will certainly make the city more attractive to inward investment (Interview with the Chief Engineer, 15 June 2015).

Furthermore, within the current decentralization and land-driven local development regime, the supposedly higher revenue from land finance has also stimulated Nantong’s metro project. Due to fiscal decentralization and localized urban governance, the Chinese cities behave in ways that seek revenue maximization to compete in many ways (Qian, 2011; Shen, 2007; Wang et al., 2007; Wu, 2016, 2017; Zhang and Wu, 2006). Considering the supposed benefits from land value increase and more budget for local public welfare, the local government does expect for more revenue in the future by selling the land use rights at higher prices of lands nearby the planned metro stations, especially those located in undeveloped suburbs (Interview with the ex-Director of BCAN, 5 July 2015).

A way to greener and better urban life. Modern and sustainable urban transportation represented by metro system is attractive to both policy-makers and the public, in terms of structural adjustment of urban transportation and meeting the demand of public transportation priority policy. Both the interviewed experts and local officials believed that strong, positive social and environmental impacts would emanate from the metro project: to meet the growing local socio-economic demands, to have a more completed, connected, accessible and comfortable public transit network and better ecological environment in the main urban area. The ex-Director of Building and Construction Authority of Nantong (2011–2016),⁴ who was also the Secretary-General of the Government Office of Nantong, explained the government’s viewpoints as:

Our emphases soon are to increase urban livability, enhance urban growth capacity, direct industrial distribution and drive economic growth. … Yes, the metro project is the most important infrastructure project to achieve these objectives. (Interview with the ex-Director of the BCAN, 5 July 2015)

The metro project is supposed to be an approach to deliver TOD and to bring transformative spatial influences. Priority in public transportation development is key to reduce road congestion and increase the utilization efficiency of traffic resources (Nanjing Urban and Transport Planning and Design Co., Ltd, 2012). Over the past decade, Nantong has been experiencing rapid economic growth, accompanied with considerable increase in private car ownership, exacerbated congestion and pollution. TOD is the current underlying ideology of urban planning in many Chinese cities, and Nantong is no exception according to the respondents. From our interviews, the local government of Nantong hopes to deliver TOD, with optimal usage of limited landscape, less urban illnesses, more sustainable travel modes and smarter way of urban expansion. The local leaders’ vision of the Nantong’s future urban development with metro is a city with decentralized and compact urban clusters, and with residents living and working along the metro stations (Interview with the Vice Mayor of Nantong (2011–2016), 30 June 2015). Admittedly, the local officers know clearly that by starting and operating such UMP as a public good, money is an important issue to consider. They still expect this project to offer a ‘greener’ travel option for residents (Interview with the head of investment group,⁵ 28 June 2015).

The development process

Getting approved without meeting the national criteria. To initiate urban metro projects, Chinese cities are required to meet NDRC’s quantifiable criteria but not all the criteria were strictly effective in practice. In the case of Nantong, we see more attention given to economic indicators in the appraisal as opposed to the population and ridership statistics. According to data from published materials,⁶ only the economy-related indicators met the stated requirements. Comparing with the existing official criteria to start an urban metro project (a total population over 7 million with over 3 million of these in the urban area), although Nantong had its total population of 7.29 million, 7.29 million and 7.3 million in total by 2011, 2014 and 2016, respectively, the number of residents in main urban area were only 2.12 million in 2011 and 2.3 million in 2016 (Municipal Statistic Bureau of Nantong, 2011; Municipal Statistic Bureau of Nantong, 2014; Municipal Statistic Bureau of Nantong, 2016). The one-way peak-time metro ridership projections of the first two metro lines were estimated to be 23.4 to 23.6 thousand trips per hour by 2028 and 2029, and 21.6 to 22 thousand trips per hour by 2030, respectively, neither of which met the national requirement (no less than 30 thousand trips per hour). Moreover, the negative trend in natural population growth (fluctuated between –0.69% and –0.3% for the past decade⁷) and the commonly poor local bus ridership ratio⁸ in Nantong even means that there will be fewer projected residents to use the proposed metro. However, as the metro project relies only on local government finance, the local economic development and its GDP growth rates are the major supporting strengths to add weight to the plan with a strong sense of local and national confidence in its development.

