Detailed Proposal
December 2019
TransPod in Alberta - Detailed Proposal - December 2019
© 2019 TransPod Inc. All Rights Reserved Page | 1
Table of Content
Table of Content 2
1. Proposal 5
1.1. Background 5
1.2. Benefits of this new mode of transport 5
1.3. Project phases 6
First phase: Short-term (2020-2022): Feasibility Study 6
Second phase: Short-term (2020-2024): Research and development in Alberta 7
Third phase: Medium-term (2022-2027): Test center and test track in Alberta 7
Fourth phase: Long-term (2025-2030): Construction of the full line 7
1.4. Public value and benefits for the government of Alberta 7
1.5. Support required from the government of Alberta 11
1.6. TransPod’s financial strength to support this proposal 12
1.7. Track record of similar initiatives and projects 12
1.8. Risks associated to the proposal 13
1.9. Our vision for Alberta 14
2. TransPod 15
2.1. Overview 15
2.2. History of tube transportation 15
2.3. TransPod’s competitive advantage 16
2.4. Market segment and applications 17
Passenger market 18
Freight market 18
Other applications 19
2.5. Business Model 21
Short term (2020): Licensing of the technology during the R&D phase 21
Medium term (2025): Pod sales 21
Medium term (2025): Participation in public private partnerships (PPP) 21
Long term (2030): Maintenance: Service, reconditioning, and spare parts 21
2.6. Milestones 22
2.7. Experience in similar project, managing team and partners 22
2.8. Partners 23
Project partners 23
Financial partner 24
Strategic Partners 24
Legal advisors 25
2.9. Awards 25
2.10. Media coverage 25
7. Appendix A: Definitions 76
8. Appendix B: Calgary - Edmonton high-speed Rail studies and map 77
9. Appendix C: Notice of Motion, NM2017-33 - 2017 August 30 78
10. Appendix D: Transportation Report to SPC on Transportation and Transit -
TT2018-1054 - 2018 October 04 79
11. Appendix E: Cost-Benefit Analysis 83
11.1. The literature 83
11.2. Market readiness 84
11.3. Cost Benefit Analysis (CBA) - Calgary-Edmonton Corridor 85
Methodology 85
Limitations 86
Empirical findings: 87
11.4. Sensitivity analysis 89
11.5. Conclusion of the CBA 90
Third phase: Medium-term (2022-2027): Test center and test track in Alberta
Construction of a full-scale test facility to test and certify the final iteration of TransPod’s technology. This
full-scale test track will be 10km-long to achieve ultra-high-speeds (1,200km/h and will include every
component of a full commercial line, such as emergency exits, airlocks, expansion joints, safety air refill
systems, and signaling and communication systems to be able to test the circulation of several pods in the
same tube. The construction will create 152 direct jobs and provide a direct GDP impact of $32.90M.
Operations will create 69 direct jobs, and $4.97M in GDP per year.
Outcome 3 - Connected and Active Communities: Albertans have inclusive and accessible
transportation options in and between communities
• Key Objective 3.1 Promote safe, affordable, accessible and environmentally sustainable public
transportation options for Albertans.
• Key Objective 3.2 Work with partners to support innovative, cost-effective transportation options
that better connect Albertans to critical services and each other, and support access to modern
transportation services in rural and urban communities.
Outcome 4 - Safety and Security: Transportation safety and security is enhanced through
educational, regulatory, technological and infrastructure improvements
• Key Objective 4.1 Continue to implement transportation safety strategies to prevent transportation-
related deaths and serious injuries on Alberta’s roads, including those in Indigenous communities.
Outcome 5 - Innovation and Technology Integration: Alberta’s transportation system adapts to new
innovations and technologies
• Key Objective 5.2 Work with partners to investigate and implement innovative technologies and
approaches, including new modern urban transportation modes such as e-scooters, automated
and connected vehicles and Intelligent Transportation Systems, to promote economic development
and support the safety and mobility of travellers.
• Key Objective 5.3 Investigate and implement innovative technologies, standards and approaches,
including Dynamic Message Signs and unmanned aerial vehicles, to reduce costs and promote the
long-term affordability and efficiency of the transportation system.
