High Speed Train

Ananda

The Bunker Group

I put a thread not related to defense, on HST (High Speed Train) since this I believe one thing that many proponents of green economy try to enhance. Reducing carbon foot print from Air Traveling.

I put a video from Indonesia Technological Development Agency (BRIN used to be call BPPT). This is the concept of High Speed Train between Two biggest Indonesian Cities (thus biggest economic hubs), Jakarta and Surabaya. Distances around 800 km, and with operational speed of 250 km it will be covered theoritically around 4.5 - 5.0 hrs. Still longer time then plane of 1 hrs, but 2.5 times faster then existing train.

Differed from current HST project between Jakarta and Bandung with Chinese contractor (which now already balloning over budget), This project will be lead by Indonesian contractor (with possibilities JV with Japanese) and Train build domestically. The domestic train manufacturer INKA rumoured going to partner with Euro vendors (altough other vendors from Japan or even China is also possibilities).

However my point mostly on this thread is how far the distances on that still make it HST feasible.



Put one video shown the achievement of China on building the most extensive HST network, and also article on how their HST is also loosing money on several routes.


On other hand some HST/HSR operation can be so succesful that can help bring a national carriers to bankruptcy and cease to exist (off course it's not the only reason why Alitalia cease to exist). This case even prompt some 'green' politicians and enviromentalists to ask EU banning short term flight in favor more HST/HSR network.

This come back to the question what distances that can be attractive for consumers to leave other mode of transportation toward HST ? I'll take example of Indonesian-Chinese HST project between Jakarta and Bandung. The distance is less than 200 km, already exists existing railway (alltough some section still used track from Dutch era toward mountains that significantly reduce speed), and High speed Toll network.

The HST by theory should only take 50 minutes then 3.5 hrs on present train, and with automobile through Toll road. The costs should be 2.5 times more expensive then current train or toll road costs. Then the question of balloning costs of Investment due to land acquisition and the first stage still not into Bandung downtown station (only up to suburb), due to the high investment costs building extension toward downtown. This then raise questions (even political ones) whether HST Jakarta-Bandung will be attractive enough for consumers, if they have to in the end of line taking other transportation mode from suburb to downtown.

Balloning cost of investment also that prompt decision from Jakarta to take over some costs in order not to get more debt from China. Talking on debt trap, high cost on building HST/HSR also become questioning issue when Laos open HST line to China, as part of Road and Belt inisiative. Many call doubt the impoverished Laos will going to have capabilities to pay back USD 6 bio (excluding interest) on investment cost back to China.


For that, I still think Jakarta-Bandung distances of 200 km is too short for HST, but Jakarta-Surabaya distances of 800 km is more appropriate. Also 4-5 hrs time is the longest period of most customers wiling to stay in HST. More than that, they will choose Airplane.

If we see the Chinese HST network, it's very extensive, but I understand why some of the routes is not going profitable. Like I can understand Beijing to Shanghai. However Beijing to Guangzhou ? It's just to far that customers probably choose Airplane instead. Let alone to area in West like Tibet. It's clearly build to open more remote areas, but also more to CCP Political masage on putting all network throughout China whether profitable or not.

Still HST momentum seems going to increase both due to enviromental issue on reducing flights and automobile traffics, but also due political image on more enviromentally friendly tranportation infrastructure image.
 
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swerve

Super Moderator
The TGV killed off Air Inter in France. Who'd trek out to the airport outside the city, wait to board, fly to an airport outside Paris, & travel into the city when they could travel from a city centre or at worst suburban TGV station directly to the middle of Paris, in comfort? The first time I did that was 1987, from Lyon.
 

kato

The Bunker Group
Verified Defense Pro
The TGV killed off Air Inter in France.
What's really killing it off in France was a recent law (8 months ago) that no domestic flights can be offered on connections where a TGV connection of under 2.5 hours exists.

That basically shuts down any domestic flights other than the massive tourist business from Paris to the Mediterranean coast. The originally proposed bill would have covered that too but was struck down successfully by lobbyists.
 

