Transportation Deployment Casebook/TGV



(Note: References still being formatted)

The Train à Grande Vitesse, or TGV, which means High-Speed Train in English, is the French name for their high-speed rail (HSR) service in France. First connecting Paris to Lyon in 1981, the TGV was the first large-scale builder of HSR service in Europe, second in the world only to Japan’s Shinkansen. Today, the TGV network in France comprises nearly 2100 kilometers of track, with many more planned over the next few decades.

Introduction
High-speed rail as we regard it today was first developed by Japan in the construction of their Shinkansen network. The Shinkansen utilized a separate rail infrastructure exclusively built for high-speed passenger service. This was done in part to provide the greatest safety to the trains and passengers and maximize efficiency. The 515-kilometer link from Tokyo to Osaka was designed to be flat and straight, which required many tunnels, bridges, and elevated section. This design approach led to significant cost overruns - double the original estimate - for the first Shinkansen line.

The trains developed for the Shinkansen were designed to be lighter and less prone to crash than their conventional counterparts. The lightweight nature of the trains reduced energy consumption and wear of the rails, thereby reducing operating and maintenance expenses. Electric overhead power provided the ability for trains to accelerate and decelerate quickly. A similar design approach was utilized in the development of the TGV.

Many advantages exist between the TGV and other modes of travel. The TGV provides arguably the best option for medium distance travel between major European cities, beating out the car in terms of travel time, and competitive with airlines in terms of travel time and ease of accessibility. Its success has shown over time that its speed and connectivity between major urban centers has made it a significant player in business and leisure travel. Additionally, energy consumption on the TGV is considerably lower than using a car or flying, which reduces operating expenses relating to travel. Since many of the high-demand, low-investment routes have already been constructed in France, expansion of the rail network is becoming increasingly difficult to justify. However, as the European Union attempts to elicit greater connection and competition between HSR service in different countries, the growth of the French network may continue for many years ahead.

Existing modes
Prior to the development of the TGV network, three main options existed for those wishing to travel across France: conventional rail travel, automobile, and air travel. As the first TGV line opened was the 470-km Paris to Lyon route, this document will frequently on this link to compare different travel modes.

Conventional rail and the automobile both offered similar journey times prior to 1981. The drive between Paris and Lyon takes approximately 4 hours 30 minutes, compared to 4 hours by conventional passenger rail. The advantages of the train included a modest time savings and freedom to engage in other activities. Highly-taxed petrol in Europe may deter people from driving, in addition to difficulties driving and parking in central area, but auto use provided greater flexibility and versatility in delivering travellers directly from their origin to their destination. Travelers choosing to fly could travel between the cities in only 75 minutes (excluding airport travel time and security). With these mode options, conventional rail competed more closely with the automobile, and high-speed travel was limited to air travel.

Limitations of existing modes
There were growing limitations with each mode in the run-up to the TGV. Auto congestion is a typical problem of most major metropolitan areas. Furthermore, auto travel is usually limited for trips up to 200 km before other modes are considered. The conventional passenger rail service between Paris-Lyon route was at or near maximum capacity, and the service and infrastructure were not well-regarded. The numerous flights between short-haul markets compounded congestion in airports for long and short-haul flights alike. Furthermore, since the two airports are not centrally located, and are not typically a destination in themselves, traveling by car or train is common among air travelers, particularly for those traveling to smaller cities and towns outside Paris and Lyon. Ultimately, greater capacity was needed to deliver passengers between the two cities, and to destinations beyond.

New possibilities
The development of the HSR network has been a part of the French Government’s efforts to modernize the rail network since WWII. This goal was inspired in large part by the success of Japan’s Shinkansen line. In 1976, France’s nationally owned rail company SNCF released their master plans, Objectif 2000, with a Paris-Lyon link being the first line to open. The development of the train borrowed heavily from the Shinkhansen, with improvements focused on providing a train capable of being fast, safe, and reliable. Making the train lightweight was essential to providing a high power to weight ratio, which is important in delivering high-speed service. Stability was very important as well from a safety and comfort perspective. Rails on exclusive TGV tracks are carefully joined to eliminate the rhythmic gallop typical of trains. Trains today are able to travel at speeds of 320 km/h without making a glass of wine wobble.

