China’s HSR Revolution. The Green New Engine Powering It

Early this month, while on a tour of China to meet with key players in the renewable energy sector in the country, we ran into an unexpected issue in Chengdu, the capital of Sichuan Province.  Fog had settled into the city, and flights to Hefei (1500 kms away) , the next stop on our tightly scheduled meetings, were cancelled. Suddenly, the whole schedule looked in danger of going haywire, with a cascading effect on the rest of the plans.  But our organisers had other ideas.

They quickly checked, and confirmed that flights to Shanghai were available and taking off. So we quickly boarded a 3 hour flight to Shanghai (2000 kms away), and on landing at Hongqiao airport, which itself is connected to the Hongqiao railway station, the hub for HSR connections from Shanghai,  we moved to a bullet train or HSR, to Hefei, just 475 kms from Shanghai. A journey that took just over 2 hours, ensuring we reached Hefei well in time for our meetings the next day. Thus, we travelled an extra 1000 kms, while starting well beyond mid-day, and still reached our eventual destination comfortably. Which made me think. Just how useful is this China HSR network proving to be ? Quite a lot, a detailed check reveals.

Managed and operated by the China Railway Corporation under the brand China Railway High-speed (CRH), the  massive network today runs trains ranging netween speeds of 250 m/h to 350 km/h.  The Beijing-Tianjin intercity rail, which opened in August 2008 and could carry high-speed trains at 350 km/h (217 mph), was the first passenger dedicated HSR line.Having opened one portion of it in 2008, the line was completed in 2013; it has reduced travel time by 20 hours and created a solid link from the Yangtze River Delta to east and south-central China. Today, the 29,000 kms (approximately) network has most of the world’s HSR firsts to its credit. Including the longest line opened in September 2018, the Beijing – Hong Kong line that connects the two key cities  in ten hours .

Like most things, including our very own renewables energy, where the Chinese, once they saw the opportunity, threw everything behind it to make it a leader with over 70% global capacities today, in HSR too, China seems to have spotted the opportunity of a generation. Thus, even as naysayers predicted poor returns and other viability challenges, the country went ahead and built up the world’s largest HSR network in just over  a decade, easily accounting for over 2/3rds of global HSR network today. So much so  that in 2008, when the financial recession hit the world, China chose to focus its infrastructural stimulus on the HSR network, in fact.

In a World bank report on the subject, Martin Raiser, the bank’s Country Director for China says  “China has built the largest high-speed rail network in the world. The impacts go well beyond the railway sector and include changed patterns of urban development, increases in tourism, and promotion of regional economic growth. Large numbers of people are now able to travel more easily and reliably than ever before, and the network has laid the groundwork for future reductions in greenhouse gas emissions,” .

The World Bank itself has financed some 2,600 km of high-speed rail in China . It’s report,  China’s High-Speed Rail Development has  key lessons and practices for other countries .

A key enabling factor identified by the study is the development of a comprehensive long-term plan to provide a clear framework for the 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.

In China, high-speed rail service is competitive with road and air transport for distances of up to about 1200 km. Fares are competitive with bus and airfares and are about one-fourth the base fares in other countries. This has allowed high-speed rail to attract more than 1.7 billion passengers a year from all income groups. Countries with smaller populations will need to choose routes carefully and balance the wider economic and social benefits of improved connectivity against financial viability concerns. Tickets on the route we too, Shanghai-Heifei, were just 299 RMB (Rs 2990 approx.), competitive with air fares, while offering higher baggage limits and comfort. Tickets on the Shanghai-Beijing leg, where 40 pairs of trains cover the 1300 km distance in well under under  5 hours, are Rs 5530 in ordinary class. This compares well with say, the distance between Delhi and Mumbai in India today, and flight tickets between the two .

A key factor keeping costs down is the standardization of designs and procedures. The construction cost of the Chinese high-speed rail network, at an average of $17 million to $21 million per km, is about two-thirds of the cost in other countries. India’s own high speed project, at around $18 million , is thankfully competitive to these costs.

The bank study also looks into the economic benefits of HSR services. 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. 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.

According to data from the CRC itself, the number of passengers using high-speed rail exceeded that using traditional rail for the first time in 2017. Trips on the  Beijing-Shanghai line have grown five fold over the past five years. Trains run every 10 minutes to 15 minutes. As one of the most profitable lines, it saw 180 million passengers in 2017, with a 12.5 per cent year-on-year growth.