PROMOTING LOW CARBON TRANSPORT IN INDIA. Scenarios and Roadmap for Intercity Transport in India: The Role of High Speed Rail

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1 PROMOTING LOW CARBON TRANSPORT IN INDIA :

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3 PROMOTING LOW CARBON TRANSPORT IN INDIA : Authors P. R. Shukla Indian Institute of Management, Ahmedabad Minal Pathak Centre for Urban Equity (CUE) and Faculty of Planning, CEPT University Shivika Mittal National Institute of Environmental Studies, Tsukuba, Japan Subash Dhar UNEP DTU Partnership, Copenhagen, Denmark September 2015

4 UNEP DTU Partnership, Centre on Energy, Climate and Sustainable Development Technical University of Denmark This publication is part of the Promoting Low Carbon Transport in India project ISBN: Design and production: Magnum Custom Publishing New Delhi, India Photo acknowledgement: Front cover: Ilya Semyonoff Back cover: George W. Hamlin Disclaimer: The findings, suggestions and conclusions presented in the case study are entirely those of the authors and should not be attributed in any manner to UNEP DTU Partnership or the United Nations Environment Programme, nor to the institutions of individual authors.

5 Contents List of Tables and Figures Acknowledgements Abbreviations Executive Summary v vii ix xi 1. Introduction Background Intercity Transport: The Context Scope 2 2. High Speed Rail Background Global Experience Modal share Benefits of HSR Construction cost The Case for HSR in India Intercity Transport in India Investments in Transport Infrastructure Driving forces Scenarios About the Model Energy and GHG emissions Ahmedabad-Mumbai HSR Corridor About the corridor Mode share Travel time Alternative scenarios for Ahmedabad-Mumbai Conclusions and Roadmap References 39 Annexure 45 iii

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7 List of Tables and Figures List of Tables Table 2.1: Benefits of HSR 12 Table 2.2: Construction cost of HSR in different countries 14 Table 3.1: Share of railways in BAU and HSR Scenario 22 Table 4.1: Population, GDP and Travel Demand between Ahmedabad and Mumbai 27 Table 4.2: Comparison of travel time, cost and CO 2 emissions for intercity modes between Ahmedabad and Mumbai 28 List of Figures Figure 2.1: Length of HSR network in Selected Countries (km) 6 Figure 2.2: Share by country in Cumulative HSR length 7 Figure 2.3: Existing and Proposed HSR lines (2015) 7 Figure 2.4: Modal share in Passenger Transport US, EU, China and Japan 8 Figure 2.5: Share of high-speed rail in passenger transport in different countries 9 Figure 2.6: GDP per capita at the time of first HSR construction in different countries 10 Figure 3.1: Potential HSR lines in India 19 Figure 3.2: Mode share in BAU and HSR Scenario 23 Figure 3.3: Energy Demand by Fuel in BAU 23 Figure 3.4: Energy Demand by Mode 24 Figure 3.5: CO 2 Emissions from passenger transport 24 Figure 4.1: Proposed Ahmedabad-Mumbai High Speed Rail Corridor 29 Figure 4.2: Mode Share in Intercity Transport between Ahmedabad and Mumbai 31 Figure 4.3: CO 2 Emissions for Intercity trips between Ahmedabad and Mumbai (Million Tonnes) 31 v

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9 Acknowledgements We wish to thank Dr. Francesca Pagliara and Ms. Kamala Ernest for reviewing this report. The report has greatly benefitted from their critical and insightful comments and suggestions. We are especially thankful to the Airports Authority of India for their support with data on air traffic between Ahmedabad and Mumbai. Our special thanks go to Ms. Kamala Ernest from UNEP, for her support and valuable input in the preparation of this report. A special thanks to Ms. Josephine Baschiribod for proof reading and Ms. Surabhi Goswami for overseeing the layout of the report. Authors vii

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11 Abbreviations BAU CO 2 CO 2 e GoI GDP GHG HSR HSRC JICA Kmph LCS LCT NAPCC MoEF MoEF & CC Pkms UNEP Business-As-Usual Carbon dioxide Carbon dioxide equivalent Government of India Gross Domestic Product Greenhouse gases High Speed Rail High Speed Rail Corporation of India Limited Japan International Cooperation Agency Kilometres per hour Low-Carbon Scenario Low-Carbon Transport National Action Plan for Climate Change Ministry of Environment and Forests Ministry of Environment and Forests and Climate Change Passenger kilometres United Nations Environment Programme ix