Finally, the main mandate of the Minister of Transportation is: “The ministry supports the province’s
economic, social and environmental vitality by developing and preserving a safe, efficient and affordable
multi-modal transportation system. The system enables economic growth and supports market access
while promoting connected communities and enhancing Albertans’ quality of life.” This proposal supports
these objectives: the pre-feasibility study conducted by TransPod and its partners helped identify the
potential regional benefits associated with the implementation of a freight-only hyperloop system between
1
https://open.alberta.ca/dataset/9d234882-5822-4e06-8e08-b00faa488647/resource/a8b67194-f49a-4f30-af5f-
7d591237da8c/download/transportation.pdf
Freight Transport
2030 2045 2055
Benefits (CAD)
Environmental Benefits $ 13,187,101 $ 29,017,991 $ 49,093,394
Revenues $ 876,897,981 $ 1,915,072,121 $ 3,224,108,199
Travel Time Savings $ 405,795,662 $ 1,086,903,649 $ 2,114,911,627
Safety Benefits $ 31,627,793 $ 37,207,559 $ 41,464,200
Total Benefits $ 1,327,508,536 $ 3,068,201,321 $ 5,429,577,419
*These benefits are not the present values, see the Cost Benefit Analysis (CBA)
section for the Net Present Value (NPV)
Value for Money for the government of Alberta
The value for money of the entire project (the construction of the commercial line) will be established
according to the guidelines of Infrastructure Ontario, during the conduct of the feasibility study.
Since the project does not require financial support from the government for the first two phases, there is
no value for money associated with these phases.
For the third phase, if the financing and delivery model is an Alternative Financing and Procurement model
(similar to 3P model), the Province will own a percentage of the consortium owning the infrastructure,
increasing the assets of the Province, and generating substantial revenues as the line operate. The
Province could also choose to sell its assets once the value of the infrastructure has increased.
20 .00
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16 .00
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5.62
11 0.00
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17
12 .00 90 .00
2.73 13
10 .00
70 .00
8.0 0
50 .00
6.0 0
4.0 0
2.0 0
7.95 30 .00
61
10 .00
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-1 0.0 0
10 0.00
97.02 40 0.00
372 15 0.00
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9.63
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80 .00
28.23
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112 7.0 0
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15 0.00 1.80
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Output
-1 .00 -1 0.0 0
Long-term (2025-2030): Building and operating a line between Calgary and Edmonton
60.00
15 .00
10.89
50.00
38
Creation of a new industry, strong increase in
40.00
10 .00
1.12 30.00 11
3.59 productivity in the province across sectors
5.0 0
20.00
12
6.19 10.00
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0.0 0 0.00
Reducing accidents by 200 to 300 and decreasing
Output Employment (FTE-Years) carbon emissions by 200k to 300k tonnes per year
Direct Indirect Direct Indirect $1.5 M. of travel time savings for people and
Induced Total businesses per year
Induced Total
Procurement Model
In order to limit the risks for the government, the proposal has been divided into three phases, and each
phase unlocks the go / no-go decision for the next phase. Then, although an Alternative Financing and
Procurement model (AFP, similar to 3P model) seems to be the most appropriate model for the construction
of the full line, such a procurement model does not have to be set in place at the beginning of the project.
The only contractual arrangement required for this proposal to kick-off is a letter of engagement from the
Government
(i) supporting the project to go ahead;
(ii) offering assistance, mainly in giving access to data, for the feasibility study;
(iii) offering to provide land for a full-scale test track once the feasibility study has proven a line
is beneficial;
(iv) and a commitment to go forward with the construction of a full line, integrating the test
track, when the technology will be ready, and if the feasibility study proves a line beneficial
for the Province of Alberta.
Such support and letter of engagement will allow TransPod to unlock the financial support from its partners
and start the project in Alberta.
2
https://transpod.com/wp-content/uploads/2019/03/Final_Report_TransPod_Hyperloop_Thailand.pdf
https://www.youtube.com/watch?v=tGhEj-MWyUc
A further concept was introduced in the SpaceX alpha document in 2013, under the name "hyperloop."
However, since then, rather than developing this technology directly, SpaceX has been focusing on
spacecraft development and meanwhile establishing design and speed competitions for "hyperloop" pods
build by student teams worldwide. SpaceX has built a reduced-diameter test tube in Los Angeles, in which
the teams place a low-speed model unit. These units do not have provisions for passengers or cargo bays,
nor for long autonomous trips.
Between 2013 and 2015, three companies have formed to specifically develop variants of the hyperloop
concept: HTT (Hyperloop Transportation Technologies), HTI (Hyperloop Technologies Inc.; since renamed
Virgin Hyperloop One), and TransPod. Besides TransPod, the competition has based their designs around
the earlier SpaceX concept and are constrained by the cost of their propulsion configurations, which
consists of a significantly large array of electromagnets installed along the entire length of the line.
More recently, three more companies have been created in Europe: Zeleros in Spain, HyperPoland in
Poland, and Hardt in the Netherlands. Four test tracks have been built, in the USA, France, and in the
Netherlands, several governments have demonstrated interest in such technology (including the Federal
government of Canada), and the first commercial project is about to be awarded in India.
