Australia high speed rail- will Japan be financing?

[bikkuri bahn]

Filed in FWIW category, but somewhat interesting...

 

 

The push for an east coast, high-speed, rail link has received a boost, with the Abbott government holding a series of high-level meetings with Japanese, Chinese, Spanish and French rail companies in Australia and abroad.

Trade Minister Andrew Robb said the talks had included discussions on financial models to make the project viable, despite its hefty estimated price tag of $110 billion and the government’s fiscal constraints.

Renewed interest in the project comes as Central Japan Railway Company declared Japanese tunnelling methods could strip 20-30 per cent off the projected cost. The company, Japan’s most profitable high-speed rail operator, has also revealed that Japanese government lender JBIC is prepared to bankroll construction if Australia shares the risk.

 

 

http://www.businessspectator.com.au/news/2014/8/19/debt-capital-markets/high-speed-rail-may-receive-japanese-backing

[Densha]

As always the Japanese government seems to think borrowing money is infinitely possible.

[katoftw]

Would never happen.  Public transport in Australia is a money pit.  As in most Western countries.

[ToniBabelony]

JR Central is of course the most profiting of all high-speed operators. All traffic has to go through their territory in order to connect the Kantō and Kansai area. I wonder how much it compensates for the loss on their more local traffic...

[Densha]

Sometimes I find myself thinking about what would happen if you'd put high tolls on highways and making trains cheaper to force people to take the train. Of course investments in the railway network (and especially also connecting public transport) has to be made before doing so, but I think it will greatly lower car traffic which is better for anyone. That's actually about how Japan did it right?

[westfalen]

Must be an election coming up soon, that's usually when they start talking about high speed rail.  If they actually did anything they'd have nothing to promise next time.

 

The Australian population need a massive change in their way of thinking about intercity passenger trains, between Brisbane/Sydney/Melbourne they see them as an uncomfortable all day or over night (two days if you go all the way) journey that costs substantially more than an airline flight that takes one and a half to two hours and that's what they associate high speed rail with because that's all they know and so say "No, we don't want it".  Unlike Japan and Europe rail doesn't factor into most people's travel plans here these days.

Edited August 24, 2014 by westfalen

[linkey]

It is a wishful dream to have High Speed Rail in Australia but sadly the government only uses it as an election tool and then don't continue to push for it as they place it into the very hard to deal with basket. Tim Fisher has been wanting to push for the High Speed Rail in his last few years in Parliment and outside of Canberra, but he too has gone all quiet about it.

[kvp]

The question is (as always) if there is a need for it. Above a certain distance, air travel is cheaper and faster. Australia is a huge country with great distances between urban centers. High speed rail there is only realistic for commuters, so the best network would be a high speed electric version of the redhens and their successors, much like the Yamanote line or any other modern urban/suburban line in Japan.

[katoftw]

The question is (as always) if there is a need for it. Above a certain distance, air travel is cheaper and faster. Australia is a huge country with great distances between urban centers. High speed rail there is only realistic for commuters, so the best network would be a high speed electric version of the redhens and their successors, much like the Yamanote line or any other modern urban/suburban line in Japan.

Brisbane to Sydney, Sydney to Melbourne.  Same within 100km at Toyko to Osaka, Osaka to Hakata.  The rest of the country would never seen rail ever.

[westfalen]

That's true, but between Tokyo and Osaka there are maybe a half dozen cities the size of Brisbane or Adelaide and Tokyo and Osaka together have a greater populatuion than the whole of Australia.  I think population, or lack thereof, rather than distance is seen as the biggest stumbling block.

[bikkuri bahn]

Is the air corridor between Melbourne and Sydney at capacity, or due for future growth? No big cities between Houston and Dallas, but JR Central is going to build a line there (of course the terrain is much less challenging, so costs are lower).

[miyakoji]

It's the Houston/Dallas line for sure? I usually don't believe something like that until I see it :).

[katoftw]

I thought the Texas train was dead in the water.

[disturbman]

Not completely. The body is still kicking. JR Central did announce they were ready to invest up to 10 billions in the project. This is still a possibility, but it might have to wait until CHSR finally break-ground to gather more momentum. As Miyakoji said, I won't put to much faith in it until I see it. However Texas HSR makes a lot of sense, it would have a solid business case.

[Ochanomizu]

hmmm....

 

A few comments:

 

I read today that Qantas and Virgin Australia (two major airlines in Australia), both recorded losses in excess of $2b.  That leads me to think that airfares are too cheap and prices might rise.

 

The proposed HST route between Brisbane and Sydney has been published in a 2013 report.  Just viewing the maps I can see several problems.

 

1. The central station in the Sydney CBD is.  But most of the population live west.  In fact, the report identifies that the demographic centre of the city is close to Parramatta, so why doesn't the HST go via Parramatta?

 

2. I look at the station for Newcastle.  It is called Ourimbah.  It is planned in the middle of nowhere.  But 7km west is the town of Maitland, which appears to have a local railway station and would have made a good interchange.  But then I read elsewhere that Newcastle is "ripping up" it's railway and demolishing its station.  So how do you get to Newcastle by train?  The key to the success of Shinkansen is the interchange and the link with relay and local rail services.  This has not been recognised in the report, or reflected in the maps.  I use Newcastle as an example, but I see the same problem at nearly every station.

 

3. About 120km of railway through Sydney will be tunnelled.  This is such an expensive option.

 

4. The link with Canberra, the nations capital, is a spur.  This planning decision is misguided.  At only an hour from Sydney by HST making Canberra a spur will reduce the number of services.  This has planning repercussions and restricts opportunities to commute to Sydney or Melbourne daily from Canberra.  The same is true for any town within 1 hour of a major city.

