ESD Working Paper Series

ESD Working Paper Series Comparative Study of High-Speed Passenger Rail Deployment in Megaregion Corridors: Current Experiences and Future Opportunities Sevara Melibaeva World Bank Washington, DC, USA Joseph Sussman MIT Cambridge, MA, USA Travis Dunn MIT Cambridge, MA, USA ESD-WP-2010-09 December 2010 esd.mit.edu/wps DRAFT Proceedings of the ASME/ASCE/IEEE 2011 Joint Rail Conference JRC2011 March 16-18, 2011, Pueblo, Colorado, USA JRC2011-56115 COMPARATIVE STUDY OF HIGH-SPEED PASSENGER RAIL DEPLOYMENT IN MEGAREGION CORRIDORS: CURRENT EXPERIENCES AND FUTURE OPPORTUNITIES Sevara Melibaeva Joseph Sussman Travis Dunn MIT MIT MIT Cambridge, MA, USA Cambridge, MA, USA Cambridge, MA, USA ABSTRACT of the EU countries investing in high-speed rail. Issues Deployment of high-speed passenger rail services has considered include the suitability of high-speed passenger rail occurred around the world in densely-populated corridors, service in existing megaregions as well as the potential for often with the effect of either creating or enhancing a unified formation of megaregions in other corridors. By understanding economic “megaregion” agglomeration. This paper will review the impact of high-speed passenger service on economic the technical characteristics of a variety of megaregion growth, labor markets, urban form, and the regional corridors, including Japan (Tokyo-Osaka), France (Paris- distribution of economic activity, planners can better anticipate Lyon), and Germany (Frankfurt-Cologne), and their economic and prepare countermeasures for any negative effects of high- impacts. There are many lessons to be drawn from the speed rail. Examples of countermeasures include deployment and ongoing operation of high-speed passenger complementary investments in urban and regional transit rail service in these corridors for other countries now connections and cooperation with airlines and other considering similar projects, such as the US and parts of the transportation service operators. European Union. High-speed passenger rail represents a substantial First, we will review three international cases, describing investment whose implementation and ultimate success the physical development of each corridor as well as its depends on a wide range of factors. Among them is the ability measured impacts on economic development. In each case, the of planners and decision-makers to make a strong case for the travel time reductions of the high-speed service transformed sharing of benefits across a broad geography, both within and the economic boundaries of the urban agglomerations, beyond the megaregion (and potential megaregion) corridors integrating labor and consumer markets, while often where service is most likely to be provided. This paper simultaneously raising concerns about the balance of growth provides some useful lessons based on international within the region. Moreover, high-speed travel within the experiences. regions has had important implications for the modes and patterns of travel beyond the region, particularly with respect INTRODUCTION to long-distance air travel. An example is the code-shared rail- HSR is becoming an increasingly important and popular air service between DeutscheBahn and Lufthansa in the form of passenger transportation infrastructure, as roads and Frankfurt-Cologne corridor. airports become more congested and greenhouse gas levels Next, we will examine the implications of these increase. Since the introduction of the first high-speed rail international experiences for high-speed rail deployment (HSR) line in Japan in 1964, HSR has been gaining acceptance elsewhere in the world, particularly the US and Portugal, one worldwide, with new lines in operation or under construction 1 Copyright © 2011 by ASME in several EU countries, China, South Korea, and Taiwan, as on the 297 km (185 mile) corridor between Lisbon and Porto, well as lines under serious considered in other countries. the country’s two largest cities, in 75 minutes, with The implementation of high-speed rail lines plays an intermediate stops in 4 smaller cities. important role in reshaping the travel patterns and activities of First, we review transportation literature on economic people and consequently changing the ways cities develop. development effects of HSR investments (including economic Apart from the goals of increasing transportation infrastructure geography and megacities). Next, we present case studies of capacity and providing a “green” transport alternative, the international HSR corridor experiences, specifically Tokyo- motivation to develop HSR system for many countries has also Osaka in Japan, Paris-Lyon in France, and Frankfurt-Cologne been promotion of economic growth and regional in Germany. The case studies explore the phenomenon of