By implementing a staggered approach to network development, France learned from Japan’s financial troubles in developing a solely exclusive railway network. The TGV between Paris and Lyon was opened incrementally along existing, but upgraded, rail infrastructure, and eventually on exclusive rail infrastructure. By avoiding the need to build a completely separate rail infrastructure, France avoided some of the initial capital investments that Japan faced in the development of their separate HSR alignment. France’s decision to initially mix their high-speed system with existing rail infrastructure differs from other countries besides Japan. In Spain, new HSR infrastructure is being built to standard gauge track, whereas older conventional track was built at a non-standard gauge. This mixed gauge track issues has been resolved, but only with the development in recent years of gauge-changing technology. In Germany, their high-speed, conventional, and freight trains are all fully mixed in the system, meaning all trains are able to use the same track [hs2] which may create greater potential for delays and congestion.

France would ultimately build rail infrastructure exclusively for the TGV trains. However, while Japan designed a flat, straight track between Tokyo and Osaka, SNCF realized that with fast, lightweight, high-powered trains, they could actually build rail at grades in excess of those typically allowed on heavy conventional rail. The construction of separate HSR infrastructure could then be built to more closely follow the topography of the land, significantly reducing earthwork costs. As a result, capital rail improvements for TGV lines are typically among the lowest in the world. [hs2]

The pricing structure that SNCF followed was based on a demand-based model. The TGV followed the yield management system adopted by airlines that varied prices based on the demand of a particular train based on its departure time and destination, and was the first rail company in Europe to do so. Implementing this profit-maximizing policy for the TGV from the beginning was essential to its success, and would have been more difficult to implement later on. [mr]

TGV Sud-Est - Connecting Paris and Lyon
The TGV Sud-Est from Paris to Lyon was decided upon as the inaugural route for the TGV. The first phase of the line opened in 1981, and the second phase opened in 1983. Investment was made initially where it was most greatly needed, and would provide the greatest impact. As the rail network and trains were state-owned, this vertically integrated structure made it easier to provide the funds necessary to develop the network. The congested route between Paris and Lyon was the clear choice, as it served 40% of the French population. The initial aim of the TGV was to attract business and leisure travelers looking that might short-haul flight. It also provides time savings and improved connectivity for existing rail travelers. The modest increase in time to take the TGV was considered palatable since many travelers could connect to conventional or metro train service from the train station, instead of switching modes at the airport on the edge of town.

Furthermore, the energy savings provided by HSR were significant. Whereas travel by plane equates to the equivalent of 7.1 liters of diesel fuel for every 100 passenger-kilometers, and 3.3 liters for auto travel, the TGV only utilizes only 0.7 liters of fuel over the same distance. In addition to the energy and associated cost savings, the reduction in energy consumption (in addition to the fact that the TGV operated on electricity via overhead wires), meant that the effects of air pollution from autos and planes might be significantly reduced.

Deployment of HSR infrastructure along this corridor made rail travel more comparable with air travel than with car travel. The travel time between Paris and Lyon on the TGV Sud-Est line was initially reduced from nearly 4 hours (227 minutes) to 2.5 hours (160 minutes). Further upgrades to the system have brought the travel time down to under 2 hours (115 minutes). [hs2]. Before 1981, modal share for trips between Paris and Lyon were 31% by air, 40% by train, and 29% by car or bus. After 1984, only 7% travel by air, 72% travel by train, and 21% travel by car. TGV now has a 90% share in high-speed service between the two cities, and air travel’s mode share has declined by over 75%, and automobiles by nearly 30%. Deployment of HSR infrastructure has shifted rail travel to be more comparable with air travel than with car travel. It is clear that the TGV made significant impacts on they way people travel between these two cities, the greatest impact being in mode shift to TGV from the air travel market [hs2]

Modal Share Among All Modes - Before and After TGV Sud-Est Opening Between Paris and Lyon

Modal Share Among High-Speed Service - Before and After TGV Sud-Est Opening Between Paris and Lyon

The TGV Network Expands
The Sud-Est line was a major success for SNCF, and the TGV network continued to expand throughout France throughout the 1980s through the 2000s. The network expanded to Calais in the north, Marseilles in the south, Bordeaux in the southwest, and Strasbourg to the east. By 2010, nearly thirty years after the first TGV line, France had built or upgraded rail lines across 1600 km of France, connecting many of the major cities. The relative low cost of construction of the TGV lines has made the networks quick growth possible.