The local government also regard the Metro Plan as a ‘proactive’ planning tool to transform the urban development pattern and change people’s travel preference ‘as early as possible’ (Interview with the Vice Mayor of Nantong (2011–2016), 30 June 2015; Interview with Chief Executive of NUCDI Group, 28 June 2015). Once Nantong meets the official criteria in terms of resident numbers and ridership, the construction of a metro would face larger costs and more other challenges due to the intensified urban development.

Therefore, both the population and ridership indicators were overestimated to gain the approval. It is common to interpret the numbers in a rather vague manner to approximate the stated requirements, where the respondents tended to refer to those numbers as ‘tricky’ when preparing the proposal (Interview with the Chief Engineer, 15 June 2015; interview with the director of the railway institute, 13 July 2015). They used rather blurry figures for current and future situations, and varying definitions of what constituted the confines of the city (such as the municipal territory, the metropolitan area, the main urban area, the central urban area and the planned area).

Delayed implementation. Having delays on construction projects is a universal phenomenon (Mahamid et al., 2012), and Nantong’s metro project is no exception. Per Metro Plan, the construction periods of Nantong Metro Line No.1 and No.2 (first phases) are scheduled from July 2014 to December 2018 and December 2016 to December 2020, respectively (City Council of Nantong, 2014). However, after getting approval by the State Council, it has not started its actual implementation until December 2017, with a delay of over three years. There had been several instances of unofficial messages, i.e. from local forum websites or private media, announcing the beginning of the project during the past three years, yet none of these was true. Despite the growing public expectation towards the coming metro project, project actors and key informants were careful and prudent when they mentioned the progress of the project implementation, implying the underlying difficulties faced by the local government.

As a public mega-infrastructure, the implementation of a metro project may bring huge financial and safety risks without rigorous scientific demonstration, reasonable planning and comprehensive management. During the first period of interviews in 2015, the respondents mentioned several unsolved issues as reasons for the delay, such as financial modes, operational strategies, detailed designs of stations and even the specific metro network design. Although Metro Plan has provided relevant measures to potential risks in planning, marketing, etc. in ‘Guarantee measures of construction scheme’ section, it virtually failed to offer practical resolutions (Interview with the director of the railway institute, 13 July 2015). For example, from the technological perspective, since Nantong is in the alluvial plain of the Yangtze River Delta with soft ground as majority and relative high water table, its hydrogeological characteristics as well as original riverside development pattern have made this metro project hard when compared to other cases. The Metro Plan identified this difficulty followed by some general suggestions, yet sufficient technical and practical references are still required (Interview with a rail transit planner in local planning authority, 27 June 2015). Similarly, Metro Plan proposed to develop this project through PPP with 40% from public investment, yet detailed operational financial scheme was up in the air until June 2015 (Interview with the Chief Executive of NUCDI Group, 28 June 2015).

Taking such issues into consideration, the pace of implementation suspended. Though this delay was explained as being a ‘precise’ (Interview with the Vice Mayor of Nantong (2011–2016), 30 June 2015) and ‘rational’ decision-making process (Interview with the ex-Director of the BCAN, 5 July 2015), the fact that Nantong’s metro project required myriad preparations despite being planned, proposed and approved several years ago, indicates insufficient credible analysis during its proposing stage.

The recent progress. During 5–7 June 2017, relevant local authorities and experts were invited from Beijing, Shanghai, Guangzhou and Tianjin and they examined and approved the Overall Design of Nantong Metro Line No. 1 (first phase), which documented its construction period as December 2017 to December 2022, with an estimated 28.3 billion (CNY) investment in total. The geotechnical investigation of metro engineering works started in July 2017. Immediately after the approval of the Feasibility Report of Nantong Metro Line No. 1 (first phase) by the Development and Reform Commission of Jiangsu Province on 21 August, Nantong started municipal pipeline modification works and traffic dispersion measures in September. As expected, the construction of six nodal metro stations firstly started in December 2017 and all the other 22 stations followed since March 2018. Although it will not meet the overall technical conditions to deliver shield tunnelling until the end of 2018, Metro Line No. 1 is believed to be able to complete its first phase on schedule (Interview with the director of the railway institute, 4 March 2018; interview with a structure engineer of Nantong Metro Company, 14 March 2018).

Mismatches with certain criteria and delayed implementation bring about continuous controversies and issues to the project development. Both the facts that the State Council halted Hohhot and Baotou’s metro projects in 2017 and NDRC’s new metro policy in 2018 to improve the economic requirements to initiate metro projects have indicated more stringent examination in subscribing new metro approvals. Nantong’s current economic status manages to meet the new criteria in terms of local fiscal revenue and local GDP, yet the mismatches with requirements in population and ridership projection still exist. As far as we can determine, the project is under construction with metro plans being approved, so there should be no plan alternations for Nantong’s first two metro lines (the first phases) (Interview with the director of the railway institute, 4 March 2018).

However, regarding the prospect of the long-term overall rail transit system (consisted of four metro lines and four suburban rail transit lines), the respondents did lack confidence in present policy environment and have recognized the uncertainty to deliver TOD in Nantong. The existing inconformity with the national criteria could be potential reasons to deny the future proposals of the rest lines (Interview with the director of the railway institute, 4 March 2018). Meanwhile, Masterplan of Nantong 2017–2035 (the new local development plan being prepared since mid-2017) also had to reserve some room due to the undetermined plan of the inner-city rail transit system (Interview with the Chief Engineer, 14 March 2018), indicating further uncertainties within the future metro development.

The key driving forces

Both local and central states’ willingness to growth contributes to the rising UMPs. At the local level, inter-city competition drives project initiation and local economic capabilities strengthened confidence in gaining the project approval in the background of market economy and fiscal decentralization. At the state level, favourable macroeconomic environment and policy inclination exert direct influences on decision-making.

The underlying inter-city competition. Since China is staking much of its economy in mega-infrastructure development and both local GDP growth rate and environmental quality are important indicators in evaluating and ranking urban performances, local governments are actively pursuing transport infrastructures and encouraged competition in bidding for and promoting these UMPs (Deng, 2011). Place-wars among cities in economic achievement, environmental improvements and local ambitions to build modern metropolises hereby explain the rise of metro development in China.

Operating metro system is a symbol of modernization and new growth engine of local economy, and this belief differentiates the cities with metro systems and those without (Interview with the Vice Mayor of Nantong (2011–2016), 30 June 2015; interview with the ex-Director of BCAN, 5 July 2015). No city is willing to fall behind their peers but to become modern, big metropolises, especially in comparison to those nearby cities who are less successful economically. From the economic perspective, Nantong performs well as an ordinary prefectural-level city, whose fiscal revenue ranked fourth among 13 cities in Jiangsu Province over the past 20 years (after Suzhou, Nanjing and Wuxi), and ranked the 24th in China in 2016. Apart from Nanjing, Suzhou and Wuxi started operating their own metro projects with early planning approvals (by 2008), two other prefecture-level cities in Jiangsu, Changzhou and Xuzhou, also received their approvals to start their metro projects in 2012 and 2013, respectively. We reviewed the economic and population indicators using the socio-economic data collected from the statistic yearbooks of these cities for the recent decade.⁹ Nantong has a distinctive larger size of total population and annual GDP when compared to Wuxi and Changzhou, and holds the highest GDP growth rate in Jiangsu. In other words, both Xuzhou and Changzhou gained their metro approvals earlier than Nantong even though they did not perform economically as well as Nantong and had even greater gap between the national requirements in population figures.

Regarding whether there are peer pressures, responses from the interviewed officials were vague, yet rather affirmative from the expert group. There were no distinct competitions in getting their metro approvals, since the approval of one metro plan do not cause the denial of the others at the state level. However, Nantong’s advantages in the industry, the economy and the location would be hidden once all the nearby cities had their urban metro systems except Nantong (Interview with the Chief Engineer, 15 June 2015). Here, a vivid example describes how this type of competition emerged:

When the municipal leaders from different cities attend meetings together, they may discuss and ask the Mayor of Nantong about ‘why Nantong don’t build metro, with such a high GDP and large population?’ (Interview with the manager of the railway institute,¹⁰ 13 July 2015)

Therefore, as some of the other prefectural-level cities in Jiangsu Province received their metro approvals, the underlying peer pressures among them became noticeable. Local leaders from cities with better economic performances are more inspired to avoid falling behind in the rising tide of urban metro development.

