Link to thesis - Concept - NTNU

Impact Analysis of Railway Projects in a Flexibility Perspective 559The possibility and effect of dividing railway investments into smaller independentprojects, or sections, is affected by the high integration in a railway system.Bruzelius et al. (1993) point out that railways are the only transportation mode(except pipelines) where each vehicle has only one dimension of freedom. Ships,vehicles on roads and aeroplanes on the ground have two modes of freedom(even though the sideway freedom may be limited for vehicles on roads andaeroplanes). Aeroplanes in the air have three degrees of freedom. In contrast toother transport modes, a whole trip must therefore be allocated in one planningstep for railways. While a bus company can schedule its individual serviceslargely independently, a rail operator must consider the interaction between vehiclesand infrastructure (Nash, 1992). A potential travel time reduction on railwayscannot be realized unless the whole timetable system is adjusted to accommodatethe change. Consequently, Nash claims that railway infrastructure projectappraisal cannot be seen as a separate activity, isolated from the general businessplanning of the railway operation.Challenges related to forecasts are also known in other disciplines, such assupply chain management. Tyndall et al. (1998, p. 75) advise strategies to deemphasizeforecasts, rather than trying to improve them, because “forecasts arealways inaccurate”. A key issue in de-emphasizing forecasts is short lead-times.Thereby, production volumes can be adjusted by actual, rather than estimated,demand. The real options approach to railway investment decisions used byBergendahl (2002) is based on a similar logic, where the decision to build the nextsection of a major railway project is dependent on the demand generated by theimprovements from the construction of a first section. The projects analysed inthe present paper are chosen to illustrate effects of different decision and executionmodels of the investment projects.MethodologyThe study is a multiple case study, in the terminology used by Yin (2003). Onecharacteristic of case studies is that multiple sources of information are used.The analysis of four railway projects is based on a range of information sources,the most important of which are as follows:●●●Archives, both within the involved organizations, as well as publicly availableinformation. These include project documentation, evaluation reports, andquantitative information such as timetables and statistics.Interviews.Participating observation in meetings, etc., where the projects have beendiscussed.The analysed projects were carried out between 1986 and 2003. An overview ofthe projects in the study is shown in Table 1. The overview shows that the projectswere largely carried out in parallel. The studied projects included four of the largestNorwegian railway line investments since 1980.Norwegian RailwaysBefore the results are presented, a short introduction to the railway situation inNorway is given. The former public enterprise NSB was split into the train operator