Profitability and debtOne major concern of the high-speed rail network is the high amount of debt incurred. As of 2022, the China State Railway Group has had a debt of around US$900 billion, according to Nikkei.
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Profitability and debtOne major concern of the high-speed rail network is the high amount of debt incurred. As of 2022, the China State Railway Group has had a debt of around US$900 billion, according to Nikkei.
According to the latest data, as of the first half of 2022, the total liabilities of China National Railway Group totaled 6 trillion yuan, and in the first half of 2022 alone, it has lost 80.4 billion yuan, with an average loss of 400 million yuan per day.
Kelly acknowledges that the $8-billion goal is “aggressive and rightly so” because California is paying for 84% of the cost so far. “If the national government wants to get a national cleaner, faster electrified rail system, it has to do better than 16%. And so we're going to make that case,” he said.
However, a Paulson Institute research had estimated that the net benefit of the high-speed rail to the Chinese economy to be approximately $378 billion and an annual return on investment at 6.5%.
Implementing high-speed rail will keep billions of dollars in the U.S. economy by decreasing the amount of oil that the U.S. consumes. According to the International Association of Railways (UIC), high-speed rail is eight times more energy efficient than airplanes and four times more efficient than automobile use.
For China's ruling Communist Party and its leader Xi Jinping, high-speed rail is also a powerful tool for social cohesion, political influence and the integration of disparate regions with distinct cultures into the mainstream.
With the right commercial strategy, high-speed rail (HSR) routes can be profitable, with some lines achieving modal shares of up to 65%. When considering route strategy, HSR's market share versus other modes must be well understood.
In addition, the tracks, signals, rail cars and software made in the U.S. are costlier than imports, largely because the government has not funded rail the way European and Asian countries have, experts say.
Build costs in the UK are higher. This is partly because we have higher costs associated with design. It is also because our sector is particularly reliant on subcontractors. Little more than an eighth of the UK construction workforce is permanently employed, according to the Construction Products Association.