The expansion of the TGV network to the far reaches of the country provide opportunities for international connections. The connection to Calais provided an eventual connection to London via the Channel Tunnel, and connections to the northeast toward Brussels and Amsterdam. The original Sud-Est line has expanded toward Marseilles, and continues on to the Spanish border, where TGV service will soon continue uninterrupted to Barcelona. The Haut-Bugey connection, completed in 2010, provides a shortcut for TGV service between Paris and Geneva, and the TGV Est line to Strasbourg will provide service to Germany.

Chronology of TGV Network Development

For cross-border travel, train operators were created by multiple state-owned train companies to provide service between international destinations. Thalys International is one company that was created to provide high-speed passenger rail services between Paris, Brussels, Amsterdam, and Cologne. Capital ownership of the company is divided amongst SNCF (France), 28% held by the SNCB (Belgium) and 10% held by the DB (Germany). [Thalys]

Eurostar is a similar consortium that provides commercial passenger service between London, Paris, and Brussels. It is operated by a consortium of public and private companies in the UK, France, and Belgium. Eurostar became Eurostar International with its transition from a joint venture between the UK, France, and Belgium to a single corporate entity. [12] [6]

Technological improvements have continued since the TGV first began in 1981. In 1996, TGV unveiled its first double-decker train, which significantly increased capacity (and revenue) along routes that were becoming increasingly congested. Additionally, French trains are continually striving to provide faster service, and have broken rail speed records on numerous occasions. Most recently, a modified TGV train set a new record by reaching a top speed of 574.8 km/h in 2007.

Policy changes began taking place in the mid-to-late 1990s with the European Union forcing many state-owned rail companies to split their rail ownership division from their trains operations. In 1997, France broke up SNCF, which controlled both the rail infrastructure and the rolling stock, and created the Réseau Ferré de France (RFF), or the French Railway Network. The RFF was split from SNCF, now simply the train operator, and inherited its debt, in order to make SNCF operationally profitable when train services are opened to privatization. RFF remains a state-owned company, and owns, maintains, and upgrades the rail network throughout France. [13]

Effects of a growing HSR network
As the TGV and European HSR network expands, it has had significant effects on air service between cities served by HSR. According to SNCF, the point at which more travelers choose air over HSR is at a train trip time of 4.5 hours [mr]. Given the density of the general population and large cities throughout western Europe, this has had significant impact on short haul air travel across Europe. At distances greater than 800 km (or about 3.5 hours travel time by train), air travel begins to take on a majority of the modal share based on current maximum travel speeds by HSR today. But train travel times of 2.5 hours or less show HSR capturing over 80% of the high-speed travel market. [Werner Rothengatter] The advent of HSR in Europe has certainly been detrimental to the airline industry in terms of market share. However, while HSR has been successful in the short-haul, high-speed markets, there are geographical limitations to the extent of a viable HSR network in Europe.

In France, determining the maximum extent of a high-speed rail network length may be helpful for estimating the maximum viable size of the network. As discussed above, the TGV was first deployed between Paris and Lyon. The TGV Sud-Est line provided high-speed access for 40% of the French population between the two largest cities in the country. It was an obvious choice, and perhaps unsurprisingly, quite successful. While the French government has significant leverage to fund the expensive capital investments to infrastructure and rolling stock, as passenger service shifts from SNCF to other carriers with the privatization of the train systems, greater attention will be paid to the return on investment of future service expansion. [hs2] As the network continues to grow, and the network branches out to more distant or less populated areas, or traverses more difficult terrain, subsequent expansion of the system may become difficult to justify. Certainly, there is a limit to the length of economically viable lines that can serve the French countryside.