AndrewS

New Member
If we see the Chinese HST network, it's very extensive, but I understand why some of the routes is not going profitable. Like I can understand Beijing to Shanghai. However Beijing to Guangzhou ? It's just to far that customers probably choose Airplane instead. Let alone to area in West like Tibet. It's clearly build to open more remote areas, but also more to CCP Political masage on putting all network throughout China whether profitable or not.
Almost nobody takes the entire Beijing-Guangzhou journey.
But on the that route, there are many stops which includes a number of major cities like:

Shijiazhuang City. Population 11 Million. Capital of a Province with 76 Million people.
Zhengzhou City. Population 12 Million. Capital of a Province with 99 Million people.
Wuhan City. Population 11 Million. Capital of a Province with 57 Million people.
Changsha City. Population 10 Million. Capital of a Province with 66 Million people.

The cities are roughly the same size as a Paris, and the provinces are roughly the same size as a Mainland France or Germany.
So there are lots of shorter journeys which are competitive.
The Beijing-Guangzhou line has actually reached capacity in certain sections, so they are building another Beijing-Guangdong HSR line.

Yes, the lines in the Western China are political statements, but the others should get busier with time.
 

Ananda

The Bunker Group
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The cities are roughly the same size as a Paris, and the provinces are roughly the same size as a Mainland France or Germany.
So there are lots of shorter journeys which are competitive.
Long haul train routes everywhere is always depends on traffic inter cities in between. However doesn't make commercially justifiable for all routes. In mid 201,8, me and two colleagues spend 6 days in business trip to Shanghai. 2 days on that we spend on Xian. We're intrigued with Xian to Shanghai HSR, so we decided to go to Xian flying with China Eastern and go back to Shanghai with HSR.

We took the fastest HSR schedule with less stop that taking 6 hrs compared to flying that take only 2hrs+. We found just like any HST/HSR the cabin more comfortable to China Eastern, but the question is it worth it ? The cost for fastest HSR in average more than China Eastern coach.

Yes only very minority of passanger actually take the whole Xian-Shanghai route like us, but most of the others only taking routes between East coast cities. That's back to the question, is all routes (if we take China HSR case) outside East coasts cities justifiable commercially ?

Why build Beijing - Guangzhou HSR line that through middle part of China, when there's already HSR connected all major east coast cities from Shenzhen to Shanghai (and to Beijing also) ? I do suspect the internal middle China routes and those to the West that creates so much financial debt into China Railway book. Those routes are loosing money and if no Politics involved, I do believe no China Railway executive wants to Invest there.

Any HSR/HST whether in China, Japan, Europe etc depends on Business travels and tourist. Italian HSR between Milan and Naples is very favorite with tourists since it's stopping on many tourist destination cities in between. Tourists like inter cities line cause it's direct to downtown station, and if the distance not taking to long (rather than use plane and landed in outside cities airport).

Xi'an has many tourist attractions, after all it's the cradle of China Imperial past. However not that many tourist attractions between Xi'an to Shanghai. Will tourist want to spend 6 hrs even 10 hrs (for cheaper HSR routes) compared to 2hrs+ flying ? The business travellers will take flying off course on that route considering the time saving even ticket price saving.

That's why in my previous posts I put 4-5 hrs is the max people want to take HSR before they decided to take plane to instead. China HSR model can't be duplicate to other countries not because the problem with tech or Investment costs, but more to most of the routes (outside Eastern coast cities) is actually not commercially viable. So China HSR is actually not a pure commercial business model, and more to Political business model. So China has to live with National Railway that loosing money and have high debt leverage in it's book. I'm sure no other nations want to be burden with National Railway company on that condition.

The HSR venture between Indonesian SOE and it's China partner doing HST/HSR between Jakarta - Bandung already creating Political controversy due to the cost ballooning and in fact due to the distance of less then 200 km, actually the HST can not reach full speed in much of the routes. The average speed only reach 200km+ which is actually the speed on Semi-Fast train and not full HST/Bullet train.

If we see the present categories for Intercity train, there's regular train that run 100km+ in average, Semi-Fast running 200km+ in average and HST that run 300km+ in average. Turn out there's significant Investment cost difference between Semi-Fast and HST. This again raise question for more thinners routes, is it justifiable for HST or only Semi-Fast train ?

Don't get me wrong, I like HST and will take it if the routes only taking less then four hours like Tokyo and Osaka. I believe most of customers is like that. However more than that, it's raise question on whether it will be enough traffic to justify them, unless there's enough inter cities traffic between the routes just like in Japan eastern coasts cities or China Eastern costs cities.
 

ngatimozart

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A video by an expat PRC born commentator about the PRC HST. She makes some very valid points. The focus / obsession on the HST has been at the expense of PRC domestic rail freight operations, to the point that it is now significantly cheaper for customers to move freight by road then by rail. That includes bulk cargoes such as coal etc. This results in significantly more vehicles on the roads (read motorways) more damage to said roads, higher use of diesel and petrol fuels, and higher air pollution; all adding high costs to the nation.

