The Beijing Municipal Commission of Transport revealed that, following in the footsteps of Subway Lines 4 and Line 14, Subway Line 16 has also introduced a PPP mode to attract social capital for construction and operation. In addition, the line has drawn investments through equity financing for the first time, Chinanews.com reported on Nov. 27.

PPP refers to Public-Private Partnership. It is an internationally recognized public service mode accomplished through cooperation between public and private sectors.

Total investment in Beijing Subway Line 16 is 49.5 billion RMB. The project includes two components. The first component covers civil work like caves and stations, for which investment is about 34.5 billion RMB, or roughly 70 percent of the total; that portion will be covered by the government. A charted company will invest 15 billion RMB in the second component: trains and signal equipment.

According to guidelines released by China's State Council in 2014, the Beijing Municipal government has made great efforts to promote the introduction of social capital in infrastructure. The transportation sector signed a cooperation agreement with Beijing MTR Corporation Limited (BJ MTR) in November 2015 for the construction and operation of Beijing Subway Line 16. Beijing MTR received the operation rights for 30 years.

Beijing MTR, established in January 2006, is jointly backed by Beijing Infrastructure Investment Co. Ltd. (2 percent), Beijing Capital Group (49 percent) and MTR Corporation (49 percent). The compound investment and financing mode has eased the government's funding pressure.