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Economics of Investment in High-Speed Rail

New Delhi, India, 18-19 December 2013

Mr. Roger Vickerman, University of Kent, UK

Summary and Conclusions

The Economics of Investment in High-Speed Rail: Summary and Conclusionsof the Roundtable

John PRESTON, University of Southampton, UK
Go to Discussion Paper    (2013-30)  

Papers and Presentations

When to Invest in High-Speed Rail
Christopher NASH, University of Leeds, UK
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When to Invest in High-Speed Rail. The British Experience
Christopher NASH, University of Leeds, UK
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High-Speed Rail Performance in France: From Appraisal Methodologies to Ex-post Evaluation
Yves CROZET, Laboratoire d’Economie des Transports (LET), Université de Lyon, France
Go to Discussion Paper   (2013-26)
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Shinkansen Investment before and after JNR Reform
Fumio KUROSAKI, Institute of Transportation Economics in Japan, Tokyo, Japan
Go to Discussion Paper   (2013-27)
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New Entry in the Italian High-Speed Rail Market
Fabio CROCCOLO, Ministry of Infrastructure and Transport, Italy
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The Financial and Economic Assessment of China’s High-Speed Rail Investments

Jianhong WU, Beijing Jiaotong University, China
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High-Speed Rail in Taiwan
S.K Jason CHANG, National Taiwan University, Chinese Taipei
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High-Speed Rail in India: A perspective after a decade of Planning
Anjali GOYAL, Planning Commission, New Delhi, India
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High-Speed Rail in India
G. RAGHURAM, Indian Institute of Management, Ahmedabad, India
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Development of High Speed Trains in India
Girish PILLAI, Ministry of Railways ,New Delhi, India
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High-Speed Rail in India: Selection of corridors and Impacts on energy and emissions
Sarbojit PAL
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Korea.  National Presentation
Jun LEE, Department of Railway Research, Seoul, Korea
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High-speed trains can compete successfully with road, air and conventional rail passenger transport services on densely trafficked routes over medium-long distances where willingness to pay is sufficient at the relatively elevated fare levels needed to cover costs. High-speed rail investments can also relieve congestion on the conventional rail network where income levels are sufficient and ticket prices reflect costs on the conventional network. And the capacity for high-speed rail to provide fast city centre to city centre services creates new possibilities for day-retrun business trips and short-stay leisure trips.

Very long cost recovery periods for investments in high-speed lines imply government involvement in one form or another in the financing of most high-speed rail investments. The very large investment costs mean that governments can be exposed to accumulation of extremely large debts, particularly if demand for high-speed services develops more slowly than expected. Where high-speed rail investments are designed to promote regional integration rather than meet commercial demand, significant subsidy from central and regional governments will be needed for the construction of infrastructure and possibly also for train operations.

For commercial viability the market has to be very deep. For a positive social cost-benefit ratio, typically of the order of 10 million passengers need to use the service in the first year of operation. For full coverage of the capital costs of construction and commercial viability of services, 30 to 50 million passengers may be required. Costs vary greatly, depending particularly on the amount of tunneling and grade separation works required by the terrain and accessing city centre stations. Costs escalate with the addition of stations to serve intermediate destinations and locations off the main line; serving intermediate stops can also undermine the time savings achieved by high speeds. Given the size of the financial risks it is extremely important to assess cost and expected benefits thoroughly.

The roundtable has been convened to examine the key factors that drive the costs of high-speed rail investment and review the economic benefits delivered by high-speed rail services on the basis of papers that review experience in a range of countries that have developed large high-speed rail networks. Participants with expertise on the economics of smaller scale high-speed rail systems will also be invited to the discussions. The Roundtable will be held in New Delhi in order to contribute to deliberations on the potential for investment in high-speed rail in India.