The ideal technology, which will benefit from the government's efforts to stimulate their economies out of the current crisis, is likely to absorb a large number of labor from the construction industry affected by the recession, provide a long-term economic boost when completed, and provide environmentally friendly benefits along with that.
Therefore, it is not surprising to see high-speed passenger railway projects, an industry that uses labor intensively, by business, and is able to enhance the economic situation in the areas it serves, and attract passengers to use it away from cars and planes, to see it prominent in the incentive programs of many from governments.
China has the most impressive construction program in the world, and countries such as Saudi Arabia and India are continuing to develop plans to build dedicated train tracks.
Even the United States, which has long lagged behind in terms of passenger volumes carried by rail, has drawn up ambitious plans for high-speed rail corridors as part of its stimulus deal.
Europe remains the continent that uses high-speed rail extensively, and some countries within the continent have ambitious expansion plans.
Earlier this year, France accelerated a project aimed at expanding its high-speed network by another 500 kilometres.
Germany also spends heavily on its railways, although these expenditures are not earmarked for high-speed railways.
The British government has requested a report by the end of this year on potential construction of dedicated high-speed lines.
Also, Spain, which next year will overtake Japan with the largest high-speed rail network in the world, is likely to speed up its program to stimulate its economy, according to Juan Matías Arcilla, director of international projects at Renf, an operating company.
Government owned trains.
The justification given for these programmes, one of the most often claimed advantages of high-speed rail, is that they revitalize the stagnant cities they serve.
Archila points as an example to the town of Valladolid, 160 km from Madrid. Its university, as well as its economy, prospered with the opening of a high-speed railway connecting it to Madrid within an hour. The professors now want to work more in Valladolid because they can keep their homes in Madrid. Archila says: In the medium term, the investment of the current years will contribute to improving the economy over the coming years. But the investments remain dependent on the money of wealthy governments.
David Azima, director of strategy and finance at SNCF, the French government-owned rail operator frankly says that his company, along with RFF, the company that owns French rail infrastructure, is owned by the government, They make investments to boost the economy.
Azima says: As we are two government-owned companies, thus benefiting from the credit rating of France's sovereign bonds, we do not have any direct restrictions on the capital expenditure programme. We are able to play a counter-cyclical role. #2 But SNCF will not be able to play such a role indefinitely, given the effects of the recession on the company's revenue. We will not continue to do this for several years, Azima says.
Such considerations have fueled some concerns that, even when new projects are planned, they could in the future be subject to budget cuts. "If we see a more serious economic situation next year, I don't know what the consequences could be," says Johannes Ludwig, executive director of the European Railways Council. Even if the programs continue to work, there are concerns that this could be at the expense of other parts of the rail system, which do not have that luster. The biggest problem for most European railways, says Ludwig, is the development of freight networks.
But there are far more general problems in depression-affected Central and Eastern Europe. Michael Clausecker, Director General of UNEVA, says: The European Rail Supply Industry Association says the hardest-hit Central European country will struggle to secure about 15 per cent of funding for its projects, with the European Union paying the rest.
Thomas Mayer, director of the infrastructure group at the European Bank for Reconstruction and Development, says that Eastern European railways, which collect their revenues in local currency, find it quite difficult to raise the volume of financing, compared to railways in the eurozone countries. Yet even the railways of Western Europe are having difficulty securing private sector financing, which can be a circumvention of budgetary problems. The French government was forced to abandon some plans to attract private financing for the construction of its high-speed railways, due to the conditions of the capital markets. Under such circumstances, not a large number of observers believe that bridging the gap in railway standards between the two halves of the continent is a possibility soon.
Moderator: I broke this up into more digestible chunks.
