Road vs railway: Which one is cost-efficient?
ISecond of three parts n terms of direct contribution to the national economy, hands down it is the private car that gives the lion’s share. Private car owners pay for registration and road tax, as well as duties and customs tax for parts and imported units. It’s private car owners who pay the tax on their fuel purchases and on insurance. It’s private car owners who also pay for parking, bridge and highway tolls.
Much of the taxes collected from private car owners pay for the roads, on top of the investment that BOT and PPP participants and franchisees pay to build toll ways. In the Philippines, the taxes from car making, car owning and car driving pay for the road building that benefits everyone. In fact, the taxes paid by the motorist and the car industry help pay for more than roads; these subsidize public transport, including railways. Hence, the private car owner is a net contributor to the government’s treasury.
In contrast, look at the railway ticket holder. He or she just pays for the ticket. He or she never deals with the expenses and the operational costs of a private car owner. Rail commuters are hardly taxed and, in the Philippines, rail ticket fare is far less than half of the operational expenses of the train line as this is artificially held down by a populist-leaning government eager to cater to voters. Indeed, railways, almost without exception, lose money and would certainly close shop if not subsidized by the government. It actually means that the buck stops with you and the taxes you pay. Hence, cheap rail fares equate to a huge subsidy paid by the government and funded by ever-higher taxes on the wealth and income of corporations and individuals.
Around the world, it is a truism that all rail networks lose money, except those that have a business model that relies on peripheral businesses to gain revenue. The only rail networks that do not lose money and that do not siphon off taxes via government subsidy are mostly in China, Hong Kong and Japan.
Why and how? Profitable rail companies like Japan’s JREast and Hong Kong’s MTR get their main revenue from leasing their high net-worth real estate assets — like their city- center train stations — to high- paying lessees. But without the windfall from property sales/ lease, railways will always lose money.
So why is running a railway a losing proposition? For one, railways, except those very dense networks that the Dutch colonizers built for the Indonesian island of Java, or the very dense rail network that the British Raj built for the Indian subcontinent, can only serve customers as far as where the rails go. How can a railway break even when the train is forced to reach and stop at out-of-the-way places where the passenger take-up is equally minuscule? Railways have a high break-even point, i.e., to be profitable their ridership must at least equal the passenger take-up of airlines departing for similar destinations.
Now, consider that railroads are 19th century in origin. Compared to paved macadam roads, railways are easier to build even through jungles. High-capacity trains though need railways that are gradually inclined and curves gently. The rails have to be stronger in order to take the weight of a large steam engine on multiple large steel wheels. The steam engine, on the other hand, has to be tough and heavy itself because it has to store the “fuel” (coal), along with the gigantic steam boiler subject to high temperatures and pressures and is thus made of heavy-duty metal. Steam engines serve as heavy-duty prime movers for long trains of many, many coaches or freight rolling stock. Since the prime mover or locomotive is used to pull a lot of weight several times greater than its own, the locomotive has to serve as the anchor/ counterweight for the rest of the train.
Even today’s electric and diesel-electric locomotives still have to weigh a lot because of the traction the trains need when climbing or towing a long load of freight cars. Today’s commuter trains distribute the traction motors to every “bogey,” or paired set of axles, so that weight and traction is equally distributed while changes in direction of travel need not entail turning the whole train around. This has been thought of to be better and more versatile than one big powerful locomotive engine hauling several coaches.