Vol1 Demand & Revenue Forecast Final Report

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Vol1 Demand & Revenue Forecast Final Report

  1. 1. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 BRAZIL TAV PROJECT Halcrow – Sinergia Consortium June 2009 VOLUME 1 DEMAND AND REVENUE FORECAST Final Report
  2. 2. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Brazil TAV Halcrow – Sinergia Consortium VOLUME 1 Demand and Revenue Forecasts Final Report Contents Amendment Record This report has been issued and amended as follows: Reviewed Approved Issue Rev Description Date by by 01 01 WAAP MJ Final Version 25/06/09
  3. 3. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Content 1 Executive Summary 1 1.1 Introduction 1 1.2 The TAV Project 2 1.3 The Existing Market 3 1.4 Approach to Ridership Forecasts 4 1.5 Ridership Forecasts 6 1.6 International Benchmarking 8 2 Study Background 10 2.1 Introduction 10 2.2 The TAV Project 10 2.3 TAV Area of Interest and Socio-economic Background 12 3 Existing Transport System 21 3.1 Introduction 21 3.2 Overview of Transport Systems by Mode 21 3.3 Travel Time and Performance 28 3.4 Access and Egress 29 3.5 Fares and Travel Costs 35 3.6 Demand Levels 39 3.7 Future Plans 46 3.8 Summary and Impacts on TAV 49 4 General Approach to Surveys and Model Development 51 4.1 Introduction 51 4.2 Overall Demand Forecasting Approach 51 4.3 Model Design and Development 53 4.4 Study Process 55 5 Surveys 57 5.1 Introduction 57 5.2 Focus Groups 57 5.3 Revealed and Stated Preference Surveys 61 5.4 Survey Results 65 5.5 Summary 74 6 Model Development 75 6.1 Introduction 75 6.2 Overall Model Structure 75 6.3 Zoning System 76 6.4 Transport Network 79 6.5 Observed Trip Matrix Development 81 6.6 Integrated Demand Model 82 6.7 Trip Generation 83 6.8 Trip Distribution 87 6.9 Mode Split Sub-model 89 6.10 Discussion of Parameter Values 94 7 Assumptions and Base Case Analysis 97 7.1 Introduction 97 7.2 Travel Time Assumptions 97 7.3 Fare Assumptions 98 7.4 Revenue Optimisation 101 7.5 Base Case Network Assumptions Summary 106
  4. 4. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 7.6 Competitive response/dynamics 107 7.7 Socioeconomic Assumptions 109 7.8 Impact of TAV on Socio-Economic Assumptions 113 7.9 Base Year Results (2008) 113 7.10 Estimation of Peak Hour Demand 117 8 Ridership Forecasts 120 8.1 Introduction 120 8.2 TAV Express 120 8.3 Regional Services 123 8.4 Optional Station Analysis 127 8.5 Airport Services 127 8.6 Summary 131 8.7 International Benchmarking 132 8.8 Sensitivity Tests 133 8.9 Ramp-up 134
  5. 5. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Index of Tables Table 1-1: Summary of TAV and Air assumptions - Rio de Janeiro to São Paulo 5 Table 1-2: Passenger demand, Rio de Janeiro - São Paulo 2014 6 Table 1-3: Passenger Demand, Rio de Janeiro - Campinas 2014 7 Table 1-4: Passenger Journeys and Revenue 2014 – 2044 8 Table 2-1: Population of the regions in the direct area of influence of TAV 15 Table 3-1: In-vehicle travel time by air, car, and bus, in minutes 28 Table 3-3: Access times in São Paulo 32 Table 3-4: Fares by day of week and flight time, Rio de Janeiro to São Paulo 36 Table 3-5: Fares by day of week and flight time, São Paulo to Rio de Janeiro 36 Table 3-6: Representative taxi fares to airports in Rio de Janeiro and São Paulo 37 Table 3-7: Tolls and fuel costs in the area of influence 38 Table 3-8: Fares of the main routes São Paulo–Campinas–Rio de Janeiro 38 Table 3-9: Air Passenger Volumes between Rio de Janeiro and São Paulo, 2007 39 Table 3-10: Frequency of weekday flights in each direction Rio de Janeiro – São Paulo 40 Table 3-11: Summary of competing modes with possible impact on TAV 49 Table 5-1: Location and dates of Focus Groups 58 Table 5-2: Focus Group Findings 60 Table 5-3: Charter bus counts 65 Table 5-4: Number of full RP surveys by mode, with the average number of daily trips 66 Table 5-5: Complimentary modes for airport trips, by trip purpose 67 Table 5-6: Main Trip motivation by mode 67 Table 5-7: Income Range of interviewees 68 Table 5-8: Trip frequency by mode 69 Table 5-9: Comparison of trip purpose by Express and Regional 72 Table 5-10: Characteristics of regional trips to São Paulo and Rio de Janeiro 72 Table 5-11: Origin/destination of visitors to the Shrine of Aparecida. 73 Table 6-1: Trip Generation Sub-models 84 Table 6-2: GDP/Capita and Air Passenger Growth 85 Table 6-3: 2008 Express Trip generation Sub-model Observed v Modelled 86 Table 6-4: 2008 Regional Trip generation Sub-model Observed v Modelled 86 Table 6-5: 2008 Trip Generation Summary 86 Table 6-6: Trip Destination Choice Sub-models 88 Table 6-7: Observed 2008 Annual Person Trips (thousands) 89 Table 6-8: Expanded Trips by Mode and Purpose in 2008 (‗000 passengers/year) 90 Table 6-9: Express Sub-model 92 Table 6-10: Express Mode Choice Sub-models 93
  6. 6. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Table 6-11: Regional Mode Choice Sub-models 94 Table 6-12: Values of Time by Income Group and Purpose (R$/hr) 95 Table 6-13: Other Parameter Values in IVT Minutes – Express Model 95 Table 6-14: Other Parameter Values in Minutes – Regional Model 96 Table 7-1: City Pairs connected by HSR services 100 Table 7-2: HSR Single Fares 100 Table 7-3: Executive/Economic fares peak and off peak 100 Table 7-4: Stated Preference attribute levels 101 Table 7-5: Summary of key assumptions for Express model Rio de Janeiro – São Paulo 102 Table 7-6: Fares on a per km basis 103 Table 7-7: TAV Demand x Fare x Revenue for Regional connections 2008 104 Table 7-8: Modelled demand at R$0.30 per km 105 Table 7-9: Travel Time (minutes) 106 Table 7-11: Delays (minutes) 107 Table 7-12 : Annual Population Growth Rates for the Model Areas 109 Table 7-13 : Average Annual real growth rates for Income, for the modelled area by zone 111 Table 7-14: Car ownership (vehicles per ‗000 population) 111 Table 7-15: Annual percent change in total car ownership 112 Table 7-17: Acceleration factors applied each year to employment growth rates due to TAV 113 Table 7-18: TAV Express – Annual Figures 2008 114 Table 7-19: TAV Regional Services – Annual Figures 2008 116 Table 8-1: Demand and Revenue, Rio de Janeiro – São Paulo, 2014 121 Table 8-2: Demand and Revenue, Rio de Janeiro – Campinas (2014) 122 Table 8-3: Demand and Revenue Forecasts 2014 – 2044 Express Services 123 Table 8-4: Demand and Revenue Forecasts 2014 Regional Services 124 Table 8-5: Demand and Revenue Forecasts for Regional Services, 2014 - 2044 125 Table 8-6: 2014 Demand and Revenue aggregated by station 126 Table 8-7: Demand and Revenue Forecasts for Optional Stations 127 Table 8-8: 2008 Airport service demand and revenue 128 Table 8-9: 2014, 2024, 2034 and 2044 Airport service demand and revenue 129 Table 8-10: Passenger Journeys and Revenue 2014 – 2044 131
