The benefits of high-speed rail in comparative ... - Invensys Rail
The benefits of high-speed rail in comparative ... - Invensys Rail The benefits of high-speed rail in comparative ... - Invensys Rail
The benefits of high-speed rail in comparative perspective
- Page 2 and 3: 2 : Invensys | The benefits of high
- Page 4 and 5: Introduction: high-speed rail in a
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- Page 10 and 11: Spain Key attributes First year of
- Page 12 and 13: Challenges FINANCING High-speed lin
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- Page 16 and 17: Germany Key attributes First year o
- Page 18 and 19: Challenges FINANCING High rural pop
- Page 20 and 21: The ‘Eurostar network’: London
- Page 22 and 23: Challenges INTEROPERABILITY Establi
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- Page 28 and 29: Challenges LAND ACQUISITION Land ac
- Page 30 and 31: China Key attributes First year of
- Page 32 and 33: Challenges FINANCING A breakneck pa
- Page 34 and 35: Conclusion Investment in HSR has re
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<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong><br />
<strong>in</strong> <strong>comparative</strong> perspective
2 : <strong>Invensys</strong> | <strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective
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INTRODUCTION: HIGH-SPEED RAIL<br />
IN A SHIFTING GLOBAL CONTEXT 4<br />
Diverse paths toward the future <strong>of</strong> HSR 6<br />
EXECUTIVE SUMMARY 7<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> HSR 7<br />
HSR success factors 9<br />
SPAIN 10<br />
Key attributes 10<br />
Context 10<br />
Anticipated <strong>benefits</strong> 11<br />
High-<strong>speed</strong> <strong>rail</strong> network 11<br />
Challenges 12<br />
F<strong>in</strong>anc<strong>in</strong>g 12<br />
Track gauge 12<br />
Competition and Market Share 12<br />
Freight and Short L<strong>in</strong>es 13<br />
Signall<strong>in</strong>g 13<br />
Realised <strong>benefits</strong> 14<br />
Economic impact 15<br />
GERMANY 16<br />
Key attributes 16<br />
Context 16<br />
Anticipated <strong>benefits</strong> 17<br />
High-<strong>speed</strong> <strong>rail</strong> network 17<br />
Challenges 18<br />
F<strong>in</strong>anc<strong>in</strong>g 18<br />
Local environmental objections 18<br />
Signall<strong>in</strong>g 19<br />
Realised <strong>benefits</strong> 19<br />
Hannover - Berl<strong>in</strong> 19<br />
Cologne - Frankfurt<br />
Impact on <strong>in</strong>termediate towns:<br />
19<br />
Montabaur and Limburg 19<br />
THE ‘EUROSTAR NETWORK’:<br />
LONDON TO PARIS AND BRUSSELS 20<br />
Key attributes 20<br />
Context 20<br />
Anticipated <strong>benefits</strong> 21<br />
High-<strong>speed</strong> <strong>rail</strong> network 21<br />
Challenges 21<br />
Interoperability 22<br />
Environmental objections 22<br />
F<strong>in</strong>anc<strong>in</strong>g <strong>of</strong> HS1 22<br />
Operator Organisation 23<br />
Competition 23<br />
Realised <strong>benefits</strong> 24<br />
Traffic and journey time <strong>benefits</strong> 25<br />
Environment 25<br />
Lille and regeneration 25<br />
JAPAN 26<br />
Key attributes 26<br />
Context 26<br />
Anticipated <strong>benefits</strong> 27<br />
High-<strong>speed</strong> <strong>rail</strong> network 27<br />
Challenges 28<br />
Land acquisition 28<br />
F<strong>in</strong>anc<strong>in</strong>g 28<br />
Safety and tra<strong>in</strong><strong>in</strong>g 28<br />
Signall<strong>in</strong>g 28<br />
Realised <strong>benefits</strong> 29<br />
CHINA 30<br />
Key attributes 30<br />
Context 30<br />
Anticipated benefit 31<br />
High-<strong>speed</strong> <strong>rail</strong> network 31<br />
Challenges 32<br />
F<strong>in</strong>anc<strong>in</strong>g 32<br />
Signall<strong>in</strong>g 32<br />
Competitiveness 32<br />
Realised <strong>benefits</strong> 33<br />
CONCLUSION 34<br />
ABOUT THE AUTHORS 35<br />
<strong>Invensys</strong> <strong>Rail</strong> 35<br />
Oxford Analytica 35<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 3
Introduction:<br />
<strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> a shift<strong>in</strong>g global context<br />
Transportation <strong>in</strong>frastructures around the world are be<strong>in</strong>g challenged<br />
by shifts <strong>in</strong> demographics, fluctuat<strong>in</strong>g fuel prices, and public concern<br />
over climate change and environmental protection. Grow<strong>in</strong>g<br />
populations have created new travel demand, while urbanisation<br />
has concentrated this demand with<strong>in</strong> expand<strong>in</strong>g cities. Ag<strong>in</strong>g<br />
transportation networks have been stretched well past their <strong>in</strong>tended<br />
capacities, and the ris<strong>in</strong>g price <strong>of</strong> fuel has made conventional forms<br />
<strong>of</strong> travel more expensive than ever for the consumer. Meanwhile,<br />
public concerns over climate change have <strong>in</strong>creased pressure on<br />
policymakers to improve energy efficiency <strong>in</strong> spite <strong>of</strong> <strong>in</strong>creas<strong>in</strong>g<br />
requirements for safe, efficient, and affordable transport.<br />
4 : <strong>Invensys</strong> | <strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective
This study shows how <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> (HSR) has<br />
played an important role <strong>in</strong> address<strong>in</strong>g these and<br />
other transportation challenges across five case<br />
studies: Spa<strong>in</strong>; Germany; the ‘Channel Tunnel’ network<br />
connect<strong>in</strong>g London with Paris and Brussels; Japan; and<br />
Ch<strong>in</strong>a. Its goal is to <strong>in</strong>form future HSR development<br />
by <strong>high</strong>light<strong>in</strong>g past achievements, po<strong>in</strong>t<strong>in</strong>g to factors<br />
that enable success, and identify<strong>in</strong>g strategies for<br />
overcom<strong>in</strong>g an array <strong>of</strong> policy and plann<strong>in</strong>g challenges.<br />
Each case study is presented <strong>in</strong> the follow<strong>in</strong>g format:<br />
> Key attributes. Summarises vital statistics, strategies<br />
utilised, and <strong>benefits</strong> accrued.<br />
> Context. Establishes the political, economic, or<br />
demographic context <strong>in</strong> which the decision to<br />
develop an HSR network was taken.<br />
> Anticipated <strong>benefits</strong>. Summarises the anticipated<br />
<strong>benefits</strong> <strong>of</strong> HSR development as articulated <strong>in</strong> the<br />
plann<strong>in</strong>g stages.<br />
> High-<strong>speed</strong> <strong>rail</strong> network. Describes the nature<br />
<strong>of</strong> the result<strong>in</strong>g <strong>rail</strong> network, draw<strong>in</strong>g attention to<br />
contrasts with other national strategies.<br />
> Challenges. Exam<strong>in</strong>es the major challenges<br />
confronted by policymakers (and <strong>in</strong> some cases<br />
their private sector partners) and identifies the <strong>of</strong>ten<br />
unique strategies employed to match the capabilities<br />
<strong>of</strong> HSR technology with vary<strong>in</strong>g constra<strong>in</strong>ts <strong>of</strong><br />
geography, demographics, fund<strong>in</strong>g, and politics.<br />
> Realised <strong>benefits</strong>. Establishes the economic, social,<br />
environmental and other <strong>benefits</strong> realised by the<br />
adoption <strong>of</strong> HSR and compares these to the orig<strong>in</strong>al<br />
rationale for HSR <strong>in</strong>vestment.<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 5
6 : <strong>Invensys</strong> | <strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective<br />
Diverse paths toward<br />
the future <strong>of</strong> HSR<br />
<strong>The</strong> case studies explored <strong>in</strong> this report were chosen to<br />
<strong>high</strong>light a contrast<strong>in</strong>g set <strong>of</strong> strategies used to realise<br />
the <strong>benefits</strong> <strong>of</strong> HSR, each tak<strong>in</strong>g <strong>in</strong>to account national<br />
policy priorities and unique constra<strong>in</strong>ts <strong>of</strong> fund<strong>in</strong>g,<br />
geography, demographics and politics. Some countries,<br />
for example, have <strong>in</strong>vested <strong>in</strong> <strong>high</strong>-<strong>speed</strong> roll<strong>in</strong>g stock<br />
for partial use on conventional <strong>rail</strong> networks, sacrific<strong>in</strong>g<br />
top <strong>speed</strong>s for the decreased cost and complexity<br />
<strong>of</strong> operat<strong>in</strong>g and ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g a s<strong>in</strong>gle network.<br />
Others have entered <strong>in</strong>to public-private partnerships,<br />
dispers<strong>in</strong>g risk across multiple levels <strong>of</strong> government and<br />
private operators. <strong>The</strong> diversity <strong>of</strong> HSR networks <strong>in</strong> the<br />
case studies below <strong>in</strong>dicates that def<strong>in</strong><strong>in</strong>g ‘success’ <strong>in</strong><br />
HSR development should be done with an eye toward<br />
the national context, and <strong>in</strong> reference to national goals,<br />
rather than aga<strong>in</strong>st a set <strong>of</strong> generic priorities.<br />
Yet on the broadest level, global trends <strong>in</strong> transportation<br />
requirements are likely to make HSR an <strong>in</strong>creas<strong>in</strong>gly<br />
important part <strong>of</strong> the policy toolbox. As grow<strong>in</strong>g<br />
populations and expand<strong>in</strong>g cities stra<strong>in</strong> exist<strong>in</strong>g<br />
transport networks, and as improv<strong>in</strong>g technologies<br />
yield <strong>in</strong>creases <strong>in</strong> <strong>speed</strong> and efficiency per dollar <strong>of</strong><br />
<strong>in</strong>vestment, we expect HSR’s competitive advantage<br />
over other modes <strong>of</strong> transport to grow. <strong>The</strong> case studies<br />
below pa<strong>in</strong>t a picture that will allow future <strong>in</strong>vestors<br />
to take advantage <strong>of</strong> improv<strong>in</strong>g technologies while<br />
ensur<strong>in</strong>g that their plann<strong>in</strong>g leverages the collective<br />
experience <strong>of</strong> current and past generations <strong>of</strong><br />
HSR practitioners.<br />
High <strong>speed</strong> <strong>rail</strong> distance by country (km)<br />
4500<br />
4000<br />
9500<br />
3000<br />
2500<br />
2000<br />
1500<br />
1000<br />
500<br />
0<br />
UK Germany Spa<strong>in</strong> France Japan Ch<strong>in</strong>a<br />
Before 2000 2001 to 2005 2006 to April 2010
Executive summary<br />
While the <strong>benefits</strong> <strong>of</strong> HSR vary <strong>in</strong> different<br />
contexts, the achievements identified <strong>in</strong> the case<br />
studies below can be synthesised <strong>in</strong>to a number <strong>of</strong><br />
categories spann<strong>in</strong>g a broad set <strong>of</strong> transport and<br />
economic development policy challenges.<br />
HSR <strong>in</strong>vestment has commonly resulted <strong>in</strong>:<br />
> reduced travel times;<br />
> reduced congestion on established modes<br />
<strong>of</strong> transport;<br />
> improved access to markets and commerce;<br />
> decreased carbon footpr<strong>in</strong>t <strong>in</strong> comparison<br />
to road and air transport;<br />
> and creat<strong>in</strong>g <strong>in</strong>dustry growth and<br />
export opportunities.<br />
Similarly, while challenges vary greatly by country, HSR<br />
<strong>in</strong>vestment experiences reveal a number <strong>of</strong> factors that<br />
def<strong>in</strong>e both the technology’s potential and its limitations<br />
<strong>in</strong> a global context. Exam<strong>in</strong><strong>in</strong>g the diverse challenges<br />
faced by governments and their private-sector partners<br />
across each <strong>of</strong> the case studies yields a number <strong>of</strong><br />
lessons for ‘best practices’ <strong>in</strong> future development. From<br />
the studies below, we can conclude that:<br />
> successful HSR can adapt to a variety <strong>of</strong> geographic<br />
and demographic layouts – with<strong>in</strong> limits;<br />
> f<strong>in</strong>ancial susta<strong>in</strong>ability <strong>of</strong> HSR relies on exist<strong>in</strong>g<br />
capacity constra<strong>in</strong>t with<strong>in</strong> the low-<strong>speed</strong> <strong>rail</strong> network;<br />
> maximum <strong>speed</strong> should not always be the goal;<br />
> HSR succeeds as part <strong>of</strong> a holistic<br />
transportation policy;<br />
> and HSR’s excellent safety record reflects sufficient<br />
<strong>in</strong>vestment <strong>in</strong> tra<strong>in</strong><strong>in</strong>g and safety <strong>in</strong>frastructure.<br />
Each <strong>of</strong> these <strong>benefits</strong> and success factors is now<br />
divided <strong>in</strong>to component parts based on experiences<br />
from the case studies below.<br />
Door-to-door journey time (hours)<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> HSR<br />
Reduced travel times.<br />
> HSR <strong>of</strong>fers faster net travel times than conventional<br />
road, <strong>rail</strong> and air travel between distances <strong>of</strong><br />
approximately 150 kilometres (km) and 800 km.<br />
> For distances shorter than 150 km, the competitive<br />
advantage <strong>of</strong> HSR over conventional <strong>rail</strong> is decreased<br />
drastically by station process<strong>in</strong>g time and travel to<br />
and from stations.<br />
> For distances longer than 800 km, the <strong>high</strong>er <strong>speed</strong><br />
<strong>of</strong> air travel compensates for slow airport process<strong>in</strong>g<br />
times and long trips to and from airports.<br />
Journey times v. distance for <strong>rail</strong> (HS and conventional<br />
l<strong>in</strong>es) and air transport<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
High-<strong>speed</strong> <strong>rail</strong> fastest<br />
High-<strong>speed</strong> necessary<br />
for <strong>rail</strong> to be fastest<br />
0 100 200 300 400 500 600 700 800 900 1000<br />
High-<strong>speed</strong> <strong>rail</strong><br />
Conventional <strong>rail</strong><br />
Air<br />
Distance (km)<br />
Source High-<strong>speed</strong> <strong>rail</strong>: International comparisons, Steer Davies Gleave,<br />
Commission for Integrated Transport, London, 2004<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 7
Reduced congestion on established modes<br />
<strong>of</strong> transport.<br />
> With<strong>in</strong> the parameters above, HSR reduces<br />
bottlenecks on conventional <strong>rail</strong> routes, improv<strong>in</strong>g<br />
their reliability, <strong>in</strong>creas<strong>in</strong>g efficiency, reduc<strong>in</strong>g wearand-tear<br />
on the conventional network, and <strong>in</strong>creas<strong>in</strong>g<br />
capacity for freight traffic on conventional l<strong>in</strong>es.<br />
> As air travellers move to HSR, short-haul flights are<br />
discont<strong>in</strong>ued, <strong>in</strong>creas<strong>in</strong>g runway capacity for longer<br />
flights on which air travel ma<strong>in</strong>ta<strong>in</strong>s a competitive<br />
advantage over HSR.<br />
> As drivers shift to HSR, motorways become less<br />
congested, reduc<strong>in</strong>g ma<strong>in</strong>tenance costs and <strong>in</strong><br />
some cases lower<strong>in</strong>g the number <strong>of</strong> traffic fatalities.<br />
Improved access to markets and commerce.<br />
> Through reduced travel times, HSR reduces the<br />
opportunity cost -and commonly the expense-<br />
<strong>of</strong> <strong>in</strong>ter-city commerce and tourism.<br />
> This <strong>in</strong>creases the reach <strong>of</strong> small bus<strong>in</strong>esses, improves<br />
the operational efficiency <strong>of</strong> larger ones, and enables<br />
commut<strong>in</strong>g over longer distances while ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g<br />
quality <strong>of</strong> life.<br />
> Stations <strong>in</strong> underdeveloped communities attract new<br />
retail and hospitality <strong>in</strong>vestment, while bus<strong>in</strong>esses can<br />
take advantage <strong>of</strong> <strong>comparative</strong>ly low property values<br />
and easy access to major city centres.<br />
> This <strong>in</strong> turn can reduce regional disparities, as has<br />
been the case <strong>in</strong> Spa<strong>in</strong> and on certa<strong>in</strong> parts <strong>of</strong> the<br />
Eurostar network.<br />
8 : <strong>Invensys</strong> | <strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective<br />
Decreased carbon footpr<strong>in</strong>t <strong>in</strong> comparison to road<br />
and air transport.<br />
> Comparative CO2 emissions between HSR<br />
development and the cont<strong>in</strong>ued use <strong>of</strong> conventional<br />
transport vary significantly case-by-case, but on a<br />
per-passenger, per-kilometre basis, HSR is a dist<strong>in</strong>ctly<br />
more climate-friendly mode <strong>of</strong> transport than either<br />
road or air travel.<br />
> While HSR emits more CO2 on this basis than<br />
conventional <strong>rail</strong> networks, the greater potential for<br />
HSR to challenge road and air travel <strong>of</strong>ten makes it the<br />
‘greener’ option with<strong>in</strong> the distance parameters above<br />
when consider<strong>in</strong>g new <strong>in</strong>vestment.<br />
Creat<strong>in</strong>g <strong>in</strong>dustry growth and export opportunities.<br />
> Many countries have sought to maximise the<br />
long-term economic benefit <strong>of</strong> HSR <strong>in</strong>vestment<br />
by develop<strong>in</strong>g <strong>in</strong>digenous HSR technology and<br />
manufactur<strong>in</strong>g sectors.<br />
> Many <strong>of</strong> these have ga<strong>in</strong>ed reputations for quality and<br />
<strong>in</strong>novation and have created export <strong>in</strong>dustries that<br />
contribute significantly to the national economy. This<br />
is particularly visible <strong>in</strong> signall<strong>in</strong>g, where European<br />
manufacturers have leveraged the successful<br />
construction and operation <strong>of</strong> an <strong>in</strong>ternational<br />
control system to create bus<strong>in</strong>ess opportunities <strong>in</strong><br />
new markets.