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13 Executive Summary India s intercity transport demand is mainly met by road and rail. A small part of the demand is met by air though growth of air traffic has been fast in the last decade. Growth in population, urbanization and incomes is expected to propel travel demand in future. Given the current trend of declining share of rail, this demand will largely be met by road-based transport and air, resulting in challenges of national energy security and greenhouse gas emissions. Increased investments in rail for improving efficiency of railways and reducing travel time would address the competitiveness of railways and arrest the decline in rail share in total intercity transport. The Indian Railways VISION 2020 envisages building four high speed corridors of 2,000 km by 2020 and further expansion in the future. This report looks at the current intercity transport landscape in India and analyses future scenarios of intercity passenger transport and the role of HSR within these. The national scenarios span from 2010 to 2050 and are analysed using a bottom up energy system model: ANSWER MARKAL and are complemented by a case study of Ahmedabad- Mumbai high speed corridor. Key findings and recommendations 1. HSR creates opportunities for regional economic development by improving connectivity between large urban centres, as well as other small and medium cities along the corridors, and generates socio-economic benefits by improving access to employment, health, education and time savings. 2. HSR can deliver a very sizable reduction in energy in the long-term and, therefore, contribute to energy security. The energy reductions also provide a significant reduction in CO 2 emissions which get further enhanced when electricity is decarbonized (Figure 1). Significant benefits can therefore be realized if policies for transport and energy sector are integrated with climate goals. 3. Integrating with other modes, including regional rail and bus services, is essential to enhance the catchment of HSR. National governments can therefore consider innovative funding mechanisms that facilitate private sector participation. State and local government can support for building complimentary infrastructure. 4. HSR can complement as well as compete with air travel. It will compete with air on shorter hauls (less than 1,000 km) and reduce demand for air, and at the same time improve connectivity of hub airports with surrounding cities and therefore complement long distance air travel. 5. Upfront investments for developing high speed rail corridors are high, however, the sustainability benefits are diffused and occur over a longer time frame. Therefore, investments for HSR would have to be viewed comprehensively for the long-term development benefits they generate. 6. HSR can provide an opportunity to develop domestic manufacturing capacity for wagons and allied infrastructure. xi

14 7. The analysis of the Ahmedabad-Mumbai corridor shows that introduction of HSR increases competition with air and road post Consequently, the share of rail increases and rail meets over half the total travel demand in Due to a shift from air to rail and partly from road to rail, CO 2 emission savings increase gradually post 2020 reaching 0.2 million ton annually by 2050 compared to the No HSR scenario. The most significant benefit of HSR will be balanced regional development through improved connectivity of the cities located on the corridor. Figure 1: CO 2 Emissions from passenger transport The introduction of high-speed trains has revived the share of rail transport in many countries. In India, additional capacity through HSR will help alleviate congestion on major corridors and help increase the share of rail. Increasing travel demand, personal incomes and affordability and presence of high density corridors make a strong case for HSR in the future of intercity transport in India. HSR consumes less energy compared to air transport and in future, as electricity gets decarbonized, it will also deliver substantial mitigation benefits. However, this report makes a case for viewing HSR beyond costs or immediate mitigation benefits, and as a larger sustainability option leading to overall regional development by connecting several small and medium cities in India compared to air transport where only select few cities benefit. xii

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16 Photo credit: Brian Stephenson

17 1. Introduction 1.1 Background India is currently the fourth largest emitter of greenhouse gases (GHG) globally. The transport sector accounts for 13% of India s energy-related CO 2 emissions (MOEF, 2010), and, as such, opportunities exist to mitigate GHG emissions and make India s transport growth more sustainable and climate compatible by aligning objectives of development and climate change. India s National Action Plan for Climate Change (NAPCC) recognizes that GHG emissions from transport can be reduced by adopting a sustainability approach through a combination of measures, such as increased use of public transport, higher penetration of biofuels, and enhanced energy efficiency of transport vehicles (GoI, 2008). This document is produced as part of a larger research project on Promoting Low-Carbon Transport in India, an initiative of the United Nations Environment Programme (UNEP), hereafter referred to as the Low-Carbon Transport (LCT) project. The key objectives of the LCT project are as follows: a) Delineating an enabling environment for coordinating policies at the national level to achieve a sustainable transport system. b) Enhancing the capacity of cities to improve mobility with lower CO 2 emissions. The LCT project has been endorsed by the Ministry of Environment and Forests (MoEF), Government of India, and is jointly implemented by the UNEP DTU Partnership, Denmark (UDP); Indian Institute of Technology, Delhi (IIT-D); Indian Institute of Management, Ahmedabad (IIMA); and CEPT University, Ahmedabad. 1.2 Intercity Transport: The Context Per capita mobility in India in 2010 was around 6,000 km, which is lower than most developed countries. Driven by increase in population, GDP and urbanization, intercity passenger demand is expected to reach nearly 26,000 bpkms by 2050 an increase of 4.3 times relative to 2010 levels. A prominent trend in recent years is the declining share of rail transport in overall intercity passenger travel, and a corresponding increase in the share of air and road-based modes. Projections based on current trends show that future intercity passenger demand will largely be met by road-based transport and a growing share of air transport, resulting in challenges of national energy security and greenhouse gas emissions. The demand shift towards low-carbon modes like rail would underpin the low-carbon transition of transport in India. Transport sector investments and economic development are closely related since they improve accessibility for passengers and freight transportation (Gutierrez & Urbano, 1996 for EU; Li S.M. & Shum Y.M for China). However, the investments in transport infrastructures are only one of the necessary conditions (Gutierrez et al., 2010), and need to be matched by other production factors. The transport sector in India commands a high share of infrastructure investments, which accounts for around 2.6% of the GDP (NTDPC, 2014).Planned transport infrastructure investments in India include: projects for expansion and upgradation of roads and highways, capacity additions and upgradation of existing 1