  7. 7. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Index of Figures Figure 1.1: TAV Study 1 Figure 1.2: TAV Schematic 2 Figure 2.1: Indicative TAV route and stations 10 Figure 2.3: South America, Brazil, and the states of Rio de Janeiro and São Paulo 13 Figure 2.4: States of Rio de Janeiro and São Paulo and the Area of Influence. 13 Figure 2.5: Direct Area of Influence for TAV - Metropolitan Areas and Regions 14 Figure 2.6: Real GDP percentage change year on year, 1994-2008 16 Figure 2.7: GDP per capita 2005 (in R$ 2000 equivalent) 17 Figure 2.8: Car Ownership rates in the Area of Influence 18 Figure 2.9: GDP by administrative area – 2005 19 Figure 2.10: Car ownership per person – 2007 19 Figure 3.1: Location of Santos Dumont and Galeão Airports in Rio de Janeiro 22 Figure 3.2: Location of Congonhas and Guarulhos Airports in São Paulo 23 Figure 3.3: Radial Road systems of São Paulo and Campinas 24 Figure 3.4: Radial road network of Rio de Janeiro 25 Figure 3.5: CPTM service between Jundiaí to São Paulo Luz station 28 Figure 3.6: Location of Santos Dumont Airport and Novo Rio Bus Terminal in relation to the Central Business District and proposed TAV station in Rio de Janeiro 30 Figure 3.7: Location of Congonhas and Guarulhos Airports, bus terminal, and main business centres in São Paulo 31 Figure 3.8: Rio de Janeiro Urban Rail Network, with indicative TAV Route 33 Figure 3.10: Volume of Annual Passengers between Rio de Janeiro and São Paulo 40 Figure 3.11: AADT of all vehicles in both directions at toll plazas. 42 Figure 3.12: Volume of traffic in São Paulo State - 2000 (all vehicles) 43 Figure 3.13: Overview of historical travel in the study corridor 44 Figure 3.14: Passengers by Bus by Year 45 Figure 3.15: Summary of historic number of trips growth by air, car, and bus 45 Figure 3.16 Proposed trains to the city of Guarulhos and Guarulhos Airport Express 46 Figure 3.17: Layout of the VLT at Congonhas Airport 47 Figure 3.18: Arc Road 48 Figure 3.19: Rodoanel ―Ring Road‖ 49 Figure 5.1: Example of screen with model scenario 62 Figure 5.2: Survey Locations at highways 63 Figure 5.3: Mode split of main mode of users interviewed 66 Figure 5.4: Mode split per monthly income range 68 Figure 5.5: Trip ends from expanded surveys in Rio de Janeiro zoning system, by air, car, and bus 70
  8. 8. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Figure 5.6: Trip ends from expanded surveys in São Paulo zoning system, by air, car, and bus71 Figure 5.7: Visitors to the Shrine of Aparecida, 2003-2008. 73 Figure 5.8: Distribution of visitors by month and weekday/weekend in 2007 74 Figure 6.1: Model Structure 76 Figure 6.2: Model Zoning System 78 Figure 6.3: Model Zoning System in Rio de Janeiro and São Paulo 79 Figure 6.4: Travel Time Surveys in the Rio de Janeiro Urban Area 80 Figure 6.5: Choices made in the 3 model stages 82 Figure 6.6: Express Sub-model - Work Choice Structure 90 Figure 6.7: Express Sub-model - Non-work Choice Structure 90 Figure 6.8: Regional Sub-model Choice Structure 91 Figure 7-1: Yearly demand and revenue for regional connections (2008) 105 Figure 8.1: International Benchmarks 133 Figure 8.2: Passengers by Fare and Journey Time – Sensitivity Test 2008 134 Figure 8.4: Ramp-up graph for Rio de Janeiro São Paulo (2014-2024) 135
  9. 9. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Glossary of Acronyms and Abbreviations Portuguese English AGETRANSP Agência Reguladora dos Serviços Regulatory agency of Públicos Concedidos de Transportes Concessioned Public Transport Aquaviários, Ferroviários, Services (Water, Rail, Metro, and Metroviários e de Rodovias do Roads) of the state of Rio de Estado do Rio de Janeiro Janeiro ANAC Agência Nacional de Aviação Civil National Agency of Civil Aviation ANTT Agência Nacional de Transportes National Agency of Land (Ground) Terrestres Transportation ARTESP Agência Reguladora de Transporte Regulatory Transport Agency of the do Estado de São Paulo state of São Paulo BCR Benefit-Cost Ratio BID Banco Interamericano de Desenvolvimento BNDES Banco Nacional de Desenvolvimento Economico e Social CAPEX Capital Expenditure CBD Central Business District CNT Confederação Nacional do National Confederation of Transport Transporte CPTM Companhia Paulista de Trens São Paulo Metropolitan Train Metropolitanos Company DENATRAN Departamento Nacional de Trânsito National Department of Transport DER-SP Departamento de Estradas de Department of Roads of the state of Rodagem do Estado de São Paulo São Paulo DETRO/RJ Departamento de Transportes Department of Road Transport in Rodoviários do Estado do Rio de the State of Rio de Janeiro Janeiro DfT UK Department for Transport DNIT Departamento Nacional de Infra- National Department of Transport Estrutura de Transportes Infrastructure EMBRATUR Instituto Brasileiro de Turismo Brazilian Institute of Tourism FEA Financial and Economic Appraisal GDP Gross Domestic Product HST/HSR High Speed Train/High Speed Rail IBGE Instituto Brasileiro de Geografia e Brazilian Institute of Geography and Estatística Statistics IBOPE Instituto Brasileiro de Opinião Brazilian Institute of Public Opinion Pública e Estatística and Statistics INFRAERO Empresa Brasileira de Infra-estrutura Airport Infrastructure Company of Aeroportuária Brazil IRR Internal Rate of Return MCA Multi Criteria Analysis
  10. 10. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 NATA New Approach to Transport Appraisal (UK Government) NPV Net Present Value OPEX Operating Expenditure PDDT-Vivo Plano Diretor de Desenvolvimento Transport Development Master 2000/2020 dos Transportes 2000/2020 Plan Study PDTU-RMRJ Plano Diretor de Transportes Urban Transport Master Plan of the Urbanos da Região Metropolitana do Metropolitan Region of Rio de Rio de Janeiro Janeiro PITU Integrated Urban Transport Plan for O Plano Integrado de Transportes the Metropolitan Region of São Urbanos para 2020 Paulo PPP Public-Private Partnership PV Present Value SEADE Fundação Sistema Estadual de State Agency of Data Analysis of Análise de Dados de São Paulo São Paulo TAV Trem de Alta Velocidade High Speed Train TOR Terms of Reference VfM Value for Money VOC Vehicle Operating Costs VOT Value of Time WEBTAG The Web-based version of the UK DfT‘s Transport Appraisal Guidance IMPORTANT NOTICE THE CONSORTIUM DOES NOT ADVOCATE OR ENDORSE ANY SPECIFIC TYPE OF HIGH SPEED TRAIN OR TECHNOLOGY; WHEREVER POSSIBLE GENERIC HIGH SPEED RAILWAY SPECIFICATIONS AND STANDARDS HAVE BEEN USED TO DEVELOP ALL ASPECTS OF THIS STUDY INCLUDED IN THIS VOLUME. WHERE REFERENCE IS MADE TO A TYPE OF HIGH SPEED TRAIN OR TECHNOLOGY THIS DOES NOT IMPLY A PREFERENCE OR RECOMMENDATION ON THE PART OF THE CONSORTIUM. ALL JOURNEY TIMES ARE APPROXIMATE AND ARE BASED ON SIMULATIONS UNDERTAKEN BY THE CONSORTIUM. THEY ARE SUBJECT TO CHANGE DEPENDING ON THE FINAL ALIGNMENT ADOPTED.
