Mobility Evolution May Push High Speed Rail Forward

New technologies are influencing decisions around high-speed rail.

  • HSR can be 100% powered by renewable energy, making it zero carbon transportation
  • California, Florida and Texas are among the states now developing HSR projects
  • The capital costs and logistical hurdles required for large scale adoption are significant

High-speed rail (HSR) has been a reality for decades, but adoption in the US continues to lag. New thinking around mobility may potentially make the technology more accessible.

According to the US High Speed Rail Association, HSR is one of the more environmentally friendly modes of transport compared to cars, buses and airplanes. Moreover, it is the world’s greenest form of transportation, and can be 100% powered by renewable energy, making it zero carbon transportation.

To be sure, there are a small number of projects in the US including California HSR, All Aboard Florida and Texas HSR. But the capital costs required for large scale adoption are significant.

“HSR is expensive depending on where it is built, and it would be prudent to include public subsidy,” Cherian George, a managing director at Fitch Ratings told Icons of Infrastructure. “If it serves as a true point-to-point service where demand is high, it may have ability to support its own, for example along corridors like New York to Washington, DC where passenger volumes are high.”

California for example has made little progress on its proposed HSR project. The state in its most recent report increased the projected cost by 20% to roughly $77 billion, and pushed the planned completion date back four years to 2033.

Furthermore, the nation’s size and topography also makes the economics of high speed rail difficult. Building new rail lines requires securing land along a relatively straight path as trains cannot generally run at high speeds along too sharp a curve.

There is no sign that the appetite for HSR in the US has abated. However, Jean-Francis Strayer, head of P3 advisory at Grant Thornton, noted that construction needs to be backed by strong leadership in the public and private sectors.

“There are hurdles but it would be unfair to make a blanket statement that HSR has no future,” he said.

“There are hurdles but it would be unfair to make a blanket statement that HSR has no future.”
— Jean-Francis Strayer,
head of P3 advisory at Grant Thornton

Other options

While HSR drags its feet, new technologies that are focused on reducing travel times and congestion are gathering pace. The Hyperloop is among the most well-known.

Notably, Chicago Mayor Rahm Emanuel recently awarded Elon Musk’s Boring Company a contract to design, build, finance, operate and maintain the O’Hare Express System (OES) using hyperloop technology. The high-speed underground public transportation system known as the Chicago Express Loop is comprised of autonomous electric skates capable of carrying as many as 16 passengers underground. The electric skates are vehicles built on a modified Tesla Model X chassis.

The estimated $1 billon public-private partnership will, when built, provide express transportation service between O’Hare International Airport and downtown Chicago. The Boring company proposes to fast dig low cost tunnels that would make Hyperloop adoption viable and enable rapid transit across densely populated regions.

Some such as Nasir Khan, managing director & head of infrastructure, Americas at Natixis, maintain that there is no either-or proposition in terms of HSR and the Hyperloop.

“Hyperloop and HSR can co-exist,” Khan said. “Roads and airports are highly congested, so there is a real need for high speed rail travel, particularly for distances in the 200-600 mile range which is the sweet spot for HSR.”

Others in the market maintain that the hyperloop can be an annex to HSR. Where the HSR cannot be built along a straight alignment and away from densely populated areas, Hyperloop can step in. Moreover, Fitch in a June 2018 report noted that hyperloop systems could reduce traffic volumes, especially if coupled with autonomous vehicle technology, to make the “last mile” more seamless at either end of the high-speed rail line.

George noted that while investment in HSR will continue, the right-of-way on existing systems could be attractive for new technologies like Hyperloop to utilize. Though the technology would still have to be proven. Similarly, Khan noted that, while the potential around hyperloop is significant, it would be challenging to finance such a new technology without a guarantee or support from a credit worthy entity.

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