18 railways, electrification of rail corridors, dedicated freight corridors, expansion of air infrastructure constructing high speed rail corridors and mass transit in cities. Transport sector investments in India highlight the focus on multiple benefits of meeting the transport demands and delivering environmental and development benefits (Shukla and Pathak, forthcoming). Railways face strong competition with air and buses for intercity movement. The Government of India has planned to boost the share of railways in intercity passenger movement by upgrading infrastructure to increase the speed of existing rail lines, introducing high speed trains on select corridors, improving overall rail infrastructure and coach services. Recently, the Ministry of Railways, Government of India, has formed the High Speed Rail Corporation of India Limited (HSRC) for the development and implementation of high-speed rail projects. High speed rails have been suggested as a good substitute for conventional railway services on routes where high capacity is required, to reduce time, to improve the railway services against other modes ultimately resulting in mode substitution (Givoni, 2006). The report examines the case of HSR as a sustainable transport option for India, keeping in mind that increasing incomes will lead to higher travel demand by air and road, economic growth and high transportation demand between large urban centres. The ability of HSR to link small and medium cities can lead to a more geographically balanced development. 1.3 Scope The Indian Railways VISION 2020 envisages a two-pronged approach to bringing high speed rail in the country. The first strategy involves using conventional technology to increase the speed on segregated passenger corridors on trunk routes, from the existing kmph to kmph. The second approach involves identifying viable intercity routes to build advanced high speed corridors for speeds up to 350 kmph. These plans target building four corridors of 2,000 km by 2020 and planning for eight other corridors. These interventions are expected to deliver significant economic, social and environmental benefits. However, no explicit analysis of these considerations is available publicly. In this report, the benefits for energy security and mitigation of CO 2 emissions are analysed, thereby contributing to the understanding of the impacts of HSR in a limited way. Scenario analysis methodology is used for this purpose. The report is divided into five sections. The first section is the introduction, and sets the context and scope of the report. The second section very briefly looks at the historical evolution and progress of HSR projects globally. The third section presents the current intercity transport scenario in India and its future scenarios, including the demand, key modes and the competition between these. The section explores how the introduction of HSR will influence modal split and, in turn, energy use and emissions. This is done by creating alternative storylines for intercity passenger transport, mainly with respect to high speed rail. The fourth section details the case study of the Mumbai-Ahmedabad High Speed Rail corridor and its potential impacts on mobility, GHG emissions and socioeconomic impacts. The final section concludes with a roadmap for enhancing the share of rail in India. High Speed Rails can help address future travel demands, reduce congestion along major corridors, and its proposers claim it will achieve the simultaneous benefits of improved mobility, economic development along the transport corridor, energy security and climate change mitigation. The authors analyse some of these claims and identify lessons for policy makers and managers planning rail projects in the country. Since the results are supported by long-term modelling to 2050, the report emphasizes viewing these investments in the long run, instead of the short-term views that dominate the current debate. 2

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20 Photo credit: Minal Pathak

21 2. High Speed Rail 2.1 Background The High Speed Rail System comprises of the infrastructure system, rolling stock and operating conditions (UIC, 2015). High speed trains globally differ in their technology, infrastructure, including rolling stock, and, consequently, achievable speeds. Currently, high speed rails can achieve speeds ranging from 200 kmph to 350 kmph depending on the technology and infrastructure. The European Union defines High Speed Rail in terms of infrastructure, speed and rolling stock. Trains that can operate at the maximum speed of 250 kmph for new lines, and 200 kmph on existing lines are defined as high speed rail (Givoni, 2006). In the literature, HSR system is also classified according to the type of connection with the neighbouring cities, i.e. non-stop between the metropolitan areas, serving intermediate cities between metropolitan areas, and the relationship between train technology and infrastructure (Ureña et al., 2009; de Rus et al., 2009). Presently, dedicated high speed rail lines are able to achieve speeds over 350kmph, and upgraded conventional rail lines are able to reach 250 kmph 1. High-speed rail has been suggested as a good substitute to conventional railway services on routes where there is a need to increase the capacity, improve the service reliability and reduce the travelling time (Givoni, 2006). With the increase in running speed up to kmph, high speed rail service can compete with air over the medium distance up to 1,000km. HSR has less access, egress and waiting time compared to air transport (Rus, 2012). Based on past experiences, it has been estimated that when high-speed rail travel time is less than 2.5 hours, 80% of passengers switch from air to high-speed trains (UIC, 2012). However, this competitive advantage reduces for long distance travel (approximately 2,000 km), as air transport has less in vehicle time than HSR. Aside from the travel time difference between the HSR terminal and air transport, other factors like service quality, service frequency, location and accessibility to airport and railway station from city centre, and load capacity also have an influence on the competition between air and rail transport (Dobruszkes, 2011). 2.2 Global Experience High-speed rail is not a new technology. Historically, high-speed trains have been around since the first line opened in Japan between Tokyo and Osaka in After the success of the Tokaido Shinkansen, which started in 1965, the Japanese government adopted the Shinkansen Development Law in The Shinkansen network has expanded significantly since then, with the total length of high-speed railway network in Japan growing to 2,620 km and carrying around 292 million people in Accessed March 1, The upgrade of conventional rail lines requires some modification to tracks but new rolling stock however the speed achieved will depend on the track infrastructure e.g., trains running on narrow gauge would be difficult to upgrade to a speeds above 150 km per hour 5

