Delusions of success: Costs and demand of high-speed rail in Italy and Spain

• Published in: Transport policy 2018-09, Vol.68, p.63-79
• Main Authors: Beria, Paolo, Grimaldi, Raffaele, Albalate, Daniel, Bel, Germà
• Format: Article
• Language: English
• Subjects: Cost overrun; Demand (Economic theory; Demand estimation; Demanda (Teoria econòmica); Ferrocarrils; High speed trains; High-speed rail; Infraestructures (Transport); Italy; Megaprojects; Optimism bias; Railroads; Spain; Transportation buildings; Trens d'alta velocitat
• ISSN: 0967-070X; 1879-310X
• DOI: 10.1016/j.tranpol.2018.03.011

Mismatches between forecasted and actual costs and traffic figures are common in transport investments, especially in large scale ones, and so are delusions of the future demand. High-speed rail projects are often among the worst practices for cost overruns and demand overestimation, even where traffic figures may tell a history of apparent success. In the paper, we analyse two significant cases of delusions of success, namely the Italian and Spanish HSR programmes. The Italian one shows excellent demand performances, but is among the continent's worst cases for construction costs. The Spanish one, recognised worldwide as one of the most successful outcomes of HS policy, is the one where potential demand estimations were systematically neglected, and the planned network appears largely out-of-scale compared to actual traffic. In both cases, the forecasts were not simply biased, as well-known literature on megaproject failures has clearly shown: Italian lines were deliberately designed to increase the cost, and the Spanish network was deliberately planned out-of-scale. By means of the two cases, the paper will show that the core of the problem does not lie in the wrong estimations, but in deliberate choices of overinvestment, overdesign and overquality. •Italian and Spanish high-speed rail are among the largest networks in Europe.•Looking at effectiveness, both systems perform excellently.•Actually, Italian systems is suffering of overdesign and Spanish one is out-of-scale in terms of potential demand.•Both problems of “planning optimism” can be explained in terms of planning process and actors involved.