Tale of two rail systems

By Raffique Shah

Two news articles from the international press agencies caught my eye last Friday. The first was a report that China was building a US$27-billion train line that will connect Beijing with the southern economic hub of Shenzen. I read it bearing in mind that our Transport Minister, Colm Imbert, recently told a post-Cabinet briefing that the proposed rail link between Arima and Port of Spain will cost “at least US$6 billion”. Last week, in an obvious bid to speed up the tendering-and, presumably, construction-process, Imbert’s ministry hosted a meeting with potential bidders at which more details of the reintroduction of rail transport in the country were discussed.

What struck me were the major contrasts in both time-lines and costs of the rail projects in China and this country. In our case, the first phase will take commuters between Arima and Port of Spain, a distance of not more than 20 miles. This phase will cost the sum referred to above, and it will take at least six years to be completed. In China’s case, the new line will extend for 1,420 miles, and will cut the travel time between the two cities from 24 hours to ten hours. The track will be designed to allow trains to travel at speeds of at least 120 mph. The entire project, for which foreign investment is being invited, is expected to be “a profitable railway”, with investment cost being recovered in six years from the start of operations.

In contrast, ours is a piddling project-one-seventieth of the Chinese in distance. Yet our cost is almost 25 per cent of the huge Chinese project, and their time-line is the same as ours. On a per-mile basis, theirs will cost US$19 million, ours $300 million. Something just does not add up here. For starters, the trains being planned for here will hardly travel at speeds of 120 mph: if they do, commuters will take ten minutes between terminals, assuming it’s a non-stop service.

So clearly we are talking of much slower trains, stopping at several points between the main terminals. The relative costs are way out of sync. One need ask, therefore, are we in T&T being taken for a bullet-train ride on an old-time “smokey-joe system”, which admittedly still exists in the most backward Third World countries, and which we ought not to remotely consider? What’s the catch here?

If the Chinese can build and make operational a 1,420-mile, modern train system at a fraction of what ours is projected to cost, on a per-mile basis, it seems that something is radically wrong. Are we sure we are getting value for money? Imbert may argue that labour costs are significantly lower in China than in T&T. Well, why not bring in Chinese labour? We already have them on several construction projects, and from what has been reported, they will form the main component of the workforce on the Alutrint project. Bear in mind, too, that China imports almost all of its oil and gas, so their energy cost will be much higher than ours. As for steel, we both pay similar prices, since we are both net importers. And, presumably, the trains we buy may be similar, the difference being theirs will be faster, more expensive trains.

Two additional points I need to raise: last year China announced a US$250 billion plan to renovate and expand its entire rail network, one of the largest in the world. And last week I spent a few days in St Maarten where I saw the new Queen Juliana Airport terminal in its final stages of construction. Aesthetically, it’s a far superior terminal than ours, although it appears to have less “fingers”. The cost, I was told, is around US$100 million. If that is true, and given that the airport itself caters for maybe ten times the traffic ours does, it’s a serious indictment against those who built the new Piarco terminal, and who boasted of it being among the best in the world. While I am not comparing trains with planes, it seems that the proposed rail system will be a similar, over-expensive and questionable project.

Staying in the air, in a manner of speaking, last week British Airways announced a second-quarter, pre-tax profit of US$366 million. This came despite a 44 per cent jump in fuel costs and a seven per cent rise in employee costs. The airline’s CEO, Willie Walsh, said: “BA’s recent low fares offer in the short-haul market had been a big success, despite brutal competition.” In the meantime, BWIA, operating out of oil-rich T&T, and heavily subsidised by taxpayers, posts loss after loss, with the threat of the “government axe” hanging over its head.

Is it that we cannot achieve what the English can because we are grossly stupid? Or, in the case of China-rail, that the Chinese are vastly superior to us in brain-and-brawn? Whatever the explanation, we certainly come across as being the classical fools and their money, as pompous jackasses who fail at everything we attempt. Hmmm.


3 Responses to “Tale of two rail systems”

  • I concur with Raffique Shah’s observations, they are indisputable. However, we must not forget that we as a people and by extension the victims of inferiority when it comes to foreign, especially the United States; are collective asses. History validates this observation.

  • A difference of $281M per mile in projected cost (for the same product) goes beyond significant. Multiply that difference by the 20 miles between Arima and Port of Spain, and we could fund the entire annual budgets of several regional neighbours. Even allowing that some of the costs are the same for both projects, and the Chinese calculation would benefit from ‘economies of scale’, the difference is still unacceptable. Don’t the decision-makers in T&T have access to world-wide benchmarks for these types of projects? Is it a given that every government project must serve to devalue, besides our money, our moral and intellectual currency, and our prestige among our neighbours?

  • Many cry down the cost but that is excluding the fact that whilst China has experience in rail construction we do not. They can support the initiative because they have a greater capacity to engineer, construct and maintain their project we do not. The learning curve for us as it is for all construction we have undergone is very steep. In addition to this the terrain proposed for our rail is very much different than that in China. We are proposing to build in areas that are not only developed heavily but they were not planned development. As a result more costs need to be ascribed to the construction to prepare and ultimately build the railway. Benchmarks and mathematical measures aside the costs though seemingly high are not as high as they could be. In fact I would be surprised if the actual cost does not end up being closer to half the cost of the rail in China. The fact is not only does Cina benefit from economies of scale but the benefit of experience and this is something we will be paying for.

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