HSR success factors<br />
Successful HSR can adapt to a variety <strong>of</strong> geographic and<br />
demographic layouts – with<strong>in</strong> limits.<br />
> HSR plann<strong>in</strong>g strategies can accommodate the<br />
‘scattered’ major cities <strong>of</strong> Germany as well as the<br />
‘l<strong>in</strong>ear’ or ‘spoked’ arrangements centred on the capital<br />
cities <strong>of</strong> Japan and Spa<strong>in</strong>.<br />
> Similarly, technological <strong>in</strong>novation has made HSR<br />
appropriate for a variety <strong>of</strong> topographies and has<br />
<strong>in</strong>creased opportunities for m<strong>in</strong>imis<strong>in</strong>g<br />
environmental impact.<br />
> Maximis<strong>in</strong>g revenue on HSR l<strong>in</strong>es requires connect<strong>in</strong>g<br />
cities with sufficient population size and density to<br />
ensure a significant customer base with good access<br />
to stations.<br />
> Invest<strong>in</strong>g <strong>in</strong> HSR l<strong>in</strong>ks between two cities beyond the<br />
800 km threshold described above is unlikely to<br />
provide a susta<strong>in</strong>able addition to the<br />
transportation <strong>in</strong>frastructure.<br />
F<strong>in</strong>ancial susta<strong>in</strong>ability <strong>of</strong> HSR relies on exist<strong>in</strong>g capacity<br />
constra<strong>in</strong>t with<strong>in</strong> the low-<strong>speed</strong> <strong>rail</strong> network.<br />
> HSR networks that cover costs with revenue do so most<br />
<strong>of</strong>ten because they serve an exist<strong>in</strong>g travel market that<br />
challenges the capacity <strong>of</strong> exist<strong>in</strong>g <strong>in</strong>frastructure.<br />
> While immediate cost cover<strong>in</strong>g is commonly a<br />
secondary concern to governments <strong>in</strong>vest<strong>in</strong>g <strong>in</strong><br />
HSR, match<strong>in</strong>g HSR services with exist<strong>in</strong>g capacity<br />
constra<strong>in</strong>ts lowers the f<strong>in</strong>ancial risk <strong>of</strong> <strong>in</strong>vestment<br />
considerably and shows taxpayers -- <strong>in</strong>clud<strong>in</strong>g those<br />
who cont<strong>in</strong>ue to favour other forms <strong>of</strong> transport --<br />
a clear return on <strong>in</strong>vestment.<br />
Maximum <strong>speed</strong> should not always be the goal.<br />
> HSR has fared poorly when plann<strong>in</strong>g prioritises<br />
maximum <strong>speed</strong> at all costs. While <strong>in</strong>creas<strong>in</strong>g <strong>speed</strong>s<br />
on the longest HSR l<strong>in</strong>es can narrow the gap with air<br />
travel <strong>in</strong> terms <strong>of</strong> journey time, settl<strong>in</strong>g for lower <strong>speed</strong>s<br />
<strong>of</strong>ten enables <strong>high</strong>er revenue with m<strong>in</strong>imal effects on<br />
competitiveness with other modes <strong>of</strong> transport.<br />
> Plac<strong>in</strong>g <strong>in</strong>termediate cities on long <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es<br />
<strong>in</strong>creases revenue across the l<strong>in</strong>e and allows the growth<br />
<strong>benefits</strong> <strong>of</strong> HSR to accrue to smaller cities.<br />
> Many <strong>of</strong> the countries exam<strong>in</strong>ed below have<br />
lowered costs and <strong>in</strong>creased the customer base<br />
by <strong>in</strong>corporat<strong>in</strong>g varied services with a range <strong>of</strong><br />
maximum <strong>speed</strong>s <strong>in</strong>to their HSR networks.<br />
> Instead <strong>of</strong> focuss<strong>in</strong>g on achiev<strong>in</strong>g top <strong>speed</strong>s over<br />
limited distances, the adoption <strong>of</strong> advanced signall<strong>in</strong>g<br />
systems can <strong>in</strong>crease average <strong>speed</strong>s across the l<strong>in</strong>e<br />
while lower<strong>in</strong>g long-run operational costs.<br />
HSR succeeds as part <strong>of</strong> a holistic transportation policy.<br />
> Planners can maximise the <strong>benefits</strong> <strong>of</strong> HSR<br />
by streaml<strong>in</strong><strong>in</strong>g l<strong>in</strong>kages with other forms <strong>of</strong><br />
transportation, and by utilis<strong>in</strong>g ‘mixed use’<br />
technologies that can operate on either <strong>high</strong>-<strong>speed</strong><br />
or conventional track. This enables HSR roll<strong>in</strong>g stock<br />
to serve wider markets that pay a smaller premium for<br />
moderate reductions <strong>in</strong> travel time.<br />
> Station placement should seek to balance the<br />
necessities <strong>of</strong> efficient operation and urban<br />
plann<strong>in</strong>g priorities. Strategic station placement<br />
is a pr<strong>in</strong>cipal enabler <strong>of</strong> HSR-related growth <strong>in</strong><br />
underdeveloped communities.<br />
> Introduc<strong>in</strong>g ‘yield management’ pric<strong>in</strong>g strategies<br />
enables dynamic competition with regularly shift<strong>in</strong>g<br />
airfares, <strong>in</strong>creases revenue on <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es with<br />
rema<strong>in</strong><strong>in</strong>g capacity, and allows access to HSR services<br />
by customers with vary<strong>in</strong>g travel budgets.<br />
HSR’s excellent safety record reflects sufficient<br />
<strong>in</strong>vestment <strong>in</strong> tra<strong>in</strong><strong>in</strong>g and safety <strong>in</strong>frastructure.<br />
> HSR’s global safety record is impressive, match<strong>in</strong>g that<br />
<strong>of</strong> air travel and beat<strong>in</strong>g road travel by a wide marg<strong>in</strong>.<br />
> <strong>The</strong> few HSR <strong>in</strong>cidents to date reveal not a problem<br />
<strong>in</strong>tr<strong>in</strong>sic to the technologies employed, but attempts<br />
to cut construction and management costs by<br />
under-<strong>in</strong>vest<strong>in</strong>g <strong>in</strong> <strong>in</strong>frastructure and tra<strong>in</strong><strong>in</strong>g.<br />
> Where countries new to HSR have attempted to<br />
<strong>in</strong>digenise technologies such as signall<strong>in</strong>g, <strong>in</strong> which<br />
established companies have created a track record <strong>of</strong><br />
quality construction and operational best practices,<br />
safety may compromised.<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 9
Spa<strong>in</strong><br />
Key attributes<br />
First year <strong>of</strong><br />
operation<br />
1992<br />
Length <strong>of</strong> track 2,057 km<br />
Top <strong>speed</strong> 305 km/h<br />
Cost per kilometre 12 million euros<br />
Strategies employed > Adoption <strong>of</strong> centralised, cross-platform<br />
signall<strong>in</strong>g technology<br />
> Allow<strong>in</strong>g freight on <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es<br />
> Lower <strong>speed</strong> services on less-travelled<br />
routes<br />
Key <strong>benefits</strong> > Dramatic reduction <strong>in</strong> travel times<br />
> Large modal shift from air travel<br />
> Increased access to large economies<br />
from <strong>in</strong>termediate cities<br />
<strong>The</strong> Spanish <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> network <strong>in</strong> 2011<br />
Source International Union <strong>of</strong> <strong>Rail</strong>ways<br />
10 : <strong>Invensys</strong> | <strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective<br />
Context<br />
Before <strong>in</strong>vestment <strong>in</strong> HSR, Spa<strong>in</strong>’s conventional <strong>rail</strong><br />
system had played a m<strong>in</strong>or role <strong>in</strong> the transportation<br />
network. Lower than average <strong>speed</strong>s on the <strong>rail</strong> system<br />
reflected extreme topography on popular routes,<br />
necessitat<strong>in</strong>g sharply curved tracks and climbs on steep<br />
gradients. <strong>The</strong> network was limited to s<strong>in</strong>gle-track<br />
l<strong>in</strong>es, which constra<strong>in</strong>ed capacity on the most popular<br />
routes. <strong>The</strong> use <strong>of</strong> tilt<strong>in</strong>g roll<strong>in</strong>g stock was <strong>of</strong> some<br />
help <strong>in</strong> rais<strong>in</strong>g <strong>speed</strong>s, but both <strong>speed</strong>s and capacity<br />
were still <strong>in</strong>adequate to capture a significant portion <strong>of</strong><br />
transportation demand. <strong>Rail</strong>ways therefore played only<br />
a limited role <strong>in</strong> <strong>in</strong>tercity passenger transport, which was<br />
dom<strong>in</strong>ated by the road network.<br />
By the 1980s, Spa<strong>in</strong>’s <strong>rail</strong> system was <strong>in</strong> desperate<br />
need <strong>of</strong> modernisation, and the host<strong>in</strong>g <strong>of</strong> the 1992<br />
World Expo <strong>in</strong> Seville provided the spark for the<br />
country’s first <strong>in</strong>vestment <strong>in</strong> HSR. Stra<strong>in</strong>ed capacity on<br />
the conventional track between Seville and Madrid<br />
threatened to decrease local revenue from the Expo,<br />
and Spa<strong>in</strong>’s accession to the EU <strong>in</strong> 1986 opened<br />
fund<strong>in</strong>g opportunities for transportation reform <strong>in</strong><br />
underdeveloped regions such as Andalucia, where<br />
Seville is located.<br />
<strong>The</strong> distribution <strong>of</strong> cities <strong>in</strong> Spa<strong>in</strong> falls well with<strong>in</strong><br />
the established distance parameters to ensure a<br />
competitive advantage <strong>in</strong> travel time aga<strong>in</strong>st other<br />
modes <strong>of</strong> transport. Madrid, with a population <strong>of</strong> three<br />
million <strong>in</strong> the metropolitan area, is located <strong>in</strong> the centre<br />
<strong>of</strong> the country some 400-700 km from most other<br />
major cities. This <strong>in</strong>cludes the major cities <strong>of</strong> Barcelona<br />
(population 1.6 million), a commercial and <strong>in</strong>dustrial<br />
centre and capital <strong>of</strong> Spa<strong>in</strong>’s richest prov<strong>in</strong>ce, Valencia<br />
(population 0.8 million), Seville and Zaragoza (both<br />
population 0.7 million).<br />
Spa<strong>in</strong>’s <strong>high</strong> population density presented the prospect<br />
<strong>of</strong> easy access to <strong>rail</strong> stations by a large percentage<br />
<strong>of</strong> the urban population, which made HSR planners<br />
confident that travel time to and from centrally-located<br />
tra<strong>in</strong> stations would not be significant enough to nullify<br />
HSR’s competitive <strong>speed</strong> advantage over other modes<br />
<strong>of</strong> transport. <strong>The</strong> average density <strong>of</strong> the five largest<br />
cities <strong>in</strong> Spa<strong>in</strong> is 6,200 <strong>in</strong>habitants per square kilometre<br />
-- twice the density <strong>of</strong> the five largest German cities. This<br />
density reflects cont<strong>in</strong>u<strong>in</strong>g trends toward urbanisation,<br />
and rural population densities rema<strong>in</strong> low with an<br />
average <strong>of</strong> only 81 <strong>in</strong>habitants per square kilometre.