Passenger market
The first target market for TransPod’s technology is the global intercity passenger market. Many corridors
around the world do not have efficient passenger transportation for cities located around 500 km away from
each other. In this case, air travel takes a very short time but forces customers to commute to airports and
wait a long time for boarding and disembarking. Meanwhile, train service is usually poor and doubles the
trip duration compared to aircrafts. The TransPod ultra-high-speed system directly solves this issue by
providing fast and affordable transportation in these corridors.
People are increasingly looking to travel cheap and fast. However, the aviation sector is struggling to
accommodate this new capacity. As economies are growing, increased passenger transport will generate
important CO2 emissions and present a true threat to humanity.
While TransPod’s technology is particularly well suited for diverting air passengers, a vast majority of the
ridership will also come from rail and road transport. Providing a more flexible and quicker alternative to
driving will attract road users and transform the way commute. Indeed, it will be possible to live and work
in two cities far apart from each other and take the TransPod line to get to work. The system will dramatically
shrink distances and transform regions into interconnected boroughs.
Freight market
Over the past five years, e-commerce has been growing at an extremely fast pace and will keep growing
at an average rate of 7% in North America, 5% in Europe and 14% in Asia Pacific within the next decade.
This unprecedented growth is driving the revenues of express shipping companies such as UPS, DHL, and
Canada Post, which are heavily investing in new warehouses and transport modes to cope with this sharp
increase in demand. There is therefore an increasing need for more capacity and faster freight transport to
satisfy the needs of Billions of consumers. Air cargo is currently the most used mode of transport for express
freight delivery and is followed by truck transport.
The fast market growth will engender a sharp increase in GHG emissions, which raises a paradox between
increasing trade and achieving sustainable development. Unfortunately, other modes of “green” high-speed
freight transport such as high-speed rail and MAGLEV did not prove to be economically viable for express
deliveries due to high costs and low speeds.
Other applications
In the words of Gibran Hadj-Chikh, Director for Innovative Transport at Parsons Corp., a new technology
has little chance for success if it isn’t integrated into the global ecosystem. Here are several applications
for a TransPod line, that differ from traditional railway applications, and are made possible only because of
the speed and high frequency of the system:
Decentralize city centers
Urbanization is rapidly growing around the world. However, citizens want to be able to live close to their
work, while having a reasonable cost of living. Ultra-high-speed transportation offers a solution to this
equation, that is quite often difficult to resolve. A 30-minute journey in an urban area covers a limited
distance depending on the mode of transport used. A 30-minute journey in a TransPod line would cover a
distance of 200km (on average 680km/h, taking into account the acceleration and deceleration). In this
scenario, cities in the region would replace the current urban periphery. This would mean a more affordable
cost of living, a better standard of living and urban decentralisation, which would revolutionise home to work
travel.
Reducing warehouse expansions
A TransPod line will also benefit supply chains for business, just-in-time delivery, and online ordering. The
‘want it now’ culture has been growing, which has seen the increase in online orders and next day deliveries,
500 km 500 km
Ville B Aéroport Aéroport Ville E
40 min 1 2 40 min
Avions
Aéroports
Ville C Ville F
Villes
Short term (2020): Licensing of the technology during the R&D phase
• TransPod will license its technology to other industries upon completion of each subsystem
development.
• Royalties on licensing will vary between 2% and 10% of the subsystem’s value.
• Revenues from royalties will be reinvested into further technological development.
2.8. Partners
TransPod has initiated discussions with several renowned partners in Alberta, in Canada, and in Europe.
Since the project aims at developing local industries, TransPod is currently exploring the local industrial
network to look for further partnerships with local academics and local companies.
Project partners
ENTUITIVE:. Entuitive is a Calgary-based consulting engineering practice with a vision
of bringing together engineering and intuition to enhance building performance. Backed
by decades of experience, they are taking design performance to new heights through
their collaboration with clients in North America and internationally including architects,
developers, building owners and managers and construction professionals.
Fiera Infrastructure: Fiera Infrastructure provides investors with attractive risk-adjusted
returns, on a long-term basis, by investing in Canadian and international infrastructure
assets, projects and companies. Fiera offers to provide its expertise in infrastructure
projects, in terms of financing, management, and realizations.
Financial partner
Angelo Investments: Angelo Investments is an Italian holding company focused on long-
term investments in the high-tech sector, and works with talented entrepreneurs and
management teams to develop breakthrough technologies. With their unique blend of
industry-leading expertise in the space, aviation, and railway industries, Angelo’s
companies collaborate with TransPod throughout the design, testing, and development
of TransPod technologies.
Strategic Partners
MERMEC: MERMEC is an Italian company focused on rail inspection and diagnostics
(both systems and vehicles), railway signalling, asset management software, and
professional services for the railway industry. The company co-develops the signaling
and communication systems with TransPod.
Blackshape Aircrafts : Blackshape Aircrafts develops and produces high-performance
carbon fibre aircrafts, for civil aviation and military. Blackshape is working with TransPod
on the structure and the shell of the pods.