Funnily enough it's a situation similar to here in NZ where neoliberal economists convinced politicians that rail was an inefficient method for moving freight around the country. Same politicians won't spend the money on the roading network or adequately repairing the current network (pet gripe).


A video look at the PRC BRI rail freight lines between the PRC and the EU. It has links to the HST video because the same cities that are busy subsidising the HST and its infrastructure are are so doing the same with the BRI rail freight line and service. It's proving very expensive with each city going into many US$ billions of debt to pay these subsidies; money they can't afford as the PRC economy contracts.

 
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Ananda

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Like I said, Not business model, but more Political Business model. Whenever Politics is the driver for business decisions, it never provide sound commercial viabilities. That's what China Railway has to paid and cope consequences.

This is why also the drive from some 'Green' politicians in Euro zone for banning most short leg flight in EU for the benefit of HST has to be calculate commercially first. If not people will go into highway instead. How eco friendly it is ?
 
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AndrewS

New Member
Long haul train routes everywhere is always depends on traffic inter cities in between. However doesn't make commercially justifiable for all routes. In mid 201,8, me and two colleagues spend 6 days in business trip to Shanghai. 2 days on that we spend on Xian. We're intrigued with Xian to Shanghai HSR, so we decided to go to Xian flying with China Eastern and go back to Shanghai with HSR.

We took the fastest HSR schedule with less stop that taking 6 hrs compared to flying that take only 2hrs+. We found just like any HST/HSR the cabin more comfortable to China Eastern, but the question is it worth it ? The cost for fastest HSR in average more than China Eastern coach.

Yes only very minority of passanger actually take the whole Xian-Shanghai route like us, but most of the others only taking routes between East coast cities. That's back to the question, is all routes (if we take China HSR case) outside East coasts cities justifiable commercially ?
Xi'An to Shanghai is part of the core network.
It also has huge cities along this route like Zhengzhou, Hefei and Nanjing.
Again, each of these cities is roughly the same population as Paris and is the capital of their province.
And the provinces are roughly the size of a France or Germany

So there are many stations where the journeys are less than 4 hours.
If I have a quick look, depending on the railway section, there are anywhere from 52 to 102 train-pairs per day.
With a design capacity of about 140 train-pairs per day, the 102 trains running between Xi'An- Zhengzhou would represent 71% utilisation.
So my guess is that this section will reach capacity within the next 5 years.

I think this answers your question on whether Chinese HSR is justified outside of the East Coast.

Why build Beijing - Guangzhou HSR line that through middle part of China, when there's already HSR connected all major east coast cities from Shenzhen to Shanghai (and to Beijing also) ? I do suspect the internal middle China routes and those to the West that creates so much financial debt into China Railway book. Those routes are loosing money and if no Politics involved, I do believe no China Railway executive wants to Invest there.
I think you missed the part where Beijing-Guangzhou is already running near full capacity, so I doubt it is losing money.
I see anywhere between 91 and 136 train-pairs per day, depending on the section.

Any HSR/HST whether in China, Japan, Europe etc depends on Business travels and tourist. Italian HSR between Milan and Naples is very favorite with tourists since it's stopping on many tourist destination cities in between. Tourists like inter cities line cause it's direct to downtown station, and if the distance not taking to long (rather than use plane and landed in outside cities airport).

Xi'an has many tourist attractions, after all it's the cradle of China Imperial past. However not that many tourist attractions between Xi'an to Shanghai. Will tourist want to spend 6 hrs even 10 hrs (for cheaper HSR routes) compared to 2hrs+ flying ? The business travellers will take flying off course on that route considering the time saving even ticket price saving.

That's why in my previous posts I put 4-5 hrs is the max people want to take HSR before they decided to take plane to instead. China HSR model can't be duplicate to other countries not because the problem with tech or Investment costs, but more to most of the routes (outside Eastern coast cities) is actually not commercially viable. So China HSR is actually not a pure commercial business model, and more to Political business model. So China has to live with National Railway that loosing money and have high debt leverage in it's book. I'm sure no other nations want to be burden with National Railway company on that condition.