The TGV network in France in still growing, and has not yet reached maturity, therefore, it is only possible to estimate the maximum value of HSR lines in France. The chart below shows a number of possible scenarios for the maximum extent of cumulative track mileage in France, based on nearly 40 years of completed and planned development of TGV lines. Table 1 shows a timeline of TGV development from 1981 to future lines planned into 2021. By 2021, there will be approximately 2100 kilometers of high speed rail throughout France. Some estimates suggest that the network may reach 3500 kilometers in total.

Determining the maximum extent of HSR in France
What is a reasonable assumption for the maximum extent of rail on the TGV network? Most technologies follow a similar pattern of growth and decline, characterized by an “S-Curve”. This S curve can be represented by the equation


 * $$S(t) = \frac{K}{1 + e^{-b(t-to)}} $$

Where:

S(t) is the estimated cumulative track length at time t (in years); to is the inflection point at which ½ K is achieved; K is the saturation level of cumulative track length, in kilometers b is a coefficient that affects the steepness of the curve across time, t.

The data gathered for track length was analyzed using data analysis software in Microsoft Excel 2011. The results of the data are shown below.



The results show that values ranging anywhere between 2,500 and 4,500 kilometers (and possibly higher) are possible for maximum K values, based on the strength of the R-squared and t-stat numbers. These numbers are highest for K = 2,500 km. However, plans by the French government plans for up to 4,600 km of total track in the years ahead [BBC news article]. Based on the strength of the results from the regression analysis, the future saturation limit of HSR in France is difficult to predict based in the chronology of past construction.

The future of HSR in France and Europe
Analyzing the future effects of privatization and investment in future HSR service in France is difficult, particularly during the current global financial crisis, and the high volatility in oil prices around the globe. Ultimately, the success of TGV over time may provide France a competitive edge as the HSR network expands throughout Europe, and HSR services becomes privatized, meaning TGV services can enter markets outside of France.

As markets open up to competition, the playing field around HSR is bound to get more interesting. The consortium of state-owned operators like Eurostar and Thalys may soon have to operate alongside other service providers, including new entrants to the market. With the decline of short-haul air travel, airlines like Air France have considered entering the HSR market, with one ticket offering connecting service between air and rail. In this scenario, rail and air travel may become as much complementary modes as they do competitive modes. [Spiegel]

In the interest of improving the operations and management of HSR across borders, the 7 HSR providers in Europe have formed a marketing alliance called Railteam. These companies include SNCF (France), Eurostar UK, DB (Germany), OBB (Austria), SBB (Switzerland), NS Hispeed (Netherlands), and SNCB (Belgium). This alliance is similar to partnerships between airlines in terms of marketing and sales, such as KLM and Delta. High-speed rail operators sought to create a booking system that would allow travellers to purchase tickets across multiple providers, and receive a comparable level of service, regardless of which train they traveled on. These efforts were abandoned in late 2009, when it was determined that the policies of each individual service provider were too difficult and expensive to bring together.One of the main goals in this alliance was not necessarily to develop or expand upon the physical technology of HSR, but to develop a single Europe-wide booking system to improve efficiency. This service would make it possible to book travel anywhere across Europe with a single ticket, in place of separate transactions required for international travel (with exceptions for travel on Thalys or Eurostar lines). Due to increasing costs and complexities of creating this system, the project was scrapped in 2009. [BBC 2009]

Attempting to bridge differences in pricing and service policy between individual countries has made providing joint service difficult. In the near future, Deutsche-Bahn trains will soon travel on the TGV Est line linking Frankfurt and Paris. However, customers and workers in each country are accustomed to how their respective systems operate. Whereas France uses a demand-based pricing system with required reservations, Germany uses a fixed-price system, and reservations are not required. These differences have proven difficult for the two parties to resolve. Additionally, labor rules differ between the two countries further complicate matters between the separate operators. While a complete agreement has yet to take shape, SNCF and DB are working to bridge these gaps incrementally over time. [mr]

As the HSR rail system grows throughout Europe, technological advances will continue to improve the quality of service provided on the rail infrastructure itself. With the HSR market being opened up to competition through privatization, innovation will further grow the network over time.