Friday, April 4, 2008

Surface Railways - the real economic cost

While on a fairly long train journey recently, I glanced through an article about the various urban transport options facing developing countries. From a cost-benefit analysis of surface rail transport and underground railway lines (metro), the article concluded that surface rail was a much cheaper and viable option. Concidentally, the train journey gave me an opportunity to observe some of the more unquantified costs of the presence of surface railway lines, especially in urban areas. I will list out a few of these uncaptured costs.

1. Falling land values. All along the margins of railway tracks, land values remain depressed and turns off high value investments.
2. Sound pollution and other costs discourages many economically productive activites from railway track margins. A buffer of economically unproductive zone in created all along the length of these tracks. However, this is something that technology can surely help mitigate.
3. Unorganised residential slums develop along the margins of these tracks. The margins of rail tracks in all our cities, without exception, is dotted with numerous such slums. The health and other social costs imposed by this development on the residents and the neighbourhood is huge.
4. Railway lines divides the areas on both sides into distinctly separated entities, which are difficult to link with regular transport infrastructure. Unlike roads, which seamlessly gets integrated into the area, railway lines creates sharp disconnects between adjacent areas.
5. Railway tracks are generally lined by an unhygenic strip of land on both sides of the track, which become a breeding ground for many health hazards.
6. Surface Railway lines do not have the same potential for leveraging commercial spaces development as underground lines. The entire area on top of a metro station can be developed commercially, while surface railway stations are constrained by lack of space for similar exploitation.

In other words, surface railway lines produce a huge amount of unquantified negative externalities, which impose a prohibitively high cost. In contrast, underground railway lines, while undoubtedly expensive to lay, are free from all these negative externalities and help us make optimum use of our land resources. It is as though a railway track comes along with a package of negative externalities - pollution, slums, health and social problems, falling land values etc.

My contention is not to abandon all surface railway lines, but to include the opportunity cost of surface railways in making choices between alternate modes of railway transport.

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