Of all the major announcements made by Prime Minister Narendra Modi last year, there seems to be no excitement for HSR (High Speed Rail), commonly known as Bullet trains. The reason for this lack of optimism, quite clearly is the critics stance both home and abroad arguing that HSR is not an ideal mode of transportation for a developing country like India. Every argument is raised against construction of HSR, from the massive cost of construction to how middle class or lower middle class Indians would be unable to afford the tickets for a costly transit system. We believe, that the pricing of HSR is not out (hence no point fretting about it), and secondly, a project of this size boosts GDP activity (we shall be doing a follow-up article on this) for the country, hence being skeptical on Day ZERO is essentially not the right approach.
I believe, some global experiences in for HSR should be taken into perspective before we draw up our conclusion.
Anecdotal response on HSR in China:
During a Supervision Mission in China, a team of World bank officials interviewed 1st time HSR users to share their experience about the train between Chinese cities of Wuzhou and Nanning and its impact on their lives. Here are few of narrations:
• A couple of people, well in their senior years at 73 and 81. For them, it was the joy of taking a travel to Guilin for tourism and to do so in a way that was still comfortable enough for them to enjoy. They felt that the bus, while available, was not comfortable enough at their age. They were excited to take their first ride in a fast train.
• A couple in their mid-30s, traveling to Guilin. The lady worked for a hospital and was a frequent business traveler. It took her four hours driving to reach her destination in Nanning before, a number that had been halved at this point. It meant for her that short and frequent trips to Nanning were now possible. She recommended increasing the number of trains each day to allow for regular day trips, as three was too little. (The number of trains is expected to grow when the full line opens.)
• In the first class cabin, we met a businessman working for a listed pharmaceutical company in Guangdong. He was already using the train more than 7 times a month. His business turnover had grown by 15 percent since the train opened, an achievement he attributed to his ability to meet more clients with the railways. He was eager to get a better connection to Guangzhou as well, since this is where the research lab for his company is located.
• Two farmers with their two young kids. They had been visiting their relatives for the second time using this train, traveling from Liuzhou to Zhaoqing in Guangdong. They used to meet their family, but infrequently as the bus trips were unpleasant, very long (about 8 hours from Liuzhou to Wuzhou), and dangerous particularly at night, considering the winding roads in Guangxi.
Source: http://blogs.worldbank.org/…/passengers-recently-opened-wuz…
Other key thoughts on impact of HSR:
• Efficiency in work: HSR have ability to connect cities to work more closely together as a return trip between far flung Urban centers becomes possible within a day.
- Productivity gains: As per Gerald Ollivier, World Bank’s Senior Transport Specialist, the impact in terms of economic exchanges, accessibility, and productivity gains are expected to be significant, and extend beyond traditional transport savings.
- Boost in domestic tourism: As per Provincial Tourism Bureau of Guizhou, China ‘after the start of HSR services, >9.87 million tourists, a +20% yoy increase with ~70% of tourist taking HSR, arrived in the city during the Spring Festival Golden Week’.
- A Professor from the Guangxi Normal University noted for the Chinese High Speed Rail that, “the direct benefits will further generate impacts on people’s travel, logistics, capital flow and so on, and finally stimulate GDP of the city.”
- The Environmental Impact of High Speed Rail is also not a factor that should be ignored, Rail is already the most efficient mode of transportation for both Passengers and Freight when compared to other popular modes of transportation like Air & Roadways. Each High speed train would be able to carry the load of seven Boeing 737 planes or hundreds of cars. As opposed to oil, which India produces very little, High Speed Rail systems use Electricity to power trains.
- As per a study by the California High-Speed Rail Authority, the proposed system from Los Angeles to San Francisco will remove 12 billion pounds of carbon dioxide per year by 2030 as it uses electricity generated from wind, solar, and other renewable resources and can save ~12.7mn barrels of oil by 2030. (Source: http://thinkprogress.org/…/oil-reduction-as-a-transportati…/)
- Furthermore, the Japanese HSR system has a carbon footprint is ~16% vs., that of cars making the same journeys. (Need source for this line)
- HSR is also statistically safer than cars. For example, the French and Japanese high-speed systems have been operational for over 30 years and there have been no passenger deaths as a result of a high-speed crash in either country.
(Source: http://www.newcitiesfoundation.org/the-promise-of-high-spe…/)
Coming to India’s High Speed Rail project, the NDA Government has successfully negotiated a Transfer of Technology (ToT) under ‘Make in India’ with Japan.
What does ToT mean:
- The Make in India of HSR systems will include manufacture of rolling stock, equipment and machinery to be promoted in a phased manner.
- This will be accompanied by development of many ancillary activities around the construction of the high speed line and the manufacture of the coaches in India.
- The manpower required to build the High Speed Railsystem will help India to develop many High Tech Industries providing skilled employment to millions of people in the process. Above all such Technology transfers will eventually lead to India developing its own High Speed Rail technology one day just like how China has done previously.
Note: The Chinese example shows that how Foreign Technology transfers helped China become a global leader in High Speed Rail technology. As of Dec 2015 China has ~19,000 km of Operational High Speed Rail (https://en.wikipedia.org/wiki/High-speed_rail#cite_note-35).
It should be noted that the Ahmedabad-Mumbai High Speed Rail project is a victory for India diplomacy as Japan has agreed to finance 81% of the cost of the $15b Mumbai-Ahmedabad high speed rail project at 0.01% interest rate with massive Transfer of Technology. It is definitely a step in right direction given the economic & technological impact of the project.
Note:
- Currently the fastest train system in India touches the peak speed of 160 km/h with the average speed of 130-160 km/h (Gatimaan Express (New Delhi-Agra), this is far slower than the Ahmedabad-Mumbai HSR which will run at a top speed of 320 km/h (Assuming Shinkansen E5 series has been offered to India).
- As per an article in Global Construction Review site (Jul 2014), World Bank report pegs China’s high-speed rail cost at $17-21m per kilometer (despite a high ratio of big-ticket viaducts and tunnels), an average cost of $25m-$39m per kilometer in Europe, while in the estimated cost for HSR in California is approximately $56m/km. While based on line length on Wikipedia of ~534 km and a project cost of $15 bn would translate to $28.1m per KM.
- Additionally, Rail stations providing High Speed Rail service witness a healthy increase in land values, as the areas around stations suddenly become more accessible to a larger number of people and therefore, more attractive to development and real estate interests. For example, Japan Rail East, the largest of the seven companies operating Japan’s High Speed Rail network, requires no government subsidy because it owns the land around its stations and is able to capture the added value of that land and reinvest it into its system. Nearly one-third of JR East’s revenue comes from commercial developments along the railway route.
(Source: http://www.citymetric.com/…/high-speed-rail-popping-all-ove…)