SITAEL: SITAEL is the largest privately-owned Space Company in Italy leading the
development of the Small Satellites sector. With over 300 employees and state-of-the-art
facilities, SITAEL covers all the processes needed for the Design, Development and
Production of Small Satellites, Advanced Propulsion Systems, Instruments and Avionics.
SITAEL’s IV10 vacuum chamber is amongst the largest space simulators in the world,
Legal advisors
KGPC: Located in Alberta, KGPC provides value-based professional legal services from
simple individual wills to complex commercial transactions in a convenient, accessible
manner.
Patent International: Patent International is the number one best resource to protect the
entire portfolio of intellectual property rights owned by Fortune 500 and other companies
in all foreign jurisdictions. They take the burden of requisite obligations to do foreign filings
and language translations off their customers’ shoulders while providing a centralized
point of contact to reduce administrative burden and costs.
2.9. Awards
TransPod is proud to have received several awards for its innovative technology:
• Member of the World Alliance for Efficient Solutions, managed by the Solar Impulse
Foundation - since 2017
• Canada’s Clean50 Emerging Leaders, by DELTA MANAGEMENT GROUP INC., November
2018
• Startup of the year, Provincial Award, by Startup Canada, June 2018
• National Innovation award, by Startup Canada, November 2018
• Lauréat As des As, at the Paris Air Forum, June 2017
• “Les Innovateurs”, by the French-Canadian Chamber of Commerce in Alberta, 2018
3
See Appendix B and C
Steering Committee
This entity will regroup one member of each entities, including one person from Alberta Transportation, to
make concrete decisions on the project’s budget, timing, deliverables etc. Furthermore, the committee will
provide advice on the decisions taken in each work package with regards to the technology used and
methodology adopted in the analysis. The steering and technical committee will be in charge of solving the
problems that could be encountered. If no consensus can be reached following a motion or solution to a
problem, the board will undertake a vote with winning majority. The board will hold a general meeting at
least every 4 months.
Project Management and Finance Office
TransPod proposes James Lew as a project manager. James brings a solid track record of project
execution for infrastructure megaprojects and is well experienced in conducting feasibility studies. The
project manager will be responsible of organising the project planning phase and control the timeliness and
budget of each Work Packages.
WP Leaders
This project’s two major work packages will be split between TransPod and its infrastructure partners to
leverage both partner’s full expertise potential. WP 2 (Technology and Infrastructure Analysis) will be led
Project Management
Steering Committee
and Finance Office
WP 1 : Project
Management
WP 2 : Technology and
Infrastructure Analysis
WP 3 : Economic
Forecasting
WP 4 : Dissemination
and Communication
Participant number 2
Objectives
WP1 focuses on providing state of the art project management throughout the project’s duration with the
goal of ensuring excellence in budget management, time keeping and risk mitigation.
The WP1 will be divided in 2 main tasks:
• Detailed work plan
• Ongoing Project Management
Description of work
Task 1.1 Detailed Work Plan
In order to kickstart the project, the project management office will start planning the entire project with its
relevant stakeholder and brief the whole team on a weekly basis. The project planning will address the
budget split as well as the potential risks and mitigation solutions available. The work plan will be very
detailed and involve all the relevant project actors in order to ensure the project delivery in a timely manner.
Task 2.2 Ongoing Project Management
Partner meetings, tools and procedures
TransPod will organise partner meetings and Steering Board meetings every four month. TransPod will
setup a file sharing platform between project members. Finally, the PM will prepare a Handbook for
participants including procedures for communication and reporting.
The Steering board will meet every four months. The project coordinator will chair the Steering Board
meetings. Minutes will be taken and shared with the members of the Steering Board, highlighting the
project’s main challenges and approach to be taken.
The Steering Board is responsible for the overall work, report on the progress, tasks performed and
challenges/problems to be solved. The members of the Steering Board shall take executive decisions
ensuring a smooth operation of the project. The frequency of the meetings will depend on the project’s
challenges.
Outcome: Steering Committee, Advisory Board, Project handbook, file-sharing platform, reports.
Project Management
Day-to-day project management will be carried out by the project manager, who will supervise the project
and monitor the overall-progress, the Deliverables and Milestones and flow of information between WP’s.
Periodic and final reports will be made throughout the duration of the project.
Outcome: Day-to-day project management, periodic and final reports.
Financial Management
The project manager will be in charge of the overall budget and monitor the financial progress. Reports will
be prepared by the end of each four-month period.
Outcome: Day-to-day financial management and four-month financial reports.