Anticipated <strong>benefits</strong><br />
<strong>The</strong> ma<strong>in</strong> objectives <strong>of</strong> Spa<strong>in</strong>’s HSR development<br />
were to reduce travel times and <strong>in</strong>crease capacity on<br />
the <strong>rail</strong> network <strong>in</strong> order to improve access to large<br />
economies from smaller cities and to help mitigate<br />
regional disparities and tensions that had persisted<br />
s<strong>in</strong>ce the 19th century. In particular, policy makers<br />
sought to encourage growth <strong>in</strong> cities other than Madrid<br />
and Barcelona, which had developed at a significantly<br />
faster rate than other cities with smaller <strong>in</strong>dustrial<br />
and service-based economies. Other objectives<br />
were to provide employment opportunities through<br />
construction and ma<strong>in</strong>tenance outside <strong>of</strong> the major<br />
cities, to <strong>in</strong>crease development opportunities for the<br />
domestic <strong>rail</strong> <strong>in</strong>dustry, and to reduce the environmental<br />
impact <strong>of</strong> travel by encourag<strong>in</strong>g shifts from road and air<br />
transport. Efficiency <strong>in</strong> conventional freight traffic was<br />
also expected to benefit from capacity made available<br />
as passenger services moved to <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es.<br />
<strong>The</strong> government decided early on that to compete with<br />
other modes <strong>of</strong> transport, HSR would have to ensure<br />
travel times from regional capitals <strong>of</strong> less than four<br />
hours by tra<strong>in</strong> to Madrid and six hours to Barcelona. In<br />
addition, the government’s current transport plan aims<br />
to br<strong>in</strong>g 90% <strong>of</strong> the Spanish population with<strong>in</strong> 50 km <strong>of</strong><br />
an HSR station by 2020.<br />
Spanish HSR development has received significant<br />
assistance from the EU as part <strong>of</strong> its Trans-European<br />
Networks <strong>in</strong>itiative (TENs), which seeks to use<br />
transportation policy to improve environmental<br />
susta<strong>in</strong>ability through modal shifts away from air travel,<br />
to improve economic <strong>in</strong>tegration under a ‘s<strong>in</strong>gle market’<br />
concept, and to address regional disparities across<br />
the Union. In the early days <strong>of</strong> HSR, the EU hoped <strong>in</strong><br />
particular that the Madrid–Barcelona HSR l<strong>in</strong>e would<br />
largely replace air travel between the two cities, free<strong>in</strong>g<br />
capacity at both airports for longer journeys. EU priorities<br />
for Spanish HSR development also <strong>in</strong>cluded connect<strong>in</strong>g<br />
the network to the French TGV system, <strong>in</strong> the hopes<br />
<strong>of</strong> further reduc<strong>in</strong>g the necessity for air travel and<br />
encourag<strong>in</strong>g regional <strong>in</strong>tegration.<br />
High-<strong>speed</strong> <strong>rail</strong> network<br />
To reduce the cost <strong>of</strong> construction and to avoid public<br />
opposition to new construction <strong>in</strong> city centres, planners<br />
opted to run HSR services through exist<strong>in</strong>g <strong>rail</strong> stations.<br />
In rural areas, l<strong>in</strong>es were built with a m<strong>in</strong>imum <strong>of</strong> tunnels<br />
and earthworks (<strong>in</strong> contrast to Japan as described later<br />
<strong>in</strong> the report).<br />
This <strong>of</strong>ten resulted <strong>in</strong> steep gradients, which are viable<br />
for passenger-only <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es provid<strong>in</strong>g the<br />
roll<strong>in</strong>g stock is designed with adequate power and low<br />
weight. Notably, HSR construction <strong>in</strong> Spa<strong>in</strong> demonstrates<br />
that <strong>in</strong> mounta<strong>in</strong>ous areas, <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es can <strong>in</strong> fact<br />
represent a cheaper solution for capacity problems than<br />
conventional l<strong>in</strong>es due to the possibility <strong>of</strong> us<strong>in</strong>g<br />
direct alignments.<br />
S<strong>in</strong>ce the open<strong>in</strong>g <strong>of</strong> Spa<strong>in</strong>’s first <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>e <strong>in</strong><br />
1992, the network has expanded considerably, enabl<strong>in</strong>g<br />
travel between Madrid and Barcelona via cities such<br />
as Zaragosa, and now <strong>of</strong>fers access to cities <strong>of</strong>f the<br />
pr<strong>in</strong>cipal southwest-to-northeast l<strong>in</strong>e such as Valladolid<br />
and Valencia. High-<strong>speed</strong> networks now represent 14%<br />
<strong>of</strong> total <strong>rail</strong> kilometres <strong>in</strong> Spa<strong>in</strong>. <strong>The</strong> l<strong>in</strong>e connect<strong>in</strong>g<br />
Barcelona to the French border will be opened <strong>in</strong> 2012,<br />
and will allow the first passenger services between<br />
Spa<strong>in</strong> and France without change <strong>of</strong> gauge.<br />
Three types <strong>of</strong> passenger tra<strong>in</strong> services now operate on<br />
<strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es:<br />
> S<strong>in</strong>ce 1992, AVE tra<strong>in</strong>s with top <strong>speed</strong>s <strong>of</strong> 300-350<br />
kilometres-per hour (km/h) have operated over long<br />
distances, only on <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es.<br />
> S<strong>in</strong>ce 2004, Avant tra<strong>in</strong>s with top <strong>speed</strong>s <strong>of</strong> 250 km/h<br />
have operated over shorter distances, aga<strong>in</strong> only on<br />
<strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es.<br />
> S<strong>in</strong>ce 2006, dual gauge Alvia tra<strong>in</strong>s with top <strong>speed</strong>s <strong>of</strong><br />
250 km/h have operated over long distances on both<br />
<strong>high</strong> <strong>speed</strong> and conventional l<strong>in</strong>es.<br />
Spanish HSR has thus identified a balance <strong>of</strong> <strong>speed</strong><br />
and pric<strong>in</strong>g on <strong>in</strong>dividual routes allow<strong>in</strong>g it to rely<br />
less heavily on the most popular <strong>high</strong>-<strong>speed</strong> routes to<br />
subsidise operations elsewhere. <strong>The</strong> <strong>in</strong>troduction <strong>of</strong><br />
Avant and Alvia services, <strong>in</strong> addition to the AVE, has<br />
led to greater traffic volumes and revenue on the<br />
HSR network as a whole. This division <strong>of</strong> services<br />
has become common practice for successful<br />
HSR <strong>in</strong>vestment.<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 11
Challenges<br />
FINANCING<br />
High-<strong>speed</strong> l<strong>in</strong>es <strong>in</strong> Spa<strong>in</strong> are cheaper to build than<br />
elsewhere <strong>in</strong> Europe, with an average cost <strong>of</strong> 12 million<br />
euros per kilometre compared to over 30 million<br />
euros <strong>in</strong> Germany. This is because low rural population<br />
densities reduce the cost <strong>of</strong> acquir<strong>in</strong>g land for track<br />
construction, and reduce the number <strong>of</strong> objections to<br />
the construction <strong>of</strong> <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es, which <strong>in</strong> other<br />
countries have necessitated costly mitigation measures.<br />
Wages are also relatively low <strong>in</strong> Spa<strong>in</strong>, lower<strong>in</strong>g the cost<br />
<strong>of</strong> construction. Despite these relative <strong>benefits</strong>, Spanish<br />
HSR has necessitated considerable government<br />
<strong>in</strong>vestment. In 2005, the government set out plans to<br />
build a further 9,000 km <strong>of</strong> <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es between<br />
2006 and 2020 at an anticipated cost <strong>of</strong> 83 billion euros.<br />
While a precarious economic environment has<br />
compelled the government to moderate its HSR<br />
development targets somewhat, cont<strong>in</strong>ued <strong>in</strong>vestment<br />
has been made possible by extensive use <strong>of</strong> publicprivate<br />
partnerships (PPPs). <strong>The</strong> Spanish government<br />
now has a goal <strong>of</strong> fund<strong>in</strong>g 19% <strong>of</strong> HSR <strong>in</strong>vestment from<br />
‘outside the budget’ until at least 2015.<br />
PPPs <strong>in</strong>itiated by Adif, the public <strong>in</strong>frastructure<br />
management company, have attracted numerous<br />
bidders, thus enabl<strong>in</strong>g the government to negotiate<br />
favourable distributions <strong>of</strong> risk between public and<br />
private actors.Competition for private <strong>in</strong>volvement<br />
<strong>in</strong> PPPs has also ensured considerably more efficient<br />
management <strong>of</strong> HSR networks than had been achieved<br />
<strong>in</strong> the past, and has, <strong>in</strong> general, allowed the network<br />
to use a deep pool <strong>of</strong> private capital to replace reallocated<br />
government fund<strong>in</strong>g. <strong>The</strong> new l<strong>in</strong>e lead<strong>in</strong>g <strong>in</strong>to<br />
France from Figueras was built under a 50-year contract<br />
between the French and Spanish governments and a<br />
special-purpose company, T.P. Ferro. Two new PPPs are<br />
now <strong>in</strong> the plann<strong>in</strong>g stages.<br />
TRACK GAUGE<br />
12 : <strong>Invensys</strong> | <strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective<br />
Spa<strong>in</strong>’s conventional track uses gauges that differ from<br />
the European standard. <strong>The</strong> government decided to use<br />
the standard European gauge on the <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es,<br />
ensur<strong>in</strong>g <strong>in</strong>teroperability with the rest <strong>of</strong> Europe with<br />
which the Spanish network will soon connect. To ensure<br />
connectivity with exist<strong>in</strong>g conventional l<strong>in</strong>es <strong>in</strong> Spa<strong>in</strong>,<br />
Renfe, the state-owned <strong>rail</strong> operator, has <strong>in</strong>troduced<br />
locomotive-hauled Talgo tra<strong>in</strong>s (branded Alvia), which<br />
use gauge changers to alter the width <strong>of</strong> the wheels to<br />
and from the Spanish standard.<br />
COMPETITION AND MARKET SHARE<br />
High-<strong>speed</strong> <strong>rail</strong> faces considerable competition <strong>in</strong><br />
Spa<strong>in</strong>. Coaches have historically been the ma<strong>in</strong> mode<br />
for short/medium distance public transport.<br />
Over longer distances, air is the still the ma<strong>in</strong><br />
competitor to <strong>high</strong>-<strong>speed</strong> <strong>rail</strong>, and private road<br />
transport is important at all distances. A key challenge<br />
for <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> Spa<strong>in</strong>, as <strong>in</strong> the majority <strong>of</strong> cases,<br />
is to match air <strong>in</strong> terms <strong>of</strong> journey times while ensur<strong>in</strong>g<br />
a cost advantage. Spanish HSR has succeeded <strong>in</strong> do<strong>in</strong>g<br />
this by achiev<strong>in</strong>g travel time between city centres <strong>of</strong> 2<br />
½ hours (well with<strong>in</strong> the 3-4 hours generally thought<br />
necessary for <strong>rail</strong> to compete with air on overall journey<br />
time), and fares that are generally lower than the price<br />
<strong>of</strong> air travel. Renfe is currently plann<strong>in</strong>g to <strong>in</strong>troduce<br />
yield management techniques (differentiated pric<strong>in</strong>g<br />
based on number <strong>of</strong> seats available or travel dates)<br />
<strong>in</strong> order to leverage spare capacity and ensure that<br />
opportunities to take advantage <strong>of</strong> HSR are available to<br />
customers <strong>in</strong> a variety <strong>of</strong> <strong>in</strong>come brackets.
FREIGHT AND SHORT LINES<br />
While domestic freight has benefitted from HSR<br />
through the free<strong>in</strong>g <strong>of</strong> capacity on conventional l<strong>in</strong>es,<br />
<strong>in</strong>ternational freight, which has greater potential as a<br />
driver <strong>of</strong> economic growth, was <strong>in</strong>itially hampered by<br />
the proprietary Spanish track gauge. To take better<br />
advantage <strong>of</strong> growth opportunities <strong>in</strong> <strong>in</strong>ternational<br />
freight, the Spanish government’s HSR strategy now<br />
<strong>in</strong>cludes development <strong>of</strong> hybrid passenger/freight<br />
l<strong>in</strong>es operat<strong>in</strong>g on European standard gauge for routes<br />
that cross borders. In comb<strong>in</strong>ation with the phas<strong>in</strong>g out<br />
<strong>of</strong> HSR services <strong>in</strong> areas <strong>of</strong> particularly low demand,<br />
this decision constitutes a narrow<strong>in</strong>g <strong>of</strong> the HSR focus<br />
to routes that ensure a balance between social and<br />
economic <strong>benefits</strong> and susta<strong>in</strong>able revenue.<br />
SIGNALLING<br />
<strong>The</strong> expansion <strong>of</strong> Spa<strong>in</strong>’s HSR network has posed a<br />
challenge for signall<strong>in</strong>g systems, which normally differ<br />
considerably between conventional and <strong>high</strong>-<strong>speed</strong><br />
networks, and between <strong>high</strong>er- and lower-<strong>speed</strong><br />
services <strong>of</strong>fered on the AVE, Alvia, and Avant l<strong>in</strong>es. <strong>The</strong><br />
efficient function<strong>in</strong>g <strong>of</strong> these varied systems is ensured<br />
by advances <strong>in</strong> signall<strong>in</strong>g control technologies that have<br />
enabled the regulation <strong>of</strong> all networks from centralised<br />
locations. Spa<strong>in</strong> was the first adopter <strong>of</strong> this technology,<br />
which now regulates HSR operations across Europe as<br />
the European <strong>Rail</strong> Traffic Management System (ERTMS).<br />
Aside from ensur<strong>in</strong>g safety and efficiency across various<br />
<strong>rail</strong> services, this has removed the necessity <strong>of</strong> build<strong>in</strong>g<br />
expensive signall<strong>in</strong>g centres across the network,<br />
thereby lower<strong>in</strong>g the cost <strong>of</strong> HSR <strong>in</strong>vestment.<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 13
Realised <strong>benefits</strong><br />
Because <strong>of</strong> the poor state <strong>of</strong> Spa<strong>in</strong>’s conventional <strong>rail</strong><br />
system, <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> has reduced travel times by an<br />
average <strong>of</strong> 60-70%. Reliability is exceptional with 99.8%<br />
<strong>of</strong> AVE tra<strong>in</strong>s between Madrid and Sevilla arriv<strong>in</strong>g with<strong>in</strong><br />
three m<strong>in</strong>utes <strong>of</strong> schedule. Improvements <strong>in</strong> <strong>speed</strong> and<br />
reliability have enabled economic development <strong>in</strong> cities<br />
that were previously poorly connected to the network.<br />
S<strong>in</strong>ce the open<strong>in</strong>g <strong>of</strong> the Madrid-Seville l<strong>in</strong>e, ridership<br />
has <strong>in</strong>creased from three million to five million per<br />
year. While this level <strong>of</strong> traffic and the rate <strong>of</strong> growth<br />
(around 3% annually) are relatively low by comparison<br />
to other <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es around the world, HSR growth<br />
has <strong>in</strong>duced a significant modal shift away from air<br />
travel -- one <strong>of</strong> the government’s key objectives. <strong>The</strong><br />
follow<strong>in</strong>g tables show that air travel’s share <strong>of</strong> traffic<br />
fell from 40% to 13% dur<strong>in</strong>g a period <strong>of</strong> major HSR<br />
network expansion between 1991 and 1994. By 2009,<br />
five times more passengers were carried by <strong>rail</strong> than<br />
by air between the two cities. <strong>The</strong>se modal shifts have<br />
substantially reduced CO2 emissions from transport,<br />
and reduced congestion at both airports.<br />
Even greater reductions <strong>in</strong> travel times were achieved<br />
on the l<strong>in</strong>e between Madrid and Barcelona, <strong>in</strong>itially<br />
to 2.75 hours. Follow<strong>in</strong>g the <strong>in</strong>troduction <strong>of</strong> ERTMS <strong>in</strong><br />
2011, travel times between Madrid and Barcelona were<br />
further reduced to only 2.5 hours. Traffic on this l<strong>in</strong>e<br />
now exceeds seven million passengers per year, some<br />
<strong>of</strong> whom travel to <strong>in</strong>termediate cities on the corridor.<br />
Between Madrid and Barcelona, <strong>rail</strong> market share has<br />
<strong>in</strong>creased from 12% to 49%. Renfe, the national <strong>rail</strong><br />
operator, estimates that by provid<strong>in</strong>g a fast and costeffective<br />
alternative to road travel, this l<strong>in</strong>e alone saves<br />
250,000 tonnes <strong>of</strong> carbon emissions and 144,000<br />
tonnes <strong>of</strong> oil, and reduces road fatalities by an average<br />
<strong>of</strong> 68 <strong>in</strong>cidents annually.<br />
Before AVE (1991)<br />
After AVE (1993)<br />
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Airplane 11%<br />
Conventional tra<strong>in</strong> 14%<br />
Bus 15%<br />
Car 60%<br />
Airplane 4%<br />
Conventional tra<strong>in</strong> 2%<br />
Bus 8%<br />
Car 34%<br />
AVE 52%
With the completion <strong>of</strong> several new l<strong>in</strong>es over the<br />
past few years, total <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> traffic more than<br />
quadrupled to 11.5 billion passenger kilometres <strong>in</strong><br />
2009. Although this is less than the <strong>high</strong>-<strong>speed</strong> <strong>rail</strong><br />
traffic <strong>in</strong> France and Germany, it represents half <strong>of</strong> all<br />
<strong>rail</strong> passenger kilometres <strong>in</strong> Spa<strong>in</strong>. HSR has been such<br />
a popular success <strong>in</strong> Spa<strong>in</strong> that Renfe’s <strong>high</strong>-<strong>speed</strong><br />
division is now the only one for which revenue covers<br />
operat<strong>in</strong>g cost.<br />
<strong>The</strong> reduced costs <strong>of</strong> construction and the unusually low<br />
<strong>speed</strong>s and <strong>in</strong>adequate capacity <strong>of</strong> the conventional<br />
<strong>rail</strong> network make Spanish HSR <strong>high</strong>ly successful on<br />
a benefit-per-passenger basis. Spanish HSR planners<br />
have leveraged the strengths <strong>of</strong> HSR while m<strong>in</strong>imis<strong>in</strong>g<br />
its cost by: runn<strong>in</strong>g services which go <strong>of</strong>f the <strong>high</strong><strong>speed</strong><br />
l<strong>in</strong>e us<strong>in</strong>g gauge chang<strong>in</strong>g techniques; allow<strong>in</strong>g<br />
freight on some <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es (especially those to<br />
France to take advantage <strong>of</strong> the gauge); limit<strong>in</strong>g the<br />
construction <strong>of</strong> <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es to longer distances<br />
where the time advantages are more significant; and<br />
<strong>in</strong>troduc<strong>in</strong>g ERTMS to further reduce journey times.<br />
ECONOMIC IMPACT<br />
In addition, HSR has had a significant impact on the<br />
economies <strong>of</strong> Spa<strong>in</strong>’s smaller cities. Residents <strong>of</strong><br />
Ciudad Real and Puertollano, each with a population<br />
<strong>of</strong> approximately 50,000 and located about 200 km<br />
from Madrid, can now access the capital city <strong>in</strong> one<br />
hour. <strong>The</strong>se cities had previously been isolated from<br />
the ma<strong>in</strong> transport routes but, as result <strong>of</strong> the <strong>high</strong><strong>speed</strong><br />
l<strong>in</strong>e to Seville, are now better <strong>in</strong>tegrated <strong>in</strong>to<br />
the wider economy. New residents have moved <strong>in</strong><br />
to take advantage <strong>of</strong> cheap property, commut<strong>in</strong>g to<br />
Madrid has become common, and property values<br />
have <strong>in</strong>creased as a result <strong>of</strong> the l<strong>in</strong>e. Economic growth<br />
has also been promoted by urban revitalisation around<br />
stations, particularly when stations have been placed<br />
close to city centres. In Lleida, for <strong>in</strong>stance, planners<br />
have attributed a 15% growth <strong>in</strong> tourism and a 20% rise<br />
<strong>in</strong> bus<strong>in</strong>ess conventions to the strategic construction <strong>of</strong><br />
a station between the historic and newer centres <strong>of</strong> the<br />
city. 1 In general, the effects <strong>of</strong> HSR on Spanish economic<br />
and social life have been such that, despite the difficulty<br />
<strong>in</strong> ensur<strong>in</strong>g susta<strong>in</strong>able revenue on less-travelled l<strong>in</strong>es,<br />
the Spanish government has cont<strong>in</strong>ued to prioritise HSR<br />
<strong>in</strong>vestment <strong>in</strong> these places.<br />
1 Todorovich, Schned and Lane (2011). ‘High-<strong>speed</strong> <strong>rail</strong>: <strong>in</strong>ternational lessons for U.S. policy<br />
makers’. L<strong>in</strong>coln Institute <strong>of</strong> Land Policy.<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 15
Germany<br />
Key attributes<br />
First year <strong>of</strong><br />
operation<br />
1991<br />
Length <strong>of</strong> track 1,284 km<br />
Top <strong>speed</strong> 305 km/h<br />
Cost per kilometre 32 million euros<br />
Strategies employed > Emphasis on <strong>in</strong>termodal transit: HSR<br />
stations at airports, code-shar<strong>in</strong>g<br />
with airl<strong>in</strong>es<br />
> High <strong>speed</strong> roll<strong>in</strong>g stock operat<strong>in</strong>g on<br />
conventional l<strong>in</strong>es<br />
> Lower average <strong>speed</strong>s to suit a<br />
polycentric distribution pattern<br />
Key <strong>benefits</strong> > Improved reliability, particularly <strong>in</strong><br />
the east<br />
> Eased transfer <strong>of</strong> capital back to Berl<strong>in</strong><br />
> Modal shift from road/air travel<br />
> Significant growth <strong>in</strong> <strong>in</strong>termediate cities<br />
<strong>The</strong> German <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> network <strong>in</strong> 2011<br />
Source International Union <strong>of</strong> <strong>Rail</strong>ways<br />
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Context<br />
Germany’s urban population is polycentric and<br />
widely dispersed. Berl<strong>in</strong> has 3.4 million <strong>in</strong>habitants,<br />
Hamburg 1.8 million, Munich 1.3 million and Cologne<br />
1.0 million. <strong>The</strong>re are eight cities with populations<br />
between 500,000 and 1 million. This is <strong>in</strong> contrast to<br />
countries such as Spa<strong>in</strong>, where the urban population<br />
is concentrated <strong>in</strong> two major cities. <strong>The</strong> average<br />
population density <strong>of</strong> the five largest cities <strong>in</strong> Germany<br />
is only 3,000 <strong>in</strong>habitants per square kilometre, mean<strong>in</strong>g<br />
that much <strong>of</strong> the population <strong>of</strong> these cities <strong>of</strong>ten must<br />
travel significant distances to reach a <strong>rail</strong>way station.<br />
Population densities <strong>in</strong> the countryside are <strong>high</strong>er than<br />
<strong>in</strong> Spa<strong>in</strong>, though lower than <strong>in</strong> Japan.<br />
Long-distance tra<strong>in</strong>s <strong>in</strong> Germany have therefore always<br />
passed through many major cities, <strong>of</strong>ten operat<strong>in</strong>g<br />
frequent services with many stops. <strong>Rail</strong> l<strong>in</strong>es also run <strong>in</strong><br />
a variety <strong>of</strong> directions <strong>in</strong> a ‘web-like’ formation rather<br />
than converg<strong>in</strong>g on the capital <strong>in</strong> a hub-and-spoke<br />
arrangement as <strong>in</strong> many other countries. This makes for<br />
a particularly complex <strong>rail</strong> network. A large population<br />
divided amongst a significant number <strong>of</strong> major cities,<br />
comb<strong>in</strong>ed with the fact that German manufactur<strong>in</strong>g has<br />
historically generated considerable freight transport<br />
volumes, led Germany to develop Europe’s largest<br />
conventional <strong>rail</strong> network.<br />
Germany’s HSR <strong>in</strong>vestment was designed to address<br />
a capacity shortage on an ag<strong>in</strong>g and slow <strong>rail</strong><br />
network <strong>in</strong> the face <strong>of</strong> grow<strong>in</strong>g demand, with specific<br />
bottlenecks that <strong>in</strong>hibited the growth <strong>of</strong> commerce<br />
and tourism. Cont<strong>in</strong>u<strong>in</strong>g development <strong>of</strong> the air and<br />
road <strong>in</strong>frastructure also compelled government to<br />
search for new approaches to ensur<strong>in</strong>g <strong>rail</strong>’s overall<br />
competitiveness. HSR was also seen <strong>in</strong> the immediate<br />
post-Cold War era as a means <strong>of</strong> improv<strong>in</strong>g transport<br />
l<strong>in</strong>ks between the newly united east and west,<br />
support<strong>in</strong>g the economic and social objectives<br />
<strong>of</strong> re-unification.
