Modal Shift Estimation and Financial Viability of High Speed Rail in India: The Case Study of Ahmedabad – Mumbai Corridor

Abstract

The share of rail in passenger transport in India has declined rapidly, primarily due to severe capacity constraints and inability of railways to increase the speed of travel. Other countries facing similar problems have found High Speed Rail to be the solution. The Indian Government has identified the Ahmedabad – Mumbai corridor with stops at Vadodara and Surat as being best suited for High Speed Rail. Accordingly, in this thesis, the modal shift and financial viability of High Speed Rail in passenger transport in the Ahmedabad – Mumbai corridor has been estimated to evaluate its potential in catering to the increasing passenger travel demand in this corridor. The modal shift towards High Speed Rail has been estimated using discrete choice models from actual data of common carrier modes considering travel cost by income, production hours and non-production hours of travel time and end to end travel penalty (a comprehensive variable which included access-egress, terminal penalty, in-vehicle discomfort, crowding penalties) as the explanatory variables assuming 2025-26 to be the first year of operation. Based on the estimated modal shift, the financial viability has been estimated for various internal rates of return. The results show that the HSR project would recover the investment within ten years of operation from the tariffs alone for a reasonable financial internal rate of return. It was also estimated that HSR would get at least 48 million end to end passengers in 2025-26, the first year of commercial operation. With an annual passenger growth rate of 15.32% between 2025-26 and 2030-31, the end to end ridership would be at least 97 million in 2030-31 and with 11.63% between 2030-31 and 2035-36, the end to end passengers for HSR would reach at least 170 million in 2035-36. This kind of expected mammoth ridership would facilitate the recovery of the entire investment cost of the project making this as the most successful HSR project in the world. Some policy measures have also been recommended to ensure the successful implementation of the High Speed Rail project and increases its ridership further. This thesis contributes to literature by way of evolving a methodology for the estimation of modal shift using actual data of the common carrier modes, inclusion of variables of production hours and non-production hours of travel and total travel penalty that have not been considered by the previous modal shift studies. This methodology provides a comprehensive, robust and new framework for modal shift estimation and financial viability of High Speed Rail projects in developing countries similar to India.