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An ex-post cost benefit analysis of Italian High Speed

Paolo Beria and Raffaele Grimaldi

No 16_3, Working Papers from SIET Società Italiana di Economia dei Trasporti e della Logistica

Abstract: The core of Italian HS rail plan is the Turin – Salerno line, in operation since 2009. The central segment Milan – Rome has been working well since the opening, with good demand figures quite in line with the later forecasts. The extremes of the line, namely the extensions to Turin and to Naples/Salerno has remained for long far less used. In 2012, unique case in Europe, a newcomer entered in the market and pushed a radical change in Trenitalia marketing, quality and pricing. This positive fact has fostered the market, with supply and demand dramatically increased, reduced fares and distributed benefits to the users, also in terms of new mobility practices. The paper aims at revising a former Cost Benefit Analysis exercise, produced just two years after line opening, in the light of the changed conditions. In particular, applying a similar methodology and estimating on the basis of third-party sources the current Origin-Destination demand matrix, we will recalculate the economic feasibility indicators. The cost-benefit analysis gives a marginally positive result in the most-likely case. To the contrary, extrapolating pre-competition trends without competition, gives a very negative result. In fact, we show that travel time benefits are a fraction of the cost. The largest benefits comes from the new demand, which in turn comes from increased frequency, from the introduction of mixed traditional/high-speed services and from the fall in prices due to the entrance of NTV.

Date: 2016
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