Research on the mechanism of value creation and capture process for urban rail development

Abstract

Based on the principle of financial sustainable development of urban rail system, this paper discussed the essentiality of “value capture”, as well as the classification and stakeholders of different generated value. The first step is to identify the interrelationships between beneficiaries and payers during the process of urban rail development. It discussed the cycle process of value creation and value capture, and proposed different value capture principles according to different stakeholders. Then the value capture mechanism was simulated taking advantage of system dynamics model, which is used to demonstrate how added value is created, proliferated, transferred and ultimately captured by different stakeholders. Through analyzing the cause-effect relationship among elements under the system dynamics model, a customized system dynamic model for urban rail on its value creation and capture properties is developed. At last, urban rail system in Shanghai has been taken as a case study to research the benefit-burden relationships among all the interest groups. The data on Shanghai real estate and transport system was simulated with the model to predict the urban rail construction and operation trend, and the cost-benefit ratio of each stakeholder. The research shows the proportion of benefits for passengers, property owners and businesses along the line increases with the length of urban rail network. This fully reflects the economies of scale of metro system. Among all beneficiaries, property owners capture the most value created; while government receives a progressive gain in the initial stage, but begins to lose momentum in capitalization after a certain point.