  11. 11. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 1 Executive Summary 1.1 Introduction 1.1.1 In 2008, the Inter-American Development Bank (IDB) commissioned Halcrow Group Ltd and Sinergia Estudos e Projetos LTDA (together the ―Consortium‖) to prepare a feasibility study for a high speed railway line, with a maximum line speed of 350km/h, over 511 kilometres connecting the cities of Rio de Janeiro, São Paulo and Campinas in Brazil. 1.1.2 The Consortium has undertaken detailed studies summarised in the following volumes, as follows: Executive Summary; Volume 1: Demand and Revenue Forecasts; Volume 2: Alignment Studies; Volume 3: Finance and Economics Appraisal and Concessioning; Volume 4: Part 1- Rail Operations and Volume 4: Part 2 - Technology; Volume 5: TAV Capital Cost; and Volume 6: Real Estate 1.1.3 Figure 1.1 highlights the relationship between the workstreams. High Speed Rail Quantm Alignment Software Engineering SP and RP Surveys Unit Cost Assumptions Parameters TAV Alignment TAV Capex Demand and Revenue Optimisation Volume 1 Volume 5 Volume 2 Timetabling TAV Journey Time Figure 1.1: Operating Planning Simulation TAV Study Operating and Timetabling Financial Model Volume 4 Economic Appraisal Finance and Economics Real Estate – Volume 6 TAV Concession and Concessioning Volume 3 Page 1 of 135
  12. 12. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 1.2 The TAV Project 1.2.1 TAV will run between Campinas, São Paulo and Rio de Janeiro (see Figure 1.1 and figure 1.2) and the TAV alignment developed fulfils an aspiration to connect the airports of Viracopos, Guarulhos and Galeão to their metropolitan areas. The total estimated distance between Campinas and Rio de Janeiro is 511 km; with the distance between São Paulo and Rio de Janeiro approximately 412 km. Based on the alignment developed (see Volume 2) the non-stop journey time between the two cities is estimated at 1 approximately 1 hour 33 minutes . Journey times will vary depending on the number of stations stops, with a high speed long distance service between Rio de Janeiro to Campinas taking up to 2 hours 27 minutes. All journey times are approximate. Figure 1.2: TAV Schematic 1.2.2 TAV will have a mix of new and refurbished stations. In Rio de Janeiro there are plans to refurbish and rebuild the abandoned station at Barão de Mauá (km 0) which is close to the main bus station at Novo Rio. Provision has also been allowed for a light maintenance facility and stabling sidings at Barão de Mauá. The next station is a new underground station to serve Rio de Janeiro‘s international airport at Galeão (km 15). From Galeão the line climbs through the mountainous region of Serra das Araras which is the major engineering challenge requiring numerous sections of tunnels and viaducts. A further station is planned at Volta Redonda/Barra Mansa (km 118) which is within the state of Rio de Janeiro. Volta Redonda is an important industrial area with Latin America‘s largest steel mill. There is provision for an optional station in the future at Resende to the west of Volta Redonda/Barra Mansa. 1 Journey times are approximate and based on a maximum operational speed of 300km/h Page 2 of 135
  13. 13. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 1.2.3 Traveling westwards TAV then crosses the state border between São Paulo and Rio de Janeiro states. Provision has been made for a possible spur from the main alignment to serve an optional station at Aparecida. Aparecida is an important pilgrim site which generates 9.5 million visitors (2008). After Aparecida TAV then reaches the large industrial city of São José dos Campos (km 327). São José dos Campos is an important centre for high technology centered on aerospace and engineering with a population of 1.4 million. São José dos Campos is the proposed location of the rolling stock maintenance depot; the city has access to the main highway network, has a well developed regional airport, houses the Embraer assembling factory and has available land to accommodate high impact land use. 1.2.4 Westwards from São José dos Campos the next station is at São Paulo‘s international airport at Guarulhos (km 390). Guarulhos Airport station will be underground close the main terminal buildings. 1.2.5 Upon reaching São Paulo a preferred station site has been identified at Campo de Marte (Km 412) which is currently a federal airfield located in the north of São Paulo. In the Consortium‘s opinion the selection of Campo de Marte provides an opportunity to build a major land mark station. Campo de Marte station will have a number of through platforms to allow trains to run from São José dos Campos to São Paulo and then north westwards towards Campinas. Campo de Marte also includes a light maintenance facility and stabling sidings. 1.2.6 From São Paulo, the TAV alignment then turns north westwards towards the city of Campinas. North of São Paulo, there is provisional for a new parkway style optional station at Jundiaí located between Anhanguera and Bandeirantes highways. The TAV alignment then proceeds northwards with a further station at Viracopos airport (Km 488.5). Thus the TAV alignment fulfils an aspiration to connect the airports of Viracopos, Guarulhos and Galeão with the major urban centres. The final station is at Campinas (km 511) the third largest city in the state of São Paulo after São Paulo and Guarulhos. This will be a refurbished station including stabling sidings. 1.3 The Existing Market 1.3.1 Existing transport modes air, car and bus are well established in the market between the three cities, in particular the high frequency air shuttle connecting the cities of Rio de Janeiro and São Paulo. In 2008, the total estimated demand between Rio de Janeiro and São Paulo was 7.3 million trips with a market share for air of 60%, 17% for car and 23% for bus. The air shuttle, which has a 15 minute frequency, a 55 minute gate-to-gate travel time and currently 71 daily flights in each direction, dominates the market for time sensitive business passengers, and as a result, is one of the most profitable routes for the three airlines (TAM, GOL and Oceanair). 1.3.2 Both domestic airports Santos Dumont (Rio de Janeiro) and Congonhas (São Paulo) are exceptionally well located for the markets they serve as they are adjacent to the central business districts of Rio de Janeiro and São Paulo, and can easily be accessed by a short taxi ride. The international airports (Guarulhos in São Paulo and Galeão in Rio de Janeiro) by contrast are located 27km and 20km respectively from the CBDs taking between 30 and 60 minutes to access by taxi. The accessibility of the domestic airports is in contrast to high speed rail projects in other countries where competing airports are typically located on the periphery while stations are in the centre. Page 3 of 135
  14. 14. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 1.3.3 However, the domestic airports of Santos Dumont and Congonhas suffer from congestion, and a fatal crash at Congonhas in 2007 in poor weather highlighted the problems of operating a high intensity service. (Full details of the operational constraints are discussed in Volume 3). Congonhas is currently operating in excess of capacity under instrument conditions, and to maximise available capacity Santos Dumont is almost entirely dedicated to services to São Paulo. Due to their respective locations, expansion of either airport would be difficult and expensive. The development of Congonhas is closely related to the overall plan for development of São Paulo‘s airports. Nonetheless, the air shuttle is an extremely efficient operation offering frequent services located close to the CBDs of the two cities. 1.3.4 Bus and car trips between Rio de Janeiro and São Paulo take 5-6 hours and suffer from congestion within the urban areas. Rio de Janeiro, São Paulo, and Campinas are served by a network of tolled highways but they have a poor safety record. Car ownership is expected to increase in proportion to increases income. Bus services are well used by European standards and offer three levels of service. There are no long distance passenger trains operating between the two cities but there is a limited commuter railway between São Paulo and Jundiaí. 