Anticipated <strong>benefits</strong><br />
While plann<strong>in</strong>g for HSR <strong>in</strong> the 1960s sought pr<strong>in</strong>cipally<br />
to accommodate new demand for <strong>rail</strong> and relieve an<br />
ag<strong>in</strong>g conventional network <strong>in</strong> West Germany, the<br />
opportunity to improve connections with Berl<strong>in</strong> after<br />
re-unification <strong>in</strong> 1990 <strong>in</strong>jected significant new political<br />
capital <strong>in</strong>to the push for extend<strong>in</strong>g HSR <strong>in</strong> a new round<br />
<strong>of</strong> <strong>in</strong>vestment. This would represent a marquee element<br />
<strong>of</strong> a broader push for transportation reform <strong>in</strong> eastern<br />
Germany, which found its <strong>in</strong>frastructure <strong>in</strong> disrepair after<br />
the end <strong>of</strong> the Cold War.<br />
<strong>The</strong> German public’s enthusiasm for environmental<br />
susta<strong>in</strong>ability further built political support for<br />
<strong>in</strong>vestment <strong>in</strong> HSR as it <strong>of</strong>fered a compell<strong>in</strong>g alternative<br />
to air and road travel. A major feature <strong>of</strong> HSR plann<strong>in</strong>g<br />
was an emphasis on the construction <strong>of</strong> stations at<br />
airports to <strong>in</strong>crease the accessibility <strong>of</strong> HSR to those<br />
transferr<strong>in</strong>g to or from <strong>in</strong>ternational flights, and to<br />
provide a station with<strong>in</strong> reach <strong>of</strong> the many residents <strong>of</strong><br />
areas close to major airports. A station built at Frankfurt<br />
airport -- Germany’s largest airport and the third-largest<br />
<strong>in</strong> Europe -- was viewed as particularly important<br />
because some 35 million people live with<strong>in</strong> 200 km,<br />
giv<strong>in</strong>g it a larger catchment population than any other<br />
European airport.<br />
High-<strong>speed</strong> <strong>rail</strong> network<br />
High-<strong>speed</strong> <strong>rail</strong> <strong>in</strong>vestment <strong>in</strong> Germany has focused<br />
less on new <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es than on the purchase <strong>of</strong><br />
special <strong>high</strong>-<strong>speed</strong> roll<strong>in</strong>g stock operat<strong>in</strong>g ma<strong>in</strong>ly on<br />
conventional l<strong>in</strong>es (Inter-City Express [ICE] tra<strong>in</strong>s). In<br />
Germany, less dist<strong>in</strong>ction is made than <strong>in</strong> other countries<br />
between conventional and <strong>high</strong>-<strong>speed</strong> systems <strong>in</strong><br />
the eye <strong>of</strong> the consumer, with both <strong>high</strong>-<strong>speed</strong> and<br />
conventional tra<strong>in</strong>s able to operate on <strong>high</strong>-<strong>speed</strong> and<br />
conventional track.<br />
<strong>The</strong> polycentric distribution <strong>of</strong> German cities did<br />
not lend itself to the development <strong>of</strong> a few new<br />
<strong>high</strong> capacity <strong>rail</strong> l<strong>in</strong>es converg<strong>in</strong>g on the capital as<br />
was constructed <strong>in</strong> Spa<strong>in</strong>. Instead, new sections <strong>of</strong><br />
track were constructed where there were particular<br />
bottlenecks on the network. <strong>The</strong>se were designed for<br />
both freight and passenger traffic, although their use<br />
by freight has been limited and more recent l<strong>in</strong>es have<br />
been constructed for passengers only. This is <strong>in</strong> contrast<br />
to Spa<strong>in</strong>, where passenger-only l<strong>in</strong>es gave way to dual<br />
purpose ones as planners sought new sources<br />
<strong>of</strong> revenue.<br />
Operations began on the first <strong>high</strong> <strong>speed</strong> l<strong>in</strong>e between<br />
Hannover and Wurzburg <strong>in</strong> 1991. <strong>The</strong> l<strong>in</strong>e was built<br />
us<strong>in</strong>g extensive tunnels and bridges to reduce gradients<br />
<strong>in</strong> order to allow freight as well as passenger services,<br />
and to mitigate environmental damage. <strong>The</strong> German<br />
approach later <strong>in</strong>corporated passenger-only <strong>high</strong><strong>speed</strong><br />
l<strong>in</strong>es that would allow for steeper gradients. This<br />
culm<strong>in</strong>ated <strong>in</strong> the passenger-only l<strong>in</strong>e opened <strong>in</strong> 2002<br />
between Frankfurt and Cologne via Frankfurt airport.<br />
L<strong>in</strong>es to Berl<strong>in</strong> were also improved over the course<br />
<strong>of</strong> the decades follow<strong>in</strong>g reunification, <strong>in</strong>clud<strong>in</strong>g the<br />
<strong>in</strong>troduction <strong>of</strong> HSR services to Hannover <strong>in</strong> 1998 and<br />
to Hamburg <strong>in</strong> 2004. A further <strong>high</strong> <strong>speed</strong> l<strong>in</strong>e between<br />
Berl<strong>in</strong> and Nuremberg is expected to be complete <strong>in</strong><br />
2017 and will allow travel from Berl<strong>in</strong> to Munich <strong>in</strong> four<br />
hours, partly on <strong>high</strong> <strong>speed</strong> l<strong>in</strong>es, compared to eight<br />
hours before construction began.<br />
German HSR constitutes only 1.6% <strong>of</strong> Germany’s <strong>rail</strong><br />
network, far less than <strong>in</strong> Spa<strong>in</strong>. Yet because <strong>high</strong>-<strong>speed</strong><br />
ICE tra<strong>in</strong>s run extensively on conventional tracks that<br />
have <strong>of</strong>ten undergone upgrades and at a cost far<br />
less than the construction <strong>of</strong> new <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es,<br />
these services account for 30% <strong>of</strong> total <strong>rail</strong> passenger<br />
kilometres <strong>in</strong> Germany, and about two thirds <strong>of</strong><br />
passenger kilometres on <strong>in</strong>tercity services. ICE services<br />
also carry twice as many passenger kilometres as <strong>high</strong><strong>speed</strong><br />
services <strong>in</strong> Spa<strong>in</strong> thanks to their ability to operate<br />
<strong>of</strong>f <strong>of</strong> <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es.<br />
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Challenges<br />
FINANCING<br />
High rural population densities <strong>in</strong> Germany have<br />
<strong>in</strong>creased the cost and difficulty <strong>of</strong> acquir<strong>in</strong>g land for<br />
construction <strong>of</strong> new l<strong>in</strong>es, and this has been a pr<strong>in</strong>cipal<br />
factor <strong>in</strong> Germany’s emphasis on us<strong>in</strong>g <strong>high</strong>-<strong>speed</strong><br />
roll<strong>in</strong>g stock at reduced <strong>speed</strong>s on conventional<br />
networks. Objections to the construction <strong>of</strong> these<br />
l<strong>in</strong>es are common and costly mitigation measures<br />
such as tunnell<strong>in</strong>g and the use <strong>of</strong> noise barriers have<br />
had to be taken to <strong>in</strong>crease the acceptability <strong>of</strong> new<br />
construction to local residents. This has meant that HSR<br />
construction <strong>in</strong> Germany typically costs 32 million euros<br />
per kilometre more than double that <strong>in</strong> Spa<strong>in</strong>. High<strong>speed</strong><br />
<strong>rail</strong> <strong>in</strong> Germany faces competition from low cost<br />
airl<strong>in</strong>es over distances at the top end <strong>of</strong> the HSR range.<br />
It has also faced competition from road travel over the<br />
relatively short distances between most German cities,<br />
which is exacerbated by the absence <strong>of</strong> tolls and<br />
<strong>speed</strong> limits.<br />
Deutsche Bahn (DB) has found it difficult to compete <strong>in</strong><br />
some markets because its fares are not based on yield<br />
management – most passengers simply turn up and<br />
travel at a fixed cost. This has resulted <strong>in</strong> overcrowd<strong>in</strong>g<br />
on some tra<strong>in</strong>s but low overall load factors (50%<br />
compared to 70% for most other European <strong>high</strong> <strong>speed</strong><br />
<strong>rail</strong> systems which have reservation-based ticket<strong>in</strong>g<br />
systems). This traditional pric<strong>in</strong>g structure reduces both<br />
traffic and total revenue.<br />
This comb<strong>in</strong>ation <strong>of</strong> relatively <strong>high</strong> costs and low<br />
revenue encouraged a selective approach to <strong>in</strong>vestment<br />
by the federal government as well as shrewd market<strong>in</strong>g<br />
strategies. ICE tra<strong>in</strong>s are marketed as a premium service<br />
<strong>in</strong> their own right, and thus are commonly used on low<strong>speed</strong><br />
l<strong>in</strong>es at an <strong>in</strong>creased cost.<br />
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LOCAL ENVIRONMENTAL OBJECTIONS<br />
Despite strong political and public support for <strong>high</strong><strong>speed</strong><br />
<strong>rail</strong>, ma<strong>in</strong>ly on environmental grounds, there<br />
have been objections from those liv<strong>in</strong>g near routes<br />
about noise and blight. Mitigation measures, such<br />
as construction near motorways and <strong>in</strong> tunnels and<br />
cutt<strong>in</strong>gs, have helped reduce these objections but have<br />
<strong>of</strong>ten delayed and <strong>in</strong>creased the costs <strong>of</strong> construction.<br />
SIGNALLING<br />
East and West German <strong>rail</strong>ways operated a variety<br />
<strong>of</strong> signall<strong>in</strong>g systems that slowed the <strong>in</strong>tegration<br />
<strong>of</strong> German <strong>rail</strong> immediately after reunification. <strong>The</strong><br />
<strong>in</strong>vestments <strong>in</strong> new signall<strong>in</strong>g technology that came<br />
alongside HSR development have allowed <strong>in</strong>creased<br />
synchronisation across various regions, a process which<br />
has been aided by the progression <strong>of</strong> ERTMS across<br />
the cont<strong>in</strong>ent. <strong>The</strong> use <strong>of</strong> ERTMS level 2 on some l<strong>in</strong>es,<br />
which enables <strong>in</strong>-cab signall<strong>in</strong>g, has further reduced the<br />
operat<strong>in</strong>g costs <strong>of</strong> HSR on new l<strong>in</strong>es.