The HSR venture between Indonesian SOE and it's China partner doing HST/HSR between Jakarta - Bandung already creating Political controversy due to the cost ballooning and in fact due to the distance of less then 200 km, actually the HST can not reach full speed in much of the routes. The average speed only reach 200km+ which is actually the speed on Semi-Fast train and not full HST/Bullet train.

If we see the present categories for Intercity train, there's regular train that run 100km+ in average, Semi-Fast running 200km+ in average and HST that run 300km+ in average. Turn out there's significant Investment cost difference between Semi-Fast and HST. This again raise question for more thinners routes, is it justifiable for HST or only Semi-Fast train ?

Don't get me wrong, I like HST and will take it if the routes only taking less then four hours like Tokyo and Osaka. I believe most of customers is like that. However more than that, it's raise question on whether it will be enough traffic to justify them, unless there's enough inter cities traffic between the routes just like in Japan eastern coasts cities or China Eastern costs cities.


In terms of population density, it's not just the East Coast between Beijing-Shanghai.
You've got over a billion people in China living in areas with with very high population densities like the Beijing-Shanghai route or Japan.
The core 4+4 and 8+8 networks cover this area and are still being built out.

Note that on a per capita basis, China's high-speed railway density is nowhere near Western European levels, yet Chinese population densities are higher than most places in Western Europe.
And in terms of the overall railway network on a per capita basis, China is still far behind Western European levels.
So a wealthy developed China would have far more traffic running on its HSR than on the lines built in Europe.

I expect there will be loss-making lines on a purely financial basis, but overall, the network should still end up profitable.
If we're looking at a 30 year railway project lifespan, most lines should be very profitable.

Plus you have to account for the non-financial benefits like better transportation links, time savings, pollution etc etc

Also recall that during the railroad building spree in the USA in the 19th Century, the vast majority of railway lines lost money for their investors.
Yet their legacy was the development and urbanisation of the poorer US regions in the vast interior.

@AndrewS You are making claims here and in a previous post that aren't common knowledge. Please provide the relevant links to sources for your claims. This is a requirement of the rules.

Ngatimozart.
 
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AndrewS

New Member
A video by an expat PRC born commentator about the PRC HST. She makes some very valid points. The focus / obsession on the HST has been at the expense of PRC domestic rail freight operations, to the point that it is now significantly cheaper for customers to move freight by road then by rail. That includes bulk cargoes such as coal etc. This results in significantly more vehicles on the roads (read motorways) more damage to said roads, higher use of diesel and petrol fuels, and higher air pollution; all adding high costs to the nation.

Funnily enough it's a situation similar to here in NZ where neoliberal economists convinced politicians that rail was an inefficient method for moving freight around the country. Same politicians won't spend the money on the roading network or adequately repairing the current network (pet gripe).


A video look at the PRC BRI rail freight lines between the PRC and the EU. It has links to the HST video because the same cities that are busy subsidising the HST and its infrastructure are are so doing the same with the BRI rail freight line and service. It's proving very expensive with each city going into many US$ billions of debt to pay these subsidies; money they can't afford as the PRC economy contracts.

Couple of comments.

She cherry picks an HSR line built for political reasons. That is a fair criticism.
The existing conventional line was already over capacity in certain sections 15 years ago, but it didn't justify a new HSR line on overall profit or economic grounds.

But you have to look at the overall railway network on a 30 year basis. Of course railways lines lose money at first.
Even the Tokaido Shinkansen made losses for years at the beginning, but look at it now. It is wildly profitable, running beyond maximum capacity and drove urbanisation in the Tokaido corridor. The Tokaido corridor easily has demand for another HSR line, if it could be built at a reasonable cost. But it can't anymore due to high land and construction costs.

In addition, the Chinese HSR has taken passenger trains off the existing rail network, which allows for more freight trains to be run.
That is part of the justification for HSR in the first place.

Also, road is always cheaper than rail if you have a point-to-point journey which takes less than a day to complete.


As for the Europe-China railway, the subsidies are acknowledged as a temporary measure until there is enough trade in higher-value goods to make it self sustaining.

Remember it started with HP sending computers by railway because HP decided it was a better option that air or sea. Holding lots of stock at sea has a cost, but it's not worth sending computers by air.
But now the outbound trains are full and there's no more capacity to send any more.
And it looks like there is now enough trade to make the Europe-China rail routes self-sustaining.