1.4 Approach to Ridership Forecasts 1.4.1 Reliable ridership forecasts are critical to assessing the overall viability of the TAV project. The main forecasting challenge is to estimate demand for a new transport mode that does not currently exist in the market. 1.4.2 The recommended modelling approach to estimating high speed rail ridership is to use revealed preference (RP) and stated preference (SP) survey techniques together with Logit models. Logit models are commonly used in transport planning to estimate market shares i.e. diversion rates from air to rail, car to rail, and bus to rail and so on, and are therefore ideally suited to modelling the introduction of TAV. The methodology used in this TAV study is consistent with that used for other high speed rail projects, notably in the UK and Spain. 1.4.3 An updated version of RP/SP methodology was used complimented by a very extensive survey programme to provide RP and SP datasets. RP surveys were used to form a comprehensive picture of current travel demand and together with traffic count data were used to develop origin and destination (OD) matrices. Focus groups were held in April 2008 to inform development of the proposed RP and SP survey programme and the design of the SP surveys. Careful consideration was given to the design of the SP surveys to minimise potential policy bias, as there are no long distance passenger train services in Brazil, and other known methodological problems with SP design and estimation. However, it can state that the overall results of the ridership forecast do not indicate a significant bias favoring TAV in the base year. Logit models were estimated within the ALOGIT software package with assistance from DICTUC a specialist modelling consultancy based in Chile. 1.4.4 The initial survey programme was designed around the core market for longer distance journeys between Rio de Janeiro – São Paulo and Rio de Janeiro – Campinas, where air is a competing mode. In total 1,759 SP surveys and 5,684 RP surveys were carried out. A large number of surveys were done to improve the statistical significance of the final results. These results were used to build an express sub-model and to establish the size of the current market. Page 4 of 135
  15. 15. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 1.4.5 Subsequently, the survey program was extended to examine potential demand at intermediate stations at São José dos Campos, Volta Redonda/Barra Mansa, Resende, and Jundiaí. Additional surveys were undertaken to infill any gaps in the data set. The additional surveys were used to develop a regional sub-model. The key difference between the express and regional sub-models is that air mode is not available in the regional model because there are no short distance flights. To reflect the importance of trip purpose the models were also partitioned into peak and off-peak trips. In total between the express and regional sub-models 7,733 RP surveys and 3,808 SP surveys were undertaken. 1.4.6 The Logit models were extended to incorporate an advanced modelling technique which integrates trip generation and trip distribution. Here the inclusion of trip generation and trip distribution stages allows estimates to be made of new or ‗induced‘ trips made to take advantage of the TAV mode, and the changes resulting in trip patterns because of the transformation of accessibility. 1.4.7 The express and regional models comprise three separate stages: trip generation, trip distribution and mode split. The air mode is available in express model only. Each of these three stages has been calibrated for 2008 and show high levels of fit between modelled and observed trips. More details are given in Chapter 6. The express and regional sub-models are able to estimate market shares based on attributes such as frequency, journey time, fare, access time and so on, which can be altered within the model. In addition the model is sensitive to socio-demographic/economic inputs such as population, GDP, employment and car ownership which are used to estimate growth in trips over time. 1.4.8 Based on parameters derived from the regional sub-model a separate airport sub-model was developed for a train serving Guarulhos, Galeão and Viracopos. However, it should be noted that the airport train forecasts given in this report are preliminary in nature and we recommend additional work be undertaken to examine the business case for an airport service independently. 1.4.9 A series of optimisation tests were undertaken to determine revenue maximising fares for the express and regional sub-models within the SP attribute ranges tested in the surveys. Optimisation was done by firstly setting the airline fares in the express sub-model and then changing the TAV fares to maximise revenue. TAV fares were developed for peak and off peak trips and for economy and executive classes. Revenue was also maximised for regional services in a similar way by progressively increasing TAV fares. 1.4.10 The optimum TAV fares for the Rio de Janeiro to São Paulo were determined by selecting air fares of R$400 for peak and R$180 for off-peak trips based on an analysis of available air fares. These air fares are close to those marketed by GOL, a low cost operator, and are lower than those offered by TAM. A summary of the key assumptions for the Rio de Janeiro - São Paulo service are shown in Table 1.1. Table 1-1: Summary of TAV and Air assumptions - Rio de Janeiro to São Paulo TAV Air (Based on GOL) Peak Off-Peak Peak Off-Peak Executive R$325 R$250 n/a n/a Economy R$200 R$150 R$400 R$180 Journey Time 1 hour 33 minutes* 55 minutes Embark 5 minutes 50 minutes Disembark 4 minutes 5 minutes Total Time 1 hour 42 minutes 1 hour 50 minutes Frequency 3 trains per hour Flights every 15-30 minutes Delay Time 5 minutes Up to 30 minutes Page 5 of 135
  16. 16. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 1.5 Ridership Forecasts Rio de Janeiro to São Paulo Market 1.5.1 Forecasts were generated for 2014 (assumed opening year of TAV), 2024, 2034 and 2044. Table 1.2 gives the forecasts for 2014. Other key results are: the total estimated market without TAV is 10.7 million trips of which air is forecast to have 68.34%; TAV increases the total market to 12.1 million trips of which TAV has an estimated ridership of 6.4 million passengers and market share of 52.89% of the total market. TAV‘s market share of the air and rail market is 75% in the off-peak and 55% in the peak; TAV generates revenues of R$1.31 billion in 2008 prices, split R$811.8 million peak and R$502.2 million off-peak; and induced traffic is estimated at 6.1% in the peak and 30.2% in the off-peak, giving 13.4% in total. After 2034 a growth rate of 3.7% p.a based on GDP forecast was used in all forecasts. Table 1-2: Passenger demand, Rio de Janeiro - São Paulo 2014 Without TAV With TAV Passenger Passenger Mode Split (%) Mode Split (%) Demand („000) Demand („000) TAV -- -- 6,435 52.89% TAV Executive -- -- 4,938 (40.59%) TAV Economy -- -- 1,497 (12.31%) Air 7,333 68.34% 3,907 32.11% Car 1,757 16.38% 960 7.89% Bus 1,640 15.28% 865 7.11% Total 10,730 12,167 1.5.2 In 2024 TAV ridership is forecast to increase to 10.2 million trips and 17.3 million trips in 2034 and 24.9 million in 2044. Rio de Janeiro to Campinas Market 1.5.3 Forecasts were generated for Rio de Janeiro to Campinas and key results are shown in Table 1.3. For 2014 the results are as follows: the forecast total market without TAV is 711,000 trips; TAV increases the market to 914,000 trips, of which TAV captures 635,000 or 69.5% of the total market. TAV share of the air and rail market is 80%; TAV generates revenues of R$146 million; and induced traffic of 28%. After 2034 a growth rate of 3.7% p.a based on GDP forecast was used in all forecasts. Page 6 of 135