 

5.  There are too few stations.  Just between Sydney and Canberra there is one single stop.  Tokaido shinkansen has 9 stops across the same distance.  The stations, I guess, should be something like: Sydney, Parramatta, Liverpool, Campbelltown, Southern Highlands, Goulburn, Bungendore, Queanbeyan, Canberra.

 

6. Shinkansen, of course, operates Nozomi, Hikari, and Kodama services.  This level of sophistication is not apparent in the proposal.

 

You can get an overview here: http://en.wikipedia.org/wiki/High-speed_rail_in_Australia

 

Tokaido Shinkansen overview here:http://en.wikipedia.org/wiki/T%C5%8Dkaid%C5%8D_Shinkansen

[disturbman]

I read today that Qantas and Virgin Australia (two major airlines in Australia), both recorded losses in excess of $2b.  That leads me to think that airfares are too cheap and prices might rise.

Actually, Quantas domestic is posting a profit (AD 200m). Quantas losses were mostly due to Quantas international, Jet Star (HK & Japan) and book depreciation. VA domestic reported a small loss (AD 59m). There issues but they do not lie so much with the domestic market, rather an over-supply of international seats and a necessary change of business plan for Quantas which has seen its European operation being decimated since the late 90s. It needs to refocus its network.

 

On that subject. A more educated explanation than mine: 

Let's start with Domestic. Neither QF nor VA was prepared to concede defeat in a war that neither could win. Between VA aggressively pursuing Qantas on the Golden Triangle and Premium Transcon routes, and QF steadfastly standing by their somewhat artificial and totally arbitrary position of 65% market share, we have seen a mind-blowing amount of capacity thrown into the Australian domestic market over the past 24-36 months. Especially given that this coincided with the end of the Mining Boom, this had a very predictable outcome: yields were trashed. We have seen a competitive situation marked by vast amounts of unnecessary excess capacity and historically low fares as each undercuts the other to try and fill their planes. This, in a nutshell, is why QF and VA are both loosing money. If you read back over the past 10 years of financial results you will see that International is always loss making and that Domestic makes bumper profits. Those Domestic profits dried up, and the whole facade fell like a house of cards. Note this applies equally to both carriers, not just QF, as let's not forget that Virgin Blue was very profitable in their time.

 

As for the other comments. I do not think it is in any case fair to compare Australia's HSR plan to the Tokaido Shinkansen. There is different ways to run a profitable operation. Obviously France and Spain are better examples for Australia than Japan, and actually, this plans looks a lot like what has been done in these two countries. Direct services, few stops. HSR in France and Spain was thought has a "plane on rail" rather than a high speed commuter line.

Edited August 29, 2014 by disturbman

[E6系]

HSR in Australia? It would be ... two ... three services a day? :rofl:

[kvp]

Ok, let's calculate. What is the capacity of a 16 car modern shinkansen? Assuming an hourly service and 16 hours of operation a day, does the proposed corridor have enough potential passengers, who currently travel by air?

 

Ps: The japanese shinkansens are both long distance, interregio and commuter rails, because they provide all three services on the same tracks. This results in a rather high track utilisation rate. Newer lines that are built as long distance only and can't provide commuter routes because they avoid city centers are not really profitable even when the rather short long distance trains are full.

[disturbman]

Sydney-Melbourne was the 5th busiest air route in the world (excluding USA) with almost 7 million passenger a year if Wikipedia is to be believed. LA to SF was 7.5m.

Sydney-Melbourne: 7m
Sydney-Brisbane: 5m

It probably would work.

 

[kvp]

The capacity of one N700A set is 1323 seats. 1323 * 16 * 2 * 365 = 15 452 640 passengers per year with a hourly service in both directions.

 

From wikipedia:

"From 1964 to 2012, the Tokaido Shinkansen line alone has carried some 5.3 billion passengers, making it by far the most heavily used HSR line in the world. Ridership has increased from 61,000 per day in 1964 to 391,000 per day in 2012."

 

This means with 391000 passengers a day, the Tokaido Shinkansen could carry 7 million in 18 days.

 

"Tokaido Line Ridership figures (per year, millions of passengers):

Year: 1967 ... 2012
Ridership: 22 ... 143"

 

Domestic air travel on the same route is around 7 million passengers / year, so total passenger numbers are around 150 million trips a year.

 

An Australian HSR patterned after the Tokaido shinkansen could work, but wouldn't be too profitable, even if they build the line as single track, non elevated with bypass tracks only at certain stations. I think there is a financial reason why investors don't build HSR routes everywhere. If the Japanese government wouldn't finance the new routes, the JR companies would only build mini shinkansen, which is actually a viable technology for Australia. The same passenger figures are reached by OBB in Austria with slightly upgraded conventional lines and locomotive hauled push pull sets (Railjet trains). The upgraded lines can also be used to haul high speed freight trains and normal commuter stock and since OBB is using the same type of locomotive for both passenger and cargo trains, this is possible.

[disturbman]

:roll
 

First. You don't have to run 16 cars Shinkansen to have a profitable operation.
Second. 7m is plenty. In 1990, the Madrid-Seville line transported 4.7m passengers (it opened in 1992).

Third. If governments would not finance airports or roads, nobody else would probably either.
Fifth. 7m is the figure for one city pair only.
Sixth. Upgrades can be extremely costly and not bring the same service as a new line. My guess is the ROI of upgrading the conventional line between Sydney and Melbourne is lower than building a new one. The actual line is around 900/1000km long and it will not be possible to bring travel time down to a competitive level with air. After all, if it is possible to upgrade the whole line for 200kph operations, the trip will still take around 5 to 6 hours. True HSR should bring this down around 3.

For those interested, I think it will be good to read this blog on CHSR; the parallels are quite striking.