22 Figure 2.1: Length of HSR network in Selected Countries (km) kms China Japan Italy Germany France Spain Denmark Source: NBSC (2014); MLIT (2014); EU (2014) The success of Shinkansen in Japan triggered HSR investments in other countries. The French National Railway decided to build a high-speed railway line in 1981aiming to increase the capacity on the congested route between Paris and Lyon. This was the first HSR line to open in Europe. After the commencement of TGV-Sud-Est in 1985, the network extended further to other areas, such as south-western France, the south of France, eastern France, Germany, Belgium, and Holland. Other European countries like Spain, Germany and Italy also adopted this technology and have HSR networks (Figure 2.1). Learning from the experiences of Europe and Japan, Asian countries, including Taiwan, Korea and China, began to invest in dedicated high-speed lines. Globally, HSR networks cover over 20,000km, 60% of which is in Asia and the rest in Europe, with a very small share of other countries including the United States. The US has an ambitious plan to introduce over 17,000 miles of national high speed rail network, which includes the California HSR corridor (Box 1) (USHSR, 2015). The first high-speed railway connection was inaugurated in 2008 between Beijing and Tianjin in China and since then, China s high-speed rail network has expanded at a rapid pace. This was an outcome of aggressive government proposals to invest in HSR infrastructure, resulting in a significant expansion of HSR network in the country in a relatively short span of time. With a length of over 6,000 km, China has a third of the global HSR length, which equals the aggregate share of European countries (Figures 2.1. and 2.2). 6

23 Figure 2.2: Share by country in Cumulative HSR length Italy 5% Taiwan-China 2% South Korea 2% Germany 7% Turkey 3% USA 2% Belgium 1% Netherlands 1% UK 1% China 37% France 11% Spain 12% Japan 16% Source: UIC (2015) Figure 2.3: Existing and Proposed HSR lines (2015) China Japan Spain France Germany Italy Turkey South Korea USA Taiwan-China Belgium The Netherlands United Kingdom Switzerland Poland Portugal Russia Sweden India Iran Saudi Arabia Morocco Brazil kms In operation Under construction Planned Source: UIC (2015) 7

24 There is a renewed impetus to augment rail infrastructure, in particular the HSR. Several countries have initiated ambitious investments in HSR projects aimed at expanding networks and introducing new lines (Figure 2.3). HSR has evolved significantly with respect to technology, speed, safety and comfort, and this differentiates the new HSR capacity additions e.g. the proposed HSR line in Japan along the existing corridor between Tokyo and Osaka will run on magnetic levitation, and proposes to double the passenger capacity and half the travel time. Figure 2.4: Modal share in Passenger Transport US, EU, China and Japan Source: EU (2014) 2.3 Modal share Globally, road transport dominates the share in passenger transport (Figure 2.4). Rail transport has a sizeable share, however, in several countries, it has lost significant share to road and air transport. The introduction of high-speed trains has revived the share of rail transport in many countries. For example, since the introduction of Shinkansen in 1965, the share of high-speed railways in total demand by rail in Japan has increased from 4% in 1965 to around 24% of total rail passenger-km in Figure 2.5 shows the changing share of HSR in passenger kilometres by rail between the years 2000 and 2010 in the EU, USA, Japan and China. China has shown a remarkable growth from a very small share at inception to over 10% in In Europe, the share ranges from as low as around 10% to over 30%. The 8

25 shares of HSR in Spain and France are higher at 50% and 60%, respectively. Overall, the share of HSR in total rail kilometres has increased to 30% in the EU27. Within the EU, high-speed rail networks have expanded from domestic to international lines. The Eurostar between London and Paris transported10 million passengers in 2013 and earned an operative profit of 54million 2. The railway share in total intercity passenger travel increased 2.5 times between Brussels and Paris after the introduction of HSR service (UIC, 2012). Figure 2.5: Share of high-speed rail in passenger transport in different countries Source: MLIT (2014), EU (2014), NBSC (2014) 2 Accessed March 6,

26 Global experiences show that the level of economic development was a major influencing factor for the introduction of HSR. As income grows, the opportunity cost of time increases and people shift towards faster modes of travel (Schafer & Victor, 2000). Moreover, comfort and reliability also assume importance with rise in income. The construction of high-speed railways in European countries started when the per capita GDP was in the range of USD 17,000-27,000 (Figure 2.6). However, in the case of Asian countries like Japan and China, the construction began at relatively early stages of development. For instance, China s per capita GDP was around USD 3,000 when the construction of the first HSR line between Qinhuangdao-Shenyang commenced in Figure 2.6: GDP per capita at the time of first HSR construction in different countries Source: World Bank database High population density of connecting cities was also an influencing factor for the introduction of several HSR corridors. In these cases, the high-speed railway lines were built to increase the capacity, in order to satisfy the high travel demand between densely populated cities. A high frequency of high speed trains with advanced signalling systems increases the passenger carrying capacity on overcrowded routes connecting large cities. 10