Realised <strong>benefits</strong><br />
<strong>The</strong> comb<strong>in</strong>ed effect <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>in</strong>vestment,<br />
<strong>in</strong>clud<strong>in</strong>g both roll<strong>in</strong>g stock and <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>e, has<br />
been to reduce travel times by around 50% compared<br />
to conventional <strong>rail</strong>. Additionally, <strong>high</strong>-<strong>speed</strong> roll<strong>in</strong>g<br />
stock now carries 30% <strong>of</strong> passenger kilometres by <strong>rail</strong> <strong>in</strong><br />
Germany and two thirds <strong>of</strong> <strong>in</strong>tercity traffic.<br />
HANNOVER – BERLIN<br />
<strong>The</strong> 185 km <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>k between Hannover and<br />
Berl<strong>in</strong> was designed largely as a symbol <strong>of</strong> east-west<br />
cooperation after reunification and <strong>in</strong> preparation for<br />
a significant <strong>in</strong>crease <strong>in</strong> demand given the lower<strong>in</strong>g<br />
<strong>of</strong> political barriers to bus<strong>in</strong>ess and leisure travel. In<br />
comb<strong>in</strong>ation with the Würzburg-Hannover <strong>high</strong>-<strong>speed</strong><br />
l<strong>in</strong>e, it now provides a corridor <strong>of</strong> access to the national<br />
capital for significant segments <strong>of</strong> the population<br />
throughout western Germany. Travel time between<br />
Hannover and Berl<strong>in</strong> was reduced from four hours to<br />
1.5 hours.<br />
COLOGNE – FRANKFURT<br />
<strong>The</strong> l<strong>in</strong>e between Cologne and Frankfurt is part <strong>of</strong><br />
the Trans-European Network, which is designated by<br />
the EU for all network <strong>in</strong>frastructure, especially <strong>in</strong> the<br />
transport sector, which has a European rather than just<br />
a national role. <strong>The</strong> l<strong>in</strong>e’s construction reduced travel<br />
times between these cities to one hour, a 55% reduction<br />
from the old <strong>rail</strong>way and 35% faster than by road. Even<br />
before <strong>high</strong>-<strong>speed</strong> <strong>rail</strong>, the classic <strong>rail</strong> l<strong>in</strong>e carried most<br />
travellers between the two cities. With the adoption <strong>of</strong><br />
<strong>high</strong>-<strong>speed</strong> <strong>rail</strong>, however, <strong>rail</strong> has come to account for<br />
97% <strong>of</strong> the air/<strong>rail</strong> market share between the two cities.<br />
This leverag<strong>in</strong>g <strong>of</strong> an exist<strong>in</strong>g and grow<strong>in</strong>g <strong>rail</strong> market<br />
represents a particularly low-risk, <strong>high</strong>-return form <strong>of</strong><br />
HSR <strong>in</strong>vestment. <strong>The</strong> success <strong>of</strong> the Cologne-Frankfurt<br />
l<strong>in</strong>e has also been bolstered by the <strong>high</strong>-<strong>speed</strong> <strong>rail</strong><br />
station at Frankfurt airport, which allows <strong>in</strong>ternational air<br />
passengers to access the airport by <strong>rail</strong>. Airl<strong>in</strong>es agreed<br />
to code share for ICE tra<strong>in</strong>s from Cologne and Stuttgart<br />
(as if they were airl<strong>in</strong>e tickets). In order to free slots for<br />
<strong>in</strong>ternational flights, Frankfurt airport helped fund the<br />
airport station and encouraged local traffic to shift<br />
to <strong>rail</strong>.<br />
IMPACT ON INTERMEDIATE TOWNS:<br />
MONTABAUR AND LIMBURG<br />
<strong>The</strong> small towns <strong>of</strong> Montabaur and Limburg <strong>of</strong>fer a<br />
unique case with which to challenge the common<br />
criticism that economic impacts <strong>of</strong> HSR development<br />
are impossible to isolate. This l<strong>in</strong>e <strong>of</strong> logic assumes<br />
that stations are generally built to expose pre-exist<strong>in</strong>g<br />
growth <strong>in</strong> urban areas to new markets elsewhere on<br />
the l<strong>in</strong>e. Yet these two towns, placed just 20 km apart,<br />
were able to secure stations on the HSR route between<br />
Cologne and Frankfurt purely as a result <strong>of</strong> heavy<br />
lobby<strong>in</strong>g by state governments rather than by virtue<br />
<strong>of</strong> pre-exist<strong>in</strong>g economic potential. <strong>The</strong>ir <strong>in</strong>clusion on<br />
the l<strong>in</strong>e was opposed by most HSR planners, who saw<br />
the price <strong>of</strong> station construction and the concomitant<br />
<strong>in</strong>crease to travel times on through-go<strong>in</strong>g journeys as<br />
unacceptable compromises given the t<strong>in</strong>y populations<br />
<strong>in</strong> question: 12,500 <strong>in</strong> Montabaur and 34,000<br />
<strong>in</strong> Limburg.<br />
Cologne and Frankfurt can now be reached from<br />
Montabaur and Limburg <strong>in</strong> www.oxan.com about 40<br />
m<strong>in</strong>utes, provid<strong>in</strong>g these towns with access to two<br />
major cities. Because the placement <strong>of</strong> these stations<br />
reflected local political priorities rather than attempts by<br />
HSR planners to leverage exist<strong>in</strong>g economic potential,<br />
researchers have succeeded <strong>in</strong> isolat<strong>in</strong>g the economic<br />
impact achieved by access to HSR. <strong>The</strong>y conclude that<br />
the access to larger markets and <strong>in</strong>creased labour<br />
mobility provided by the HSR l<strong>in</strong>e has had a strik<strong>in</strong>g and<br />
permanent effect <strong>in</strong> both towns, <strong>in</strong>creas<strong>in</strong>g GDP by an<br />
average <strong>of</strong> 2.7%. Unsurpris<strong>in</strong>gly, this was facilitated by<br />
a comb<strong>in</strong>ation <strong>of</strong> low property values <strong>in</strong> the small towns<br />
comb<strong>in</strong>ed with a will<strong>in</strong>gness by local authorities to<br />
zone areas close to ICE stations for <strong>in</strong>dustrial and<br />
commercial use. 2<br />
2 Ahlfeldt, Gabriel M and Feddersen, Arne (2010). ‘From periphery to core: economic<br />
adjustments to <strong>high</strong>-<strong>speed</strong> <strong>rail</strong>’. London School <strong>of</strong> Economics & University <strong>of</strong> Hamburg<br />
(unpublished).<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 19
<strong>The</strong> ‘Eurostar<br />
network’:<br />
London to Paris<br />
and Brussels<br />
Key attributes<br />
First year <strong>of</strong><br />
operation<br />
1994<br />
Length <strong>of</strong> track 531 kilometres (London - Paris – Brussels)<br />
Top <strong>speed</strong> 300 km/h<br />
Cost per kilometre 60 million euros<br />
Strategies employed > Unique bureaucratic model streaml<strong>in</strong>es<br />
<strong>in</strong>ternational travel.<br />
> Build<strong>in</strong>g close to motorways and pre<br />
exist<strong>in</strong>g track to m<strong>in</strong>imise<br />
environmental degradation.<br />
> Shift<strong>in</strong>g fund<strong>in</strong>g strategies <strong>in</strong> United<br />
K<strong>in</strong>gdom to match shift<strong>in</strong>g<br />
economic situation.<br />
> Yield management pric<strong>in</strong>g structure.<br />
> Competition expected to lower prices,<br />
improve service.<br />
Key <strong>benefits</strong> > Particularly acute reduction <strong>in</strong> travel<br />
time. Almost completely replaced other<br />
modes <strong>of</strong> travel on this corridor.<br />
> Regeneration <strong>of</strong> Lille.<br />
<strong>The</strong> ‘Eurostar network’ <strong>in</strong> 2011<br />
Source International Union <strong>of</strong> <strong>Rail</strong>ways<br />
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Context<br />
Before the adoption <strong>of</strong> HSR, travel between London,<br />
Paris and Brussels had relied on air or land transport<br />
comb<strong>in</strong>ed with ferries. <strong>The</strong> construction <strong>of</strong> a direct<br />
l<strong>in</strong>k between London and cities <strong>of</strong> cont<strong>in</strong>ental Europe,<br />
which had proponents as early as 1802, had been<br />
largely sidel<strong>in</strong>ed by the growth <strong>in</strong> ferry traffic and<br />
the advent <strong>of</strong> commercial air travel. A <strong>rail</strong> l<strong>in</strong>k had<br />
long been thought to <strong>of</strong>fer opportunities for regional<br />
<strong>in</strong>tegration and improved access to markets for both<br />
Paris and London, and by the 1970s, improvements <strong>in</strong><br />
tunnell<strong>in</strong>g technology lowered the cost <strong>of</strong> construction<br />
to the po<strong>in</strong>t necessary to attract <strong>in</strong>vestment <strong>in</strong>terest<br />
from the private sector. <strong>The</strong> construction <strong>of</strong> the Channel<br />
Tunnel began <strong>in</strong> 1988 and sought to take advantage <strong>of</strong><br />
<strong>high</strong>-<strong>speed</strong> technology, which had been implemented<br />
s<strong>in</strong>ce 1981 on France’s popular TGV service. <strong>The</strong><br />
present-day HSR connection between London, Paris<br />
and Brussels is referred to for the purposes <strong>of</strong> this<br />
paper as the ‘Eurostar network’, reflect<strong>in</strong>g Eurostar<br />
International’s status as the only operator utilis<strong>in</strong>g the<br />
Channel Tunnel. This will change <strong>in</strong> com<strong>in</strong>g years due<br />
to recent liberalisation <strong>of</strong> the European HSR<br />
service market.
Anticipated <strong>benefits</strong><br />
<strong>The</strong> governments <strong>in</strong> the countries served by the<br />
Eurostar network, (United K<strong>in</strong>gdom, France and<br />
Belgium) anticipated rather different <strong>benefits</strong> from<br />
<strong>high</strong>-<strong>speed</strong> <strong>rail</strong>. To the French, services through<br />
the Channel Tunnel were a logical next step for the<br />
export <strong>of</strong> France’s model for <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> services<br />
(light roll<strong>in</strong>g stock with <strong>high</strong> power-to-weight ratios<br />
operat<strong>in</strong>g over steep gradients) and <strong>of</strong> promot<strong>in</strong>g its<br />
<strong>rail</strong>way manufactur<strong>in</strong>g <strong>in</strong>dustry. High-<strong>speed</strong> <strong>rail</strong> had<br />
the advantage <strong>of</strong> promot<strong>in</strong>g the development <strong>of</strong> post<strong>in</strong>dustrial<br />
areas <strong>in</strong> northeast France, <strong>in</strong>clud<strong>in</strong>g the city <strong>of</strong><br />
Lille, which would be served by the Eurostar network as<br />
well as domestic French TGV services.<br />
For the British, the Eurostar network would provide<br />
a direct <strong>rail</strong> connection with Paris, the largest<br />
metropolitan area <strong>in</strong> cont<strong>in</strong>ental Europe; with Brussels,<br />
the adm<strong>in</strong>istrative capital <strong>of</strong> the European Union; and<br />
eventually with other cities. <strong>The</strong> British government<br />
saw an opportunity to route the l<strong>in</strong>e through the<br />
underdeveloped eastern sections <strong>of</strong> London and built<br />
a station at Ashford to encourage development <strong>of</strong><br />
that area. Spurr<strong>in</strong>g growth <strong>in</strong> the poorer areas <strong>of</strong> Kent<br />
was an additional goal. Both the British and French<br />
governments also anticipated a significant reduction <strong>in</strong><br />
congestion at London and Paris airports.<br />
<strong>The</strong> Belgian government’s support for the Paris –<br />
Brussels HSR l<strong>in</strong>k was part <strong>of</strong> a broader push for<br />
regional <strong>in</strong>tegration that <strong>in</strong>cluded both Eurostar services<br />
to Paris and London and Thalys services runn<strong>in</strong>g<br />
between Paris, Brussels, Cologne and Amsterdam.<br />
Service was extended to both Bruges and Ghent to spur<br />
growth <strong>in</strong> these mid-sized cities, though they lack the<br />
strategic placement on ma<strong>in</strong> corridors enjoyed by Lille.<br />
High-<strong>speed</strong> <strong>rail</strong> network<br />
Eurostar services are <strong>in</strong> essence an extension <strong>of</strong> the<br />
French TGV system, us<strong>in</strong>g French technology and<br />
design standards. Overhead l<strong>in</strong>e electrification <strong>in</strong><br />
the United K<strong>in</strong>gdom is licensed from the French, the<br />
signall<strong>in</strong>g system is French <strong>in</strong> orig<strong>in</strong>, and current roll<strong>in</strong>g<br />
stock is a modified TGV design. <strong>The</strong> <strong>in</strong>frastructure has<br />
been developed <strong>in</strong> stages. <strong>The</strong> Channel Tunnel itself<br />
and the l<strong>in</strong>e from Paris to the tunnel were opened <strong>in</strong><br />
1993-1994, shorten<strong>in</strong>g travel times from London to Paris<br />
to three hours. Next, the l<strong>in</strong>e from the French border<br />
to Brussels was opened <strong>in</strong> 1997. <strong>The</strong> section <strong>of</strong> track<br />
connect<strong>in</strong>g the Channel Tunnel to London (known as<br />
‘High-Speed 1’ [HS1]) was opened <strong>in</strong> two stages, <strong>in</strong><br />
2003 and 2007, further shorten<strong>in</strong>g travel times from<br />
London to Paris to 2 hours and 16 m<strong>in</strong>utes non-stop.<br />
High-<strong>speed</strong> domestic tra<strong>in</strong>s with<strong>in</strong> Southern England<br />
share this l<strong>in</strong>e with Eurostar services, provid<strong>in</strong>g an<br />
improved commuter service between London and<br />
Kent. <strong>The</strong> network also carries significant freight traffic<br />
runn<strong>in</strong>g between the United K<strong>in</strong>gdom and<br />
cont<strong>in</strong>ental Europe.<br />
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Challenges<br />
INTEROPERABILITY<br />
Establish<strong>in</strong>g effective <strong>in</strong>ternational governance <strong>of</strong><br />
services on the Eurostar network was a significant<br />
bureaucratic challenge. To avoid stopp<strong>in</strong>g at borders<br />
to change crew, accommodations had to be found<br />
regard<strong>in</strong>g tra<strong>in</strong> crew tra<strong>in</strong><strong>in</strong>g and certification. A<br />
common set <strong>of</strong> vocabulary was agreed between French,<br />
Belgian and British <strong>rail</strong> authorities so that specially<br />
tra<strong>in</strong>ed drivers could conduct services over the<br />
entire journey.<br />
<strong>The</strong> Eurostar network uses a variety <strong>of</strong> different<br />
signall<strong>in</strong>g systems across the l<strong>in</strong>e, which reflects vary<strong>in</strong>g<br />
levels <strong>of</strong> new <strong>in</strong>vestment <strong>in</strong> signall<strong>in</strong>g technologies by<br />
the nations <strong>in</strong>volved. While ensur<strong>in</strong>g operability across<br />
signall<strong>in</strong>g systems presented a challenge <strong>in</strong> plann<strong>in</strong>g<br />
stages, <strong>in</strong> practice strict operational guidel<strong>in</strong>es have<br />
prevented serious problems. As national governments<br />
prepared to allow competition among service providers<br />
on the network, ensur<strong>in</strong>g a coherent signall<strong>in</strong>g system<br />
became a renewed priority, and a goal has now been<br />
set to implement the first phase <strong>of</strong> ERTMS by 2014.<br />
ENVIRONMENTAL OBJECTIONS<br />
Across the network, impact was reduced considerably<br />
by build<strong>in</strong>g HSR track as close to motorways as<br />
possible, which limits the necessity to disturb<br />
previously prist<strong>in</strong>e areas and prevents the ‘island<strong>in</strong>g’<br />
<strong>of</strong> communities between motorways and <strong>rail</strong> l<strong>in</strong>es. In<br />
Southern England, planners took the decision to tunnel<br />
under the heavily populated area <strong>of</strong> London near the<br />
St. Pancras term<strong>in</strong>us. <strong>The</strong>y also pursued extensive noise<br />
mitigation measures, such as tunnels and deep cutt<strong>in</strong>gs,<br />
<strong>in</strong> attractive rural areas between London and the<br />
Channel Tunnel. Overall, 25% <strong>of</strong> the Eurostar network is<br />
built <strong>in</strong> tunnel.<br />
FINANCING OF HS1<br />
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F<strong>in</strong>anc<strong>in</strong>g <strong>of</strong> the British section <strong>of</strong> the network <strong>high</strong>lights<br />
both the challenges and the diverse possibilities <strong>of</strong> PPPs<br />
as a tool <strong>of</strong> HSR <strong>in</strong>vestment, and supports the conclusion<br />
that construction and management <strong>of</strong> HSR will always<br />
<strong>in</strong>volve an element <strong>of</strong> government capitalisation.<br />
HS1 f<strong>in</strong>anc<strong>in</strong>g presented a particular challenge for the<br />
British government, which has advertised the l<strong>in</strong>e as the<br />
first stage <strong>of</strong> a wider HSR program expand<strong>in</strong>g <strong>in</strong>to the<br />
northern regions. Cost per kilometre on HS1 has been<br />
more than 60 million euros per kilometre, far more than<br />
anywhere else <strong>in</strong> Europe. <strong>The</strong> <strong>high</strong> proportion <strong>of</strong> the l<strong>in</strong>e<br />
<strong>in</strong> tunnel partly expla<strong>in</strong>s the <strong>high</strong> construction cost, as<br />
does the decision to build four stations <strong>in</strong> smaller urban<br />
areas between London and the southern coast.<br />
Although the British government would have preferred<br />
to build HS1 as a privately funded project, <strong>comparative</strong>ly<br />
low <strong>in</strong>itial traffic volumes meant that the l<strong>in</strong>e would<br />
require public fund<strong>in</strong>g. A contract for design, build,<br />
f<strong>in</strong>ance and ma<strong>in</strong>tenance (DBFM) <strong>of</strong> the l<strong>in</strong>k and the<br />
operation <strong>of</strong> HS1 services were therefore put out to<br />
tender and awarded <strong>in</strong> 1996 to London and Cont<strong>in</strong>ental<br />
<strong>Rail</strong>ways (LCR), a private consortium. It was envisaged<br />
that the consortium’s primary sources <strong>of</strong> funds dur<strong>in</strong>g<br />
the construction phase would be pr<strong>of</strong>its from travel<br />
on HS1.<br />
In 2009, when LCR debt had <strong>in</strong>creased to 5.2 billion<br />
pounds, the government took over full and direct<br />
ownership <strong>of</strong> LCR for a nom<strong>in</strong>al price. This restructur<strong>in</strong>g<br />
relieved LCR’s <strong>high</strong>-<strong>speed</strong> <strong>in</strong>frastructure subsidiary,<br />
HS1 Ltd, and the tra<strong>in</strong> operator, Eurostar (UK), <strong>of</strong> their<br />
f<strong>in</strong>ancial liabilities. In 2010 the government then sold<br />
HS1 Ltd, which has a 30-year concession to manage<br />
the <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>e for 2.1 billion pounds, to a private<br />
consortium. <strong>The</strong> government will cont<strong>in</strong>ue to own the<br />
HSR network itself and monitor the private consortium,<br />
while HS1 Ltd can sell access to the track and stations on<br />
a commercial basis.
