Quote:
Originally Posted by acottawa
It is hard to see where a pension plan or other investor could see profit potential in HFR, with or without the CIB. Via simply can’t charge high enough fares to cover operating costs, capital costs plus profit for the investor. There are just too many transportation options in the corridor.
If the federal government wants this it is going to have to pay for it directly.
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Quote:
Originally Posted by acottawa
Investors, particularly conservative investors like pension funds are looking for a fairly high certainty of profit, not something that is within the realm of possibility.
Also, even if it covers operating costs, there are still capital costs before a profit can be seen.
Very few passenger railways anywhere make a profit, so predictions that this will be an exception need further explanation.
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Excuse me for my ignorance, but if a project must be financially self-sufficient without any subsidies in order to get financed through the CIB or receive funding from private investors, then how did the REM get funded, which depends on an
operating subsidy of 72 cents per passenger-kilometer? Had VIA Rail received that level of subsidies in 2017 for its Corridor East (i.e. Quebec-Montreal-Toronto) operations, the resulting subsidy payment of $755.6 million ([652,090,156 passenger-miles = 1,049,437,380 passenger-km]*$0.72) would have exceeded the operating
costs for its entire (!) network ($630.9 million).
Quote:
Originally Posted by Truenorth00
I get that. What I was expressing was a hope on upgradability. IE. Don't pick an alignment where speed can't be increased through further investment.
What I am hoping for here is that the success of HFR allows for further capital investment that increases speed. So for example, adding a billion in upgrades and grade separations could create a 100 km stretch where speeds go up to 250 kph from 177 kph, saving 10 mins.
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Have a look at the table below:
![](https://i.imgur.com/RoyEHIp.png)
Source:
FRA (2011, p.20)- If you refer to above table, the dilemma is as follows:
- Everything until 177 km/h (110 mph, Tiers 0/IA/IB) is relatively straightforward,
- Level crossings: whereas TC regulations [insert link] outright ban them beyond 177 km/h (110 mph), FRA regulations [insert link] allow a work-around in the 178-200 km/h (111-125 mph) band (Tier IC), but the necessary investments into "impenetrable barriers" under FRA regulations will become useless the moment you upgrade beyond 200 km/h (125 mph).
- Corridor-sharing with freight is still allowed beyond 200 km/h (125 mph), but only until 240 km/h (150 mph, Tier II), so moving beyond that speed requires a dedicated HSR Corridor which again renders prior investment useless.
- Track alignment: according to the Ecotrain Study, 200 km/h requires a minimum radius of 2,500 meters (2,000 meters with tilting trains), whereas 300 km/h requires a minimum radius of 6,000 meters. Investments in less generous track realignments therefore risks becoming useless when design speed is increased towards 300 km/h.
For all above reasons, investing in any infrastructure to reach speeds beyond 177 km/h only makes sense if you make sure that the investment is HSR-ready, i.e. compatible with a later upgrade to 300 km/h. For exactly that reason, I would strongly object upgrading any rail segments beyond 177 km/h, unless they overlap with Ecotrain's E-300 alignment and as far as I see that is only the case for parts of the Trois-Rivières Subdivision, Montreal-De Beujeu, Casselman West-Ottawa-Smiths Falls North and Port Hope West-Toronto:
![](https://urbantoronto.ca/forum/attachments/1546046371708-png.169020/)
Note: ROW sections eventually shared with HSR are highlighted in green, whereas existing and new ROW sections which will not be eventually shared with HSR are shown in yellow and red, respectively. Originally posted on
Urban Toronto and reposted here as
#1182.
Compiled with: distances obtained from
historic CN/CP timetables or measured with Google Earth and routings obtained from
The Globe And Mail (for HFR) and the
Ecotrain Study (Deliverable 5).
Quote:
Originally Posted by Truenorth00
My real hope here is that the Ottawa-Montreal stretch improves from 1:20 hrs to < 1 hr making Ottawa-Montreal far more commutable, while benefiting Toronto-Ottawa trips. I get that this can't be done at launch. But I hope that it can be achieved with additional capital over time.
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Basic maths reveals that you can’t cover 180 km in less than 1 hour without exceeding 200 km/h (125 mph, i.e. the maximum speed of the current fleet), which means you will need HSR equipment to reach such a speed and you won’t be able to justify such a dedicated high-performance fleet without securing the funding for such infrastructure at the same time. You are already calling for HSR, not for a step towards it…
Quote:
Originally Posted by acottawa
Just a little back of the envelope math.
Let’s say they reduce operating expenses per pax by about 25% to $80.
Let’s say they increase the number of passengers to 4M from 3.1M.
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Yeah right, VIA increased its ridership between 2014 and 2017 by 30.5% (or 11 times population growth, if extrapolating from the annualized growth of the combined population of Ontario and Quebec between 2011 and 2016) while investing “only”
$359.1 in capital expenditure (and only part of that in infrastructure), but investing 11 times that amount in a dedicated infrastructure will surely increase ridership by only 29.0% by 2030 (or just 2.3 times population growth)…^^
Quote:
Originally Posted by acottawa
Let’s say that the CPP is willing to take a low return on capital of 5% ($200M).
Each ticket sold would need to cover $50 in capital return plus $80 in expenses. Current revenue is $72 per pax, so ticket prices would need to almost double without hurting demand, which seems extremely unlikely.