Yes, this was partly a political decision because the government wanted to diversify trade routes, from both an economic and national security point of view. But you can't say it was a bad decision if these routes are now viable.

You can see similar things with the US subsidising Samsung with billions to build semiconductor plants in the USA.
 

Ananda

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She cherry picks an HSR line built for political reasons. That is a fair criticism.
The existing conventional line was already over capacity in certain sections 15 years ago, but it didn't justify a new HSR line on overall profit or economic grounds.
You always thinking one perception only. Population density. This's not the only assessment for a good business model. Again, the domestic flight in China is cheaper then HSR ticket for long route. The question right now not only HSR feasible for certain routes, but whether building HSR network outside East coast China is feasible or not currently.

As Finance Professional I also already talk with some of my Chinese colleagues, and what I put on questioning of Commercial feasibility for HSR outside East Coast China actually coming from conversation with them. China have many good Financial professional, thus they know what they're talking.

After all China Railway is loosing money for bad/"untimely" Investment that are not their decision in the first place. That's why it is as I said in my previous posts 'Political' business model.

China Railway can improve and extend existing regular network or increase it as Semi-Fast train. That's still be attractive for China Interior Inter Cities and Western network. Instead now has to build very expensive HSR that also expensive to maintain. The prices for HSR tickets can be afforded by average more prosperous East Coast population. However not for average interior population. They're mostly choose using on regular train or bus instead.

Just like in Europe, average Western European can afford HSR price, can average Eastern European afford that too? That's why just by taking population density only is not enough for good business model assessment.

You are talking on subsidising those routes, but for how long. Question is not building HSR routes to interior and Western part of China, but 'when'. The timing is important, or China Railway continue bleeding as current condition without knowing when those routes (interior and Western one) will be commercially feasible in the end.

That's what my point from my previous posts. Building HSR can not just for Political motivation without commercially viability assessment. Looking on China Railway book, well some of them are not feasible yet to be build on present time.
 
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John Fedup

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I recall reading an article years ago that said shipping anything except perishables under 1500 miles should go by truck and over that, by rail. This applied to US/Canada. Not sure if this is the case now.
 

AndrewS

New Member
You always thinking one perception only. Population density. This's not the only assessment for a good business model. Again, the domestic flight in China is cheaper then HSR ticket for long route. The question right now not only HSR feasible for certain routes, but whether building HSR network outside East coast China is feasible or not currently.

As Finance Professional I also already talk with some of my Chinese colleagues, and what I put on questioning of Commercial feasibility for HSR outside East Coast China actually coming from conversation with them. China have many good Financial professional, thus they know what they're talking.

After all China Railway is loosing money for bad/"untimely" Investment that are not their decision in the first place. That's why it is as I said in my previous posts 'Political' business model.

China Railway can improve and extend existing regular network or increase it as Semi-Fast train. That's still be attractive for China Interior Inter Cities and Western network. Instead now has to build very expensive HSR that also expensive to maintain. The prices for HSR tickets can be afforded by average more prosperous East Coast population. However not for average interior population. They're mostly choose using on regular train or bus instead.

Just like in Europe, average Western European can afford HSR price, can average Eastern European afford that too? That's why just by taking population density only is not enough for good business model assessment.

You are talking on subsidising those routes, but for how long. Question is not building HSR routes to interior and Western part of China, but 'when'. The timing is important, or China Railway continue bleeding as current condition without knowing when those routes (interior and Western one) will be commercially feasible in the end.

That's what my point from my previous posts. Building HSR can not just for Political motivation without commercially viability assessment. Looking on China Railway book, well some of them are not feasible yet to be build on present time.
Yes, the original high speed railway plans were supposed to be completed a lot slower than actually happened. But then the 2008 Global Financial Crisis started and it kicked into high gear. And here we are.

Prior to 2020, ridership was increasing by almost 300 million passengers per year. At that rate, ridership (and presumably fare revenue) would quickly have doubled. My guess would have been 7 years for this to happen. So the answer is yes to fares being affordable.

You can also argue that it's better to acquire land and build railways now, rather than wait 10 years when costs will be a lot higher. Perhaps so high it no longer makes sense to build.

The original 4+4 HSR railway plan had sections with commercial viability assessments which I saw published by the World Bank over a decade ago. I would expect this has continued for all the future lines, because they still have to be approved by the NRDC if I recall correctly.