OPERATOR ORGANISATION<br />
Eurostar services were orig<strong>in</strong>ally separated <strong>in</strong>to three<br />
national entities, pos<strong>in</strong>g significant challenges for<br />
coord<strong>in</strong>ated market<strong>in</strong>g. British market<strong>in</strong>g strategies<br />
were significantly more aggressive than those pursued<br />
<strong>in</strong> France and Belgium, and the British eventually sought<br />
to entrench their market<strong>in</strong>g strategy by restructur<strong>in</strong>g<br />
the management contract. In 2000, LCR established a<br />
management contract to run Eurostar (UK) through a<br />
consortium, which <strong>in</strong>cluded the National Corporation<br />
<strong>of</strong> French <strong>Rail</strong>ways (SNCF) and the National <strong>Rail</strong>way<br />
Company <strong>of</strong> Belgium (SNCB) as shareholders. This<br />
arrangement improved the alignment <strong>of</strong> objectives<br />
between the British, French and Belgian partners, and<br />
this ran until 2010. In September 2010, after complex<br />
negotiation with regulators, Eurostar became a s<strong>in</strong>gle,<br />
unified corporate entity owned by three shareholders:<br />
SNCF, SNCB and LCR. <strong>The</strong>se successive structural<br />
changes have largely relieved the governance and<br />
management problems that have impeded Eurostar’s<br />
otherwise considerable growth s<strong>in</strong>ce its <strong>in</strong>ception.<br />
COMPETITION<br />
European law now requires Eurotunnel (which<br />
operates the cross channel <strong>rail</strong> l<strong>in</strong>k through the<br />
tunnel), and the governments <strong>in</strong>volved to open up<br />
access to <strong>in</strong>frastructure to competition. Eurostar will<br />
soon be compet<strong>in</strong>g with Deutsche Bahn (from 2013)<br />
and possibly other open access operators. To match<br />
this competition, Eurostar has to reduce costs and is<br />
buy<strong>in</strong>g tra<strong>in</strong>s with <strong>high</strong>er capacity (900 seats <strong>in</strong>stead<br />
<strong>of</strong> 750) and lower per-unit costs from Siemens, end<strong>in</strong>g<br />
its previous relationship with Alstom. Both Deutsche<br />
Bahn and the new Eurostar tra<strong>in</strong>s will use modified<br />
German ICEs with distributed power. <strong>The</strong>se tra<strong>in</strong>s will<br />
be <strong>in</strong>teroperable <strong>in</strong> order to allow service to more<br />
dest<strong>in</strong>ations <strong>in</strong> the future, which is seen as a pr<strong>in</strong>cipal<br />
benefit <strong>of</strong> <strong>in</strong>creased competition.<br />
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Realised <strong>benefits</strong><br />
Although traffic has been less than orig<strong>in</strong>ally envisioned<br />
on the Eurostar network as a whole, the l<strong>in</strong>e has<br />
revolutionised travel from London to Paris, Brussels<br />
and Lille. Eurostar now carries 81% <strong>of</strong> the total air and<br />
<strong>rail</strong> traffic from Paris to London, a far <strong>high</strong>er proportion<br />
than HSR <strong>in</strong> other European countries. HSR has also<br />
had considerable effects on local economies <strong>in</strong> those<br />
smaller urban areas that have successfully leveraged<br />
<strong>in</strong>creased accessibility with conducive urban<br />
plann<strong>in</strong>g policies.<br />
Eurostar network yearly passengers (millions)<br />
10<br />
9<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010<br />
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TRAFFIC AND JOURNEY TIME BENEFITS<br />
<strong>The</strong> Eurostar network has almost completely replaced<br />
‘<strong>rail</strong>-sea-<strong>rail</strong>’ travel, which took 6-8 hours from London<br />
to Paris or Brussels, reduc<strong>in</strong>g the time to 2-2.5 hours.<br />
This is a greater reduction than is usual for <strong>high</strong>-<strong>speed</strong><br />
l<strong>in</strong>es over land because changes between modes are<br />
avoided. <strong>The</strong> ease <strong>of</strong> HSR travel has proven a boon to<br />
the significant tourist traffic between the areas served<br />
by Eurostar, and HSR has largely replaced air travel<br />
between these cities.<br />
While LCR forecast that by 2004-2005 nearly 24 million<br />
passengers would use the Eurostar network, the actual<br />
figure was only 9.1 million <strong>in</strong> 2008, the first year after<br />
l<strong>in</strong>e was fully operational. By 2010, traffic had reached<br />
9.5 million, the level LCR forecast for 1996-1997. It<br />
appears unlikely that it will reach 24 million for many<br />
years, if ever, although competition among service<br />
providers could provide a boost to overall traffic<br />
numbers. This shortfall is partly a consequence <strong>of</strong> the<br />
rise <strong>of</strong> low cost air carriers compet<strong>in</strong>g with the Eurostar<br />
network, though not usually for the same dest<strong>in</strong>ations<br />
(Eurostar sees itself compet<strong>in</strong>g for leisure travellers<br />
with London-Berl<strong>in</strong> by air, for <strong>in</strong>stance). Eurostar is also<br />
hampered by the fact that it must pay 15 pounds to<br />
Eurotunnel for every passenger pass<strong>in</strong>g through the<br />
Channel Tunnel. However, it has improved connections<br />
between the three capitals, and the Eurostar network<br />
has permitted the number <strong>of</strong> air services to be reduced<br />
between London and the near cont<strong>in</strong>ent, free<strong>in</strong>g slots<br />
for long distance flights.<br />
Carbon emissions from different modes:<br />
London to Paris (kg CO 2 )<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
ENVIRONMENT<br />
Return journey by plane Return journey by HSR<br />
Despite objections from Kent residents to the<br />
construction or alignment <strong>of</strong> HS1, neither Eurostar nor<br />
Kent County Council has received noise compla<strong>in</strong>ts<br />
s<strong>in</strong>ce the l<strong>in</strong>e was opened. This reflects the use <strong>of</strong> many<br />
<strong>of</strong> the costly mitigation techniques described <strong>in</strong> the<br />
German case, which expla<strong>in</strong>s <strong>in</strong> part the extraord<strong>in</strong>ary<br />
cost <strong>of</strong> HSR construction <strong>in</strong> southern England.<br />
LILLE AND REGENERATION<br />
<strong>The</strong>re is strong evidence that the Eurostar network has<br />
had a significant impact on development <strong>in</strong> a variety<br />
<strong>of</strong> small and mid-sized cities along the l<strong>in</strong>e. This is<br />
particularly visible <strong>in</strong> Lille, France, which had floundered<br />
economically as <strong>in</strong>dustry moved away from the region<br />
and local planners sought new growth <strong>in</strong> the service<br />
sector. <strong>The</strong> arrival <strong>of</strong> HSR placed the city as the nodal<br />
po<strong>in</strong>t between Paris, Brussels and London. Urban<br />
plann<strong>in</strong>g around HSR stations has sought to maximise<br />
the local economic impact <strong>of</strong> both Eurostar and TGV,<br />
encourag<strong>in</strong>g the development <strong>of</strong> a variety <strong>of</strong> services<br />
for both tourists and commuters <strong>in</strong> close proximity to<br />
the station. Lille used the arrival <strong>of</strong> HSR to undertake a<br />
large-scale shift <strong>in</strong> urban plann<strong>in</strong>g, centr<strong>in</strong>g its service<br />
<strong>in</strong>dustry <strong>in</strong> the area between the historic district and<br />
the station while <strong>in</strong>stall<strong>in</strong>g when possible <strong>in</strong> abandoned<br />
build<strong>in</strong>gs to reduce build-out costs and remove blight. 3<br />
Development <strong>in</strong> Lille shows how economic <strong>benefits</strong> are<br />
more likely when the sweep<strong>in</strong>g changes <strong>in</strong> accessibility<br />
brought by HSR are complemented by supportive<br />
plann<strong>in</strong>g policies, which expla<strong>in</strong>s <strong>in</strong> part the significant<br />
difference <strong>in</strong> economic <strong>benefits</strong> accrued <strong>in</strong> Lille and<br />
across communities <strong>in</strong> Kent.<br />
3 Nuworsoo and Deak<strong>in</strong> (2009). ‘Transform<strong>in</strong>g <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> stations to major activity<br />
hubs: lessons for California’. Transportation Research Board.<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 25
Japan<br />
Key attributes<br />
First year <strong>of</strong><br />
operation<br />
1964<br />
Length <strong>of</strong> track 2,663 kilometres<br />
Top <strong>speed</strong> 305 km/h<br />
Cost per kilometre 5.4 million euros for Tokyo-Osaka<br />
Strategies employed > Effective spread<strong>in</strong>g <strong>of</strong> risk through PPPs,<br />
reflect<strong>in</strong>g lowered expectations for<br />
government fund<strong>in</strong>g.<br />
> Strategic station placement adapt<strong>in</strong>g to<br />
<strong>high</strong> land prices.<br />
> Concentration on cities with <strong>high</strong>est<br />
population density.<br />
Key <strong>benefits</strong> > Huge reductions <strong>in</strong> travel times on<br />
ma<strong>in</strong> bus<strong>in</strong>ess arteries.<br />
> Tokyo-Osaka covers costs<br />
through revenue.<br />
> Revitalisation <strong>of</strong> small communities.<br />
> Establish<strong>in</strong>g Japan as a world leader<br />
<strong>in</strong> technology.<br />
<strong>The</strong> Japanese <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> network <strong>in</strong> 2011<br />
Source International Union <strong>of</strong> <strong>Rail</strong>ways<br />
26 : <strong>Invensys</strong> | <strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective<br />
Context<br />
Japan’s <strong>rail</strong> system <strong>in</strong> the 1960s faced geographical<br />
challenges similar to those <strong>in</strong> Spa<strong>in</strong>. <strong>Rail</strong> travel was<br />
slow due to mounta<strong>in</strong>ous terra<strong>in</strong>, which required tight<br />
curves <strong>in</strong> conventional track and either steep gradients<br />
or the construction <strong>of</strong> expensive tunnels. Capacity was<br />
also limited and demand was <strong>in</strong>creas<strong>in</strong>g quickly <strong>in</strong> l<strong>in</strong>e<br />
with Japan’s rapid economic growth. Even <strong>in</strong> 1960,<br />
conventional <strong>rail</strong> accounted for 51% <strong>of</strong> passenger<br />
transport <strong>in</strong> the country, mak<strong>in</strong>g the relief <strong>of</strong> capacity<br />
constra<strong>in</strong>ts a priority goal for transportation policy.<br />
Population densities and layout <strong>in</strong> Japan are<br />
particularly suitable for HSR. Tokyo has over eight<br />
million <strong>in</strong>habitants (the population <strong>of</strong> the wider Tokyo<br />
area is 35 million) and is located some 400-700 km<br />
from most other major cities, an ideal distance for<br />
obta<strong>in</strong><strong>in</strong>g a competitive advantage over other forms<br />
<strong>of</strong> transport. Other major cities are Osaka (population<br />
2.5 million), and Nagoya (population 2.2 million). <strong>The</strong><br />
average density <strong>of</strong> the five largest cities <strong>in</strong> Japan is<br />
8,000 <strong>in</strong>habitants square kilometre, nearly three times<br />
that <strong>in</strong> Germany; this has meant that the majority <strong>of</strong><br />
city <strong>in</strong>habitants have relatively easy access to <strong>rail</strong>way<br />
stations. In addition, cities are placed <strong>in</strong> a roughly l<strong>in</strong>ear<br />
manner across the country, enabl<strong>in</strong>g a ‘hub and spoke’<br />
configuration similar to that <strong>in</strong> Spa<strong>in</strong>.
Anticipated <strong>benefits</strong><br />
After early development start<strong>in</strong>g <strong>in</strong> the 1950s, the<br />
first <strong>high</strong> <strong>speed</strong> l<strong>in</strong>e between Tokyo and Osaka via<br />
Nagoya began operations <strong>in</strong> 1964 (and soon ga<strong>in</strong>ed<br />
<strong>in</strong>ternational recognition as the ‘bullet tra<strong>in</strong>’). <strong>The</strong><br />
pr<strong>in</strong>cipal rationale for this <strong>in</strong>vestment was to relieve the<br />
overcrowded, narrow-gauge Tokaido l<strong>in</strong>e, which was<br />
then carry<strong>in</strong>g 24% <strong>of</strong> all Japanese National <strong>Rail</strong>ways<br />
(JNR) passengers.<br />
A secondary objective was to reduce the journey time<br />
between Tokyo and Osaka, which sat at 6.5 hours. This<br />
was to be achieved ma<strong>in</strong>ly through faster <strong>speed</strong>s but<br />
also through a more direct alignment -- the new <strong>high</strong><strong>speed</strong><br />
Tokaido l<strong>in</strong>e sheared 41 kilometres <strong>of</strong>f the length<br />
<strong>of</strong> the exist<strong>in</strong>g l<strong>in</strong>e.<br />
<strong>The</strong> decision to build the first l<strong>in</strong>e was controversial.<br />
<strong>The</strong>re was considerable resistance from both politicians<br />
and <strong>rail</strong> <strong>of</strong>ficials, who saw HSR as a risky <strong>in</strong>vestment<br />
given the unproven nature <strong>of</strong> HSR technology at<br />
the time.<br />
Opposition to the l<strong>in</strong>e was overcome through force <strong>of</strong><br />
will on the part <strong>of</strong> a small number <strong>of</strong> advocates, who<br />
portrayed the cont<strong>in</strong>ued reliance on conventional<br />
<strong>rail</strong> as a greater risk to the economy than potential<br />
losses from HSR <strong>in</strong>vestment. <strong>The</strong>y also built significant<br />
support through the argument that a Japanese HSR<br />
network would help establish the country as a leader<br />
<strong>in</strong> the technology field <strong>in</strong> general. However, such was<br />
the success <strong>of</strong> the first <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>e that scepticism<br />
was replaced by strong desires from local and regional<br />
politicians for new HSR connect<strong>in</strong>g their areas to Tokyo<br />
and its grow<strong>in</strong>g economy.<br />
High-<strong>speed</strong> <strong>rail</strong> network<br />
High-<strong>speed</strong> l<strong>in</strong>es <strong>in</strong> Japan are built to standard<br />
European track gauge, wider than the conventional<br />
l<strong>in</strong>es <strong>in</strong> Japan to provide the stability required for <strong>high</strong><br />
<strong>speed</strong>s. <strong>The</strong> Sh<strong>in</strong>kansen relies on distributed power<br />
roll<strong>in</strong>g stock (electrical multiple units), an automatic<br />
tra<strong>in</strong> control (ATC) signall<strong>in</strong>g system, and centralised<br />
traffic control designed with duplication to protect the<br />
system <strong>in</strong> case <strong>of</strong> earthquakes. Although the maximum<br />
gradients are only 1.5%, Sh<strong>in</strong>kansen l<strong>in</strong>es are not<br />
designed for freight, which, <strong>in</strong> contrast to Germany,<br />
never constituted a major portion <strong>of</strong> Japanese <strong>rail</strong>way<br />
traffic. On the ma<strong>in</strong> Sh<strong>in</strong>kansen l<strong>in</strong>es (Tokaido, Tohoku,<br />
and Sanyo), which run the length <strong>of</strong> Honshu, Japan’s<br />
ma<strong>in</strong> island, there is heavy demand. Typically, 14 tra<strong>in</strong>s<br />
per hour operate <strong>in</strong> each direction on the Tokaido l<strong>in</strong>e,<br />
among the <strong>high</strong>est rate <strong>of</strong> service <strong>in</strong> HSR networks<br />
worldwide. Tra<strong>in</strong>s have up to 1320 seats <strong>in</strong> 16 cars,<br />
compared to 900 seats for the new Eurostar tra<strong>in</strong>s<br />
(which have yet to be put <strong>in</strong> service). In the 1990s, ‘M<strong>in</strong>i-<br />
Sh<strong>in</strong>kansens’ were <strong>in</strong>troduced, operat<strong>in</strong>g at 130 km/h<br />
as a ‘hybrid’ HSR and conventional system. <strong>The</strong>se tra<strong>in</strong>s<br />
service smaller markets, decreas<strong>in</strong>g travel time between<br />
those cities and larger ones without <strong>in</strong>curr<strong>in</strong>g the full<br />
cost <strong>of</strong> HSR development.<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 27
Challenges<br />
LAND ACQUISITION<br />
Land acquisition has been a major problem because <strong>of</strong><br />
the very <strong>high</strong> population densities <strong>in</strong> Japan and soar<strong>in</strong>g<br />
property and land values. About 50,000 households<br />
had to be relocated for the construction <strong>of</strong> the orig<strong>in</strong>al<br />
Tokaido l<strong>in</strong>e. Japan has a compulsory purchase law, but<br />
authorities are <strong>of</strong>ten reluctant use it as do<strong>in</strong>g so can be<br />
politically dangerous. Residents have commonly held out<br />
for more compensation, which is <strong>of</strong>ten quite generous<br />
<strong>in</strong> comparison to what is <strong>of</strong>fered <strong>in</strong> other countries.<br />
Land acquisition issues have also affected the location<br />
<strong>of</strong> stations. Yokohama, near Tokyo, had to be bypassed<br />
because <strong>of</strong> land purchase problems, result<strong>in</strong>g <strong>in</strong> the<br />
construction <strong>of</strong> a station far enough from the city centre<br />
to provide a significant dis<strong>in</strong>centive for HSR travel. Efforts<br />
to balance the extreme cost <strong>of</strong> station construction <strong>in</strong><br />
city centres with accessibility requirements have been<br />
handled differently <strong>in</strong> other cases. In Tokyo, for <strong>in</strong>stance,<br />
the potential decrease <strong>in</strong> revenue from plac<strong>in</strong>g the<br />
