HSR written

HSR (High Speed Rail), as apparent from its name is a new family member of rail transportation that is capable of exceeding the conventional rail speeds (Conventional rail speed 120km/hr). According to EU Directive 2004/50/EC, the defined operational speed for a new HSR li ne is 250km/hr and 200 km/hr for an upgraded line. This subsequent speed comes at a price as conventional railn infrastructure cannot support such speeds. HSR needs a dedicated infrastructure that can accommodate the requirements of HSR.is capable to cater this advantage. This includes the rolling stock, track geometry, power and electrification, maintenance, operation and signalling. Although iInfrastructural maintenance costs areis comparable with conventional rail, but construction costs, acquisition, operatingon and rolling stock maintenance makes this transport alternative an expensive option (De Rus 2008). It is due to the because of magnitude of theseis costs that most HSR projects are considered to be major proj ects. The early development of HSR in Europe was entirely at the national level but in 1993 , Treaty of Maastricht called for a network of Trans-European lines, linking the existing HSR lines (Nash 2009). The TEN-T (Trans-European Transport Network) which enforces the Maastricht treaty of 1993, was planned to induce the economical development and diminish the gap in the region by promoting the HSR (Lee 2007). The TEN-T is a key element of the European transport policy, and the construction of a HSR network is still among the priorities of this policy (European Commission, 2001a) (De Rus Nambola 2006). HSR investment projects of European member countries are financially supported by the European Commission. `Revitalizing the railways (European Commission, 2001a) (De RUS 2008). According to a study review by Lee (Lee 2007) he concluded that HSR has the potential to improve regional development and the local economy, the detailed findings of the report can be found in table 14 his finding are illustrated in table 14. The construction of a new line in EU, China s announcement that it intends to spend $162bn to expand its railway system and the decision by theof US government to include HSR passenger service as a centrepiece of national transport policy has given a new endorsement to the technology (De Rus 2009). The type of asset investment in the infrastructure is considered irreversible. So is investment in HSR worth it? The simple answer is: it depends (De Rus 2009). It is fair to expect the rail projects were authorised based on their economical prospects ,. hHowever research has shown this to be otherwise. STG (STG 2004) found most countries

Comment [b1]: Is this a full stop or a reference?

have conducted little if any economical analysis. From the commissioned studies, cost-benefit analysis seems to have been most popular. However it s difficult to cross reference and compare these due to demographic and socioeconomic differences. It can was also be seen that it is easy to overestimate or have premature expectations of HSR growth. France is one of the EU countries with the most experience of HSR, a country which is systematic in conducting cost benefit analyses of all transport projects. In a recent study (Nash 2009) all the lines considered were expected to have acceptable financial and social rates of return, and to carry at least 15m passengers per annum. In practice, the out turn rates of return are generally lower, mainly because of higher infrastructure costs and lower traffic levels than forecast in some cases. . It soon became apparent that financial appraisals alone are unable to justify this type of investment. According to a study by De Rus (De Rus 2009) the economic case for HSR depends on prevailing conditions in the intercity corridor in particular the level of demand, degree of congestion, value of time, expected time saving from diverted traffic, generated traffic and the net external effects. HSR projects require a high volume of demand with enough economic value to compensate the high cost involved in providing capacity and maintaining the line ( De Rus nambola 2006). Vickerman (Vickerman 1997) argues that HSR can be justified where there is a demand of between 12 to 15 million passengers per annum. Nash (Nash 2009) argues this value is very much dependant on discount rate of that economy and construction costs of the project b ut typically even under favourable conditions at least 9m passengers per annum will be needed . Of the measured indirect benefits of HSR investment, congestion is the most significant. Relief of road congestion is, however, unlikely to be a major part of the case for high speed rail exc ept where chronic congestion is spread throughout the day along much of the route (Nash 2009). Valuation of time is based on the reduction of travel time and its value for the user. User time savings are generally split into business, commuter and leisure; the current valuations used in rail schemes in Britain are as shown in (Table 2 page 8). The advice given by the British Department for Transport is that working time values should r ise in proportion to GDP, tThus long term growth of values of time is assumed to be in the range of 1.5-2% per annum (De Rus Nash 2007). For HSR to be economically sound, it is important that a relatively high proportion of HSR traffic is likely to be travelling on business (Ching wing woo 2009).