---

The World Bank also have a report below with a sensitivity analysis on the Economic Internal Rate of Return for High Speed Rail in China.
An acceptable return 5% per year requires a Passenger Density of 15 million pkm/km.
Assuming 800 seats per train and which run 50% full, that is 91 train-pairs per day.

It also says that break-even (a 0% rate of return) requires 7 million pkm/km.
Given the same assumptions, that is 42 train-pairs per day.
That isn't very difficult to reach, and it looks like 50%+ of all high-speed railways already exceed this level.

Of course, this isn't the same as financial profitability.
But if the Chinese government want to run high-speed railways at a financial loss, there should be more than enough indirect benefits to the overall economy to make this worth doing. China does have an excess of savings and construction capacity.


List below of rail routes and train-pairs below made by a hobbyist manually checking what trains are running on particular days

The rate of return of China’s network as of 2015 is estimated at 8 percent, well above the opportunity cost of capital in China and most other countries for major long-term infrastructure investments. The study also looks into the economic benefits of HSR services. Benefits include shortened travel times, improved safety and facilitation of labor mobility, and tourism. High-speed networks also reduce operating costs, accidents, highway congestion, and greenhouse gas emissions as some air and auto travelers switch to rail.

 

ngatimozart

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seaspear

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This article suggests that high-speed freight has been achieved in China
 

ngatimozart

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This article suggests that high-speed freight has been achieved in China
I wonder what the max pay load per wagon is? 40 tonnes? 60 tonnes? From the article it looks like they have to load / unload them manually, so that's time and labour consuming as well as expensive. It's double handling of freight at both ends and that double handling is where freight has the best chance of being damaged or misplaced. I have seen some rail wagons with top stow freight (light stuff) having heavy stuff chucked on top of it, pallets of freight been forked part way up by a forklift, fragile freight shattered etc. Pick a carton up and you hear the distinct sounds of broken glass or you can see the remains of the bottled liquid all over the deck. Interesting times.

One time the shunters pushed a rake of wagons up the side of the overbridge at the end of the track that went through one freight shed. Another time they pushed a rake of wagons off the end of the track, across a car park, through a chain link fence, across a street, and up the driveway of a business across the street of a yard where I worked. There was a couple of sleepers chained at the end of the track to stop wagons rolling off the end. At Lyttleton port there are numerous wagons that have gone swimming there, having been pushed off the wharves by the shunters.
 

Ananda

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of the problems with the article is that it presumes that HST can be used to freight.
This is the video on that HST freighter that @seaspear put. It's still using basically same HST car for passager version but with modification on layout. In concept it is not much different then modification of Passanger Airliners toward Freighter Airliners.

Thus it will be not be having similar capabilities with dedicated cargo train. It will still be limited to the specs of HST that need to be lighty constructed for effecient High Speed operation. In such, the costs for transporting cargo/packages with this HST Freighter will be significantly higher then Regular Freighter Train. I suspect for this HST Freight going to be financialy viable, has to work only in routes that have significant demand on high value consumers goods/package (that can justified the costs). However how's that going to compete with Airlines Freighter, if the costs (just like in HST passanger tickets for long haul) are in similar range with Airlines Cargo ? For me that's the problem with HST Freighter.

Just like passanger HST, to make it commercialy viable it's actually limited only to certain routes and range. Will cargo company justified paying long haul freight cost that double, only for 6-12 hrs time advantage from regular train Freighter ? With that cost they will go with Airline Freighter that can give 18-24 hrs time advantage, and China have much larger capacities on Airline Freighter then this HST Freighter will be. So does every other markets.

this isn't the same as financial profitability.
But if the Chinese government want to run high-speed railways at a financial loss, there should be more than enough indirect benefits to the overall economy to make this worth doing. China does have an excess of savings and construction capacity.
Will China wiling to subsidise some of those long haul routes perpetually ? That's what going to happen. That's what happen if Business Model drive by Politics and not Commercial. China already have extensive Highways, Regular Train and Airlines network for long haul travels. In the end business is business, costs matter for users. The reality is the HST costs become unattactive for long haul routes against Airlines, for those who wants time advantage. Unless China want to ban Airlines traveling to compete with HST routes (just like the eco-green politicians in Euro wants to do).
 

ngatimozart

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@Ananda Thanks. Of interest to me in Lei's videos is the amount of money that has been borrowed for the HST and its subsidisation. IIRC she said US$900 billion all up and that's real money in anyone's language. That will come back to bite them.
Couple of comments.

