The Importance of Timetable Construction Principles for Railway Investment Appraisal



The Importance of Timetable Construction Principles for Railway Investment Appraisal

Authors

J Eliasson, M Borjesson, Royal Institute of Technology, SE

Description

The social surplus of a railway investment is decided by how it is used, i.e. what timetable(s) are assumed before/after the investment. Without an explicit principle for timetable construction, the outcome of an appraisal is essentially arbitrary.

Abstract

The social profitability of a railway investment is decided by how it is used. This is in contrast to road investment. The use of a road is decided by users themselves: the demand is essentially decided by the characteristics of the physical investment and the surrounding network (and variables such as fuel prices etc.). But knowledge about the physical rail network is meaningless without information about the traffic supply on it: train frequencies, running times etc.

Different timetables have different social efficiency, in the sense that they will yield different total social surplus. If the social efficiencies of the assumed timetables with and without a suggested investment are different, the outcome of an investment appraisal is essentially arbitrary. Virtually any outcome can be obtained by choosing the two timetables ("before" and "after" the investment) to achievea desired result. For example, to get a high benefit/cost ratio, one can assume a highly socially efficient timetable "after" the investment, and a highly inefficient timetable "before" the investment. Note in particular that the same timetable will have different social efficiency "before" and "after" an investment.

Obviously , this leaves plenty of room for appraisal analysts to be strategic. Assumptions about the future traffic fed into the appraisal is usually made by the planning agency carrying out the appraisal. In practice, it is the analyst (or possibly a group of analysts) who decide how the rail infrastructure is assumed to be used, both in the "with" and "without" investment case. This means that the analyst has a large degree of freedom to, in practice, decide what the outcome of a cost-benefit analysis of a suggested investment will be.

This phenomenon seems to be not widely understood or appreciated. To our knowledge, despite the fact that many countries have offical, detailed appraisal guidelines, none of these guidelines (to our knowledge) specify explicit principles for constructing the timetables used in CBAs.

This paper explains the phenomenon in some detail, using simplified but realistic examples. Further, we discuss what implications for CBA results different approaches to timetable design will have - including the more or less implicit principles that are used in current Swedish railway CBA. Finally, we suggest tentative principles for CBA timetable design, and a tentative roadmap for further research to refine such principles.

Publisher

Association for European Transport