“At a lower cost, investors could be sure of a faster return on investments as well as less pressure on ticket price hikes associated with the more expensive regular rail project.”
Large-scale borrowings to fund infrastructure development have been considered both necessary and right. Nigeria, like other African countries, took on significant amounts of debt to build ports, railways, and roads among others. While the underlying rationale is understandable, there is no gainsaying the danger of the aforementioned strategy and the consequent impact on the fiscal strength of many African countries. However, building a nationwide infrastructure needn’t cost a proverbial pound of flesh. New technologies combine utility, reliability, and cost-effectiveness. One of these is the Chinese-developed Autonomous Rapid Rail Transit, popularly known as a trackless tram. This article explores its potential impact on Nigeria and other developing economies.
Autonomous Rapid Rail Transit or trackless trams are, as the name implies, trams without the extensive infrastructure of regular light rails. Instead, the system relies on Lidar and a system of sensors to keep the tram travelling on a virtual track. Like a bus, trackless trams travel on rubber tires albeit with advanced stabilization technology that provides the high ride quality of regular trams. The trams currently deployed by China’s CRRC are able to travel at up to 70km/hr and carry up to 500 passengers on a single ride. The system’s bus-tram hybrid characteristics have both impressed and grated on admirers and critics alike. Nonetheless, trackless trams have key characteristics that have drawn interest from developing and developed countries.
Foremost, trackless trams are a cost-effective alternative to light rail. Considering the absence of expensive and often disruptive railway steel infrastructure, trackless tram projects deployed so far have gulped 5-20% of the cost of regular tram projects; a significant cost-saving for cash-strapped governments. In some countries, the cost savings have been more. For instance, data from Vox Research shows that the average cost of rapid rail infrastructure per KM for Australia is estimated at $300 million. A recent study on an intended trackless tram project in the same country estimates the per KM cost at $6-$8 million; just over 3% of the country’s average railway cost. Admittedly, the aforementioned figure for the trackless tram does not include new road construction since the Lidar system would be deployed on existing roads; a reality that is different in many African countries where there is a dearth of well-developed roads. Nonetheless, the significant gap between both rail types, even after incorporating the cost of road construction, is impressive. The relatively lower cost helps reduce infrastructure borrowings, ensures debt sustainability as well as increases potential funding sources, including local and regional financial markets.
Beyond lower costs, other characteristics make trackless trams especially suited to Nigeria and other developing countries. One of these is the speed of construction. While regular tram projects take many months, even years, to complete, trackless trams could be deployed in weeks or days. The ease of converting existing road infrastructure into tram tracks significantly reduces the total project time, with a positive impact on financing costs, cash flow management, and returns on investment for funders. Furthermore, the trackless tram is powered by fast-charging lithium batteries, thus obviating the need to burn diesel or other fossil fuels. This both improves air quality vis-a-vis diesel-powered buses as well as opens up more financing sources such as renewable/sustainable project financiers. With well-placed battery-swapping stations, these trams can cover the entire breadth of cities.
However, while the above sections show the positive characteristics of the trackless tram system, it is not without its shortcomings. Foremost, the technology remains quite new with relatively few real-world deployments. Outside China, many countries are in various stages of planning and testing, including Australia, Malaysia, Qatar, and Israel among others. However, without long-term real-world data, it is hard to fully predict the performance of the system in diverse conditions. Furthermore, recent studies show that the large passenger capacity of the tram as well as its large set of tires could cause faster road wear, thereby requiring major road reinforcements along the trackless tram path. This could cut into the low-cost argument. Nonetheless, the overall financial savings argument makes the technology worth studying by infrastructure investors interested in developing markets.
Nigeria, like many African countries, suffers from a dearth of efficient transport infrastructure, lacks the economic strength to continue her debt-binging infrastructure loan drive for expensive railways, and could potentially benefit from the aforementioned characteristics of the trackless tram. More so, recent constitutional changes empower states to build their energy and rail infrastructure. These changes, combined with the low ticket cost of trackless tram projects provide a clear opportunity for investors looking to invest in city-wide transport infrastructure without the delays and multi-year bureaucratic gridlock associated with larger rail projects. More so, at a lower cost, investors could be sure of faster return on investments as well as less pressure on ticket price hikes associated with the more expensive regular rail project.
The trackless tram is a new technology that is fast gaining interest in different parts of the world. Its combination of low project cost, speedy completion, and low environmental impact makes it attractive to both developing and developed economies. Combined with Nigeria’s regulatory changes, investors could pick states that combine favourable demographic characteristics, political stability, regulatory certainty, and a pro-business climate. Kwakol Research could help with this. Contact s Today.
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