She cherry picks an HSR line built for political reasons. That is a fair criticism.
The existing conventional line was already over capacity in certain sections 15 years ago, but it didn't justify a new HSR line on overall profit or economic grounds.

But you have to look at the overall railway network on a 30 year basis. Of course railways lines lose money at first.
Even the Tokaido Shinkansen made losses for years at the beginning, but look at it now. It is wildly profitable, running beyond maximum capacity and drove urbanisation in the Tokaido corridor. The Tokaido corridor easily has demand for another HSR line, if it could be built at a reasonable cost. But it can't anymore due to high land and construction costs.
Your mistake, IMHO, is that you are looking at everything within the CCP / PRC from a non political view. That doesn't happen there; everything is political, especially now under Xi Jinping's leadership. Now you have to include the CCP political element in everything that they do and everything that you assess. Any analysis through a western lens was always problematic anyway, but now it is substantially skewed to the point that it may not be valid. It's like standing in a normal lighted room, trying to observe a feather falling in vacuum, by watching it through a welding mask with the protective lens in use.
In addition, the Chinese HSR has taken passenger trains off the existing rail network, which allows for more freight trains to be run.
That is part of the justification for HSR in the first place.
But the freight trains aren't being run. That's the point. The city authorities are spending money they don't have subsidising the HST, the foreign companies are pulling their manufacturing out of the PRC because its now becoming to expensive and to difficult to operate there, there are electricity shortages and hence industries are been forced by the CCP to shut down in order to take pressure off the electricity grid, the PRC economy is contracting with a forecast GDP of about 3.4% for the next financial year, the real estate development market has collapsed, whole industries within the economy have been decimated by CCP rulings in the last 12 months; e.g., their game industry, tech industry, real estate development industry, and tutoring industry. Another industry that looks like it will be hit is the outbound tourism industry, with suggestions that PRC passports are very difficult to obtain now.
Also, road is always cheaper than rail if you have a point-to-point journey which takes less than a day to complete.

As for the Europe-China railway, the subsidies are acknowledged as a temporary measure until there is enough trade in higher-value goods to make it self sustaining.
Beijing told the cities and regions to phase out the subsidies and cease them by the end of 2022. Some have ignored the order.
Remember it started with HP sending computers by railway because HP decided it was a better option that air or sea. Holding lots of stock at sea has a cost, but it's not worth sending computers by air.
But now the outbound trains are full and there's no more capacity to send any more.
And it looks like there is now enough trade to make the Europe-China rail routes self-sustaining.
How can it be self sustaining if it is only moving empty boxes from the EU back to the PRC. Yes that's most likely a temporary situation but the longer it goes on for the more it cost in lost revenue. The CCP / PRC has also picked a fight with the EU over its banning of Lithuanian trade and that will come back to bite them pretty hard. The EU will not roll over about this.
Yes, this was partly a political decision because the government wanted to diversify trade routes, from both an economic and national security point of view. But you can't say it was a bad decision if these routes are now viable.

You can see similar things with the US subsidising Samsung with billions to build semiconductor plants in the USA.
There's a big political and geostrategic difference between the CCP / PRC obtaining ownership of strategic industries and the US subsidising Samsung to move a chip factory to the US.
Yes, the original high speed railway plans were supposed to be completed a lot slower than actually happened. But then the 2008 Global Financial Crisis started and it kicked into high gear. And here we are.

Prior to 2020, ridership was increasing by almost 300 million passengers per year. At that rate, ridership (and presumably fare revenue) would quickly have doubled. My guess would have been 7 years for this to happen. So the answer is yes to fares being affordable.

You can also argue that it's better to acquire land and build railways now, rather than wait 10 years when costs will be a lot higher. Perhaps so high it no longer makes sense to build.

The original 4+4 HSR railway plan had sections with commercial viability assessments which I saw published by the World Bank over a decade ago. I would expect this has continued for all the future lines, because they still have to be approved by the NRDC if I recall correctly.

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The World Bank also have a report below with a sensitivity analysis on the Economic Internal Rate of Return for High Speed Rail in China.
An acceptable return 5% per year requires a Passenger Density of 15 million pkm/km.
Assuming 800 seats per train and which run 50% full, that is 91 train-pairs per day.

It also says that break-even (a 0% rate of return) requires 7 million pkm/km.
Given the same assumptions, that is 42 train-pairs per day.
That isn't very difficult to reach, and it looks like 50%+ of all high-speed railways already exceed this level.