Local government as the major player. We also held interviews trying to trace the recent project progress after March 2017 and found the entire political turnover of the municipal government considered as the main cause of the delay, where we see a vital role played by the local state in pushing forward UMP development. A stable political environment at the local level and local leaders’ attentions are key to move the progress of such projects forward. The leadership transition period in Nantong started since January 2016 when a new leading group was elected by the local people’s congress, and ended at the end of 2016. As the change of local leadership approached, the former local leaders had to pay more attention on other affairs instead of focusing on this UMP to consume plenty of time and resources (Interview with the Chief Executive of NUCDI Group, 26 March 2017). Meanwhile, local leaders knew clearly that the project payback and positive influences would certainly belong to the successors’ achievements (Interview with a rail transit planner in local planning authority, 3 September 2017).

The establishment of Nantong Metro Company on 19 December 2016 was a clear beginning of Nantong’s metro project, which soon carried out a series of preparation works for construction in the following year. It is a subsidiary company under NUCDI – a state-owned enterprise of Nantong’s municipal government – and is responsible for investment, financing, construction and future project operation. Instead of PPP proposed in Metro Plan, the project financing is only from public investment in practice, through local fiscal budget and bank loans, meaning stronger government power in its development process.

The local government of Nantong also intends to do whatever possible to narrow the gap between Nantong’s situation and the national criteria to get the project approved. Adjustment of administrative division (known as Chexianshequ) is a strategic measure of urbanization in China making the population in main urban area increase immediately. One of our recent interviews mentioned a local draft policy, far from official but possibly related to gaining future metro proposals, that is re-determining the confine of Nantong’s current main urban area by merging some adjacent areas of Haimen – a county-level city – under the administration of Nantong, as a new urban district.

Motivation of central government. The project approval decision-making process is more political as it stands at the state level. Since UMPs have proved remarkably ‘recession proof’, the approval decisions in the State Council depended largely on socio-economic situation and policy preferences. During the late period of the Premier Wen Jiabao’s government (until March 2013), there was criticism going on regarding the overheated investment in capital and projects which thus, brought a halt to several mega-project proposals, including Nantong’s Metro Plan completed in 2012 (Interview with the ex-Director of the BCAN, 5 July 2015). After the national government transition, with China’s new central government hoping to stimulate economic growth through investment to confront the decline, the infrastructure investments were again considered as the right decision, which signified more economic opportunities (Interview with the ex-Director of the BCAN, 5 July 2015). Without requesting investments from the central government, the local self-financing UMPs proposed by economically developed cities are indeed appealing. Thus, when the NDRC officers examined Nantong’s proposal, they just ‘gave a green light’ (Interview with the director of the railway institute, 13 July 2015). The timing of Nantong’s metro proposal coincided with the relatively loose policy implementation in infrastructure development confronting China’s recent economic slowdown and the state’s political–economic desire to stabilize growth. Put differently, strict rules still tend to be effective in denying some proposals if the economic situation and state’s desire turn.

However, as the domestic economy turns better and some of the UMPs become problematic, risk prevention, especially in financial aspects, becomes vital in deciding the state-owned projects. The Announcement of Strengthening Management and Control of PPP Project in State-owned Enterprises (Document No.192 of 2017) published by the State-owned Assets Supervision and Administration Commission represented the intensifying regulation of financial risks in PPP projects and dramatically dropped the rapid growth of such projects during the past years. The halted metro projects in Inner Mongolia in 2017 due to local financial risks, as well as the stricter requirements published in 2018 to start new metro projects also reflect the state’s late prudency in UMP investment decision-making.