  17. 17. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Table 1-3: Passenger Demand, Rio de Janeiro - Campinas 2014 Without TAV With TAV Passenger Passenger Demand („000) Mode Split (%) Demand („000) Mode Split (%) TAV -- -- 635 69.50% TAV Executive -- -- 508 (55.6%) TAV Economy -- -- 127 (13.9%) Air 361 50.80% 160 17.50% Car 98 13.80% 43 4.70% Bus 252 35.40% 76 8.30% Total 711 914 1.5.4 In 2024 TAV ridership for Rio de Janeiro to Campinas is forecast to increase to 1.1 million trips. Regional/Commuter Services 1.5.5 Forecasts were also produced for regional services between Rio de Janeiro and Campinas with stops in Galeão, Volta Redonda/Barra Mansa, São José dos Campos, Guarulhos, São Paulo and Viracopos. 1.5.6 They key results in 2014 are as follows: The largest flow by volume is between São Paulo and Campinas at 12.4 million passengers. This is in fact the largest flow on TAV in terms of passenger volume. São Paulo to Campinas generates R$386 million; The second largest flow is between São José dos Campos and São Paulo at 8.6 million passengers generating R$246.3 million; The third largest flow is between Rio de Janeiro and Volta Redonda/Barra Mansa at almost 2.6 million passengers generating R$105 million p.a.; and All other flows (e.g. Rio de Janeiro to São José dos Campos) generate low levels of demand. 1.5.7 Demand on the regional services is expected to grow by 3.1% p.a. from 2014 to 2024 and 3.6% p.a. from 2024-34. Growth rates are highest between São Paulo - Campinas and São Paulo – São José dos Campos, suggesting continued strong demand for these commuter services. Induced demand is 16.0% overall on the regional services, while on the largest flows, it is 17.7% between São Paulo – Campinas and 17.1% for São Paulo – São José dos Campos. Beyond 2034 a 3.7% p.a. growth rate based on forecast GDP growth was used. Model Results Summary 1.5.8 Table 1.4 provides the total revenue and journeys for the base case. Total TAV revenue in 2014 is R$2,421 million increasing to R$5,921 million by 2034. For the purpose of the finance and economics report it has been assumed that TAV opens mid-year in 2014 to allow for ramp-up of demand. Page 7 of 135
  18. 18. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Table 1-4: Passenger Journeys and Revenue 2014 – 2044 Demand Journeys (passengers / year, 2014 2024 2034 2044 Component „000) Rio de Janeiro – São Paulo Express sub-model 7,070 11,282 19,323 27,788 Rio de Janeiro – Campinas Regional sub- Rio de Janeiro – Galeão – Volta model Redonda/Barra Mansa – São José 27,944 38,734 55,353 79,602 (including airport dos Campos – Guarulhos – São services) Paulo – Viracopos – Campinas Total Journeys 35,014 50,016 74,676 107,390 Demand Revenue (R$/year, in „000) 2014 2024 2034 2044 Component Rio de Janeiro – São Paulo Express sub-model 1,460,025 2,328,500 4,012,100 5,769,780 Rio de Janeiro – Campinas Regional sub- Rio de Janeiro – Galeão – Volta model Redonda/Barra Mansa – São José 961,387 1,337,780 1,909,096 2,745,461 (including airport dos Campos – Guarulhos – São services) Paulo – Viracopos – Campinas Total Revenue 2,421,412 3,666,280 5,921,196 8,515,241 Station Analysis 1.5.9 The largest station by demand volume in 2014 is São Paulo Campo de Marte at 27.5 million passengers, or approximately 75,450 per day. The second largest is Campinas at 15.2 million or approximately 41,400 per day. Passenger volume is important when considering station capacity and design, and interchanges with other public transport systems. Optional Stations 1.5.10 Forecasts were developed for optional stations at Jundiaí, Resende, and Aparecida. They have been examined on the basis of revenue alone. A detailed analysis of the economic case for each station has not been undertaken other than the details given in the alignment volume. In 2014 the forecasts are as follows: Jundiaí generates demand of approximately 10 million passengers and R$157 million in revenue. Thus, detailed analysis for this station is presented in this report even though it still an optional station; Resende has the lowest demand volume of all the stations analysed, with 1 million passengers and R$51 million in revenue; and Aparecida station is only expected to operate at weekends and has a potential demand of 3.4 million passengers generating R$229 million in 2014. 1.6 International Benchmarking Ridership forecasts for Rio de Janeiro to São Paulo and Rio de Janeiro to Campinas have been benchmarked against international experience. There are a number of city pairs now served by high speed rail and academic research (Steer Davis Gleave - 2006, Air and Rail Competition and Complementarity) has focussed on comparing the market share between air and high speed rail. Figure 1.3 shows the forecast market share for TAV in 2014 against rail journey for Rio de Janeiro to São Paulo (peak and off-peak) and for Rio de Janeiro to Campinas benchmarked against other city pairs. Page 8 of 135
  19. 19. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 1.6.1 Based on the benchmarking the following conclusions can be drawn: The close fit for Rio de Janeiro to Campinas suggests that the model is producing sensible results benchmarked against international experience as it is on the trend line; Competition from the domestic airports is strong, and arguably unique to São Paulo and Rio de Janeiro hence the market share of TAV is below the trend line. All major European capitals have airports located some distance from the centre which increases access time and reduces the competitiveness of air; If the peak and off-peak are considered separately TAV has a market share of 55% in the peak and 75% in the off-peak, and hence in the off-peak is closer to the trend line. This is a reflection of the fact that the scope for induced traffic in the peak is limited compared to the off-peak; For the Paris – Brussels route, which has the highest rail market share at over 90% with a similar rail journey time to TAV, there is a very limited air service. Air France does not operate any flights between Paris and Brussels, and Brusselsair operates just one daily flight. A similar reduction in flights between São Paulo and Rio de Janeiro would increase TAV‘s market share close that of Paris – Brussels; Brazil has a strong culture of bus usage, more so than in Europe, where rail services dominate medium/long distance travel. Buses in Brazil are efficient and offer generally good levels of comfort and very competitive prices. This reason may also account for TAV market share being below the trend line; and It should also be noted that other induced traffic effects take time to build-up, in particular land-use changes and real estate development. These effects will generate additional traffic which in reality will be captive to TAV and will therefore increase its market share. Rail- Air Marketshare International Benchmarks 100 Paris-Brussels 90 Paris-Lyon Tokyo-Osaka Rio-Campinas Madrid-Seville 80 Seoul-Busan Paris-London 70 Rio-S.Paulo Off-Peak Roma-Bologna Air Stockholm-Gotteborg Competition 60 Rail share (%) of Rail/Air Market 50 Rio-S.Paulo Peak Paris-Amsterdam 40 Rome-Milan 30 Madrid-Barcelona 20 10 0 50 100 150 200 250 300 Rail Travel Time (Minutes) Figure 1.3: International Benchmarks Note: Consortium figure using data from Steer Davis Gleave (2006), Air and Rail Competition and Complementarity. Prepared for European Commission DG TREN. Page 9 of 135
