Side view of corridor and docks.

Delays expected: why high-speed rail projects are failing worldwide

03 June 2021. Published by Poppy St John, Trainee Solicitor

Throughout history, railways have been a universal symbol across the world of prosperity and innovation.

From the steam railways spanning swathes of the American West in the 1800s, to the futuristic bullet trains of Japan, for centuries nations have invested heavily in the construction of new trainlines to embrace modernity and connect various far-flung cities. As rail journeys become more and more ubiquitous, with 463 million rail journeys undertaken in the UK in 2019-2020, high speed rail seems to be the logical next step to make rail travel faster, more efficient and greener…in theory.

The demise of various high-speed rail projects around the world has made headlines far too often. 

The UK

In the UK, the infamous HS2 project linking London with Birmingham, Manchester and Leeds via a network of high-speed trains has become a something of a political embarrassment. Completion of the line has recently been pushed back to 2031 for the Birmingham branch and 2040 for the Manchester/Leeds branch, and the projected cost of the railway has practically doubled from the initial budget of £56bn to nearly £100bn due to a raft of issues including the under-valuation of the land that had to be purchased to build the railway, protests and asbestos. The cost and the environmental impact of the scheme has attracted no shortage of opponents, who now cite the pandemic and the likely normalisation of working from home as another reason why the project should be scrapped.

The rest of the world

HS2 isn't the only rail project in the world to have run out of steam in recent times. The State of California's plan to build a high-speed rail between Los Angeles and San Francisco, first approved in 2008, has recently been scaled back to a relatively short link between two towns in California's less populated Central Valley, rather than its better-known coastal metropolises. In Brazil, similar plans for a high-speed link between Sao Paulo and Rio de Janeiro were abandoned following a series of funding and regulatory problems. Singapore and Malaysia announced in March 2021 that a project for a high-speed rail link between Kuala Lumpur and Singapore had been shelved after the Malaysian government decided it was cheaper for them to terminate the agreement between the countries and pay Singapore compensation rather than complete the project.

Projects in Taiwan and South Korea were originally completed successfully, only to be derailed in the following years by poor utilisation and sluggish ticket sales. So far, countries have struggled to emulate the success of Japan and China, the only two countries to have successfully delivered and maintained a national network of high-speed railways.

Off the rails

All construction projects carry risk, but why do high-speed projects in particular seem doomed to fail?

The biggest factor in the failure of high-speed projects is the sheer enormity of their budgets. Not only do the initial figures for these railways frequently amount to billions, but, as with HS2, unforeseen costs can quickly pile up and double the budget before a train goes anywhere near the tracks. This is exacerbated further when many projects are funded by government grants, which may need to be re-allocated at a future date if more pressing concerns crop up.

Even when the railways are up and running, the expense of high-speed projects means they take a long time to make a financial return. Ticket prices alone are not sufficient to break even, as the cost of a ticket would have to be astronomical to do so, making them unaffordable.. Instead, projects need to rely on other ventures such as advertising revenue to bolster their takings, but even these sources of income may not be enough to fill the financial dent.

By contrast, air travel is now extremely accessible, with tickets to domestic and short-haul international destinations from the UK frequently costing less than a day-return rail ticket from London to Manchester.  High-speed train operators will struggle to entice potential travellers away from no-frills airlines that can get from A to B for a fraction of the price in a similar timeframe.

Finally, although high-speed trains need separate tracks to ensure their safety, the existing rail infrastructure (such as city 'hub' stations) needs to be in a reasonable condition to cope with the mechanical demands of high-speed rail – another cost that can balloon dramatically if not properly accounted for at the start.

Back on track?

Private financing may be the way forward. Despite the inevitable delays, the Indian government is still optimistic that its plans for a bullet train between Mumbai and Ahmedabad can go ahead, which is funded by a £12.8 billion loan from a group of Japanese investors with business interests in the region.

Alternatively, maybe the future of transport doesn't lie with high-speed rail after all. One technology in the pipeline (quite literally) is 'Hyperloop', which involves pods carrying passengers travelling at high speed through a vacuum tunnel. Several companies are developing the concept, with travel conglomerate Virgin considering deploying it as a link between London's Heathrow and Gatwick airports, reducing the 45-mile journey to a 4 minute ride. At its current pace, high-speed rail runs a risk of being made obsolete by alternative technologies before it has the chance to prove itself.

Given the host of problems troubling high-speed rail, is Hyperloop just a pipe dream? Perhaps, but then again, so was the Tube once…