Benefits and Costs of Urban Mass Transit in Asia - Cases for Bangkok, Hanoi, Jakarta and Manila

Abstract

This paper tries to evaluate the economic impact of mass transit systems, such as subways or railways. On evaluating four different urban areas (Bangkok, Hanoi, Jakarta, and Manila), the paper analyses the benefits and costs associated with urban mass transits and estimate their economic internal rate of returns (EIRRs). Through estimating the EIRRs, this paper addresses the potential economic benefits of urban mass transit systems, specifically energy security and environmental conservation.The paper found that urban mass transit systems can, in general, produce substantial socio-economic benefits. The benefits come from savings on energy, CO2, time and passenger vehicle ownership. Also the simulation exercise revealed that cities with higher income may have bigger socio-economic benefits. Bangkok could enjoy the largest socio-economic benefits from expanding its urban mass transit network. Additionally, the analysis found that cities with higher population density may yield large socio-economic benefits. An outstanding example includes the case of Manila, which income level is nearly half of Bangkok, however, the city’s high population density will result in substantial socio-economic benefits through expanding its mass transit systems.It should be noted that more than two decades is required to realize the potential socio-economic benefits from the urban mass transit systems. And this suggests that the early and timely implementation of a project could maximize the potential benefits. To facilitate early implementation, planning for mass transit systems should be an integral part of the city’s energy and environmental policy.