  20. 20. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 2 Study Background 2.1 Introduction 2.1.1 In 2008, the Inter-American Development Bank (IDB) commissioned Halcrow Group Ltd and Sinergia Estudos e Projetos Ltda (the ―Consortium‖) to prepare a feasibility study for a high speed rail line connecting Rio de Janeiro – São Paulo and Campinas, referred to as TAV: Trem de Alta Velocidade in Portuguese. 2.1.2 This chapter aims to provide important background to the TAV study. Section 2.2 provides an overview of the TAV project including details of past feasibility studies which have been undertaken. Section 2.3 focuses on the areas of Brazil most influenced by TAV, and examines the socio-economic aspects of the area, including population, GDP, and car ownership. The existing transport situation in the TAV area of influence is discussed in Chapter 3. 2.2 The TAV Project 2.2.1 The total length of the proposed high speed line between Campinas and Rio de Janeiro is 511km with an initial estimated journey time of approximately 2 hour 25 minutes (based on the preferred alignment and including intermediate stops), while a non-stop service from São Paulo to Rio de Janeiro would be approximately 1 hour 33 minutes, slightly longer in the opposite direction as São Paulo is at a higher elevation. An indicative schematic of the proposed TAV line is shown in Figure 2.1. Figure 2.1: Indicative TAV route and stations 2.2.2 The design for TAV is based on generic high-speed rail technology with specific provision for a dedicated, fully segregated alignment between the cities to maximise running speed and ensure high operational performance in terms of reliability and punctuality. At this stage it is not envisaged that TAV will share any existing track or joint running with existing Brazilian rail or metro services but will have dedicated tracks to the final terminal station in each city. Page 10 of 135
  21. 21. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 2.2.3 TAV will have a very high capacity compared with other transport modes; for example, Eurostar services between London and Paris can accommodate 750 passengers per train compared with an Airbus A320-200 series with 148 seats, used on internal short haul flights. However, the capital cost of high speed rail is very high (around €40m per km – see Volume 4), but it creates very high capacity and is therefore most economical when trains are running at capacity i.e. there is high demand. High speed rail therefore lends itself to city pairs with high existing demand, as is the case between Rio de Janeiro and São Paulo. 2.2.4 TAV is expected to have a mix of new and refurbished stations. There are plans to refurbish and upgrade the abandoned stations at Barão de Mauá and Campinas. Intermediate stops are being planned at Galeão, Volta Redonda/Barra Mansa, São José dos Campos, Guarulhos, Campo de Marte in São Paulo, and Viracopos. Optional stations are being considered at Jundiaí, Resende and Aparecida to serve visitors to the Shrine of Aparecida. 2.2.5 Based on European experience TAV can expect to capture a significant share of the current market between São Paulo and Rio de Janeiro; currently Eurostar has 70% plus of the combined rail and air market between Paris and London, with a similar share for the London to Brussels market. This demand study seeks to forecast the market share for TAV. More detail on comparison to international comparison can be found in Chapter 8 – Ridership Forecasts. The TAV Feasibility Study 2.2.6 Three previous feasibility studies have been undertaken to examine the potential for a high speed rail service: TRANSCORR in 1997-2000, Enontec in 2004, and DE-Consult in October 2007. Of the three studies, the TRANSCORR study was the most detailed and was chosen by the Consortium as a starting point, providing a reference for our work. However this study was conducted between 1997 and 2000 and since then high speed train technology has evolved, and the Brazilian economic situation has advanced to the extent that TRANSCORR‘s conclusions and results needed to be exhaustively reviewed. 2.2.7 As per the Terms of Reference (TOR) the Consortium is currently completing detailed studies in the following areas: Volume 1: Demand and Revenue Forecasts (this report); Volume 2: Alignment Studies; Volume 3: Finance and Economics Appraisal and Concessioning; Volume 4: Part 1- Rail Operations and Volume 4: Part 2 - Technology; Volume 5: TAV Capital Cost; and Volume 6: Real Estate 2.2.8 The relationship between the volumes is shown in figure 2.2. A separate workstream examining environmental issues is being developed by Prime Engenharia outside the Consortium. 2.2.9 It is important to stress the interrelated nature of the studies since the demand work is critical to developing a railway timetable and also to the financial and economic appraisal work. Similarly, the alignment work is critical to developing journey time estimates and construction costs. Page 11 of 135
  22. 22. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 High Speed Rail Quantm Alignment Software Engineering SP and RP Surveys Unit Cost Assumptions Parameters TAV Alignment TAV Capex Demand and Revenue Optimisation Volume 1 Volume 5 Volume 2 Timetabling TAV Journey Time Operating Planning Simulation Operating and Timetabling Financial Model Volume 4 Economic Appraisal Finance and Economics Real Estate – Volume 6 TAV Concession and Concessioning Volume 3 Figure 2.2: TAV study 2.2.10 The remainder of this chapter discusses the socio-economic background of the study area. 2.3 TAV Area of Interest and Socio-economic Background Introduction 2.3.1 The TAV area of influence is located in the states of São Paulo and Rio de Janeiro, as shown in Figure 2.3. Figure 2.4 focuses on the two states and shows the area of influence straddled between them. Page 12 of 135
  23. 23. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Figure 2.3: South America, Brazil, and the states of Rio de Janeiro and São Paulo 2 Figure 2.4: States of Rio de Janeiro and São Paulo and the Area of Influence . 2 The costal area located just east of the SP/RJ State border is not included as an Area of Influence for TAV because of the existence of the Serra do Mar. The connection of this area and São Paulo is made using the BR-101, a highway that runs along the coast from Rio de Janeiro to Santos. Page 13 of 135
  24. 24. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 2.3.2 As seen in Figure 2.5, TAV will provide an important connection between the Metropolitan Regions of Campinas, São Paulo and Rio de Janeiro. In the area of direct influence of TAV are also the regions of Jundiaí and Vale do Paraíba Paulista in São Paulo State, and the Vale do Paraíba Fluminense in Rio de Janeiro State. Stations planned in these areas include, São José dos Campos, and Volta Redonda/Barra Mansa, as well as stations at Guarulhos, Galeão and Viracopos Airports in São Paulo, Rio de Janeiro and Campinas respectively. In addition, optional stations are being considered at Jundiaí, Aparecida to serve the Shrine of Aparecida, a major tourist and religious destination and Resende. Figure 2.5: Direct Area of Influence for TAV - Metropolitan Areas and Regions 2.3.3 The region encompassing Rio de Janeiro - São Paulo - Campinas is the most important economic region of the country. The states of Rio de Janeiro and São Paulo contain 30% of the Brazilian population and 45.5% of its GDP (Source: IBGE-2007). 2.3.4 Within this area, the São Paulo - Campinas corridor is now being called "the first megalopolis in the Southern Hemisphere". The combined population of the 65 cities in the 2 38,000 km area is 22 million. This area is the economic centre of Brazil. São Paulo, which has traditionally been associated with manufacturing and trade, has developed its financial and service sectors in recent years, greatly increasing the wealth of the area. The GDP of the city of São Paulo represents over 12% of Brazilian GDP, while containing less than 6% of the population. 2.3.5 It is important to clarify the locations in use in this report as they may lead to confusion. The city of São Paulo is the capital of the state of São Paulo and is contained within the Metropolitan Region of São Paulo. Similarly the city of Rio de Janeiro is the capital of the state of Rio de Janeiro, and is contained within the Metropolitan Region of Rio de Janeiro. 2.3.6 The definition of the Metropolitan Region of Rio de Janeiro follows the definition given by the Master Plan for Urban Transport in the Metropolitan Region of Rio de Janeiro (PDTU) and the Metropolitan Region of São Paulo defines which municipalities are included in the Integrated Urban Transport Plan (2025 PITU). Population 2.3.7 This section highlights some important socio-economic trends of the region, starting with population. Appendix A contains a spreadsheet with the tabulation of the socioeconomic data collected. Any blank spaces refer to data that is not available. 2.3.8 Table 2.1 provides a brief summary of the regions of the area of interest, including population, main industries, and major cities. The total population of the area of influence is over 36,422,964, mainly concentrated in the metropolitan regions of São Paulo and Rio de Janeiro, which also have the highest population densities. Page 14 of 135