Comment [b2]: I don t understand this sentence, reword

HSR has shown little benefit for travel distances less than 200km or over 800km (Mediumdistance range). HSR cannot compete with land based modes such as car and bus in distances less than 200km and cannot compete with aviation over distances in excess of 800km (STG

2004). Countries where a large proportion of travel is predominantly have been particularly over distances of 300 to 600km have shown a good integration of this technology.

In long intercity journeys HSR cannot compete with aviation as no longer the extra generalised cost associated with HSR ( time and cost savings, reliability, comfort and safety, etc.) favour avaiationthis mode. High speed rail is more successful at competing with air than car (Nash 2009). The generalized cost of air transport is seriously being penalised by security controls and the need to arrive earlier at airports, and this translates in more attractiveness of the HSR option (De Rus 2008).

As airports and air routes get ever closer to their capacity constraints, and environmental impacts are more severely penalised, the intensity of the competition will fall in favour of HSR. Where networks are congested or the affected airports are working close to their maximum capacity, the construction of a new HSR lines has the benefit of relieving capacity for suburban or regional passenger services or freight (De Rus 2008). In 1960s when oil prices were low car was an adequate means of establishing rapid economical growth. However since 1980s due to policy changes, congestion, air pollution, road tax, congestion charging and high fuel prices this is no longer is the case and hence railways are being revived leading to a and we are witnessing a rail renaissance (Lee 2007). Diverted traffic from road travelling the medium-distances corridor benefit from reductions in travel-time reductions but suffer lose in terms of access, egress and waiting time (De Rus 2009). In conjunction to conventional rail especially i n short intercity journeys, high speed rail cannot offer any extra benefit. Due to higher energy consumption it is a less favourable choice due to increased actually is the worst choice both in operation costs and the environmental impact costs. Compared with conventional rail, HSR services barely affect access, egress and waiting time (De Rus 2009). Whilst HSR may involve twice the energy consumption per seat km of an average train this may be substantially offset by higher load factors. T he French TGV operates with an average load factor of 67%, whereas for conventional trains load factors are typically no more than an average of 40-45%. The reason for the difference is that the limited number of stops of the TGV makes it possible to enforce compulsory seat reservation and yield management techniques (De Rus Nash 2007). Road, and air transport services are vertically separated and railways are unbundled in some cases and vertically integrated de fact. Buses and cars share the same roads, competing airlines

share airports but HSR is technically operated as a single business, even if, from an organizational standpoint, the maintenance and operation of the infrastructure a re separated from service operations. Airports and airlines would still serve a large number of markets using the same airport capacity. The HSR advantage in this case is that capacity is used to serve a very small number of markets and this makes it possible to reach very high levels of reliability. HSR is more reliable than air transport, and with less cumbersome access and reduced waiting time much less cumbersome (De Rus 2009). Typically, a substantial proportion, but not all, of the new traffic attr acted to HSR will be diverted from other modes mainly car and air (Atkins, 2003, suggest that this may be of the order of 50%) and the remainder are totally newly generated traffic (De Rus, Nash 2007). The reduction in the generalized cost of travel generates new trips, and the diverti onng of traffic from other modes of transport may contribute to the reduction of congestion, accidents and environmental impactexternalities. Unfortunately, the net impact on the alternative modes is not necessarily positive. The reduction of congestion is one effect on those who continue to use the previous mode of transport, but the reduction of operations in response to lower demand volumes affects negatively the adjustme nt to travel preferences of those users (De Rus 2009).