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I struggle to understand what’s so shocking about a business plan becoming unviable if you arbitrarily remove more than half of its projected ridership. If you take the 9.9 million projected by VIA, then your per-passenger contribution for capital costs decreases from $50 to $20.20, thus a total operating cost of $100.20 per passenger or 140% rather than 181% of the current fare...
Quote:
Originally Posted by acottawa
It is a 35 minute improvement in travel time on the Montreal-Toronto route and an hour on the Ottawa-Toronto route (if Via’s estimates are accurate). I don’t think there is any precedent for time improvements of that magnitude leading to doubling of ridership.
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I believe that we’ve also reached the point where we need to talk about Generalized Journey Time (GJT), but before we can do that we need to somehow distribute VIA’s ridership from Corridor segments to the individual routes: The least arbitrary way I could find was to reallocate the passenger miles provided in the
2017 Annual Report (by multiplying the “Shortfall” figure with the “subsidy per passenger-mile”) according to the train mileage calculated from the 2017/05/29 timetable (i.e. the timetable which was valid for the largest part of 2017).
The second step is to adjust the ridership by the average of the annualized growth rates observed between 2011 and 2016 in the respective CMAs at both ends, which increases the passenger-mileage by 14.6% on average (which happens to achieve already half of the entire growth rate you only seem capable of imaging).
![](https://i.imgur.com/sT5kvrD.png)
Source:
Victoria Transport Policy Institute (2018, p.23)
Step three is to multiply the change in generalized journey time (see my table in my
previous post) and multiply it with the applicable elasticity: As you can see in above table, the elasticity for intercity rail travel demand in respect to its travel time is -1.58, which means that demand will decrease for every 1% increase in travel time by 1.58%, while it will increase by the same margin for every 1% decrease in travel time. This means that travel demand can be expected to increase by between 22.9% (Toronto-Montreal) and 61.1% (Montreal-Quebec) for an overall increase of 38.5% in the Corridor East or 32.6% over the entire Corridor (note that GJT stays unchanged for Southwestern Ontario). This means that the
combined effect of population growth and reductions in GJT on passenger mileage equals an increase by between 14.7% for Southwestern Ontario (i.e. the pure population growth effect) and 79.5% (Montreal-Quebec) for a total growth of 58.6% on the Corridor East and 51.9% on the entire Corridor. Similarly, dividing the passenger-mileage by the average trip length in 2017 yields the same 58.6% as increase in passenger figures on the Corridor East, but (due to the longer trip lengths on the Corridor East) a slightly lower 47.8% for the entire Corridor – for an increase in total passenger count on the Corridor East from 3.1 million in 2017 to 5.0 million in 2030 and total Corridor ridership from 4.1 to 6.1 million:
![](https://i.imgur.com/2vVAB7E.png)
Note: The respective growth rates for Southwestern Ontario (SWO) are taken from Toronto (CMA) as start of route and Ontario (Province) as end of route.
Compiled from:
VIA Rail Annual Report 2017,
VIA Rail's travel time projections for HFR,
Passenger Demand Forecasting Handbook, and
Victoria Transport Policy Institute (2018).
Quote:
Originally Posted by Truenorth00
You are looking at this wrong. It's not just trip time improvement. It's a massive upgrade in reliability, a boost in frequency and substantially more seats offered.
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Exactly, and that’s why above figures can only act as a sanity check to prove @acottawa’s ridership growth projections as over-pessimistic, while they say little about how realistic VIA’s ridership projection of 9.9 million is as we would have to quantify the effect of the other factors influencing generalized journey time and thus demand:
- Operations quality: on-time performance, travel time predictability
- Service quality: on-board and at-the-place services offered
- Rolling stock: ambience, comfort, convenience and amenities offered by the rolling stock
- Station experience: ambience, comfort, convenience and amenities offered by the station facilities
- Boarding experience: ease and convenience offered during the boarding process
- Booking experience: ease and convenience offered during the booking process
- Pricing: pricing level and product variants
Whereas my subjective impression is that service quality is already very high, I believe that most other areas identified above could, should and will be improved as a consequence of HFR or other investment programs already underway (new fleet, new reservation system, Toronto Union Station vitalisation, …) and that they will have a significantly positive effect on GJT and thus ridership. At the same time, there are some growth factors which are beyond the scope of GJT, but should generate additional ridership:
- Capacity constraints: availability of matching rolling stock availability (in-fleet as well as in-service) to demand (e.g. new fleet will allow increased utilisation and includes an option which would substantially increase capacity)
- Markets currently not served (e.g. Peterborough and Trois-Rivières) or only indirectly (e.g. Laval)
- Changes in the competitive environment (e.g. highway congestion driving up car and coach travel times or airlines substituting short-haul flights by sending their connecting passengers by rail in order to free up airport slots for more valuable flights)
I’m far from expecting anyone to trust studies they so far haven’t been able to even look at, but I hope that it becomes clear that there are indeed "precedents" (elasticises are derived from real-world experiences in countless studies), which suggest that the changes in population size, travel time and headways alone would already explain a growth of total Corridor ridership from 4.1 to 6.1 million, while I provided a few factors which should grow ridership further (though I'm unfortunately not able to quantify these effects). Hopefully, this gives you all a better idea of how the studies which are or have been conducted might be able to back up the claims which have been made regarding HFR…