As megacities around the world struggle to cope with congested roadways and airways, high speed rail (HSR) offers a competitive and sustainable mass transit solution with immense capacity, speed and passenger comfort. HSR acts as a safety valve for overcrowded global cities and promotes economic development of widespread areas along its corridors.
At present, HSR lines are operational in more than 20 countries including the UK, France, Germany, Belgium, Spain, Italy, Japan, China, Korea and Taiwan, while construction is ongoing in over 10 countries including China, Spain, Saudi Arabia, France and Italy.
Till date, India has not developed a single HSR line. Its fastest train can operate at a maximum speed of only 160 km per hour (kmph). The country is, however, planning to develop the 505 km Ahmedabad-Mumbai HSR project, which will become its first line allowing trains to operate at speeds of 320 kmph. If built, travel time between the two western cities of India will reduce from eight hours to only two hours.
HSR – The concept
While there is no universal definition of HSR, the European Union (EU) defines a high speed train as a train capable of reaching speeds of over 200 kmph on upgraded conventional lines and of over 250 kmph on new lines designed specifically for high speed transportation.
In 1964, Japan became the first country to develop HSR technology and make it commercially available. The first HSR line, the 515 km Tokaido Shinkansen line connecting Tokyo and Osaka, opened with the maximum commercial speed of 210 kmph. It was highly successful and returned investments in seven years. Japan is now building the Chuo Shinkansen, a magnetic levitation train, which will enable travel at speeds of up to 590 kmph by 2027. The second country to successfully develop an HSR network was France. The first line from Paris to Lyon, the TGV-PSE, opened in 1981.
China has built its HSR network at a break-neck speed, and has an operational network of 19,000 km. This is more than half its targeted length of 35,000 km. The total track length is equivalent to the combined track length of all other HSR systems in the world. In December 2012, China launched the 2,298 km Beijing-Guangzhou HSR, which is the longest high speed route in the world. The line reduced travel time between the two cities from 22 hours to eight hours. Earlier, in June 2011, the 1,318 km Beijing-Shanghai HSR line was operationalised. Built at a cost of CNY 221 billion, it was the single largest infrastructure project in the country.
Spain has the second largest HSR network in the world, after China. This is remarkable given the relatively small size and population of the country.
Speed is the key attribute of high speed trains. Central Japan Railway has launched the next-generation bullet train capable of reaching speeds of up to 498 kmph. China has displayed its test trains, capable of travelling at over 500 kmph, and the China CNR Corporation launched CRH3A, its self-developed fast intercity trains suited to the country’s climatic and geographic conditions.
India’s first dedicated HSR line
The concept of developing an HSR network in India was first introduced by the central government six years ago. The Ahmedabad-Mumbai dedicated HSR is planned to be the first line to be taken up. Almost two-thirds of the route length will fall in Gujarat, and the remaining will be in Maharashtra. The scope of work will include the building of 11 tunnels, one of which will be built under the sea near Thane creek.
Japan, which is looking to export its Shinkansen technology, had expressed interest in developing the project. The feasibility study for the project was undertaken by the Japan International Cooperation Agency (JICA) and submitted to the Indo-Japan Joint Monitoring Committee (JMC) in July 2015. The JMC comprises representatives of the Ministry of Railways (MoR), the Ministry of Finance, the Ministry of External Affairs and NITI Aayog, as well as their Japanese counterparts.
In the draft report, JICA indicated a substantial cost escalation from Rs 650 billion to nearly Rs 1 trillion by factoring in elements such as price escalation and interest during construction. Operation and maintenance costs are likely to be about Rs 44 billion (4.5 per cent of the construction cost) for 75 bullet train round trips daily in 2024.
In December 2015, the governments of India and Japan signed an MoU for financing the project. Japan will provide 80 per cent of the funds required for the project, with a repayment period of 50 years including a moratorium of 15 years. Indian Railways (IR) will invest Rs 98 billion and the remaining cost will be borne by the Maharashtra and Gujarat governments.