  25. 25. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Table 2-1: Population of the regions in the direct area of influence of TAV Primary City Metropolitan 2007 2 2 Area km Pop/ km Main industries (2007 est Region Population Population) Finance, services, São Paulo 19,226,426 7,943 2,421 10,886,000 manufacturing High tech, auto, Campinas 2,635,358 3,647 723 1,059,000 research, education Services, Jundiaí 580,119 431 1,346 347,000 manufacturing Manufacturing, 611,000 Vale do Paraíba research, 2,156,534 16,179 133 (São José dos Paulista aeronautics Campos) Tourism, finance, Rio de Janeiro 11,157,122 5,645 1,977 services, 6,136,000 manufacturing Vale do Paraíba Manufacturing, steel, 259,000 667,405 3,828 174 agriculture Fluminense (Volta Redonda) Source: IBGE 2.3.9 Table 2.2 highlights population trends for the area of influence. Three main trends are evident. Firstly, while the period 1970-2007 has seen a significant population increase, by comparison growth has tapered off in all regions from 2000-2007, with growth rates approximately half of the 37 year period. Second, the regions near São Paulo have grown at a higher rate compared with Rio de Janeiro – in São Paulo state growth rates range from 1.16-1.75% from 2000-2007 vs. 0.96% near Rio de Janeiro. Thirdly, the Rio de Janeiro and São Paulo metropolitan regions have lower growth than the other less populated regions, indicating that the more outlying areas have a greater capacity for growth. Page 15 of 135
  26. 26. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Table 2.2: Summary of population changes in the Area of Influence Annual Growth Population 1 Rate Region 1970- 2000- 1970 1980 1991 2000 2007 2007 2007 São Paulo Metro 8,139,705 12,588,745 15,444,941 17,833,511 19,226,426 2.35% 1.08% Region Campinas Metro 680,826 1,276,801 1,866,025 2,333,335 2,635,358 3.73% 1.75% Region Jundiaí Region 201,651 335,029 437,978 529,302 580,119 2.90% 1.32% Vale do Paraíba 834,652 1,221,221 1,651,594 1,989,692 2,156,534 2.60% 1.16% Paulista Rio de Janeiro 6,813,917 8,650,181 9,657,010 10,695,357 11,157,122 1.34% 0.61% Metro Region Vale do Paraíba 332,263 467,382 547,798 624,090 667,405 1.90% 0.96% Fluminense 1 – The list of cities of each region is presented in the Appendix A – Socioeconomic data – Area of Influence Source: IBGE GDP Growth 2.3.10 GDP, as an aggregate measure of economic activity in the country, provides a good indication on overall travel demand, and growth in GDP has a strong relationship with travel demand growth. Passenger demand increases with economic activity due to additional travel demand from business trips, while leisure travel increases as residents are more able to afford leisure travel. 2.3.11 Figure 2.6 presents the growth in Brazilian GDP since 1994 when the economic stability plan ―Plano Real‖ was implemented, during which time it averaged 3.07% pa. 6.00 5.71 5.67 5.33 5.00 5.08 GDP Real Percent Change 4.42 4.31 4.00 3.97 3.38 3.16 3.00 2.66 2.15 2.00 1.31 1.15 1.00 0.25 0.00 0.04 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year Percent Change Figure 2.6: Real GDP percentage change year on year, 1994-2008 Source: IPEA-DATA Page 16 of 135
  27. 27. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 2.3.12 Dividing GDP by population (GDP/capita) normalizes the GDP for different regions of Brazil. One would expect travel demand rates to be highest to and from regions of higher GDP/capita reflecting higher economic activity rates (e.g. increasing business travel) while the implied greater affluence will enable more leisure travel. 2.3.13 Figure 2.7 provides a breakdown of GDP per capita by region in the area of influence, with the regions listed from west to east. 20,000 18,000 17,297 GDP per capita in R$ 2000 (2005) 16,854 16,000 14,354 13,940 14,000 12,000 11,275 9,664 10,000 8,000 6,000 4,000 2,000 - Campinas Jundiaí São Paulo Vale do Vale do Rio de Jan Metro Region Metro Paraíba Paraíba Metro Region Region Paulista Fluminense Region Region Figure 2.7: GDP per capita 2005 (in R$ 2000 equivalent) Source: IPEA – DATA (GDP) & IBGE (Population) 2.3.14 GDP per capita is significantly higher in São Paulo than in the Rio de Janeiro metropolitan region (R$13,940 vs. R$9,664), and Rio de Janeiro and São Paulo‘s GDP is lower than their surrounding regions. The high GDP/capita in the São Paulo region reflects the greater proportion of financial services here compared to Rio de Janeiro. Vale do Paraíba Fluminense has the highest levels of GDP per capita, due to its smaller population, diverse economy, and large industrial base, with Latin America‘s largest steel works located in Volta Redonda. 2.3.15 Both states have average household incomes well above the national average, reflecting the relative affluence of this area of the country. São Paulo in particular, has household incomes more than 50% higher than the national average, and about 11% higher than Rio de Janeiro. This reflects the high GDP/capita productivity figures that are observed in São Paulo. Car ownership 2.3.16 Car ownership in the study corridor is relatively high compared to the national average, and has grown markedly in recent years. Figure 2.8 presents car ownership rates by region for 2001 and 2008. Page 17 of 135
  28. 28. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 350 300 Cars per 1000 population 250 200 2001 2008 150 100 50 0 Campinas Jundiaí São Paulo Vale do Vale do Rio de Jan BRAZIL Metro Region Metro Paraíba Paraíba Metro Region Region Paulista Fluminense Region Region Figure 2.8: Car Ownership rates in the Area of Influence Source: DENATRAN. NB: Population figures to calculate the rates for 2001 have been interpolated. 2.3.17 The highest car ownership rates are found in the São Paulo, Campinas, and Jundiaí regions, reflecting the relative affluence of this area with more than 0.3 cars per capita. Car ownership rates in São Paulo were 72% higher than Rio de Janeiro in 2008, while ownership rates of Campinas are almost double those of Rio de Janeiro. 2.3.18 The highest rates of growth have also been largely in the areas of highest existing car ownership, particularly the surrounding areas of Vale do Paraíba Fluminense (4.8% p.a.) and Jundiaí (4.7% p.a.). São Paulo and Rio de Janeiro have grown at more moderate rates of 3.9% and 3.4% respectively. Geographic Distribution of GDP and car ownership 2.3.19 The figures below show the distribution of GDP and cars registration in the area of interest, which reinforce the graphs above. Page 18 of 135
  29. 29. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Source: IBGE Figure 2.9: GDP by administrative area – 2005 2.3.20 With regard to GDP, the entire corridor of the proposed TAV route shows high levels of GDP per capita; it is especially high in the corridor from Campinas to São Paulo, and in the Vale do Paraíba Fluminense (just west of Rio de Janeiro) which has a large industrial base, while the more rural areas near the coast, and the outer regions of the Rio de Janeiro metropolitan region are lower. Figure 2.10: Car ownership per person – 2007 Source: Denatran Page 19 of 135
  30. 30. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 2.3.21 Car ownership per person follows a similar pattern to GDP, with higher levels in the Campinas-São Paulo-São José dos Campos corridor, compared to Rio de Janeiro. Summary 2.3.22 This section has presented the primary socioeconomic factors and trends which will impact on demand for TAV: São Paulo has become a centre for the service and financial industries, and is the economic focus of Brazil, with a 12% of all GDP in Brazil; the Campinas-São Paulo-Rio de Janeiro region is important to the national economy and the TAV provides an opportunity to connect the cities to support further economic growth; population has grown substantially in the past 40 years, particularly in São Paulo and Campinas, increasing the potential market for TAV; GDP in Brazil has grown strongly in recent years and the GDP of the area of influence represents a significant proportion of the Brazilian economy. GDP growth is strongly linked to demand for travel, leading to both increased road congestion and greater demand for TAV; and car ownership is higher in the São Paulo-Campinas corridor than in Rio de Janeiro. Registration rates are higher than the national average, and increasing more quickly in São Paulo than Rio de Janeiro. Page 20 of 135
