Business Interview: ‘GCC-wide hyperloop network may be economically feasible’
Nick Earle is an IT and mobility expert and former vice president of global field operations at Virgin Hyperloop One, the leading company in the race to build the world’s first new mode of transportation. He recently attended the IRU World Congress which took place in Muscat.
In an interview with Muscat Daily, Earle spoke about the possibility of setting up this new mode of transport in Oman. He said the current cargo volumes are not economically justifiable to set up hyperloop in any of the GCC countries on a standalone basis, but a combined hyperloop network for all the GCC countries could make it feasible in future.
There are confusions about what exactly hyperloop is, and how it would transform transportation and logistics sector. Can you provide clarification?
Hyperloop is a new form of ground transportation, which will see passengers and goods travelling at 700 miles per hour in floating pods within low-pressure tubes. Travelling with such high speed cannot be done on wheels, this would need a new form of mobility devices and, as air resistance at this speed could be massive, so this system would work in a closed environment very close to a situation called vacuum.
Now this system, like other big engineering projects, involves several steps. First step is to carry out detailed feasibility studies followed by design and engineering studies. After the first step, a pilot project is taken up to study how things actually work. This pilot project would be done in a small stretch of the proposed project. And after all these steps, the construction on the actual project begins. It is a massive project and data suggests wherever the hyperloop project is being planned, it has the potential to create around 10,000 jobs.
But the same steps are required to set up any major transportation project be it high-speed railway or a metro project, what makes hyperloop different from these projects?
The project planning for hyperloop is same as that of any other rail project, but the execution is different. First a paid survey is conducted on the proposed route, which is also called a feasibility study. Once the feasibility study is done, the government or authorities put their equity either in form of land or access, and then a special purpose vehicle (SPV) is constituted to raise money from third parties for the project. Many companies which are going to be benefited from the project such as steel, cement or other companies put their money in the project and eventually government becomes a minority shareholder in the SPV. Later, the SPV becomes instrumental in executing the different stages of the project, and lots of other players who have keen interest in the project either during the planning, designing, constructing, operating or financing the project become part of it. This is the same standard process followed in the UAE, the US or in India.
Among all the feasible hyperloop projects across the world, which one according to you is going to see the light first and has the potential to become a commercial success?
I was involved in the Indian project, so I can confidently say that project is on a very advanced stage. But I don’t know about the opening date of Abu Dhabi-Dubai one. Though the UAE government has announced that they will start work on building the pilot project in 2019, not much information about the project is available in the public domain. However, the biggest hurdle would come in getting regulatory approvals for transporting humans through it. For instance, hyperloop technologies will be first use for transporting goods, and when there is enough data or information available on safety and other aspects then it might get regulatory approvals for transporting humans through it.
The Indian project, which is in initial stages, will connect the upcoming Navi Mumbai International Airport to the existing port. Hence it has higher potential for commercial success as you need a track, which has business case for freight and where people can also move in later stages. So, I believe there is a distinction between routes being announced and actual construction likely to begin.
In your view, how hyperloop technology is going to help revolutionise freight industry?
If you look at the functioning of ports now, they are very inefficient. First, nearly 60 per cent of space in a container is empty and they are not custom-designed for every type of cargo. Secondly, it is very difficult to load and unload containers because of their sheer size and weight. For instance, when a ship arrives at a port, containers are unloaded with the help of heavy-duty cranes, and then sent to yards on trucks. From yard, they are again moved on trucks to their destinations. The whole process is very time consuming and costly as containers are heavy and can only be moved, to places where heavy trucks are allowed. But in case of hyperloop, cargoes will directly move from airport or port, where it got unloaded, to end consumers. Thus it will not only save time but also the cost, as package size moving through it will be of much smaller and can be directly delivered to end-customer by skipping yards and warehouses.
Do you believe Oman has a business case for hyperloop supplementing the proposed GCC-wide railway network?
Any transportation system needs traffic. So, if you look at the current traffic at Oman’s ports and airports, it is very difficult to find an economic case suitable for the type of investment required for building hyperloop system in Oman. Another issue is what the strategy of ports in Oman is and what economic models they want to follow. Are the ports in Oman going to become a hub for freight distribution across the region? Right now they aren’t, but of course, they are aspiring to. So, a GCC-wide transportation system could represent a potential economic model for hyperloop in Oman. The country plans to project itself as a logistics hub and until it obtains a seamless movement of goods and passengers across all the GCC countries, talks of hyperloop is only meant for keeping it as a trophy to showcase others.