JICA has offered the loan at a concessional interest rate of 0.1 per cent, which, of course, comes with a rider that 30 per cent of the rolling stock for the project would be sourced from Japanese firms. JICA’s interest in the project is based on the estimated ridership – almost 40,000 passengers are expected to avail of this service daily. The agency’s feasibility study estimates the fare to be around Rs 2,800, almost one and a half times more than the cost of a Rajdhani Express AC first class ticket.
India is not one to be left far behind. A key aspect of the MoU is that technology transfer will take place from Japan to India to support the Make in India initiative. As such, in future, India is expected to have the capability to manufacture high speed trains. Japan will also train the staff to develop and operate these trains. A similar technology transfer has already taken place in the metro rail segment, which earlier relied heavily on international players. Now, however, domestic suppliers such as BEML have entered the market through technology transfer arrangements with global players.
In January 2016, the MoR established National High Speed Rail Corporation Limited, a special purpose vehicle, under IR. The company will eventually be made into a joint venture (JV) with equity participation from the Maharashtra and Gujarat governments and will build and operate the line.
Further, the Japanese government has indicated that an Indian company, a Japanese company or a Japanese company-led JV with an Indian company can undertake civil works for the line. This is a major departure from JICA’s prevalent loan conditions whereunder prime contractors can only be Japanese companies or Japanese-led JVs.
Challenges and lessons
While the plans look promising, India has a poor track record of executing large infrastructure projects. This project has been on the drawing board for more than half a decade. Experts suggest that if construction begins in 2018, the line can be made operational only by 2024. This is a time span of almost 15 years to develop one HSR line. In contrast, China added 6,657 km of HSR line length between 2010 and 2012.
India also faces key inherent challenges as it embarks on a journey to develop HSR systems. These include issues related to land acquisition, lack of standards (signalling, gauge width, axle loading, etc.), interoperability of trains, environmental concerns, funding, etc.
Even if these concerns are addressed, just developing the HSR project will not be enough. The returns through ridership must match the massive investments in the project. Typically, the level of ridership needed to justify the cost of HSR systems ranges from 6 million to 9 million riders in the first year. In China, daily ridership has increased from 237,000 passengers in 2007 to 2.5 million in less than a decade.
Ridership levels are likely to be higher if several cities are located in a geographically linear configuration rather than in a “zigzag” or “hub-and-spoke” configuration. This is because travel time to end-point cities will be increased only by the amount of time taken for station stops at intermediate cities and not by additional time required to divert to, and possibly change trains at, an intermediate city.
HSR is considered most successful when it connects major population centres less than 1,000 km (625 miles) apart. Over 1,000 km, airplanes become more competitive. Globally, for HSR trips of two hours or less, the train’s market share in overall transport solutions exceeds 90 per cent, while for trips of three hours, HSR’s share exceeds 50 per cent. For example, Eurostar, which operates the HSR service between Paris and London via the Channel Tunnel (a journey time of 2 hours and 15 minutes), has a market share of 90 per cent. In this context, India seems to have made an appropriate route choice for its first HSR line.
A successful financial model for an HSR line involves state-owned companies paying for the tracks and independent companies owning and operating their own trains under contract. In a mature HSR industry like Europe, the EU law mandates separation of operations and infrastructure companies to encourage competition among private operators and transparent access to the track owned by public infrastructure companies.
In cases where privatisation or breaking up of public companies takes place, companies are more likely to become profitable in terms of operations. However, these companies are either relieved of the debt associated with initial capital costs, or provided government assistance (in the form of subsidies or low-interest loans) to help pay off the debt.
A final word
One of the world’s superpowers, the US, launched its HSR development plan in 2008. However, eight years later, the government has spent around $2.4 billion without the investment translating into progress on the ground. Most of funds have been spent on planning, design and pre-construction work. The country’s first government-built HSR system, the 1,284 km California HSR, has faced significant challenges including time and cost overruns, and will be only partially operational by 2025. As a result of the slow progress of the HSR plan, the US government has allocated a large amount of funds for upgrades to the national rail system, operated by Amtrak, to improve speed, reliability and safety. In India, Talgo trains, which can be operated as semi-high speed trains on existing and upgraded tracks, present the possibility of a cheaper solution. Should India, a country operating the world’s third largest passenger rail network with unprecedented ridership numbers, take a cue from the US experience in building a dedicated HSR?