27 The first high-speed rail operation started between Tokyo and Osaka, where the population density was in the range of 2,000-3,000 persons per square kilometre. The transport demand generated due to the high concentration of population rationalised the HSR projects in countries like China and Japan, despite the relatively low per capita GDP at the time of construction (Vickerman et al., 1999; Gutiérrez et al., 1996). 2.4 Benefits of HSR High speed rails transport more passengers per unit of energy compared to all other modes, including regional suburban rail, air, bus and private car (UIC, 2010). In recent years, aircraft efficiency and fuel economy for passenger cars has improved substantially. Currently, new aircrafts are 20-30% more efficient than older ones (Sims et al., 2014). Although aircraft efficiency is projected to undergo improvements in the future, these will be slow due to long aircraft life and limited options for fuel switching, except from biofuels. Fuel economy standards for passenger cars are also expected to improve substantially in the future. Meanwhile, HSR will benefit from energy efficiency through advanced technology and design, further decarbonisation of electricity and other measures including regenerative braking (ibid). High-speed trains offer the advantages of improved mobility through comfort, and convenience through seamless connectivity with local transport modes, compared to air travel. Compared to conventional rails, time savings from high-speed rails are significant. This also includes time saved from travelling to the terminals within the city. As an alternative against air travel, HSR offers convenience through better connectivity to local transport infrastructure. Since HSR can use rail infrastructure within cities, time for intra-city commuting to and from terminals can be reduced through strategic planning of stations within cities. Total CO 2 emissions per 100 passenger kilometres by HSR are four times less than air travel and three times less than car travel (UIC, 2010). However, CO 2 emissions depend on a number of factors, including the design of the system (speed and distance between stops), capacity utilization 3 and carbon content of electricity. There is a discussion over high-speed rails contributing to large emissions in the short-term if embedded emissions are considered. However, research shows that high traffic volumes could recover costs and balance construction emissions, provided most of the traffic diverted from other modes is from aviation, and the project does not involve the extensive use of tunnels (Westin and Kageson, 2012). Table 2.1 highlights the reported benefits of HSR on social, environmental and economic dimensions. 3 Accessed April 18,

28 Table 2.1: Benefits of HSR Dimensions Impacts References (Z. Chen & Increase the number of tourist arrivals Haynes, 2015; Impact on tourism Have impact on travel destination choice Masson & Petiot, Boost the tourism market 2009; Pagliara, 2014) Increase in real estate prices (Andersson, Shyr, Increase in productivity due to time saving & Fu, 2010; Chen Economic Impact Stimulated economic growth in the nearby & de Abreu e cities Silva, 2014; Ginés De Rus, 2012; Increase in average market potential for the Zheng & Kahn, cities connected by high speed train due to 2013) better accessibility Social Impact Better accessibility to health and education centres Better social cohesion (Gines de Rus & Nombela, 2007; Givoni, 2007a; UIC, 2011) Impact on environment Less pollutant emissions compared to air (for example: journey between Heathrow and Paris by aircraft results overall in three times more emissions of pollutants than by HSR) HSR is on average 2-5 times more energy efficient than air and cars Shift of traffic from energy intensive mode like air to HSR, due to comparable speed for medium distance travel (Chester & Horvath, 2012; Givoni, 2007b; Kamga & Yazici, 2014; Miyoshi & Givoni, 2014) High speed rail is also more efficient on land use an average high-speed line uses 3.2 ha per km compared to 9.3 ha per km for an average motorway (UIC, 2012). Land impacts can be significantly reduced if new high-speed lines are laid out parallel to existing motorways. Time savings is one of the most significant benefits of HSR over conventional rail and road. HSR has been shown to be more time efficient compared to air for distances below 1,000 km, if the access and egress to airports is considered. HSR also delivers multiple benefits including: revitalizing cities, encouraging highdensity real estate development along corridors, boosting the development potential of smaller cities along the corridor, providing employment access and choice to workers through better connectivity, linking cities into integrated economic regions and enhancing tourism 4. Moreover, in comparison to air transport that links two cities without any stopovers, HSR connects many more mid-cities and also several smaller towns through feeder lines that facilitate more balanced development along the high-speed rail corridor(dutzik and Steva, 2010; UIC,2012; UIC,2010). For example, areas surrounding Frankfurt-Cologne where high- 4 Accessed April 18,

29 speed rail stations were built, witnessed a 2.7% rise in overall economic activity compared to the rest of the region (Dutzik and Steva, 2010).High speed rail reduces congestion on conventional rail and road and is also safer. Recognizing the multiple benefits of HSR, the state of California has initiated an ambitious project connecting San Francisco to the Los Angeles basin with HSR, which is expected to deliver a range of benefits including emission savings of 1.3 million tonnes of CO 2 e at the end of Phase I (Box I). Box 1: High Speed Rail in California The state of California is one of the most important actors in the United States in terms of green development. California has achieved its success with almost no federal or international support. With the strong intention to take action to limit climate change, in 2006 the state launched, under Arnold Schwarzenegger s mandate, the Global Warming Solutions Act better known as law AB32. Through this law, the state has committed itself to reducing greenhouse gas emissions to 1990 levels by 2020 and reducing them 80% by An important milestone in California s green agenda is the High Speed Rail connecting the mega regions of the state. According to the current plans, a high speed rail link will connect San Francisco to the Los Angeles basin by With a speed of over 200 miles per hour, this will cut travel time to less than three hours. The state s links will further expand, totalling 800 miles, connecting other urban centres. The HSR is seen as an important part of the overall strategy of meeting California s climate goals. High Speed Rail Authority s GHG Report to the Legislature highlights the low-carbon benefits of HSR. At the end of Phase I, the project will reduce 1.3 million tonnes of CO 2 e as a result of offering mobility choices, and consequently decreasing vehicle miles travelled by passenger vehicle and airplane. The project is seen as part of the sustainable growth strategy that will reduce traffic and airport congestion and energy dependency, contribute to economic development and a cleaner environment, create jobs and preserve agricultural and protected lands. Source: Accessed May 15, Construction cost High speed rails need significant upfront investment for the development of dedicated tracks, stations and signalling systems. The construction costs depend on a number of factors including type of tracks, land acquisition cost, choice of technology maximum operating speed, number of tunnels, bridges and viaducts involved, number and scale of stations (Ollivieretal.,2014;Peterman,2013). The construction cost of the high speed line increases with the operating speed of the train as advanced signalling system, limited curvature, modest gradients and several other design modification are required at higher speeds. The cost of building HSR on level terrain is more cost effective compared to building special structures like bridges or tunnels in order to accommodate special topographical features including rivers and mountains along the route. 13