Conclusion

Different from conventional projects, UMPs often involve multiple stakeholders and aspirations for urban transformation, which grow continuously in numbers and scales even with overwhelming cost overruns and performance shortfalls. UMPs are often justified to create strong and positive urban impacts. In our case, the urban metro development is necessary from local government’s perspective as an approach to deliver objectives in local masterplan, to alleviate the urban congestion and pollution and to change the commuting preferences. However, the actual function of urban metro system in reducing road congestion is still weak as seen in cities like Shanghai and Beijing suffering from exacerbating congestion even with advanced and complicated urban metro networks. In addition to the long-term benefits in terms of land appreciation, job creation and promotion of relative industries emanated from the metro projects, which outweigh their costs, potential higher biddings in future land auction also affect local decision-making within the current land-driven urbanization regime. These aspects justify the need of such UMPs, as the foundation to start the whole process.

UMP development is a largely local government-driven process as inter-city competition motivates the project-proposing, and local political stability directly affects project implementation actions. In facing the growing competitive pressures, it becomes not only a tactic for locals to practice urban policy initiatives, but also a way for city marketing together with politician’s ambitions being fulfilled. For the urban metro projects, often being promoted and perceived by the urban elites as crucial catalysts for growth, cities do not want to lose to nearby cities in UMP development, especially to those who are economically less successful. The underlying peer pressures drive many cities to craft metro plans and induce with essential resources, in order to instigate their own metro plans. Rigorous demonstration and myriad case studies are indeed necessary for UMP planning and implementation, but they could be just plausible explanations for schedule delay. Instead, the actual push from certain local government leaders is crucial to carry forward the implementation, especially for those locally financed projects.

Among those NDRC’s quantifiable requirements in local economy, population and ridership forecast to initiate metro projects, not all the criteria were strictly effective in getting approvals from the related authorities. About one-third of the cities with approved metro proposals, including Nantong, do not meet more than one requirement. On one side of the coin, the local GDP and local fiscal revenue are often the major supporting strengths, which add weight to the proposal. On the other side, projections systematically make errors in certain circumstances, i.e. to make the blurry figures and tricky numbers closer to the criteria, where we see a weak role of expert group in project initiation. At the central level, the approval of UMPs is influenced by the changing domestic economic and policy contexts directly. The context of a slowing economic growth rate and the decision-makers’ desire to use substantial infrastructure spending to hedge against flagging economic growth have made more infrastructure projects irresistible with relaxed examinations of proposals.

With continuous observations and in-depth empirical investigations, our case study has revealed the influential factors that instigated the rise of Chinese UMPs from not only official justifications, but also the local and non-local driving forces. Our findings partially echo some Western literature on UMP development – being engaged in political battles (Santamaría, 2013), driven by public investments (Altshuler and Luberhoff, 2003: 8) and designated to make ambitious urban changes (Hirschman, 1995). Simultaneously, we also uncover some other features and emerging issues relating to project initiation, proposal examination and implementation specific to the Chinese context. Issues such as insufficient ex-ante investigation, lacking transparency and policy discontinuity have been causing present controversies as well as future uncertainties. Further research will then require the inclusion of more diverse UMP cases, deeper interviews with multi-level officers and multi-field experts and more necessary quantitative analysis. There is still a long way ahead for China’s UMP development, as well as the deliberations of starting them. With huge resources tied up and various uncertainties involved, orderly development within local capabilities ought to be the principle of not just metro projects but all the emerging UMPs.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iDs

Shutian Zhou

Yijun Shi

Notes

Shutian Zhou is an assistant professor in the School of Art (Architecture), Nantong University. She graduated from London School of Economics with a Master Degree in Regional and Urban Planning Studies in 2015 and got a PhD degree in the School of Architecture and Urban Planning, Nanjing University in 2019. Her research interests mainly include mega-urban project development, resilient city studies, spatial planning and urban governance.

Guofang Zhai is a professor and doctoral supervisor in the School of Architecture and Urban Planning, Nanjing University. His research focuses on urban and regional planning, urban disasters and risk assessment.

Yuwen Lu is a PhD candidate in the School of Architecture and Urban Planning, Nanjing University. Her research has been on urban resilience studies, urban disaster risk assessment, regional spatial planning.

Yijun Shi is an assistant professor of urban and rural planning in the School of Landscape Architecture, Zhejiang A&F University. He completed his PhD in the School of Architecture and Urban Planning, Nanjing University in 2018. His research mainly includes urban disaster risk assessment, urban and regional planning.

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