Data Management
Objectives
WP2 focuses on setting up the framework of analysis used in the feasibility study. This WP will be composed
on four main tasks:
• Review of high-speed Rail transport cost-benefit analyses relevant to hyperloop
• Review of existing hyperloop technologies and adapted forecasting methodologies
• Review of route options
• Forecasting of construction and operating costs
Description of work
Task 2.1 Review of high-speed Rail transport cost-benefit analyses relevant to hyperloop
The first task will have the objective to review the previous high-speed Rail studies and other transportation
cost-benefit analyses made in the Edmonton – Calgary Edmonton, as well as other studies made in the
United States and internationally about high-speed freight. The review of the previous studies, white papers,
as well as research papers on the high-speed movement of goods and people will help develop a framework
of analysis by targeting the proper impact categories for the Cost-Benefit Analysis and demand models.
Outcome: Pre-Analysis framework defined.
Task 2.2 Review of existing hyperloop technologies and adapted forecasting methodologies
The second task will leverage the expertise of both Hatch and TransPod to study the existing hyperloop
design characteristics that could be suitable for commercial operations in the Calgary-Edmonton corridor.
Objectives
WP4 provides a dissemination and communication framework for the feasibility study as well as the
dissemination and communication activities (implementation of activities). The main task of WP4 will be to
consolidate all the results obtained throughout the feasibility study period and combine the information in a
report that will be presented to Alberta Transportation and made available to the public.
This WP will be organised in two tasks
• Final Reporting for Alberta Transportation
• Public Dissemination
Description of work
Task 4.1 Final Reporting for Alberta Transportation
This talk will consolidate the final report on the economic impacts of the implementation of hyperloop
technology in the Calgary Edmonton corridor and will provide recommendations to policymakers on how to
prepare Canada for the introduction of this technology. Both costs and benefits will be clearly presented,
and policy recommendations will be made to facilitate the development of the technology in Canada. The
results of the feasibility study will be presented to Alberta Transportation as a first step after the completion
of the report.
Outcome: Presentation of the feasibility study
Task 4.2 Public Dissemination
The second task will aim to disseminate the results of the feasibility study to the public on the platform
TransPod research and social media. The goal of this public dissemination is to familiarise Canadians with
upcoming disruptive sustainable innovations in transportation and promote sustainable living.
Outcome: Enhanced public awareness on sustainable transportation
Deliverables
Here are the following deliverables:
D.4.1 – Final report to be delivered to Alberta Transportation
D.4.2 – Public version of the study results available online
- M 20
-2
-
-
ay
pr
pr
-A
-A
01
15
01
15
WP Task Sub-tasks Task Lead Start End Days
1 Project Management TransPod 2020-04-01 2021-12-01 609
1.1 Detailed Work Plan TransPod 2020-04-01 2020-06-01 61
1.2 Ongoing Project Management TransPod 2020-06-01 2021-12-01 548
2 Technology and Infrastructure Analysis HT 2020-06-01 2021-03-01 273
2.1 Review of High-Speed transport cost-benefit analyses relevant to hyperloop TransPod/HT 2020-06-01 2020-08-01 61
2.1.1 Review of the High-Speed Rail studies undertaken in Alberta 2020-06-01 2020-07-01 30
2.1.2 Review of other Canadian and North American HSR studies 2020-06-15 2020-07-15 30
2.1.3 Review of worldwide high speed freight studies 2020-07-01 2020-08-01 31
2.2 Review of existing hyperloop technologies and adapted forecasting methodologies TransPod/HT 2020-06-01 2020-11-01 153
E 2.2.1 Existing hyperloop designs 2020-06-01 2020-08-01 61
E 2.2.2 Hyperloop technical requirements 2020-06-15 2020-09-01 78
E 2.2.3 Corridor constraints and requirements 2020-08-01 2020-10-01 61
E 2.2.4 Analyses needed for the study 2020-10-01 2020-11-01 31
2.3 Review of route options TransPod/HT 2020-06-01 2020-11-01 153
E 2.3.1 Representative Routes 2020-06-01 2020-08-01 61
E 2.3.2 Service and other parameters 2020-06-15 2020-08-01 47
E 2.3.3 Calgary to Red Deer 2020-08-01 2020-09-15 45
E 2.3.4 Red Deer to Edmonton 2020-09-15 2020-11-01 47
2.4 Forecasting of construction and operating costs TransPod/HT 2020-11-01 2021-03-01 120
2.4.1 Approach and methodology 2020-11-01 2020-12-01 30
2.4.2 System configuration 2020-11-15 2020-12-15 30
2.4.3 Estimating costs for infrastructure 2020-12-01 2021-01-15 45
2.4.4 Estimating costs for start-up 2021-01-01 2021-02-01 31
2.4.5 Overall cost estimates 2021-01-15 2021-02-15 31
2.4.6 Risk Analysis 2021-02-01 2021-03-01 28
02 4 6 8 10 12 14 16 18 20 22 24
No Milestone Month
M1 Technology selected, Route design selected, Cost framework Defined 11
The first milestone will be the completion of all the technical specifications for the system studied. Choosing
the right technology can be considered to be the project’s critical path, as the decisions taken during this
phase will directly impact the findings of the other project tasks.