station outside the city centre was seen as more costly<br />
than <strong>in</strong>curr<strong>in</strong>g the exorbitant costs <strong>of</strong> construction <strong>in</strong> a<br />
more central location.<br />
FINANCING<br />
<strong>The</strong> cost per kilometre (exclud<strong>in</strong>g land costs) for the<br />
Tokyo-Osaka Sh<strong>in</strong>kansen was relatively low (5.4 million<br />
euros <strong>in</strong> 2005 values), but <strong>in</strong> all the projects carried out<br />
s<strong>in</strong>ce, this figure tripled or quadrupled. This is ma<strong>in</strong>ly<br />
because whereas the Tokaido l<strong>in</strong>e had less than 50% <strong>of</strong><br />
its length <strong>in</strong> tunnels, bridges or elevated track, for the<br />
recent Kyushu l<strong>in</strong>e, the comb<strong>in</strong>ed proportion was nearly<br />
90% (70% <strong>in</strong> tunnel). Costs have also <strong>in</strong>creased because<br />
<strong>of</strong> <strong>in</strong>sistence by landowners on more compensation<br />
and because <strong>of</strong> greater efforts to reduce noise and<br />
vibration as the HSR system expands. Unlike <strong>in</strong> Europe,<br />
the Japanese public does not <strong>in</strong>st<strong>in</strong>ctively assume<br />
that the state will bear primary responsibility for <strong>rail</strong><br />
<strong>in</strong>frastructure <strong>in</strong>vestment. When JNR was restructured<br />
<strong>in</strong> 1987 <strong>in</strong> preparation for privatisation, the Sh<strong>in</strong>kansen<br />
Hold<strong>in</strong>g Company was created to own the <strong>in</strong>frastructure<br />
assets <strong>of</strong> the Sh<strong>in</strong>kansen network. <strong>The</strong>se assets were<br />
operated and ma<strong>in</strong>ta<strong>in</strong>ed by the three ma<strong>in</strong> island<br />
companies, which paid lease charges for their use.<br />
However, the lease charges paid by each <strong>of</strong> the<br />
companies did not reflect the value <strong>of</strong> the assets<br />
they operated. Lease charges were ‘adjusted’ so that<br />
Japanese <strong>Rail</strong>ways (JR) Central, which operated the<br />
pr<strong>of</strong>itable Tokaido Sh<strong>in</strong>kansen, paid a much <strong>high</strong>er<br />
share than JR East and JR West, which operated the<br />
more lightly used and newer Sh<strong>in</strong>kansen l<strong>in</strong>es. <strong>The</strong><br />
28 : <strong>Invensys</strong> | <strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective<br />
Sh<strong>in</strong>kansen Hold<strong>in</strong>g Company lasted only four years<br />
before it was disbanded and converted <strong>in</strong>to the <strong>Rail</strong>way<br />
Development Fund <strong>in</strong> 1991. <strong>The</strong> Sh<strong>in</strong>kansen assets<br />
were then sold to the three companies. New l<strong>in</strong>es are<br />
now be<strong>in</strong>g built by the state-owned Japanese <strong>Rail</strong>way<br />
Construction Public Corporation (JRCC) and leased to<br />
the operat<strong>in</strong>g companies on completion, aga<strong>in</strong> to avoid<br />
burden<strong>in</strong>g the privatised operat<strong>in</strong>g companies with too<br />
much debt.<br />
This has enabled unique f<strong>in</strong>anc<strong>in</strong>g and management<br />
strategies. Federal and local government provide<br />
80% <strong>of</strong> f<strong>in</strong>anc<strong>in</strong>g for HSR, and carry risk for<br />
plann<strong>in</strong>g, regulation, construction cost and right<strong>of</strong>-way<br />
acquisition, reflect<strong>in</strong>g an understand<strong>in</strong>g that<br />
government is best placed to def<strong>in</strong>e and manage<br />
these. <strong>The</strong> operat<strong>in</strong>g companies carry <strong>in</strong>frastructure<br />
ma<strong>in</strong>tenance cost risk, as well as roll<strong>in</strong>g stock ownership<br />
and ma<strong>in</strong>tenance risks. Demand risk is carried by<br />
JRCC if <strong>high</strong>er-than-expected demand requires<br />
new <strong>in</strong>frastructure construction, while the operat<strong>in</strong>g<br />
companies carry the demand risk if demand falls below<br />
expectation and roll<strong>in</strong>g stock capacity is too great.<br />
With<strong>in</strong> this broad f<strong>in</strong>anc<strong>in</strong>g conception, government<br />
and the private sector have rema<strong>in</strong>ed flexible <strong>in</strong><br />
devis<strong>in</strong>g partnerships for the construction <strong>of</strong> <strong>in</strong>dividual<br />
l<strong>in</strong>es. For the extension to Nagano, for <strong>in</strong>stance, a<br />
balance <strong>of</strong> 50% fund<strong>in</strong>g from JR, 35% from central<br />
government and 15% from local government was<br />
used. <strong>The</strong> fund<strong>in</strong>g scheme was revised <strong>in</strong> 1996 so that<br />
JR would bear the <strong>in</strong>vestment cost only to a level that<br />
would ensure m<strong>in</strong>imum pr<strong>of</strong>itability.<br />
SAFETY AND TRAINING<br />
Incidents <strong>in</strong> the 1950s and 1960s raised concerns about<br />
safety while the Tokaido l<strong>in</strong>e was under construction.<br />
<strong>Rail</strong> <strong>of</strong>ficials responded quickly to these concerns by<br />
employ<strong>in</strong>g a new vibration-reduc<strong>in</strong>g bogie design,<br />
which had been identified as the cause <strong>of</strong> de<strong>rail</strong>ments<br />
<strong>in</strong> the past. Adoption <strong>of</strong> this new technology comb<strong>in</strong>ed<br />
with the creation <strong>of</strong> a rigorous tra<strong>in</strong><strong>in</strong>g regimen for<br />
operators and controllers has ensured an exemplary<br />
safety record <strong>in</strong> subsequent decades.<br />
SIGNALLING<br />
As the first country to construct dedicated <strong>high</strong><strong>speed</strong><br />
l<strong>in</strong>es, Japan was a pioneer <strong>in</strong> address<strong>in</strong>g the<br />
considerable technological challenges fac<strong>in</strong>g signall<strong>in</strong>g<br />
at <strong>high</strong> <strong>speed</strong>s. <strong>The</strong> ATC system developed as part<br />
<strong>of</strong> the orig<strong>in</strong>al Sh<strong>in</strong>kansen project <strong>in</strong> 1964 all but<br />
elim<strong>in</strong>ated safety hazards emanat<strong>in</strong>g from driver error<br />
<strong>in</strong> <strong>speed</strong> correction, and have played a vital role <strong>in</strong><br />
ensur<strong>in</strong>g Japanese HSR’s exemplary safety record. As
ATC has evolved, it has <strong>in</strong>creased average <strong>speed</strong>s by<br />
automat<strong>in</strong>g the brak<strong>in</strong>g process for each <strong>of</strong> the many<br />
roll<strong>in</strong>g stock types employed <strong>in</strong> Japanese HSR.<br />
Realised <strong>benefits</strong><br />
<strong>The</strong> Sh<strong>in</strong>kansen has been a remarkable technical<br />
success, and has realised the goals <strong>of</strong> its proponents to<br />
establish Japan as a centre <strong>of</strong> technological <strong>in</strong>novation.<br />
By 1992, the journey time between Tokyo and Osaka<br />
had been cut from 6.5 hours to 2.5 hours, and similar<br />
reductions have been achieved on other l<strong>in</strong>es. No<br />
passenger fatalities have been experienced <strong>in</strong> nearly 50<br />
years <strong>of</strong> operation, and punctuality is remarkable with<br />
average delays <strong>of</strong> only 36 seconds.<br />
Sh<strong>in</strong>kansen services carried 295 million passengers<br />
per year <strong>in</strong> 1993 and 350 million passengers per year<br />
<strong>in</strong> 2007. While this <strong>in</strong>dicates a relatively slow growth<br />
rate <strong>of</strong> 1.2% per year, this may be expla<strong>in</strong>ed by the<br />
slow rate <strong>of</strong> growth <strong>of</strong> the Japanese economy over the<br />
period as a whole, as well as a conservative outlook<br />
toward the construction <strong>of</strong> new l<strong>in</strong>es on less-travelled<br />
routes. <strong>The</strong> Tokaido l<strong>in</strong>e, connect<strong>in</strong>g Japan’s first- and<br />
third-most populous cities, still accounts for nearly half<br />
<strong>of</strong> Sh<strong>in</strong>kansen passengers. <strong>The</strong> first <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>e<br />
between Tokyo and Osaka was also a great commercial<br />
success. In only its third year <strong>of</strong> operation, its revenue<br />
covered its costs, <strong>in</strong>clud<strong>in</strong>g <strong>in</strong>terest and depreciation.<br />
<strong>The</strong> Tokaido Sh<strong>in</strong>kansen orig<strong>in</strong>ally <strong>in</strong>cluded twelve<br />
station stops, but due to local pressure and the<br />
will<strong>in</strong>gness <strong>of</strong> smaller city governments to fund station<br />
construction, the number has now <strong>in</strong>creased to 18.<br />
<strong>The</strong>re are now both through (super express) and<br />
stopp<strong>in</strong>g (express) tra<strong>in</strong>s to ensure fast journeys over<br />
long distances, maximis<strong>in</strong>g the competitive advantage<br />
<strong>of</strong> HSR over long distances while improv<strong>in</strong>g access<br />
between smaller and larger urban areas.<br />
<strong>The</strong> spectacular growth experienced by Sh<strong>in</strong>kansen<br />
services <strong>in</strong> Japan dur<strong>in</strong>g its <strong>in</strong>itial years later slowed<br />
as the market matured and the <strong>high</strong>-<strong>speed</strong> network<br />
was extended to smaller communities. This slow<strong>in</strong>g <strong>in</strong><br />
growth should not be understood as a failure <strong>in</strong> its own<br />
right; while the key to commercial success <strong>of</strong> <strong>high</strong><strong>speed</strong><br />
<strong>rail</strong> is to limit its construction to corridors <strong>of</strong> <strong>high</strong><br />
demand, there may <strong>of</strong>ten be economic, social, and<br />
political reasons to build <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>es that are not<br />
commercially viable <strong>in</strong> themselves. This is equally true<br />
for countries such as Japan, <strong>in</strong> which the private sector<br />
plays a particularly strong role <strong>in</strong> <strong>in</strong>vestment.<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 29
Ch<strong>in</strong>a<br />
Key attributes<br />
First year <strong>of</strong><br />
operation<br />
2003<br />
Length <strong>of</strong> track 4,500 kilometres<br />
Top <strong>speed</strong> 350 km/h<br />
Cost per kilometre 21.4 million euros<br />
Strategies employed > Centralised plann<strong>in</strong>g and regulation.<br />
> High maximum <strong>speed</strong>s for<br />
long distances.<br />
> Strong emphasis on technology<br />
<strong>in</strong>digenisation.<br />
Key <strong>benefits</strong> > Free<strong>in</strong>g capacity for freight transport on<br />
conventional l<strong>in</strong>es.<br />
> Dramatic reduction <strong>in</strong> journey times.<br />
30 : <strong>Invensys</strong> | <strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective<br />
Context<br />
Ch<strong>in</strong>a’s geography for the most part favours <strong>high</strong>-<strong>speed</strong><br />
<strong>rail</strong> transport, as it features long corridors throughout<br />
the eastern pla<strong>in</strong>s with large urban clusters located<br />
every few hundred kilometres. Ch<strong>in</strong>a also has a <strong>high</strong><br />
and grow<strong>in</strong>g population density and rapidly <strong>in</strong>creas<strong>in</strong>g<br />
disposable <strong>in</strong>comes. This grow<strong>in</strong>g purchas<strong>in</strong>g power<br />
has <strong>in</strong>creased travel demand, result<strong>in</strong>g <strong>in</strong> some <strong>of</strong> the<br />
most <strong>in</strong>tense <strong>in</strong>ter-city passenger flows <strong>in</strong> the world.<br />
Increas<strong>in</strong>g disposal <strong>in</strong>come has also led to heavy<br />
demand for suburban and regional travel with<strong>in</strong> larger<br />
conurbations. In recent decades, the average passenger<br />
distance travelled has nearly doubled on the national<br />
<strong>rail</strong>way system, from 275 kilometres per journey <strong>in</strong> 1990<br />
to 534 kilometres <strong>in</strong> 2008.<br />
Despite the rapid expansion <strong>of</strong> the conventional <strong>rail</strong><br />
network s<strong>in</strong>ce the late 1990s, Ch<strong>in</strong>a’s <strong>rail</strong>ways rema<strong>in</strong><br />
under immense pressure. Ch<strong>in</strong>a’s economy depends<br />
heavily upon the transport <strong>of</strong> m<strong>in</strong>erals, petroleum<br />
products, gra<strong>in</strong>, fertilizers and other bulk products<br />
that are transported most economically by <strong>rail</strong>, and by<br />
2007, only one-third <strong>of</strong> demand for <strong>rail</strong> freight for coal<br />
and other bulk commodities was met. <strong>The</strong>re is also<br />
<strong>in</strong>creas<strong>in</strong>g pressure on passenger capacity, especially<br />
dur<strong>in</strong>g peak holiday seasons when migrant workers<br />
travel from urban centres to visit their families <strong>in</strong><br />
rural areas.
Anticipated <strong>benefits</strong><br />
Ch<strong>in</strong>a began serious <strong>in</strong>vestment <strong>in</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong><br />
<strong>in</strong> 2003, <strong>in</strong> order to relieve the extreme capacity<br />
constra<strong>in</strong>ts on both passenger and freight transport,<br />
which the government viewed as <strong>in</strong>hibit<strong>in</strong>g growth.<br />
Ch<strong>in</strong>ese <strong>in</strong>vestment <strong>in</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> also reflects the<br />
newest generation <strong>of</strong> a long tradition <strong>of</strong> <strong>rail</strong> <strong>in</strong>vestment<br />
as tool <strong>of</strong> regional <strong>in</strong>tegration -- a perennial challenge<br />
for a massive country with diverse cultures and local<br />
economies. This rationale helped drive the construction<br />
<strong>of</strong> Ch<strong>in</strong>a’s conventional <strong>rail</strong> network <strong>in</strong> the early 20th<br />
century, and its status as an imperative <strong>of</strong> Ch<strong>in</strong>ese<br />
politics is largely responsible for the considerable sway<br />
held historically by the <strong>Rail</strong>ways M<strong>in</strong>istry.<br />
Given the pace <strong>of</strong> Ch<strong>in</strong>a’s economic expansion, the<br />
government favours <strong>in</strong>vest<strong>in</strong>g <strong>in</strong> <strong>in</strong>frastructure well <strong>in</strong><br />
advance, before resource shortages become more<br />
acute, land acquisition costlier and labour costs<br />
<strong>high</strong>er. This tendency, comb<strong>in</strong>ed with exist<strong>in</strong>g capacity<br />
constra<strong>in</strong>ts, has encouraged <strong>in</strong>vestment <strong>in</strong> HSR<br />
technology at an unprecedented pace.<br />
Like Spa<strong>in</strong> and Japan, the Ch<strong>in</strong>ese government has<br />
<strong>in</strong>corporated the goal <strong>of</strong> technology <strong>in</strong>digenisation<br />
<strong>in</strong>to its HSR plann<strong>in</strong>g, and has already made strides<br />
<strong>in</strong> turn<strong>in</strong>g its recent <strong>in</strong>vestments <strong>in</strong> HSR <strong>in</strong>to an export<br />
<strong>in</strong>dustry that competes with established players <strong>in</strong><br />
the field.<br />
In addition, <strong>in</strong>vestment <strong>in</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> has been<br />
viewed as a means to spur job creation, and the<br />
government has po<strong>in</strong>ted to the 100,000 workers<br />
engaged <strong>in</strong> construction <strong>of</strong> the Beij<strong>in</strong>g-Shanghai l<strong>in</strong>e.<br />
<strong>The</strong> government has seen this job creation as a robust<br />
tool for growth; when the global recession hit at the<br />
end <strong>of</strong> 2008, for <strong>in</strong>stance, Ch<strong>in</strong>a ramped up its <strong>high</strong><strong>speed</strong><br />
<strong>rail</strong> spend<strong>in</strong>g -- which doubled each year until<br />
2009, and reached 100 billion dollars <strong>in</strong> 2010 -- and<br />
brought forward the timetable for completion from<br />
2020 to 2012. Current Ch<strong>in</strong>ese HSR plann<strong>in</strong>g <strong>in</strong>cludes<br />
the construction <strong>of</strong> 42 additional <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> l<strong>in</strong>es.<br />
High-<strong>speed</strong> <strong>rail</strong> network<br />
Ch<strong>in</strong>a currently operates around 4,500 kilometres<br />
<strong>of</strong> <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>e, 3,400 <strong>of</strong> which were constructed<br />
between 2005 and 2010. This is augmented by <strong>high</strong><strong>speed</strong><br />
roll<strong>in</strong>g stock operat<strong>in</strong>g s<strong>in</strong>ce 2007 on 6,000<br />
kilometres <strong>of</strong> conventional l<strong>in</strong>e at <strong>in</strong>creased <strong>speed</strong>s <strong>of</strong><br />
around 150 kilometres per hour.<br />
Ch<strong>in</strong>a’s <strong>high</strong>-<strong>speed</strong> l<strong>in</strong>e is already the world’s largest,<br />
almost double the length <strong>of</strong> the 2,665 kilometres<br />
<strong>of</strong> <strong>high</strong>-<strong>speed</strong> track <strong>in</strong> Spa<strong>in</strong>, and is grow<strong>in</strong>g at an<br />
unprecedented rate. Ch<strong>in</strong>a expects to lay 13,000 km<br />
<strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> by January 2013 more than the<br />
comb<strong>in</strong>ed <strong>rail</strong> network <strong>in</strong>stalled across all western<br />
