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The world is going digital—time for the rail industry to jump on board

Stephen Muzira's picture
Photo: Maksim Kabakou/Shutterstock
Over the last five decades, Rail transport has faced major headwinds. The transformation of global supply chains has made the logistics business more challenging than ever, with increasing pressure to deliver fast and flexible services at a lower cost. In that quickly-evolving context, freight rail is grappling with fierce competition from road transport—a trend that will only intensify under the effect of disruptive technologies like autonomous trucks and on-demand mobility services. In addition, railways around the world have been hit by significant government budget cuts, limiting their ability to invest in infrastructure or maintain high service standards. Stiff competition from roads, which have the door-to-door delivery advantage have offered added pain.

At the same time, railways are in the midst of a profound transformation, driven by emerging digital technologies like 5G, big data, the Internet of Things, automation, artificial intelligence, and blockchain. On a recent study tour in China, I had the chance to learn more about these developments, and to reflect on how digitization may help the rail industry reinvent itself.

Railways are the future—so how can countries finance them?

Martha Lawrence's picture
Photo: Kavya Bhat/Flickr
As a railway expert working for the World Bank, I engage with many client countries that are looking to expand or upgrade their railway systems. Whenever someone pitches a railway investment, my first question is always, “What are your trains going to carry?” I ask this question because it is fundamental to railway financing. 

Railways are very capital intensive and increasingly need to attract financing from the private sector to be successful. That is why the World Bank recently updated its Railway Toolkit to include more information and case studies on railway financing. Here, in a nutshell are the key lessons about railway financing from this update. 

How to protect metro systems against natural hazards? Countries look to Japan for answers

Sofía Guerrero Gámez's picture
Photo: Evan Blaser/Flickr
The concentration of population in cities and their exposure to seismic hazards constitute one of the greatest disaster risks facing Peru and Ecuador. In 2007, a magnitude 8.0 earthquake along the southern coast of Peru claimed the lives of 520 people and destroyed countless buildings. The most recent earthquake in Ecuador, in 2016, left more than 200 dead and many others injured.
 
Of course, these risks are not exclusive to Latin America. Considered one of the most earthquake-prone countries in the world, Japan has developed unparalleled experience in seismic resilience. The transport sector has been an integral part of the way the country manages earthquake risk— which makes perfect sense when you consider the potential consequences of a seismic event on transport infrastructure, operations, and passenger safety.

​Important experiences and lessons from integrated fare systems

Jorge Rebelo's picture
Although integrated modal fares are important innovations for low-income riders, these systems can be plagued by many problems.

For example, in Rio de Janeiro — despite efforts by the government to convene all transit operators during the planning stage —private rail-based operators were reluctant to participate in the design of the system because they feared that the bus system would stand to benefit more from integrated fares.  In the end, the government went ahead with its plans.

Today, although the integrated fare system benefits the poor, it fosters the inefficiency of inter-municipal buses that receive a subsidy that allow them to survive despite low load factors. Several of those routes should have been integrated with rail. There was also fraud by van operators using transport routes and the system’s smart cards. Consequently, the subsidy rose very quickly. 

Even so, Rio de Janeiro’s system is a blessing to low-income users, and overall ridership increased. If challenges are met, the system can work better for everyone. Efforts must be done to fine-tune the system, close loopholes, decrease fraud and reward the most efficient parts of the system.

In my previous blog entry, I wrote about nine suggestions for designing and implementing integrated fare systems. Now, in addition to the initial example from Brazil, I’d like to share a few other experiences and lessons regarding integrated modal fares.

When there is a regional transport agency, an integrated fare system’s level of service can be monitored from a central location, provided buses are equipped with GPS and smart card systems (as in Santiago, Chile).