The second milestone will be the completion of the Cost-Benefit Analysis and impact measurements. The
work on this milestone will overlap with the previous one, as the regulatory requirements of the system will
be studied iteratively alongside the design specifications made in WP2.s
Finally, the last milestone will complete the project by disseminating the results to Alberta Transportation
as well as the public.
4
https://transpodhyperloop.com/wp-content/uploads/2017/07/TransPod-infrastructure_EN_July-17-update2.pdf
Project Deliverables
Each work package will provide a set of deliverables required for the completion of future tasks and
dissemination of the results to Alberta Transportation and the public. The following table presents a
summary of the deliverables presented in the Work Package descriptions:
No Deliverables
WP 1: Project Management
D.1.1 Project handbook and file-sharing platform
D.1.2 Status reports every 4 mon
D.1.3 Report on the detailed route design used in the feasibility study
D.1.4 Data policy handout
WP 2: Technology and Infrastructure Analysis
D.2.1 – Report on the previous relevant transportation studies
D.2.2 – Report on the adequate technology to be used in the analysis
D.2.3 – Report on the detailed route design used in the feasibility study
D.2.4 – Report on the forecasted infrastructure costs and operating costs
WP 3: Economic Forecasting
D.3.1 – Report on passenger demand and methodology used
D.3.2 – Report on freight demand and methodology used
D.3.3 – Report on transportation policy framework to be used for hyperloop
D.3.4 – Report on the environmental and social impacts of hyperloop
D.3.5 – Computed results of the CBA
D.3.6 – Report on the impacts of the system
WP 4: Dissemination and Communication
D.4.1 – Final report to be delivered to Alberta Transportation
D.4.2 – Public version of the study results available online
Project Metrics
To efficiently monitor the performance of each task, the project will be following the earned value
methodology which allows to integrate scope, time and cost for measuring project performance. The earned
value is a measure of work performed expressed in terms of the budget authorized (planned cost) for that
work. It is used in conjunction with the actual cost of work scheduled to calculate a performance ratio that
tells whether a project is over or under budget. By adding the total budgeted costs for labor and resources
for the project, the Planned Value (PV) can be calculated. For instance, if a task has a PV of $10,000 that
is 40% done, the Earned Value (EV) = $10,000 x 0.40 = $4,000. The following table provides a summary
of the measurement metrics that will be used in the project:
Schedule Variance
How is the project performing in terms
(+ variance, ahead of SV
of schedule? EV - PV
schedule)
Project performance will be monitored every month by the project manager with the help of the Cost
Performance Index (CPI) and Schedule Performance Index (SPI). The value of these indexes will provide
clear metrics on the project performance at every time:
Data
Outcomes / Performance Current Performance Source of
collection
outputs Indicator performance Target Data
Frequency
Monthly status
Budget and report and
Work Package Earned value vs Planned Value
CPI and SPI accounting data collection
Completion Actual Cost for the WP
summary on WP
delivery
WP 1 : Project Management
1.1 Detailed Work Plan 2020-04-01 2020-06-01 2.0 11.0 12.0
1.2 Ongoing Project Management 2020-06-01 2021-12-01 18.0 3.0 20.0
WP 2 : Technology and Routing Analysis
2.1 Review of High-Speed transport cost-benefit analyses relevant to hyperloop 2020-06-01 2020-08-01 2.0 4.0 8.0
2.2 Review of existing hyperloop technologies and adapted forecasting methodologies 2020-06-01 2020-11-01 5.0 4.0 13.0
2.3 Review of route options 2020-06-01 2020-11-01 5.0 6.0 25.0
2.4 Forecasting of construction and operating costs 2020-11-01 2021-03-01 4.0 6.0 24.0
WP 3 : Economic Forecasting
3.1 Passenger demand forecasting for hyperloop 2021-03-01 2021-06-01 3.0 6.0 10.5
3.2 Freight demand forecasting for hyperloop 2021-03-01 2021-06-01 3.0 6.0 10.5
3.3 Review of existing transportation policy applicable to hyperloop 2020-08-01 2020-11-15 3.5 2.0 7.0
3.4 Analysis of environmental and social impacts 2020-11-15 2021-04-01 4.5 4.0 18.0
3.5 Financial and Cost-Benefit analysis 2021-06-01 2021-08-01 2.0 4.0 10.5
3.6 Impact Analysis 2021-07-01 2021-09-15 2.0 3.0 6.0
WP 4 : Dissemination and Communication
4.1 Final report 2021-08-01 2021-11-01 5.0 5.0 14.0
4.2 Public Dissemination 2019-11-01 2019-12-01 1.0 1.0 1.0
Total Person Months 179.5
Additional financing
In the event of a work package exceeding its planned budget, the consortium’s lead investor Angel
Investments will cover the required additional expenses.