countries over the past half-century. By 2020, 50,000<br />
km <strong>of</strong> freight and passenger l<strong>in</strong>es are planned, to reach<br />
90% <strong>of</strong> the population. <strong>The</strong> network is <strong>in</strong>tended to cover<br />
a wide swath <strong>of</strong> Ch<strong>in</strong>a’s eastern pla<strong>in</strong>s, necessitat<strong>in</strong>g a<br />
layout more ak<strong>in</strong> to the German ‘web’ model than to<br />
the Spanish ‘hub and spoke’. Construction has thus far<br />
favoured the creation <strong>of</strong> direct alignments, enabl<strong>in</strong>g<br />
<strong>high</strong>-<strong>speed</strong> tra<strong>in</strong>s to run at close to maximum <strong>speed</strong> for<br />
longer periods than is common for HSR <strong>in</strong><br />
other countries.<br />
This reflects a general will<strong>in</strong>gness to accept trade-<strong>of</strong>fs<br />
<strong>of</strong> <strong>high</strong>er ticket prices and decreased environmental<br />
susta<strong>in</strong>ability <strong>in</strong> exchange for maximis<strong>in</strong>g <strong>speed</strong>. On<br />
the <strong>rail</strong> network as a whole between 1990 and 2010,<br />
average passenger <strong>speed</strong>s <strong>in</strong>creased more than 50<br />
percent. Planners have also favoured the construction<br />
<strong>of</strong> <strong>high</strong>-capacity tra<strong>in</strong>s to pre-empt future congestion.<br />
In partnership with <strong>in</strong>ternational manufacturers, the<br />
Ch<strong>in</strong>ese <strong>rail</strong> <strong>in</strong>dustry has produced <strong>high</strong>-<strong>speed</strong> roll<strong>in</strong>g<br />
stock that sets the global standard for operational<br />
<strong>speed</strong>. S<strong>in</strong>ce January 2010, the 961-kilometre Wuhan<br />
– Guangzhou route has utilised state-<strong>of</strong>-the-art tra<strong>in</strong>s<br />
capable <strong>of</strong> <strong>speed</strong>s over 350 kilometres per hour. In<br />
2007, electrical multiple unit (EMU) tra<strong>in</strong>s operat<strong>in</strong>g<br />
at 200-250 km/h were <strong>in</strong>troduced on several routes.<br />
In August 2008, a 300km/h EMU tra<strong>in</strong> service opened<br />
between Beij<strong>in</strong>g and Tianj<strong>in</strong>.<br />
Cooperation with <strong>in</strong>ternational manufacturers has<br />
enabled the Ch<strong>in</strong>ese <strong>rail</strong> <strong>in</strong>dustry to <strong>in</strong>digenise cutt<strong>in</strong>gedge<br />
technological knowledge, which planners see as<br />
vital to establish<strong>in</strong>g Ch<strong>in</strong>a as the premier exporter <strong>of</strong><br />
<strong>rail</strong> technology. This <strong>in</strong>cludes roll<strong>in</strong>g stock itself, which<br />
Ch<strong>in</strong>a now operates under the ‘Ch<strong>in</strong>a High-Speed <strong>Rail</strong>’<br />
brand, as well as a suite <strong>of</strong> <strong>in</strong>frastructure technologies<br />
rang<strong>in</strong>g from track to signall<strong>in</strong>g.<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 31
Challenges<br />
FINANCING<br />
A breakneck pace <strong>of</strong> construction has resulted<br />
<strong>in</strong> a rapid accumulation <strong>of</strong> debt, which has been<br />
exacerbated by significant cost overruns. Each <strong>high</strong><strong>speed</strong><br />
l<strong>in</strong>e completed has cost far more than <strong>in</strong>itially<br />
estimated. <strong>The</strong> cost <strong>of</strong> Beij<strong>in</strong>g-Ta<strong>in</strong>j<strong>in</strong> l<strong>in</strong>e ballooned to<br />
185 million renm<strong>in</strong>bi (29 million dollars) per kilometre,<br />
roughly double what was anticipated. Spend<strong>in</strong>g on <strong>rail</strong><br />
capacity doubled each year between 2007 and 2009,<br />
and reached 700 billion renm<strong>in</strong>bi last year.<br />
This cost overrun is expla<strong>in</strong>ed <strong>in</strong> part by the <strong>Rail</strong>way<br />
M<strong>in</strong>istry’s premium on achiev<strong>in</strong>g the <strong>high</strong>est-possible<br />
<strong>speed</strong>s, which both <strong>in</strong>creases the journey time<br />
competitiveness <strong>of</strong> <strong>rail</strong> at the longest distances and<br />
serves as a po<strong>in</strong>t <strong>of</strong> national pride. Passenger demand<br />
has also been lower than expected, a reflection <strong>of</strong><br />
ticket prices for HSR that are commonly triple the cost<br />
<strong>of</strong> a standard ticket. While yield management systems<br />
with graduated pric<strong>in</strong>g schemes are said to be under<br />
development, demand for HSR travel <strong>in</strong> Ch<strong>in</strong>a has<br />
proven <strong>high</strong>ly price elastic, and the current static pric<strong>in</strong>g<br />
structure generally excludes poor travellers from the<br />
<strong>benefits</strong> <strong>of</strong> HSR.<br />
M<strong>in</strong>istry <strong>of</strong> <strong>Rail</strong>ways debt<br />
1000<br />
800<br />
600<br />
400<br />
200<br />
0<br />
2005 2006 2007 2008 2009<br />
Asset-liability ratio (RHS) Long term debt<br />
<strong>The</strong> effects <strong>of</strong> an emphasis on <strong>speed</strong> and depressed<br />
demand are countered somewhat by low labour costs<br />
and the economies <strong>of</strong> scale enabled by the sheer size<br />
<strong>of</strong> Ch<strong>in</strong>a’s HSR <strong>in</strong>vestment program. HSR <strong>in</strong>vestment<br />
has also been said to have freed capacity on some<br />
conventional <strong>rail</strong> l<strong>in</strong>es for freight transport, though this<br />
has yet to be quantified. Regardless, frustration with<strong>in</strong><br />
government regard<strong>in</strong>g extreme cost overruns has<br />
compelled the <strong>Rail</strong>way M<strong>in</strong>istry to lower its targets for<br />
<strong>rail</strong> <strong>in</strong>vestment from 700 billion renm<strong>in</strong>bi to 600 billion<br />
this year.<br />
SIGNALLING<br />
32 : <strong>Invensys</strong> | <strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective<br />
50<br />
40<br />
30<br />
20<br />
10<br />
0<br />
In July 2011, two <strong>high</strong>-<strong>speed</strong> tra<strong>in</strong>s collided on a viaduct<br />
<strong>in</strong> the suburbs <strong>of</strong> Wenzhou, kill<strong>in</strong>g 40 people and<br />
<strong>in</strong>jur<strong>in</strong>g 192. Initial f<strong>in</strong>d<strong>in</strong>gs <strong>in</strong>to the accident <strong>high</strong>lighted<br />
design flaws <strong>in</strong> signall<strong>in</strong>g equipment and problems <strong>in</strong><br />
safety management.<br />
<strong>The</strong> Wenzhou accident makes clear the importance<br />
<strong>of</strong> sufficient <strong>in</strong>vestment <strong>in</strong> quality signall<strong>in</strong>g systems,<br />
which control traffic and serve as the first l<strong>in</strong>e <strong>of</strong> defence<br />
aga<strong>in</strong>st accidents. <strong>The</strong> accident also <strong>high</strong>lights the<br />
importance <strong>of</strong> adopt<strong>in</strong>g sound operational procedures<br />
through the <strong>in</strong>digenisation <strong>of</strong> new technology.<br />
<strong>The</strong> Ch<strong>in</strong>ese <strong>Rail</strong> Traffic System (CRTS) has appeared<br />
more vulnerable to power failure as a result <strong>of</strong> extreme<br />
weather than its counterparts from Europe and Japan,<br />
which may be reflected <strong>in</strong> differ<strong>in</strong>g levels <strong>of</strong> both<br />
equipment quality and <strong>of</strong> <strong>in</strong>vestment <strong>in</strong> lightn<strong>in</strong>g rods<br />
and surge protection at key junctures. While CRTS was<br />
developed <strong>in</strong> cooperation with European and Japanese<br />
firms, the operational issues underl<strong>in</strong>e the importance<br />
knowledge transfer and operational experience as much<br />
as the relatively simple transfer <strong>of</strong> technology.<br />
Another contribut<strong>in</strong>g factor <strong>in</strong> the accident was the<br />
confusion regard<strong>in</strong>g signall<strong>in</strong>g operation procedures,<br />
which <strong>in</strong> more established systems, such as ERTMS,<br />
<strong>in</strong>corporate strict protocols for cont<strong>in</strong>ued operation <strong>in</strong><br />
the event <strong>of</strong> failure.<br />
Ensur<strong>in</strong>g an excellent safety record <strong>in</strong> HSR relies equally<br />
on sufficient <strong>in</strong>vestment <strong>in</strong> <strong>in</strong>frastructure development,<br />
cont<strong>in</strong>gency plann<strong>in</strong>g, and personnel tra<strong>in</strong><strong>in</strong>g.<br />
COMPETITIVENESS<br />
At 1,318 kilometres, the Shanghai-Beij<strong>in</strong>g <strong>rail</strong> l<strong>in</strong>k sits<br />
well outside HSR’s competitiveness threshold aga<strong>in</strong>st<br />
air travel. Low demand for many current Ch<strong>in</strong>ese HSR<br />
services <strong>in</strong>dicates that <strong>in</strong>vestments <strong>in</strong> routes such as<br />
these have been made with an eye toward the very<br />
long-term, when the government expects <strong>in</strong>creas<strong>in</strong>g HSR<br />
<strong>speed</strong>s, grow<strong>in</strong>g population, cont<strong>in</strong>ued urbanisation,<br />
and expand<strong>in</strong>g disposable <strong>in</strong>comes to change the<br />
prevail<strong>in</strong>g competition dynamics. Negative public and<br />
government reaction to revenue shortfalls with<strong>in</strong> the<br />
<strong>Rail</strong>ways M<strong>in</strong>istry thus far do not bode well for the ability<br />
<strong>of</strong> HSR planners to run these l<strong>in</strong>es on extreme revenue<br />
shortfalls <strong>in</strong>def<strong>in</strong>itely.
Realised <strong>benefits</strong><br />
Ch<strong>in</strong>a’s <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> network has resulted <strong>in</strong><br />
stark improvements <strong>in</strong> journey times and reliability<br />
<strong>in</strong> comparison to the conventional network. On the<br />
longest routes, such as that between Wuhan and<br />
Guangzhou, travel times have been reduced from ten<br />
hours to three. Frequency <strong>of</strong> services is <strong>in</strong>creas<strong>in</strong>g on<br />
the most popular routes, match<strong>in</strong>g the range <strong>of</strong> services<br />
per day common on the HSR systems <strong>of</strong> countries such<br />
as Spa<strong>in</strong>.<br />
Despite the <strong>Rail</strong>ways M<strong>in</strong>istry’s sometimes questionable<br />
<strong>in</strong>vestment priorities, the existence <strong>of</strong> a centralised<br />
<strong>in</strong>stitution for plann<strong>in</strong>g, <strong>in</strong>vestment and regulation <strong>of</strong><br />
<strong>rail</strong> policy has streaml<strong>in</strong>ed the HSR development process<br />
drastically <strong>in</strong> comparison to that <strong>of</strong> other countries,<br />
enabl<strong>in</strong>g construction to proceed quickly when a<br />
damag<strong>in</strong>g capacity constra<strong>in</strong>t on the conventional l<strong>in</strong>e<br />
is identified.<br />
Additionally, despite overconfidence <strong>in</strong> <strong>in</strong>ternational<br />
manufactur<strong>in</strong>g partnerships, Ch<strong>in</strong>ese eng<strong>in</strong>eers<br />
have boosted their design experience and technical<br />
knowledge considerably over the last decade. This<br />
has stimulated rapid technological transfer to the<br />
po<strong>in</strong>t at which Ch<strong>in</strong>a’s <strong>rail</strong> technology is now on the<br />
cusp <strong>of</strong> legitimately compet<strong>in</strong>g <strong>in</strong> developed markets.<br />
Tak<strong>in</strong>g advantage <strong>of</strong> this new capability <strong>in</strong> <strong>in</strong>ternational<br />
markets is likely to rely on the cultivation <strong>of</strong> a strong<br />
Ch<strong>in</strong>ese HSR safety record to calm foreign fears about<br />
the quality <strong>of</strong> <strong>in</strong>digenous technology.<br />
Ch<strong>in</strong>a’s will<strong>in</strong>gness to <strong>in</strong>vest <strong>in</strong> future HSR demand<br />
represents a gamble <strong>of</strong> the sort that is less palatable<br />
to Western policy makers who rely on short-term<br />
returns on <strong>in</strong>vestment to ensure political support for<br />
<strong>in</strong>frastructure spend<strong>in</strong>g. While it is impossible to say<br />
whether this gamble will pay <strong>of</strong>f <strong>in</strong> light <strong>of</strong> cont<strong>in</strong>u<strong>in</strong>g<br />
challenges <strong>in</strong> safety and persistently <strong>high</strong> ticket prices,<br />
Ch<strong>in</strong>a’s <strong>in</strong>vestment strategy could appear prudent <strong>in</strong><br />
retrospect if demographics and disposable <strong>in</strong>comes<br />
cont<strong>in</strong>ue to grow <strong>in</strong> the manner they predict.<br />
<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 33
Conclusion<br />
Investment <strong>in</strong> HSR has revolutionised the nature<br />
<strong>of</strong> transportation <strong>in</strong> each <strong>of</strong> the five case studies<br />
above. Reduced travel times on key routes have<br />
facilitated drastic shifts from congested and<br />
pollut<strong>in</strong>g road and air networks, meet<strong>in</strong>g grow<strong>in</strong>g<br />
transportation demand <strong>in</strong> a manner that <strong>in</strong>creases<br />
efficiency and furthers the goals <strong>of</strong> environmental<br />
protection and curb<strong>in</strong>g climate change. <strong>The</strong><br />
decreased opportunity costs <strong>of</strong> travel on HSR<br />
have provided opportunities for growth <strong>in</strong> large,<br />
mid-sized and small cities with access to the l<strong>in</strong>e,<br />
and have helped mitigate economic disparities<br />
between both <strong>in</strong>dividual cities and larger regions.<br />
Bus<strong>in</strong>ess and commerce have benefitted from<br />
access to widened labour markets and more<br />
efficient freight transport on both HSR and lesscongested<br />
conventional <strong>rail</strong>. Aside from creat<strong>in</strong>g<br />
jobs related to <strong>in</strong>frastructure construction and<br />
management, HSR has spurred the development<br />
<strong>of</strong> national <strong>rail</strong> <strong>in</strong>dustries, creat<strong>in</strong>g a competitive<br />
global economy that cont<strong>in</strong>ues to drive down<br />
prices while further improv<strong>in</strong>g travel times and<br />
ensur<strong>in</strong>g safe operations.<br />
34 : <strong>Invensys</strong> | <strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective<br />
None <strong>of</strong> these <strong>benefits</strong> has accrued automatically.<br />
Countries that have benefitted significantly from<br />
HSR have done so through careful plann<strong>in</strong>g that<br />
views HSR as a vital part <strong>of</strong> a wider transportation<br />
<strong>in</strong>frastructure. This means us<strong>in</strong>g HSR where it has the<br />
greatest competitive advantage over other modes<br />
<strong>of</strong> travel, carefully balanc<strong>in</strong>g the goal <strong>of</strong> <strong>high</strong> <strong>speed</strong>s<br />
with the imperatives <strong>of</strong> cost m<strong>in</strong>imisation, and creat<strong>in</strong>g<br />
a pric<strong>in</strong>g structure that allows the broadest-possible<br />
demographic to benefit from decreased journey times.<br />
Realis<strong>in</strong>g opportunities for economic growth <strong>in</strong><br />
mid-sized or small cities relies on coord<strong>in</strong>at<strong>in</strong>g the<br />
goals <strong>of</strong> federal transportation <strong>of</strong>ficials with local<br />
and regional urban planners to ensure that track and<br />
station placement are practiced with an eye toward<br />
local development -- not just the achievement <strong>of</strong><br />
<strong>high</strong>est <strong>speed</strong>s across the l<strong>in</strong>e. Additionally, the most<br />
susta<strong>in</strong>able implementations <strong>of</strong> HSR have relied on<br />
PPPs, spread<strong>in</strong>g both the risks and the <strong>benefits</strong> <strong>of</strong> HSR<br />
<strong>in</strong>vestment and enabl<strong>in</strong>g governments to improve<br />
their transportation networks when compet<strong>in</strong>g fund<strong>in</strong>g<br />
priorities would otherwise make reform impossible.<br />
Debates over new HSR <strong>in</strong>vestment have commonly<br />
focused on cases <strong>in</strong> which best practices have been<br />
abandoned <strong>in</strong> favour <strong>of</strong> other priorities. In these<br />
scenarios, the significant costs <strong>of</strong> HSR have at times<br />
outweighed its <strong>benefits</strong>. Yet with transportation policy<br />
challenges grow<strong>in</strong>g under the weight <strong>of</strong> global<br />
demographic trends and grow<strong>in</strong>g fears over climate<br />
change, the task at hand is to leverage experiences<br />
from the past to ensure that future <strong>in</strong>vestment <strong>in</strong> HSR<br />
maximises the technology’s transformative potential.
About the authors<br />
<strong>Invensys</strong> <strong>Rail</strong><br />
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Oxford Analytica<br />
Oxford Analytica is a global analysis and advisory firm<br />
which draws on a worldwide network <strong>of</strong> experts to<br />
advise its clients on their strategy and performance. Our<br />
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<strong>The</strong> <strong>benefits</strong> <strong>of</strong> <strong>high</strong>-<strong>speed</strong> <strong>rail</strong> <strong>in</strong> <strong>comparative</strong> perspective | <strong>Invensys</strong> : 35
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