High Speed Rail - Transport Committee Contents


Written evidence from Adrian Hopkinson (HSR 10)

ECONOMICS OF HIGH SPEED TRAINS

Please accept my contribution to the debate about High Speed trains, as one who witnesses the operation of German High Speed trains most weeks. I commute to Dusseldorf from Birmingham (Warwick). My family used to live in Germany, and I have worked there for the best part of 30 years. As a financial analyst, my work analysing industrial success has taken me to every corner of that country.

1.  General summary. It is not clear that an infrastructure of high speed trains helps those at the wrong end of the railway line! On the basis of travel inside Germany and observation of what is occurring in the different areas of the country, the correlation between the existence of high speed trains and the prosperity of the locality is the opposite of expectations. Three case studies follow.

2.  Good conditions for high speed rail in the Federal Republic. In most cases existing railway lines could be upgraded to achieve speeds of 200 kilometres or above. The process of smoothing out curves and gradients could be achieved because of the much wider spaces available. The incentive to do so exists because the distances from large town to large town are large, and aeroplane capacity not always convenient. On several routes speeds drop to conventional speeds: ICE trains are not always HS. They are often quite conventional.

3.  Case study one. Cologne/Frankfurt. Some six years ago the high speed line between Cologne and Frankfurt (on Main) was completed. Trains can achieve over 300 kph on this brand new route and have reduced journey times between these two cities from 2.5 hours to 1 hour. The route was laid alongside an existing motorway: expensive but not too controversial, and it is a completely new train route. Previously it ran along the river past Koblenz which is why it took 2.5 hours.

4.  But….since building the new line the consequences for the economy and employment in the Rhineland (at the western end of the line) do not seem to have been entirely as expected. Frankfurt goes from strength to strength. It is as much an industrial as a banking centre. But Cologne/Dusseldorf (capital of Germany's most populous state Nordrhein-Westfalen) still appears lacking in economic impetus.

5.  Indeed the situation is worse than that. Frankfurt's strength as a financial centre within Germany has increased. The largest bank in Cologne, Sal Oppenheim, has been subsumed into Deutsch Bank during the credit crisis, and many of its activities moved to Frankfurt. The bank where the writer works, WestLB, has reduced its Dusseldorf workforce by around 20%, whilst maintaining its presence in Frankfurt (and London). Its shareholders are increasingly trying to develop a new role for the bank now that its regional relevance has been reduced.

6.  It is hard not to believe the HS train contributed to the increased polarisation. Thanks to the new train services bankers from Frankfurt can attend in the Rheinland, so that local banks are not so necessary. Financial services have tended to centralise further.

7.  Case study two. Munich and Stuttgart. In other parts of Germany, there are also some interesting straws in the wind as far as analysis of economic consequences is concerned. Munich, the economic powerhouse of Germany, is linked to Frankfurt by trains, which only achieve HS1 type speeds on part of the route. (Prosperity can be measured in GNP per head or in terms of levels of employment). The reason for this lies in the conservatism of the electors in Bavaria and Baden Wurttemberg who resist intrusive investments which damage buildings and the landscape. Baden Wurttemberg and Bavaria compete for highest National Income per head in D. Stuttgart is HQ for Mercedes Benz, and no slouch from an economic point of view. Possibly this has caused them to prioritise roads, but it certainly cannot be said that absence of HSR has impeded their economic progress.

8.  Case study three. Hannover and Berlin remain a sharp contrast to the southern states. Both are joined by excellent HSR in all directions, but continue to be economic slow-coaches. Because of their previous situation close to the border zone between east and west Germany, they have always had excellent infrastructure of all kinds. Even so Berlin still only has one or two stock market listed companies.

9.  Hannover itself is an interesting case, because it was host to the German celebrations of the new millennium in 2000. In preparation for the millennium celebrations (Expo 2000), all the transport connections were upgraded. Particularly the rail connections were improved with the construction of a brand new railway station to receive high speed trains from Frankfurt, Berlin and Hamburg. Hannover remains at the centre of a network of high speed trains. The Expo was a reasonable success, but subsequently the activity level in the city appears to have stabilised. I have not seen any reports that the excellent infrastructure has brought industrial rejuvenation to the area. Rather one suspects, the opposite has occurred. Lower Saxony of which Hannover is capital has an unspectacular economic performance.

10.  It would be interesting to hear evidence from town councillors of Hannover, about the contribution made to them by HSR. They would surely be in a good position to advise whether talent from Leeds and Manchester might be sucked away to London.

May 2011


 
previous page contents next page


© Parliamentary copyright 2011
Prepared 8 November 2011