Economic evaluation of the high speed rail Madrid-Barcelona.

Abstract

In order to know whether a particular High Speed Rail project is worthwhile, it is necessary to have an estimation of the initial investment and the flow of benefits and costs during the project life. An estimation of the benefits requires having a measure of the users diverted from other modes of transport and the number of users generated thanks to the new transport alternative and how much the average user is willing to pay for this change.Our analysis is based on the estimation of disaggregated demand models using information provided by travellers in the main corridors: Madrid-Zaragoza and Madrid- Barcelona. Based on a simplified model for the economic appraisal of the Madrid- Barcelona High Speed Rail line the estimated demand parameters and cost structure, we have obtained a set of minimum demand thresholds required for a positive net present value in this corridor, under some assumptions of feasible ranges for key parameters like the social rate of discount, project life, annual growth rate of net benefits and the proportion of generated traffic.