Untested Hyperloop faces key opportunities and issues

30 April 2018
Pressure is mounting to move people and cargo more quickly and efficiently between cities

Hyperloop, an ultra-fast transport system with theoretical speeds of up to 1,000 kilometres an hour, is attracting both excitement and pessimism in the Middle East. Hyperloop utilises the next generation of magnetic levitation (maglev) technology used by some high-speed rail systems in Japan and China.

There are a number of factors feeding pessimism on Hyperloop. The main ones, similar to what faced the world's first railway system, concern safety and security of the public: which agencies possess the expertise to certify and regulate components of the system that are beyond the scope of land transport and telecoms regulatory authorities?

The costs also remain relatively unknown. For example, how much more investment will a Hyperloop require compared with a metro that costs, on average, $100m to $120m per kilometre?  Another factor raising doubts about the viability of Hyperloop is related to funding. If traditional railway projects have been encountering trouble obtaining financing from government and private investors alike, which investment houses will take on the substantial risk of Hyperloop, given the novelty of the technology?

On the other hand, the excitement surrounding Hyperloop lies in its promise to solve road congestion and replace slow sea freight and expensive air cargo shipments using one technology that is not only super-fast but more environmentally friendly.

It is noteworthy that governments around the world have been spending billions of dollars every year building new roads, bridges, rail, ports and airports. However, rapid population growth has ensured that motor vehicles constantly outgrow built roads resulting in congestion. Moreover, sea and air-borne trade is growing at such a rapid pace that the volume of transactions is slowing down delivery time and increasing costs related to document processing, inventory and storage.

The demand for express delivery in the current cyber-age has led to advocates such as DP World, Dubai’s Roads & Transport Authority (RTA) and Abu Dhabi’s Aldar Properties forming the conviction that the benefits of Hyperloop far outweigh the risks.

Similar to the rail mania that followed the launch of the first railway in Britain in the 1830s, the race between cities to build the first Hyperloop is understandable. The first railway, for instance, helped seal Britain’s reputation as a world power. The first city to build a Hyperloop will be seen as a global trailblazer, and those that support the project are ensured a place in history and a constant revenue stream if it proves successful.

However, unlike in the 1830s Britain, Gulf cities in 2018 have plenty of options to choose from to address their mobility issues. These include urban rail systems, including maglev, which have been implemented in cities around the world and with known costs; and autonomous vehicles that could help solve last-mile access for people living or working in congested areas and assist with deliveries.

While the potential for Hyperloop is whipping up fervour in the UAE, very few billion-dollar infrastructure decisions are made without a strong business case.

Entities such as DP World and RTA have anticipated this and mandated some of the world’s leading engineering consultants to work alongside Virgin Hyperloop One in conducting preliminary studies for potential Hyperloop projects. Proponents of Hyperloop are hoping that the selection of a technology company like Virgin Hyperloop One and international engineering firms such as Parsons or Atkins will minimise risks for governments and attract investors to build them.

 

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications