A Methodology to Prioritize the Construction Projects of New Railway Infrastructures for Privatization in Railway Networks (Case Study: Iran)

Abstract

This study aims to develop a novel methodology to prioritize the construction of new railway infrastructures for privatization. The private sector can cooperate to solve the capacity problems of railway networks, by the construction of new infrastructure. The purpose of this study is to answer the basic question that whether the capacity problems of the railway networks can be solved simply by building the new infrastructures without capacity improvement solutions, or not. Another main question is that which of the new construction projects are more prioritized to be built. The main contribution of this paper is to propose a new methodology to answer the mentioned questions, based on railway capacity, traffic assignment and calculation of Net Present Value (NPV) indicator. To evaluate the proposed methodology, Iranian railway network is considered. The NPV indicator is calculated for a 30-year duration, considering both direct and indirect benefits (benefits resulting from reduced accidents, reduced environmental pollutants, and fuel saving). The results show that building of new infrastructures, simultaneously with improving the capacity of the existing railways can lead to superior efficiency, compared to merely building new infrastructures. For the cases of building the construction projects without and with improving the existing railways, the values of maximum NPV were 88.1 and 221 thousand billion rials, respectively. Also, the values of absorbed demand were 52.18 and 46.72 million tons for two cases, respectively. The proposed methodology and the results of this study can be used as a practical tool for railway management to identify the priority of different construction projects of new infrastructures.