  31. 31. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 3 Existing Transport System 3.1 Introduction 3.1.1 The high speed rail area of influence in the Rio de Janeiro - São Paulo - Campinas corridor is served by an array of transport options, providing a range of services for a diverse market. Demand forecasts for a new service entering such a market require a detailed appreciation of the current options available to understand how TAV will compete, while explaining how TAV will integrate into the wider network. This chapter describes the existing transport situation in the study corridor in terms of both supply and demand. 3.1.2 Section 3.2 presents an overview of the transport system by existing mode: air, bus, car, and rail. The remainder of the chapter assesses the transport system in the following areas: Section 3.3 - Travel Time and Performance (i.e. delays and congestion); Section 3.4 - Access and Egress issues to stations and airports; Section 3.5 - Fares and Travel Costs; Section 3.6 - Existing Demand Levels; and Section 3.7 - Future Plans which may affect demand for travel on TAV. 3.2 Overview of Transport Systems by Mode 3.2.1 Presently there are 4 modes available for intercity trips in the area of influence: air; highway/private car; bus; and rail (São Paulo – Jundiai commuter rail only). 3.2.2 Air services operate only between São Paulo, Rio de Janeiro and Campinas and they represent the most serious competitor to TAV time sensitive trips on this long distance corridor. A developed network of toll roads is available which connect the major centres, though most routes are radial and do not enter the city centres. For those wishing to use bus, a comprehensive network of interstate and intercity bus services is available and will compete with TAV between all proposed stations, while local services provide access within cities. There are currently no intercity rail services between Rio de Janeiro and São Paulo, although there is an existing service between Jundiaí and São Paulo; metro and commuter rail services provide for trips within the major cities of Rio de Janeiro and São Paulo. Air Travel 3.2.3 Air travel represents the most important competitor to TAV for long distance services, because it is most similar in terms of journey time and probable market to be served. This section provides a brief overview of the airports and air services in the area of influence. Page 21 of 135
  32. 32. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Airports 3.2.4 São Paulo and Rio de Janeiro are unusual as in addition to the traditional edge of city international airport, they are both served by domestic airports in the central area of the city. The domestic airport for São Paulo, Congonhas, is located 11km south of city centre, while in Rio de Janeiro, Santos Dumont Airport has a unique location on a landfill site on Guanabara Bay 2km from the historic and business centre of Rio de Janeiro. Both airports are only served by surface modes (bus, taxi, private car) although Congonhas has a metro station 5km away, connected to the airport by bus. The locations can be seen in Figure 3.1 and Figure 3.2 below. The locations of the domestic airports, in particular Santos Dumont (to which it is possible to walk from the city centre in about 15 minutes), contribute to making air travel a significant competitor to TAV. This is discussed in more detail in Section 3.4 – Access and Egress. Figure 3.1: Location of Santos Dumont and Galeão Airports in Rio de Janeiro Page 22 of 135
  33. 33. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 Figure 3.2: Location of Congonhas and Guarulhos Airports in São Paulo 3.2.5 Most long-distance and international flights operate from Galeão Airport, 20km north of the centre of Rio de Janeiro, and Guarulhos Airport, 27km northeast of the centre of São Paulo. Some flights between Rio de Janeiro and São Paulo operate from these airports, but most passengers connect with international flights. TAV could exploit this demand by providing long distance services to the international airports. In particular, it may be attractive for residents of Rio de Janeiro to travel directly to Guarulhos which offers direct services to more domestic and international destinations, thereby avoiding a change of planes in São Paulo or elsewhere. Fares are generally the same or lower for travel to Rio de Janeiro, because it attracts more price-sensitive leisure travellers, even for flights which require a change at São Paulo, so it is unlikely that passengers will use TAV to save money on airfare. Air service 3.2.6 Due to the level of demand for travel between Rio de Janeiro and São Paulo, the airports have prioritised a ―shuttle‖ type service between Santos Dumont and Congonhas Airports. Currently over 90% of flights from Santos Dumont airport serve Congonhas, with the rest to smaller locations close to Rio de Janeiro, while Congonhas serves many other locations. The service is currently operated by three airlines (TAM, GOL, and Oceanair), which together provide over 70 flights per day, with 4-5 flights departing every hour. The fares are unregulated and reflect supply and demand, with flights in the morning and late afternoon attracting the highest fares, with advance booking required to obtain the lowest fares. All operators allow internet check-in and the frequency of flights provides great flexibility to the traveller. It is understood that the ―shuttle‖ service is among the most profitable routes for the three airlines serving this route. Page 23 of 135
  34. 34. Brazil TAV: Vol 1 – Demand and Revenue Forecast – Final Report TAV-SI-DEM-REP-10022-02 3.2.7 Viracopos Airport outside of Campinas is also in the area of influence. Viracopos is primarily used for cargo services, though in the area of interest seven flights per weekday operate between Viracopos and Galeão in Rio de Janeiro. Information about possible Brazilian Government intentions to shift some flights from Guarulhos to Viracopos, were never made available to the Consortium so this issue could not be analyzed. 3.2.8 Chapter 5 contains information obtained from focus groups regarding users‘ perceptions of the airports, including perceived distance from centre and ease of use. Highway Network 3.2.9 The road system linking Rio de Janeiro, São Paulo and Campinas is governed by both state and federal authorities, but they are operated by the private sector. The public agencies are: Federal: National Agency for Land Transport (ANTT) State of São Paulo: ARTESP - Regulatory Agency for Transport of São Paulo State of Rio de Janeiro: AGETRANSP - the Regulatory Agency for the concession of Transport Public Services, including Water, Rail, Metro and Road Transport of Rio de Janeiro. 3.2.10 In order to improve maintenance and condition of the road network, most long distance highways in Brazil operate as concessions leased to private operators who are permitted to charge tolls. The strategic intercity roads in the area of influence are all tolled. 3.2.11 The road infrastructure of the Rio de Janeiro, São Paulo and Campinas Metropolitan Regions is generally radial. São Paulo and Campinas lack direct highway access to their centres; Rio de Janeiro has more direct access to the centre, though these arteries are heavily congested at peak times. Figure 3.3 and Figure 3.4 show the road networks for São Paulo, Campinas, and Rio de Janeiro. Figure 3.3: Radial Road systems of São Paulo and Campinas Page 24 of 135

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