30 Table 2.2: Construction cost of HSR in different countries Country USD million per km China Europe California 52 India 20 Source: World Bank (2014) Globally, the construction cost per km of HSR varies between USD 17 and 52 million (Table 2.2).The construction cost is low in China compared to other countries due to low labour costs, domestic capacity to manufacture construction equipment and standardization of design and manufacturing process of construction equipment like bridge beams and slab track. Upgrading the existing tracks and signalling system to increase the speed has a lower cost than constructing a dedicated track especially for HSR. However, topographic features of existing tracks place limitations on the potential speed improvements. It has been argued that high speed rails are an expensive solution. However, given the multiple benefits of HSR, described in Section 2.4, its cost should be evaluated on the basis of the value it generates at the local, regional and national levels. In addition, the shift to rail will save funds on aviation infrastructure and facilities. 14

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32 Photo credit: Daniel Simon 16

33 3. The Case for HSR in India 3.1 Intercity Transport in India Effective transport connectivity is essential for economic development. India s transport sector is a rapidly growing sector, contributing 6.6% of India s GDP. Despite its significant growth, the sector suffers from capacity constraints, poor infrastructure conditions and inefficiency (World Bank 2013). Presently, road transport dominates intercity transport in India with a share of over two-thirds, followed by rail and a limited share of air transport (Dhar and Shukla, 2015) (Annexure 1). There is extensive air connectivity between larger cities, which is expanding rapidly. Road transport mostly includes buses operated by State Road Transport Corporations, private companies and private car transport. These are mainly high-density short-haul trips, preferred due to the unavailability of other efficient alternatives, such as rail-based public transport systems (Gota, 2012). The share of cars in intercity road transport has increased due to higher incomes and improvements of selected highways in the country. The highway network in India, on a length per square kilometre basis, is among the highest in the world. However, most highways in the country are narrow and congested with poor surface quality (World Bank, 2013). In addition, a common network between passenger and freight transport adds to problems for both passenger and freight transportation through rail (Pangotra and Shukla, 2012). Indian railways take up a significant share of intercity transport in the country. First introduced in 1853, this is the largest railway network in Asia, with a ridership of nearly 23 million passenger kilometres daily (GoI, 2012). Between 1951 and 2011, rail passenger traffic has increased by six times from 1.3 billion to 7.8 billion. During this period, the rail network has also expanded substantially and has a network length of 115,000 km and connects 7,500 centres. Indian Railways, however, suffer from huge capacity constraints and poor infrastructure. Consequently, the share of rail in intercity transport has been decreasing. The share of rail in overall motorized passenger travel has dropped from over 40% in 1970 to 11% in 2010 due to high competition from road transport. 3.2 Investments in Transport Infrastructure The transport sector took 45% of the total infrastructure investments and 2.6% of GDP in the eleventh plan period, 2007 to 2012 (GoI, 2012). Key focus areas of the Government of India include expansion and modernization of transport infrastructure, including expansion and upgradation of roads and highways, reducing congestion in railways, investments in dedicated freight corridors, expansion of air infrastructure and investments in high speed rail. Intercity passenger travel is expected to increase significantly in the future (Dhar & Shukla, 2015; NTDPC, 2014) due to rapid urbanization, increasing personal incomes and improved infrastructure. Indian Railways, however, has seen a fall in the shares of both passengers and goods transported over the last 60 years. The government of India recognizes the implications of this modal transformation on energy security. For intercity passenger transport, policies aim to increase rail competitiveness by raising the average speed and improving efficiency. 17