Of course, this isn't the same as financial profitability.
But if the Chinese government want to run high-speed railways at a financial loss, there should be more than enough indirect benefits to the overall economy to make this worth doing. China does have an excess of savings and construction capacity.


List below of rail routes and train-pairs below made by a hobbyist manually checking what trains are running on particular days
I have a big problem with World Bank data about the CCP / PRC because it relies upon official PRC data and the CCP / PRC are well known for being very economical with the truth. Sometimes I look at PRC climatological and hydrological sourced data and I am wary about the validity of that.

As @Ananda has said you appear to be one dimensional with your posts. Economics are fine but the CCP / PRC don't adhere to western economic norms, so you can't analyse them that way. You have to include many other factors in any analysis and these can and will vary. The first thing you really need to do is get a basic handle on is the CCP, how it works, and what is happening within it at the moment. Once you have done that it may help you understand what is happening in the PRC. It is not what the msm and many western analysts are saying the reasons are.
 

Ananda

The Bunker Group
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  • #19

This article I put as example on how commercially based HST (in this case Hokkaido Shinkansen), progressing within calculate commercial Investment. In 2016, Hokkaido Shinkansen (Shin Hokkaido) inaugurated with first stage only to Southern Hokkaido city of Hakodate.

Everyone knows that to make really viable commercially Hokkaido Shinkansen has to reach Sapporo as Hokkaido main cities and main tourists destination. However practically between Hakodate to Sapporo they plan to do it in 14 years schedule.

Could JR (Japan Railway) build it faster? Off course they can. There will be technical challenge, but anything can be handle faster if they want to put more Investment. That schedule I believe is also related to the amount of Investment that Hokkaido Shinkansen want to put. In sense as commercial company, they try to leverage existing line to Hakodate first, to also help pay for second stage toward Sapporo.

This is the difference on doing HST business model between Japan Railway and Chinese Railway. JR has to do it on commercial based, thus has to timed their Investment based on their revenue projection. While China Railway clearly looking on their book being push on Investment without looking on the timing of their revenue projections. No commercial entity will occurred that much debt and cash flow deficit (from operation), if they follow their Investment timing based on clear predicted revenue projections.

IIRC she said US$900 billion all up and that's real money in anyone's language. That will come back to bite the
China is not the only one that being push to Invest HST/HSR by Political forces. However it's the biggest ones. I already see many projects that Politics drive override Commercial logics. Nearly most of time will bite in the end, and Tax Payers will have cover it.

There's enough drive in Euro Politics for HST in reducing significant Inter Euro Flights (including expansion to the east). If Politics that drive and not Commercial calculation, I'm very sure it will bite EU taxpayers in the end.

If that happens, then the question will be for how long the Tax Payers willing to bear the bite.
 

swerve

Super Moderator
.... I have seen some rail wagons with top stow freight (light stuff) having heavy stuff chucked on top of it, pallets of freight been forked part way up by a forklift, fragile freight shattered etc. Pick a carton up and you hear the distinct sounds of broken glass or you can see the remains of the bottled liquid all over the deck. Interesting times.
...
One of my former employers had an Australian subsidiary running a major system on an old mainframe & running out of capacity. The UK operation had a similar mainframe which was being run under capacity & likely to diminish further, so they sent one section (effectively a small mainframe which could be connected to others to make a bigger one) out to Australia.

Kingsford Smith freight handlers dropped it. From the side door of a freighter to the ground.

So we got a replacement from the manufacturer (which had a business going temporarily re-purposing retired mainframes, or parts of them) & sent that out.

The freight handlers stuck a forklift into it, hard enough to punch a hole in the rather solid packaging & into the computer inside.

The manufacturers managed to find another, but warned us that this time they wouldn't be able to get a replacement quickly.

I understand that senior Kingsford Smith freight handling managers watched it being unloaded, having issued dire warnings to the crew of what would happen to them if they broke another one. Even secondhand, they were expensive. I marvel at the casualness that must have led to the previous smashes. It was on a pallet, securely boxed, marked with whatever the air freight equivalent of "Fucking expensive & fragile - drop this & you'll need new bollocks!" is, & they broke two of them. The mind boggles. How did they handle normal freight?

That was over 20 years ago. Maybe things have changed.

P.S. The order of the breakages may be wrong. I remember how they were both broken, but can't swear to which came first.
 
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