A system dynamics model for effective management strategies of High-Speed Railway (HSR) projects involving private sector participation

Abstract

Policymakers increasingly seek recommendations to maximize ridership and public welfare for High-Speed Railway (HSR) projects implemented through private sector participation. Conventionally, such literature on Public-Private-Partnerships (PPPs) overlooks the complexity of HSR operations in achieving theoretical policy recommendations. Public policy recommendations based on a comprehensive understanding of HSR operations are rarely found in the literature. The current study develops a System Dynamics (SD) simulation model that formally structures the complex non-linear interactions between HSR stakeholders' management decisions and their impact on passenger ridership. The SD model is calibrated with actual operational data from the Taiwanese HSR. Simulations are implemented to observe how endogenous linkages between pricing, seat availability, maintenance, and service quality impact HSR ridership across lifecycle phases. The results provide a basis for considering important implications for relevant HSR stakeholders by revealing how simplistic strategies for managing HSR projects, not based on a complex system perspective, can lead to suboptimal results for long-term system performance. In particular, the study illustrates a mechanism for efficient HSR management through a balance between Market Saturation and Word-of-Mouth effects, with the need to increase the number of passengers willing to adopt HSR. As HSR operators alone are constrained in affecting many strategies generated by the model, the study also highlights the need for flexible but targeted coordination between public and private HSR stakeholders throughout different lifecycle phases of HSR operations. Such coordination should focus on promotional activities during the early operation stages and implementing pricing and service availability adjustments to respond differently to market penetration and demand expansion phases.