34 The Indian government has set an ambitious agenda for introducing HSR in the country. The Diamond Quadrilateral project of the Government of India aims to establish an HSR quadrilateral that will connect the four metro cities in India i.e. Delhi, Mumbai, Chennai and Kolkata. Presently, feasibility studies are on-going for three corridors, and other corridors are identified for pre-feasibility assessments (HSRC, 2015). The Railways Vision 2020 issued by the Ministry of Railways (MOR), government of India, plans to build a 2,000 km High Speed Railways Network (HSR) by 2020(Figure3.1).The proposed Diamond Quadrilateral HSR network will link the four metro cities of India 1. These are mainly high-density corridors and range from km in length 2. In February 2012, the Expert Group for Modernization of Indian Railways recommended undertaking a detailed study for selected corridors. Currently, a feasibility assessment for three projects is in progress. A high speed rail line between Mumbai-Ahmedabad is the first line which has been undertaken in a detailed feasibility study. The Mumbai-Ahmedabad corridor is explored in detail in Chapter 4. In order to facilitate HSR infrastructure, the Ministry of Railways, government of India, has created a special purpose vehicle, the High Speed Rail Corporation of India Limited (HSRC). HSRC will deal with all aspects of HSR in India, including conducting technical analysis and feasibility studies, exploring financing models all stages of project development from plan to execution, construction, operation and maintenance Driving forces Economic growth and travel demand In 2008, the average distance per trip was 229 km, while the average distance per trip for premium segments was 624 km (GoI, 2010). Currently, rail transport infrastructure in India suffers from a significant gap between supply and demand. The average occupancy ratio 4 between 2004 and 2008 ranged between 250 and 300 per coach, indicating huge overcrowding. For second class coaches 5, the occupancy ratio ranged between 400 and 500 (GoI, 2010). For longer rail journeys, advance bookings are made nearly 120 days ahead of the trip. This imposes a restriction on mobility choices, especially for the income group that cannot afford to travel by air and, therefore, would only have to opt for road transport (buses, taxis and personal cars).high-speed rails will add new capacity along congested corridors, thereby catering to some part of unmet demand. It will also allow the connecting of regional centres to the network, which may not be connected by air. India s per capita GDP in 2010 was USD2, 983, in PPP terms. Since HSR involves huge upfront costs, it is argued that this is an expensive solution for India. According to OECD estimates, India s per capita GDP is expected to reach USD5,000, in PPP terms, in 2020 which corresponds to Japan s per capita GDP in 1965 when the first high-speed train service started between Tokyo to Osaka. 1 Delhi, Mumbai, Kolkata and Chennai 2 Accessed March 1, Accessed on September 16, Occupancy Ratio: average number of passengers to total seating capacity or seats offered, multiplied by 100 (Singh, 2006). 5 Indian trains typically have three classes: first, second and third class, with the highest ticket price for the first class. 18

35 Figure 3.1: Potential HSR lines in India Sources: Goyal A. (2015); GoI (2015) 19

36 Urbanization and city regions India s urban population is approximately 384 million, of which a large part still resides in small and medium cities (less than million).however, the number of million plus cities is also increasing quickly (Singh, 2012), and in 2011 there were 43 cities with a population of more than 1 million. As more economic opportunities exist in the million plus cities, a large number of people commute for work from smaller cities to the million plus cities. Economic growth and the corresponding rise in personal incomes will also increase leisure trips. With the growth of metropolitan suburbs, India s spatial transformation is occurring rapidly. There is a recent debate on whether the benefits of this transformation are spreading uniformly over space and whether there is a need for interventions that can support the spread of economic activity without impacting overall economic development (World Bank, 2013). From a spatial equity perspective, HSR can help in redistributing economic development and population density by enhancing opportunities for the smaller cities (less than million) along the corridor. HSR can facilitate the labour and residential market for the larger cities, and open up new economic and territorial opportunities for the intermediate cities (Garmendia et al., 2012). Regional development depends a great deal on the connectivity of production centres to markets. Highspeed rail improves connectivity between urban centres, thereby playing an important role in facilitating socioeconomic development. Efficient intercity travel can improve connectivity, provide better access to regional markets, take advantage of agglomeration forces, and lead to reduced transportation costs. There is a relationship between centrality of regions and economic wealth (Ahfeldt and Federson, 2010) and, therefore, investments in national and regional infrastructure facilitates socioeconomic development and enhances competitiveness of urban centres. Recognizing the potential of transport connectivity to enhance economic growth at a regional level, the Government of India has focused in recent years on large intercity transport projects. The Delhi- Mumbai Industrial Corridor is one such project aimed at improving regional connectivity and facilitating economic development (DMICDC, 2015). Evidence shows a modal shift from air transport for rail journey times of around3 hours, as well as generation of new trips. Studies have shown that the introduction of HSR has resulted in altered patterns of regional travel by expanding the access to major urban centres (Amos et al., 2010). High-speed rails in India will facilitate the horizontal integration by improving connectivity of cities with each other and unifying the region. A study looking at HSR infrastructure in India concluded that adding HSR along the Bangalore-Mysore corridor would improve social and economic linkages between intermediate cities. This will generate secondary impacts of local economic development in these small towns, with improvement of infrastructure and value added to local businesses (Verma et al., 2013). Presence of high-density corridors High Speed Rail (HSR) is especially suited to replace short-distance passenger air travel in some circumstances, such as spatial corridors with high densities. The European and Japanese experience has shown HSR to generally be competitive with air travel on routes of up to miles, where there exists high demand for intercity travel and where several high-population areas can be connected along a single corridor Accessed on April 19,

