Armenian Railways: Five Year Business Plan



Download 0.9 Mb.
Page3/22
Date05.08.2017
Size0.9 Mb.
#26304
1   2   3   4   5   6   7   8   9   ...   22

2.3Traffic Projections


Hwtsl has developed a traffic forecast for Armenian Railways, based on analysis of the underlying demand for transport and the transport markets in Armenia. This analysis was performed on a commodity-specific basis, and projected growth in transport was based on underlying econometric projections of production.

2.3.1Scenarios


The traffic forecast has two scenarios. The Base Case scenario assumes that all rail connections other than the existing Tbilisi, Georgia corridor remain closed and economic growth is moderate. The Open Borders scenario assumes that an opening of borders, beginning in January 2002, will drive an expanding economy and grow rail freight business. The scenarios are described in detail in Appendix A.
More pessimistic and more optimistic scenarios than these are possible, but less probable. On the pessimistic side, a decision by the Georgia government to close or downgrade its rail connection with Armenia would be highly disruptive to Armenian railways. On the optimistic side, development of a dedicated oil train passing through Georgia, Armenia and Turkey (or a similar train passing through Nakhichevan, Armenia and Turkey, would be a major benefit to Armenian railways. Similarly, a joint venture container service to or through Armenia is a potential upside, but (regardless of endpoints or routings) is dependent on developments in other countries over which Armenian railways has little or no control. These developments are considered unlikely within the five year forecast period because of the multinational coordinated investment in plant and equipment required.
A number of open border alternatives, would have more modest benefits than we forecast. Examples include reopening the Turkish border only or reopening of borders combined with implementation of a proposed Georgian Railway-TCDD rail link from Tbilisi to Kars, Turkey. Neither of these alternatives is considered a high probability due to political considerations or investment costs.

2.3.2Underlying Economic Forecast


Armenian railway traffic prospects, especially imports and domestic traffic, are substantially tied to growth in Armenian GDP or components thereof. Two recent economic projections find the following growth rates for GDP over the forecast period.





2000

2001

2002

2003

2004

2005

Armenian Central Bank




6.0%

6.5%

7.0%

7.0%

7.0%

PlanEcon

-5.4%

7.7%

4.1%

4.6%

4.7%



With currently projected 2000 results, growth in Armenian GDP will have fallen below 6% in four of the last five years and below 3.5% in three of those years.6 Given this recent economic performance, hwtsl feels the PlanEcon projections are more realistic as long as most of Armenia’s borders remain closed. Therefore, PlanEcon GDP and related economic estimates are used for the hwtsl base case. Because reopening of Armenia's borders will renew and strengthen trade ties with Armenia’s traditionally most important trading partners (especially Iran and Turkey) and contribute to investor confidence, Hwtsl estimates that border reopenings would accelerate economic growth by at least 25% over the PlanEcon rates for the base case.7 This adjusted projection is used for the open-borders case. The adjusted estimate is in the same range as the Armenian Central Bank estimate cited above.


2.3.3Traffic Forecast


The Base Case traffic forecast expects modest recovery in rail freight traffic as the economy of Armenia grows. As shown in the figure, rail freight tonne-km are expected to increase from 320 million in 1999 to 400 million in 2005. This represents an increase in tonnes handled from 1.5 million to 1.7 million. While a significant improvement for a light density railway like AR, it does not represent a return to Soviet era traffic levels of 35 million tonnes.
Opening of borders would be expected to stimulate the Armenian economy and increase the demand for rail transportation generally. In addition, the railway would gain some transit traffic. As shown in the figure, freight traffic is forecast to increase to 492 million tkm by 2005—23% greater than in the Base Case. Tonnes handled increases to 2.1 million in 2005.
Passenger traffic shows a similar pattern. Ridership is expected to increase modestly on existing trains, rising to 57 million-pkm by 2005. Open borders would boost ridership by 3.6% by 2005.
Opening of borders is not expected to result in an order of magnitude change in rail traffic. The dissolution of the Soviet Union and the closure of borders disrupted the trade patterns that generated heavy traffic on Armenian Railways. In the intervening years, new trade patterns have developed and AR cannot expect that old trading relationships would be resumed if borders permitted. Armenia now has very limited heavy industry to generate rail traffic, and a good road network to carry lighter products. Transit routes through Armenia face stiff competition from alternate road and rail routes. They are unlikely to produce large volumes of new traffic.
Many operational managers at AR appeared to cherish the expectation that opening of borders would double or triple traffic on the railway., and that railway assets should be preserved to allow for such a contingency. Such traffic increases appear unlikely. Hwtsl recommends that the railway base its operations and asset decisions on more likely traffic expectations, such as those contained in this report.


Download 0.9 Mb.

Share with your friends:
1   2   3   4   5   6   7   8   9   ...   22



The database is protected by copyright ©ininet.org 2024
send message
    Main page
value that