The twin desire for a big increase in capacity and for a major improvement in jJourney times has led to the approval for construction of HSR in many countries (Nash 2009). However Lee (Lee 2007) points out that apart from the two dominating factors there is also the improvement to accessibility to remote regions which were the domination facts in construction of HSR lines Sanyo Shinkansen between Osaka and Fukuoka and the first Spanish AVE line, Madrid Seville. Most successful applications of high speed rail seem to arise when there is both a need for more rail capacity and a commercial need for higher speeds. It seems difficult to justify building a new line solely for purposes of increased speed un less traffic volumes are very large. (Nash 2009). As mentioned earlier, one of the main benefits associated with HSR is the induced capacity increase in the corresponding corridor. For effective utilisation of this benefit, large population and activity centres must be within the medium -distance corridor. Additional capacity is obviously only of value if demand is exceeding the capacity of the existing route. But in those circumstances additional capacity may be of value not just in allowing for growth between the cities served by the high speed line, but also, by relieving existing lines of traffic, for other types of service such as regional passenger or freight (Nash 2009).

Modern Signalling systems can handle train every 5 minutes. With approximate ly 1000 seats per train (Double TGV duplex unit) in theory, HSR line can carry the same number of passengers as a Boeing 737 every 45 seconds, or three parallel motorways (STG 2004). The economic rationale for the construction of new HSR depends heavily on the expected volume of demand, which is also very sensitive to the line length and population density. Nevertheless, high density urban areas mean higher construction costs. (De Rus Nombela 2006). Studies have shown there is correlation whether countries have extensive HSR networks and whether they have significant population centres with the adequate distances that make HSR competitive (STG 2004). In other words, Iit can be seen that appears to be it is the construction cost that is the key determinant of the breakeven volume of traffic. A very major contributor to costs is the amount of tunnelling involved, and generally the costs of entering large cities are high (Nash 2009). Uupgrading the existing conventional rail line ultimately reduces the construction cost or they can be utilised as part of the HSR (with limited speed) line as it approaches urban areas where the most cost associated with the construction comes from. Both the construction of rail infrastructure and the operation of high -speed trains leads to environmental costs in terms of land take, visual intrusion, noise, air pollution and contribution to global warming (De Rus Nash 2007). Environmental benefits are unlikel y to be a significant part of the case for high speed rail when all relevant factors are considered, but nor are they a strong argument against it provided that high load factors can be achieved and the infrastructure itself can be accommodated without exc essive environmental damage (Nash 2009). The development of a transport network is the result of the interplay of private and public decisions within thea context of sometimes unpredictable changes in society and particularly in the economy. The present context is one of tighter budget constraints, a situation that is going to worsen in the future given the present economic recession and growing public deficits. Increased ageing and the growing dependency rate, on one hand, and the need to devote more funds to repairing, upgrading and renewing existing infrastructure, on the other, will reduce the funds available for the transport sector and users will have to pay more than in the recent timespast, both for the internalization of externalities and cost rec overy (De Rus 2009). Whether HSR investment is socially profitable depends on the local conditions, which determine the magnitude of costs, demand levels and external benefits such as reduced congestion or pollution from other modes. Given the costs, the expected net social benefit of the investment in HSR relies heavily on the number of users and its composition (diverted and generated passengers) and the degree of congestion in the corridor affected by the investment. (De Rus Nash 2007)

Decisions to build HSR lines generally are taken , in general, without any clear overall plan (Vickerman, 1997). The rationale for the investment decisions in the recent timespast goes far beyond the usual microeconomic approach used in project evaluation, into a less solid grounding dominated by strategic and political arguments, usually related to regional development objectives (De Rus Nombela 2006).