37 The presence of several high-density corridors in China has greatly influenced the success of HSR. It has been stated that, high-speed rail investment is difficult to justify when the expected first year demand is below 8 10 million passengers for a line of 500 km (de Rus & Nombela, 2007). Based on the European experience, it has been suggested that linking large urban centres could generate a ridership of million passengers, which would ensure the viability of HSR operation (Vickerman, 1997). India has several such corridors for example, the Ahmedabad-Mumbai corridor had a ridership of 18 million in Intermodal competition Presently, Indian trains operate at a maximum speed of around 130 kmph for the majority of trains, with a few express trains achieving upto kmph. Railways have started losing share to modes like road and air for intercity travel due to capacity constraints and inadequate connectivity with other modes, which can lead to higher total travel time by rail. Air transport has already witnessed a rapid growth in the last decade, and the demand is expected to increase further with the rising incomes of future travellers. In addition to increasing the capacity of railways, HSR lines on major corridors will compete with air in the future, improving competitiveness of rail against air transport. Globally, air traffic has been found to be lower on a number of routes where the modes compete (Albalate and Bel, 2012; Jiménez and Betancor, 2012; Cheng, 2010), however, in cases of hub airports with internal HSR stations, HSR could have a complimentary impact (Albalate et al., 2015). The modal shift of business travellers with greater ability to pay to HSR will reduce congestion on existing railways and deliver mobility benefits to a large section of middle and low-income travellers. Currently, infrastructure upgradation is happening sequentially, with slow trains being upgraded to medium speed trains (160 kmph). Early investments in HSR on major rail corridors in India can offer the opportunity for leapfrogging by significantly increasing capacity on existing corridors. Improving linkages between regional centres can further increase the catchment area of HSR beyond the cities connected on the HSR line. HSR fares are higher compared to those of conventional rail. The passenger profile is expected to change in the future. The opportunity cost of time will rise with increase in per capita income, which will result in traffic shift towards faster modes of transport, like air and car, for intercity travel. HSR will become a convenient access for business trips where affordability and time value may be higher. Yao and Morikawa (2005) have found business railroad travellers to be more sensitive to changes in travel time, access time, and service frequency than non-business travellers. Models predict that a rise in passengers time value, representing growth in business travellers, increases the demand for HSR (Hsu et al., 2010). 3.4 Scenarios In order to look at the future of intercity transport in India, two scenarios were explored: the Business-as- Usual scenario and the HSR scenario. The business-as-usual (BAU) scenario follows the current policy dynamics, while the HSR scenario assumes a faster implementation of HSR in India. In both scenarios, the level of economic development and population are kept the same. The total intercity passenger travel demand is projected to increase by four times, from the current 6,772 bpkm in 2010 to 25,941 bpkm in 2050 in the BAU scenario. The methodology for projecting the travel demand is described in Dhar and Shukla (2015). 21

38 Business-as-Usual The Business-as Usual scenario assumes implementation of the planned HSR corridors (Section 3.2) and upgradation of other prominent corridors for semi high speed trains ( kmph).the rail share, however, is projected to go down from 16.1% in 2010 to 14.1% in the BAU scenario (Table 3.1) due to a slower pace of implementation resulting from difficulties in the financing required for these projects. The NTDPC assumes that to reverse the decline in share of rail, investments would have to be increased from 0.3% of GDP to 1.2% of GDP (NTDPC, 2014), which is considered to be difficult in the BAU scenario. It is assumed that in the BAU scenario, the first HSR corridor (Ahmedabad-Mumbai) will become operational by 2025and the quadrilateral length of 2,000 km will be operational in Rail would also lose share due to the increase in preference for air resulting from rising incomes, upgradation of air infrastructure and greater value for time. The demand for rail would grow in absolute terms (Figure 3.1). Table 3.1: Share of railways in BAU and HSR Scenario Scenario BAU 16.1% 16.1% 14.4% 13.6% 14.1% HSR Scenario 16.1% 16.1% 20.0% 25.0% 30.0% HSR scenario This scenario assumes a more aggressive approach to introducing HSR, which is accompanied by an increase in allocation to railways in line with NTDPC recommendations. Compared to BAU, the speed of implementation of HSR corridors in this scenario increases significantly. The HSR scenario also assumes a stronger implementation of semi high speed corridors. All these targeted investments are expected to prevent any further decline in the share of railways and push up the share to 30% in 2050 (Table 3.1), catering to a demand of 7,004 billion passenger kilometres. The 30% mode share for rail has been provided exogenously, and links to experiences from outside India e.g. Japan, which has a very elaborate network of railways, has a mode share of 27% (Tiwari and Gulati, 2013).The HSR scenario also considers an overall policy of promoting public transportation within the interconnected cities, and improved urban and regional planning which can result in higher a concentration of populations and provide the necessary ridership for making HSR economically viable. 3.5 About the Model The ANSWER MARKAL model was used for the analysis of the scenarios. MARKAL is a mathematical model for evaluating the energy system, and has a detailed characterization of technology, fuel mix and investment decisions at detailed end-use level, while maintaining consistency with system constraints such as energy supply, demand, investment and emissions (Loulou et al., 2004). The ANSWER MARKAL model framework has been used extensively for India (Shukla et al., 2008, 2009). Assessing the role of intercity transport in the long-term involves analysing cost competitiveness with other vehicle technologies and interaction with different energy markets. Choices on modes within the transport sector depend on investments into infrastructure e.g. rail, road, etc. These modal transitions are handled separately (see Dhar & Shukla, 2015) and provided as exogenous inputs to the MARKAL model. 22