Rock ’n’ roll train – high-speed rail outside China – The Property Chronicle
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Rock ’n’ roll train – high-speed rail outside China

The Analyst

3 July 1938 was a milestone for British engineering. The LNER 4468 Mallard set a new world speed record for steam-powered locomotives between Little Bytham and Essendine in South Lancashire at 203km/hr. More importantly though at the time, it narrowly beat the previous recordholder, Germany’s DRG class 05 locomotive, which had established the previous record at 200.4km/hr only two years earlier.

While the technological rivalry between British and German engineers was replaced by memorable FIFA World Cup matches (“Vergiss 1966!”“Don’t mention 1990!”), rail technology moved on to diesel and electric locomotives. These allowed weight reductions along with less complex engineering as well as aerodynamic designs. Examples include the Fliegender Hamburger high-speed rail service between Hamburg and Berlin reaching a top cruising speed of 160km/hr.

The US saw similar high-speed services at the time, like the ‘Trail Blazer’ between NYC and Chicago reaching top speeds of more than 160km/hr, albeit mostly powered by duplex steam engines. That’s almost a quarter faster than today’s Amtrak trains.

Roughly 20 years later the modern age of high-speed rail travel arrived with the first line of Japan’s Shinkansen bullet trains in the early 1960s, connecting Tokyo and Osaka at a speed of 250km/hr.

Today there are more than 50 purpose-built high-speed lines in operation globally with maximum speeds ranging from 250km/hr to 350km/hr. Compared with regular train service and short-haul air travel, HSR travel provides the following benefits:

  • Significantly reduced travel time along with enhanced service quality.
  • High frequency (throughput) of train services, enhancing capacity, flexibility and attractiveness compared with other means of transport (car, air travel).
  • Efficient direct connection of city pairs or travel corridors with multiple large urban centres, 150-300km apart, achieving agglomeration effects.
  • Time efficiency compared with short-haul air services up to 750-1,000km or 3hr travel times.

What are the ingredients to make HSR travel a sensible economic and political decision?

  • Access to reasonably priced financing sources, allowing for significant multi-year capital outlays.
  • High population density in connected city pairs/travel corridors in order to allow for high track utilisation and capacity demand levels, as well as for affordable and competitive ticket pricing.
  • Geographically suitable terrain to keep construction costs and timeframes at bay without jeopardising timely commencement of the cash-generating operations .
  • At least 20 million passengers a year with sufficient purchasing power to afford HSR travel (key for developing nations).
  • Political will and long-term credit support (co-financing, guarantees etc.), especially for cross-border projects,

How much does a HSR network cost?

Apart from its massive scale and construction speed, the Chinese HSR programme discussed in my previous article achieved something usually not seen in railway’s highly project-driven construction environment: economies of scale and standardisation. According to a 2019 World Bank Analysis, this allowed the country to bring down average construction costs for a standard HSR line, including signalling, electrification and facilities, to US$20.6m/km (~€18.4m/km), US$16.9m/km (~€15.09m/km) and US$15.4m/km (€13.75m/km) for 350km/hr 250km/hr and 200km/hr tracks respectively.  

According to research papers published by John Preston and others at the University of Southampton, HSR construction costs outside of China tend to be 60%-100% higher.

The Analyst

About Martin Schwarzburg

Martin Schwarzburg

Martin Schwarzburg is based near Zagreb, consulting with clients on a variety of strategic and operational topics with a focus on international markets, real estate and private eEquity. He previously served as Global COO Real Estate for the Abu Dhabi Investment Authority (ADIA) and Finance Director Europe for AIG Global Real Estate.

Articles by Martin Schwarzburg

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