development. Traditionally, the direct economic impacts of “megalopolis” formation along the selected corridors as a HSR and other transport investments are assessed through a result of the HSR link and to find evidence of economic benefit-cost analysis (BCA). However, there are also indirect or development effects on urban areas along the corridors, both wider development impacts that the traditional BCA may not positive and negative. The findings are then applied to capture. analyze the planned Lisbon-Porto HSR corridor in Portugal; These impacts are the main focus of the paper— and the possible emergences of megalopolis forms and the specifically, the potential for megaregion or megalopolis associated implications for HSR deployment elsewhere in the formation - an integrated economic urban complex – created world are discussed. by fusion of multiple cities connected at high-speed of 200-300 km/h (124-186 mi/h).1 Megalopolises can have many positive METHODOLOGY economic impacts stemming from larger labor markets, larger The case study approach is largely qualitative and commercial markets, expanded individual daily activity zones, descriptive, supported where appropriate with syntheses of and so forth. Ross (2009) presents a megaregion as a quantitative analyses of empirical evidence. Cases were geography that can be more effective than cities alone in selected to include countries with sufficient experience meeting “economic and social challenges.”2 Prud'homme operating HSR systems to allow for the development effects of (1997) links the size of the city’s labor market to the city’s HSR to occur. Empirical evidence was collected through productivity. The larger the labor market, both the firm and the review of available data as well as existing literature from employees have higher probabilities of getting what they want. Japan, France, and Germany, both before and after deployment A larger labor market also justifies and facilitates of HSR. Key indicators for measuring economic effects of specialization of workers and jobs thus increasing productivity. transportation investments were identified. Considering this theory, the megalopolis may offer a larger labor market relative to the existing labor markets of city pairs LITERATURE REVIEW where service is being considered, and therefore contribute to The existing theoretical literature identifies a number of increased productivity. potential economic development impacts of HSR investment, The development impacts from HSR may also be negative. many of which go beyond traditional impacts such as travel For example, HSR can disadvantage the smaller urban areas time savings and transport cost reductions. These include located between the main HSR stations. Puga (2001) notes that changes to the spatial location of economic activity, reductions “a better connection between two regions not only gives firms in regional inequalities, larger labor and consumer markets, in a less developed region better access to the inputs and and increased productivity levels. Some of the potential markets of more developed regions,” but also can harm them negative impacts include a loss of economic activity in less by reallocating economic activity to the richer regions. This is developed and/or less accessible regions, and thus uneven also true for cities. Therefore, we draw upon international allocation of growth. experiences to understand what the improved accessibility A number of existing studies assess the economic from the HSR means for the economic activity, labor markets development implications of transportation in general. and distribution of development impacts in small- and Banister et al. (2001) examines whether transportation medium-sized cities and regions. investments yield any “additional development benefits” at the These impacts are directly relevant to the U.S. and regional and local levels besides the direct gains from travel- Portugal. For example, the US government is making time savings. Puga (2001) and Krugman explore the effect of investments in HSR connections for major city pairs in “reduction in transport costs” on “the spatial location of Florida, California, and the Midwest, among other places. economic activities.” Puga also notes that transport Meanwhile, the Portugal government intends to deploy HSR infrastructure improvements are one of the main instruments for “reducing regional inequalities.” Studies assessing the development impacts of HSR find 1 Gottman, J. 1961; Pickard, J.P. 1962; Hall, P. 2006 and 2009; Lang, R. and Knox, P. 2009; and Blum et al. 1997. that HSR contributes to further centralization and 2 Ross, C.L. 2009, p. 5. concentration of most economic activity in already developed 2 Copyright © 2011 by ASME areas. For instance,

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