TransPod will
inform Alberta
WP4 The final report
Omitted information will Transportation of
Dissemination and is missing Low Low
be unlikely all the flaws
Communication information
related to the
study
2018/2019 2019/2020
Patents - 90,000
Industry diversification
Today, the energy sector represents 31.6% of Calgary’s GDP, 67% of Alberta’s exports, and 50% of capital
expenditures in Alberta. While the industry created many jobs, the reliance of the economy on a single
industry makes it vulnerable to commodity cycles, such as the one observed back in 2014-2015, which had
negative effects on Calgarians. While Calgary Economic Development’s mission strives to achieve
sustainable development, the current economic structure of the City contradicts this goal. The TransPod
research centre brings a concrete solution to the lack of diversification of the city by bridging together many
industries and innovations to build tomorrow’s transportation systems.
The work packages presented in this proposal are a direct reflection of the sectoral diversity shining through
this project. For example, the artificial intelligence components of the control systems developed in the
second work package will involve expertise from other industries and practices. The workforce involved in
this project will have the ability to spread their knowledge to other rising industries if they choose to exit
their job.
Also, we have decided to include both key industries and emerging sectors in our work packages, to build
on existing expertise (for example: pipeline and metal-forming industries) while supporting the growth of
innovative and new sectors (for example AI and geomatics).
• The aerospace cluster in Quebec (nearly 200 companies, 180 SMEs (sub-contractors and product
manufacturers), 40,160 jobs and sales of $15.5 billion in 2015, over 80% of Québec’s production
destined for export)
• The Great Lakes automotive manufacturing cluster in Alberta ($19 billion contribution to GDP, more
than 125,000 people, with an additional 400,000 people in aftermarket services and dealership
networks)
• Aerospace Valley in Toulouse, France, following the implementation of Arianespace locally
(gathering 124,000 industrial employees, 8,500 researchers and scientists, 475 R&D projects
representing an accumulated value of 1.2 billion Euro covering most scientific and technical fields
related to the various sectors of aerospace)
• Finally, research studies expect the size of the hyperloop market to reach up to $6 billion in 2026.
TransPod is looking forward to supporting Alberta get a share of this market5.
Industry diversification
The job creation for research and development activities will generate $5.39 million CAD in net direct
income/year, $1.17 million CAD in indirect labour income/year, and $1.90 million CAD in induced labour
income per year (resulting from an increased household consumption). Furthermore, at least $2.14 million
in income taxes will be paid to the government per year. The total yearly GDP impact for the research centre
will be $7.74 million direct, $2.24 million indirect, and $2.83 million induced. This project will create 61 direct
jobs, 13 indirect jobs, and 17 induced jobs.
This forecast used a very conservative average multiplier of 1.5. The economic multiplier could be vastly
superior if the impact is similar to the MaRS cluster, which has a 1.9 multiplier (the GDP would be $26.6
million CAD). Furthermore, if additional years of privately funded research could increase the impact tenfold,
TransPod would gradually move its headquarters from Toronto to Calgary, the research centre staffing will
be increased to 200 people after 5 years of operations. It is important to remember that the economic
5
https://www.marketsandmarkets.com/PressReleases/hyperloop-technology.asp and
https://www.alliedmarketresearch.com/hyperloop-technology-market
200.00 35.00
Economic impacts from the Economic impacts from the R&D on the
180.00R&D on the Alberta economy Alberta economy (M. of CAD)
30.00
160.00 (in FTE)
140.00 25.00
120.00 20.00
91.00 16.30
100.00
17.00 15.00 12.81
80.00 5.62
13.00 2.83
60.00 10.00 8.46
2.24 2.73
40.00 1.90
61.00 1.17
5.00
20.00 7.74 7.95
5.39
0.00 0.00
Employment (FTE-Years) Income effects GDP Impact Output
If the city attracts sufficient investment in high technology, the economic multipliers related to the high-
speed transportation industry could reach the same levels as what was seen in the oil and gas sector during
peak oil price, and significantly improve Alberta’s economy.
Main building
The Main Building shall be a fit-for-purpose single or two-storey structure, shall comply with applicable law,
and be connected to the test track (for clarity: incorporating the end of tube track). The building will require
approximately 50,000 square feet of floor area to accommodate the following functional program comprised
of four functions (a general arrangement will be developed once a tentative site has been identified):
• Office space for administrative and R&D work
• Control room to monitor and operational testing
• Workshop and parts storage area (clean workshop for electronic work, machine-tooling workshop,
warehouse for parts and components)
• Visitor experience centre
Office space: includes main reception/security control for the facility, workspace to accommodate staff and
technicians for analysis of tests and results, as well as engineers conducting calculations and simulations.
