How can we have nice things if they cost ten times more?

Phase 1 of the California high-speed rail project (520 miles) is now claimed to have an estimated cost of $78 to $98 billion. This is $150 million to $180 million per mile. This is $94-118 million per kilometer.

The system will be five to ten times the average cost of $17–21 million per km of high-speed rail in China and about three to four times the $25–39 million per km average for similar projects in Europe.

The California high-speed rail hopes to have 2 hour 40 minute trips from San Francisco to Los Angeles with some non-stop trains if the trains average 220 miles per hour from San Jose to LA.

China plans to extend China’s high-speed railway network to 30,000 kilometers by 2020, linking most of the big cities, general manager Lu Dongfu said. The plan is to have high-speed railway lines covering 38,000 kilometers across the country by 2025.

China has allocated 732 billion yuan (US$112.4 billion) for fixed-asset investment this year – less than the 801 billion yuan for 2017 but roughly in line with the average of the past five years. China is adding 3500 kilometers of high-speed rail network in 2018.

China is allocating about $30 million per kilometer for fixed assets. This includes more trains and other fixed assets for high volume utilization and maintenance of existing track.

How China has such low high-speed rail construction costs

China has lower high-speed rail unit costs as a result of the development of multiple competitive local sources for construction – including earthworks, bridges, tunnels and rolling stock – that adopted mechanization in construction and manufacturing. Furthermore, large volumes and the ability to amortize capital investment in high-cost construction equipment across a number of projects also helped to reduce costs.

Other factors include a relatively low cost of land acquisition and resettlement, localization of the design and manufacture of goods and components as well as the standardization of designs for embankments, track, viaducts, electrification, signaling and telecommunication systems. For example, the slab track manufacturing process was imported from Germany but the cost of the Chinese-made product is about a third lower than the German product as a result of large volumes and lower labor costs. The technology developed for construction of tunnels not only resulted in a low unit cost but also enabled tunnels to be constructed at a rate of 5-10m per day. High-speed tunnel construction costs in China are about $US 10-15m/km, a fraction of that in other countries. Tunnel costs are heavily influenced by geology and labor costs and, in the case of China, the latter has certainly helped to keep costs down.

An analysis of the construction costs of the 27 high-speed lines in operation at the end of 2013 revealed substantial variations in unit cost, ranging from Yuan 94 million ($US 15.3million) to Yuan 183 million/km. (1 US dollar is 6.3 yuan)

With a handful of exceptions, the unit cost of 250km/h lines was Yuan 70-169m/km. The weighted average unit cost was Yuan 129m/km for a 350km/h project and Yuan 87m/km for a 250km/h project.

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