China's Experience with High Speed Rail Offers Lessons for Other Countries
China has put into operation over 25,000 kilometers (km) of dedicated high-speed railway (HSR) lines since 2008, far more than the total high-speed lines operating in the rest of the world. What planning processes, capacity development, business structures, and construction modalities enabled this rapid growth? In an era when many railways face declining patronage, what price and service characteristics make high-speed rail attractive to this large number of passengers? Why can China price high-speed rail services affordably and still maintain financial and economic viability? A new World Bank study seeks to answer these and many other questions.
"China has accumulated considerable experience in planning, constructing and operating high speed rail in the past decade. Chinese best practices are very relevant for World Bank clients looking for sustainable solutions to transport development challenges," said Martin Raiser, World Bank Country Director for China.
The World Bank has financed some 2,600 km of HSR in China since 2006. Building on analysis and experience gained through this work and relevant Chinese studies, the report titled China's High-Speed Rail Development summarizes key lessons and replicable practices for other countries that may be considering high-speed rail investments.
In China, high-speed rail service is competitive with road and air transport for distances of up to about 1200 km. HSR fares are competitive with bus and airfares and are about one-fourth the base fares in other countries. This has allowed HSR to attract more than 1.7 billion passengers a year from all income groups.
The development of a well-analyzed long-term plan, strongly supported by government, provides a clear framework for development of the system. China’s Medium- and Long-Term Railway Plan looks up to 15 years ahead and is complemented by a series of Five-Year Plans. These plans are rarely changed once approved.
The construction cost of Chinese HSR network, at an average of $17 million to $21 million per km, is about two thirds of the cost in other countries, despite a high proportion of the route on viaducts or in tunnels. A key factor in the lower cost and rapid and efficient HSR construction is the standardization of designs and procedures.
China manages safety risks throughout the project life cycle by assuring appropriate technology in the design phase, quality construction in the building phase, and thorough inspection and maintenance in the operational phase. To ensure safe operation, China collects asset condition data through a mix of physical inspection and dynamic testing with instrumented equipment.
A key concern for many countries is the financial viability of HSR. In China, some heavily used HSR lines generate enough ticket revenue to cover operating costs, infrastructure maintenance and debt service. These are lines with average traffic density of 40+ million passengers per year.
Finally, the study discusses the economic benefits of the HSR services. HSR offers a broad range of travelers of different income levels with short travel time, comfort, convenience, safety and punctuality. It facilitates labor mobility, family visits, tourism and expansion of social networks. It reduces externalities such as accidents, highway congestion, and greenhouse gas emissions as some air and auto travelers switch to HSR. It also improves regional connectivity and helps rebalance growth geographically to reduce poverty and enhance inclusiveness.
"Overall, the economic results appear positive, even at this early stage. The economic rate of return of the network as it was in 2015 is estimated at 8 percent, well above the opportunity cost of capital adopted in China and most other countries for such major long-term infrastructure investments. There is thus a reason to be optimistic about the long-term economic viability of the major trunk railways of the HSR program in China," said Martha Lawrence, World Bank Senior Transport Specialist and co-author of the report.
This report is the first of a series of studies in five areas of transport - high-speed rail, highways, urban transport, ports, and inland waterways, produced by TransFORM, a knowledge platform created by the World Bank and China's Ministry of Transport to share Chinese and international transport experiences and facilitate learning within China and other World Bank client countries.