Reasons for HSR consideration UAE specific

In the UAE prestige plays an important part in the politics of the construction industry because the recent increase in wealth caused by oil revenue has led to great competition between the emirates, as well as against other Arab nations. Many buildings, airports and harbours seem to have been built for prestige rather than to meet a demand (Tobin 1980). According to a UN report the western world has witnesses a population growth of around two to three percent annually. UAE s population grew from 4.1 million in 2005 to 8.26 million in 2010. That is an average of 24 percent increase per annum. This rate of growth introduces its o challenges in wn provisions of basic needs and utilities. Infrastructure is no different. UAE s core population is concentrated in two major metropolitan cities of Dubai and Abu Dhabi. The distance between the two cities is within the medium distance corridor. Both cities cater for business and main industrial centres in UAE. It is fair to assume that a large proportion of the travelling passengers between the two cities will have business agendas (High value of time). Planners have forecasted that HSR will generate 16 million passengers per year on this corridor. The increase in population has posed significant challenges in integration of road transport across the country. Improved public transport investment such as Dubai Metro link has been welco med and plans to extend it are already being considered. This further emphasises the need for rail transportation as an alternative mode of transportation. A freight train is capable of handling an estimated load equivalent to 300 Lorries. However it is unrealistic to assume that trains would completely negate the need of road transportation but its potential in traffic reduction is undeniable. It has also been argued that having two land based transportation modes will increase the competition and eff ctively improve the service e quality and efficiency of both systems. Furthermore, UAE has one of the highest carbon footprints(calculated by the US Department of Energy's Carbon Dioxide Information Analysis Center (CDIAC)) per capita in the world and it s largely due to population s reliance to vehicles. HSR can play an important role in reducing this reliance on private transport.

Air transportation is another form of transportation to and from UAE, passenger and freightalike. The forecasted flight increase in UAE s air space is expected to rise as with elsewhere in the world. Dubai airport has forecasted a rise of 82% within the next 10 years. This raises many concerning issues such as safety, environmental impact and a need for ever growing facilities to accommodate such a growth. Failure to do so will affect the region s economy and quality of service, the commodity it s most famous for. According to Paul Griffith CEO of Dubai airport, this is a single biggest con tributing threat to region s transportation growth. HSR provides a solution to this ever growing problem. According to world economic and financial survey UAE s economy is primarily based on oil related , revenue and it showing traits of changing. Abu Dhabi is the major contributor to this oil based economy and part of its vital economic strategy is to reduce this independency as the oil and gas fields deplete in the future. UAE has demonstrated intension for large scale industrialisation. Much of it wi come from ll infrastructural provision and service of global companies and industry. Accordingto fig #$@ UAE has a major need for freight transport across the country and the region mainly from and to ports of export and import (The rail network is expected to accommodate the transportation of 50 million tonnes of goods and freight train to travel at 120kph). One of its latest plans is the construction of an industrial free zone like no other. It s referred to as KIZAD (Khalifa Industrial Zone of Abu Dhabi). The 417 square kilometre project is expected to contribute 15 percent to future economy. The strategy behind its future success is based on the benefits it promises. These include access to global market due to its location at crossroads between thee r continents and its proximity to global shipping lanes. Low operation costs due to its affordable labour cost and abundance of energy it can supply and finally allowing local and international joint venture businesses to trade in a fashion that it s easy operable. According to Paul Douglass, CEO of Abu Dhabi ports, Transport connectivity is paramount and of strategic value and it must include sea, rail and proximity to airports . It goes without saying that Etihad rail is an essential and an economic l survival a tool for UAE and its construction is a must. KIZAD is one of many such free zone projects in the process of development and completion. Ras al Khaimah In the northern emirates has opened a multimillion dollar industrial free zone as it pursues its economic diversification. The full potential and integration of these major ports cannot be realised if they are poorly interconnected. HSR facilitates such a need by providing an effective transportation corridor through all the seven Emirates. DP World, the operator of Jebel Ali port in Dubai has estimated the growth of container handling per annum to be as high as 8 percent. Jebel Ali is the largest port in the Middle East. While sea freight is on the rise, failure to invest and support facilities to cater for logistics of such goods will have tragic consequences.

It is my opinion that due to scarcity of population centres and geographical scale of the nation itself, the freight industry will be the main beneficiating party of HSR with a limited viable

passenger corridor between the two major cities. The distances between these two cities and neighbouring population centres of other countries (being outside the middle distance corridor) further support the argument of limitations on passenger ra il benefits that can be realised from HSR. The main aim of the network would be to increase the capacity and accessibility of transport network and the subsequent speed is a mere considerable bonus. It is my opinion to assume that due to major industrial and commercial interests far exceeding the passenger transport, the cost associated and the willingness to spend extravagantly on a state of art infrastructure (architectural perspective) will be limited. I further believe that Etihad Rail s aim would be on delivering and maintaining a robust and heavy haul oriented network to help realise the industrial development of the country.