Norway High Speed Rail Assessment Study: Phase III Journey Time Analysis Market, Demand & Revenue Analysis Estimation & Assessment of Investment Costs Economic & Financial Analysis Summary Report 25 January 2012 Atkins in collaboration with: Norway High Speed Study - Phase III Summary Report Notice This document and its contents have been prepared and are intended solely for Jernbaneverket‟s information and use in relation to the Norway High Speed Rail Study – Phase III. Atkins assumes no responsibility to any other party in respect of or arising out of or in connection with this document and/or its contents. This document has 106 pages including the cover. Document history Job number: 5101627 Document ref: Summary Report Revision Purpose description Originated Checked Reviewed Authorised Date Rev 1.0 Phase III Final Draft Various ARF / AJC WL WL 11/01/12 Summary Report excluding Scenario B Rev 2.0 Phase III Final Draft Various ARF / AJC WL WL 13/01/12 Summary Report (including Scenario B) Rev 3.0 Phase III Final Summary Various TM / AJC AJC WL 25/01/12 Report Client signoff Client Jernbaneverket Project Norway HSR Assessment Study - Phase III Document title Norway HSR Assessment Study - Phase III: Summary Report Job no. 5101627 Copy no. Document Norway HSR Assessment Study - Phase III: Summary Report reference 25 January 2012 Atkins Norway HSR Assessment Study - Phase III: Summary Report Norway High Speed Study - Phase III Summary Report Table of contents Chapter Pages 1. Introduction 7 1.1. Background 7 1.2. Structure of this report 7 1.3. Reference documents 8 2. Alternatives considered and key assumptions 9 2.1. HSR Corridors and Route Alternatives 9 2.2. Infrastructure Scenarios 10 2.3. Specific C/D Scenario Alternatives Considered for Technical Analysis 10 2.4. HSR Passenger Service Scenarios 12 2.5. The Reference Situation 12 2.6. Assumed Timescales 12 3. Journey Time Analysis 14 3.1. Introduction 14 3.2. Choice of core stations and stopping patterns 14 3.3. HSR Alternative Journey Times 15 3.4. Summary and Conclusions 18 4. Passenger Market, Demand and Revenue Analysis 20 4.1. Summary of Approach 20 4.2. Demand and Revenue: North Corridor 21 4.3. Demand and Revenue: West Corridor 23 4.4. Demand and Revenue: South Corridor 27 4.5. Demand and Revenue: East Corridor 29 4.6. Comparison of Results 33 4.7. Accessibility and Feeder Networks 37 4.8. Summary and Conclusions 40 5. HSR Freight Market Analysis 42 5.1. Introduction 42 5.2. Freight modelling results 42 5.3. Consultation 46 5.4. International experience 46 5.5. Summary and Conclusions 47 6. Estimation and Assessment of Investment Costs 49 6.1. Introduction 49 6.2. Capital Costs (CAPEX) 49 6.3. Life Cycle Costs (LCC) 52 6.4. Risk and Uncertainty 57 6.1 Risk Assessment Methodology 57 6.5. Optimism Bias (OB) 58 6.6. Risk and uncertainty outputs and resultant Anticipated Final Costs 59 6.7. Summary and Conclusions 59 7. Economic and Financial Analysis 61 7.1. Introduction 61 7.2. Economic Appraisal Results 62 7.3. Financial Appraisal Results 74 8. Analysis of Scenario B 81 8.1. Introduction and description of Scenario B alternatives 81 Atkins Norway HSR Assessment Study - Phase III: Summary Report Norway High Speed Study - Phase III Summary Report 8.2. Scope of analysis 81 8.3. Scenario B Journey Time Analysis 82 8.4. Scenario B Market, Demand and Revenue Analysis 83 8.5. Estimation and Assessment of Investment Costs 87 8.6. Economic and Financial Analysis 95 9. Overall Summary and Conclusions 100 9.1. HSR Alternative specification and journey times 100 9.2. Passenger market, demand and revenue analysis 100 9.3. HSR freight market analysis 101 9.4. Estimation and assessment of investment costs 102 9.5. Economic and financial appraisal 102 9.6. Analysis of Scenario B alternatives 104 9.7. Additional considerations 105 Tables Table 1. HSR Alternatives considered for detailed technical analysis 11 Table 2. Indicative Construction Timelines for HSR Alternatives analysed 13 Table 3. North Corridor Journey Times 15 Table 4. West Corridor Journey Times; Oslo - Bergen 16 Table 5. West Corridor Journey Times; Oslo - Stavanger 16 Table 6. West Corridor Journey Times; Bergen - Stavanger 16 Table 7. South Corridor Journey Times; Oslo - Stavanger 17 Table 8. East Corridor Journey Times; Oslo - Stockholm 18 Table 9. East Corridor Journey Times; Oslo - Gothenburg 18 Table 10. Summary of Demand and Revenue – Alternative G3:Y 21 Table 11. Summary of Demand and Revenue – Alternative Ø2:P 22 Table 12. Summary of Demand and Revenue – Alternative N1:Q 23 Table 13. Summary of Demand and Revenue – Alternative HA2:P 24 Table 14. Summary of Demand and Revenue – Alternative H1:P 25 Table 15. Summary of Demand and Revenue – Alternative BS1:P 26 Table 16. Summary of Demand and Revenue – Alternative S8:Q 27 Table 17. Summary of Demand and Revenue – Alternative S2:P 28 Table 18. Summary of Demand and Revenue – Alternative ST5:U 29 Table 19. Summary of Demand and Revenue – Alternative ST3:R 30 Table 20. Summary of Demand and Revenue – Alternative GO3:Q 31 Table 21. Summary of Demand and Revenue – Alternative GO1:S 32 Table 22. Air Freight Traffic on Selected Routes (tonnes) 43 Table 23. Forecast increase in freight tonnage by route per year 44 Table 24. Forecast increase in freight tonne km by route per year 44 Table 25. Forecast increase in total tonnes and tonne kms by year across all city to city movements 45 Table 26. Total base tonnes per year (city to city movements) 45 Table 27. HSR Alternative Anticipated Final Costs – Capital Costs (BnNOK, Q4 2011 prices, undiscounted) 50 Table 28. Summary Capital Cost Report (MnNOK at Q4 2011 prices, undiscounted) 51 Table 29. LCC HSR Alternative 25 Year Headline Summary (MnNOK Q4 2011 prices, undiscounted) 54 Table 30. LCC HSR Alternative 40 Year Headline Summary (MnNOK Q4 2011 prices, undiscounted) 54 Table 31. HSR Alternatives 25 Year Life Cycle Cost Report (MnNOK, Q4 2011 prices, undiscounted) 55 Table 32. HSR Alternatives 40 Year Life Cycle Cost Report (MnNOK, Q4 2011 prices, undiscounted) 56 Table 33. Application of risk and OB to HSR Alternative Capital Costs (MnNOK Q4 2011 prices, undiscounted) 59 Table 34. HSR Alternatives – Summary of Total Costs (MnNOK Q4 2011 prices, undiscounted) 60 Atkins Norway HSR Assessment Study - Phase III: Summary Report Norway High Speed Study - Phase III Summary Report Table 35. Economic Appraisal Results by Alternative for PSS1 and PSS2, Standard Framework, NPV, MnNOK, 2009 prices, 25 year appraisal period 73 Table 36. Economic Appraisal Results by Alternative for PSS1 and PSS2, Alternative Framework, NPV, MnNOK, 2009 prices, 40 year appraisal period 73 Table 37. Financial Appraisal Results by Alternative for PSS1 and PSS2, , NPV, MnNOK, 2009 prices, 25 year appraisal period 76 Table 38. Scenario B Summary of Specification 81 Table 39. Scenario B Journey Times 82 Table 40. NTM5 Journey Time Factor 82 Table 41. Summary of Demand & Revenue: Oslo – Trondheim 84 Table 42. Summary of Demand & Revenue: Oslo – Bergen 84 Table 43. Summary of Demand & Revenue: Oslo – Stavanger 85 Table 44. Summary of Demand & Revenue: Oslo – Stockholm 86 Table 45. Scenario B Anticipated Final Costs – Capital Costs (BnNOK, Q4 2011 prices, undiscounted) 88 Table 46. Scenario B, Summary Capital Cost Report (MnNOK at Q4 2011 prices, undiscounted) 89 Table 47. LCC Scenario B 25 Year Headline Summary (MnNOK Q4 2011 prices, undiscounted) 90 Table 48. LCC Scenario B Alternatives 40 Year Headline Summary (MnNOK Q4 2011 prices, undiscounted) 90 Table 49. Scenario B Alternatives 25 Year Life Cycle Cost Report (MnNOK, Q4 2011 prices, undiscounted) 91 Table 50. Scenario B Alternatives 40 Year Life Cycle Cost Report (MnNOK, Q4 2011 prices, undiscounted) 92 Table 51. Application of risk and OB to Route Upgrade Alternatives Capital Costs (MnNOK Q4 2011 prices, undiscounted) 93 Table 52. Route Upgrade Alternatives – Summary of Total Costs (MnNOK Q4 2011 prices, undiscounted) 94 Table 53. Economic Appraisal Results by Alternative, Standard Framework and „Revised Alternative‟ Framework, NPV, MnNOK, 2009 prices 25 and 40 year appraisal periods. 96 Table 54. Financial Appraisal Results, Alternative Framework, NPV, MnNOK, 2009 prices 25 year appraisal period. 98 Figures Figure 1. HSR Corridors and Route Alternatives 9 Figure 2. HSR Daily Boardings and Alightings by Station – G3:Y 21 Figure 3. HSR Daily Boardings and Alightings by Station 22 Figure 4. HSR Boardings and Alightings by Station – N1:Q 23 Figure 5. HSR Boardings and Alightings by Station – HA2:P 24 Figure 6. HSR Boardings and Alightings by Station – H1:P 25 Figure 7. HSR Boardings and Alightings by Station – BS1:P 26 Figure 8. HSR Boardings and Alightings by Station – S8:Q 27 Figure 9. HSR Boardings and Alightings by Station – S2:P 28 Figure 10. HSR Boardings and Alightings by Station – ST5:U 29 Figure 11. HSR Boardings and Alightings by Station - ST3:R 30 Figure 12. HSR Boardings and Alightings by Station – GO3:Q 31 Figure 13. HSR Boardings and Alightings by Station – GO1:S 32 Figure 14. Comparison of HSR passengers by alternative 33 Figure 15. Comparison of HSR revenue by alternative 34 Figure 16. Comparison of HSR average occupancy by alternative 34 Figure 17. Comparison of HSR passengers by alternative with PSS2 35 Figure 18. Comparison of HSR revenue by alternative with PSS2 36 Figure 19. Comparison of HSR average occupancy by alternative with PSS2 36 Figure 20. Impact of HSR fare on demand and revenue (Route Ø2:P, 2024) 37 Atkins Norway HSR Assessment Study - Phase III: Summary Report Norway High Speed Study - Phase III Summary Report Figure 21. Journey time to Oslo improvement through implementation of classic rail feeder service into Kristiansand HSR, and potential bus connections, from a multimodal hub at Kristiansand 39 Figure 22.