Estimated USD 247 for hyperloop trip between Moscow and St. Petersburg makes it affordable only for rich

The full text of IPEM's expert opinion “Hyperloop Moscow-Saint Petersburg: how much can a project cost for an investor and a passenger?” (PDF, in Russian)

According to research of the Institute of Natural Monopolies Research (IPEM), the construction costs of Hyperloop system for passenger traffic on route Moscow  St. Petersburg (ca 650 km) estimates at least 1.18 trillion rubles ($18 billion) for small passenger traffic. The fare for a passenger will be comparable to the price of a business class flight, and even if the government supports the project only the business community can afford enjoying it.

In the study “Hyperloop Moscow-Saint Petersburg: a project cost fee for an investor and a passenger?” IPEM assessed the prospects for building an innovative transport system between the two capitals of Russia. The calculations were made on the basis of open sources with eight variants of scenario conditions depending on four main factors: system type (single or double pipe), capsule capacity (28 or 40 passengers), state participation (completely private project or state subsidies 50% of the project cost) and payback periods. The route Moscow - St. Petersburg was chosen due to the importance of the direction, as well because of steady demand growth in this traffic route for rail and air transport according records in recent years.

According to IPEM, the possible Hyperloop system track distance between the two capitals approximates at 650 km, which will make it the longest of all the projects discussed today. The one-pipe system construction cost (excluding the cost of land condemnation) estimates at 1.18 trillion rubles ($ 18 billion), for two-pipe system – 2.35 trillion rubles ($36 billion). During payback period - 20 years, the daily passenger traffic should be 4.7-14.2 thousand people per day, depending on the variants of the system and the capacity of the capsules.

With no state support for the project, the price of a one-way ticket estimates at 27.5 thousand rubles ($421) to 48.8 thousand rubles ($748), depending on the type of system. State co-financing of construction will reduce the cost of a trip by 35%-42%. The two-pipe system with a capsule for 40 passengers and state support will be the most affordable option for a passenger: travel in such conditions will cost at least 16,100 rubles ($247). “Even such a reduction in the fare price does not make it accessible to most passengers, which casts doubt on the expediency of state support,” said Vladimir Savchuk, Deputy Director General of IPEM, commenting on the results of the assessment. IPEM also notes that the calculations made do not include costs of possible land alienation for the project infrastructure, therefore the real cost of the project and, accordingly, the cost of travel may be higher.

The time spent on the journey from Moscow to St. Petersburg and back by Hyperloop significantly reduced if the landing sites are located near the concentration zones of the main audience of the trip - representatives of the business community. The “door-to-door" trip between large business centers "Moscow City" and "Lakhta Center" (St. Petersburg) with all procedures at the departure station, will take 1 hour and 28 minutes. Meantime the journey through the city to the departure/arrival stations, will increase total travel time to 2 hours and 15 minutes (versus 4 hours and 28 minutes on the "Sapsan" train (Velaro RUS) and 3 hours and 38 minutes in the business class of the aircraft, including reduced preflight procedures).

“The cost of a ticket without state grants will be at least 27.5 thousand rubles ($421), which is comparable to the price of a ticket in the business class of the aircraft. To return the project investments in 20 years, full capsule loading is required, - said Vladimir Savchuk. - It is unlikely that almost 8% of Russian millionaires will shuttle between Moscow and St. Petersburg every day. Therefore, it is doubtful that the project in the current environment will be able to attract investors, the same is to rely on support from the authorities: the Ministry of Transport, the Ministry of Industry and Trade and others. We expect a similar situation for most projects in other countries.”

The full text of IPEM's expert opinion “Hyperloop Moscow-Saint Petersburg: how much can a project cost for an investor and a passenger?” is available in Russian here.


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