This space will also include typical meeting rooms and conference spaces and host the administrative team
managing and supporting the facility.
Control room: workstations for engineers performing system testing. This room will be connected to
sensing systems along the test track and house operational servers for the facility.
Workshops: composed of three separate areas, each having a specific purpose. The machine tooling area
will allow for modifications to the chassis, requiring a heavy-duty monorail hoist system and adequate
headroom clearance to lift a prototype vehicle from track level and place it on the floor [i.e. ceiling height
anticipated at 6m]. A clean workshop will be equipped with air filters and designed for work and assembly
of electronic components. The warehouse area will accommodate spare parts and tools (rack) storage, a
truck dock and forklift charging station.
Visitor experience centre: a suite to host visitor groups offering a secure location for the public during the
tests, as well as promote the history of transportation and the history of vacuum trains.
Circulation space exits, and utility and plant service rooms shall be provided as required to support the
functional program. Impact resistant enclosures (heavy-duty reinforced masonry) will be required around
the space containing the track terminal as a precaution against unplanned impacts due to incomplete
deceleration of the prototype vehicles. Security systems shall include perimeter card access control and
CCTV surveillance at all access points.
Machinery building
The Machinery Building will be a new free-standing fit-for-purpose structure. It will comply with applicable
law, and have a floor area of approximately 1,000 square feet to contain the technical components of the
Secondary building
The Secondary Building shall be a new fit-for-purpose structure, shall comply with applicable law, be
connected to a terminal of the test track (i.e. opposite end to Main Building) and have a floor area of
approximately [500] square feet. This structure will be connected to the test track, enclose the end of the
tube assembly, and be sized to accommodate the removal and re-positioning of test vehicles when
necessary to conduct a return run. Impact resistant enclosures (composed of heavy-duty reinforced
masonry) will be required around the space containing the test track terminal as a precaution against
unplanned impacts due to incomplete deceleration of the prototype vehicles.
External requirements
Access roads: The site shall have direct access from a public roadway that provides a convenient
approach to the Main Building (where the facility’s reception will be located). The facility will use this street
access as the primary access/egress control point to the site, which shall be equipped with a guardhouse
or automated barrier with CCTV and remote-control capabilities.
Environmental protection
TransPod technology (vehicles circulating in a low-pressure environment) will not generate effluents or
emissions, other than air release. The FSTT will be an industrial employment occupancy, with activities
including principally engineering staff supported by workshop floor activities such as metal forming,
Consequence
Likelihood
Risk Level
Consequence /
Risk Mitigation / Contingency
Impact
5.6. Budget
The total cost of building this facility is estimated to be $100 million CAD. To finance this project, TransPod
will raise capital from private investors. This capital raise is estimated to take place in 2020 amd 2021.
Operating costs will vary between $5 million and $7 million per year, including maintenance fees. All
operating expenses will be incurred by TransPod and financed by TransPod. The preliminary budget is
presented below. It will be refined during the detailed design phase occurring during the first phase of our
plan “Short-Term Plan in Alberta”.
Test Track Guideway
Land preparation and excavation $7,000,000
Service roads $2,000,000
Pier Structural Work $12,000,000
Tube supply $50,000,000
Tube erection $4,110,000
Tube's accessories and attachments $5,000,000
Main Building
Land preparation $400,000
Building $3,875,000
Equipment (machine tools, computers, etc.) $900,000
Machinery Building
Land preparation $10,000
Building $200,000
Vacuum pumps $6,840,000
Power substation $1,000,000
Operations
The full-scale test track will have a staff of 60 researchers and test engineers over a period of five years
minimum (for the initial phase leading to the commercialization phase of the TransPod system). This staff
will cover the full-scale testing of the system up to the final certification of the commercial product. Additional
staff will be hired after this phase, when TransPod will design the next generations of vehicles, and invite
other companies to use the test track for their own purposes. When the test track will be incorporated to
the commercial line between Calgary and Edmonton, the staff will be transferred to other projects in Alberta.
Direct impacts: Firstly, the project will have direct output impacts in the economy. The direct yearly output
impact will be $5.26 million CAD which corresponds to a $4.97 million increase in GDP (as most expenses
are salaries for researchers).
Indirect impacts: The project is expected to generate $1.80 million CAD in indirect output. This will
represent an increase of $1.45 million in indirect GDP increase for Alberta every year and create 18 indirect
jobs.
Induced impacts: The total induced output will be $1.70 million CAD which will grow Alberta’s GDP by
$1.66 million every year.
The following table provides an overview of the economic impacts of the operations:
Economic Impacts on Alberta Direct Indirect Induced Total
Income effects 3.16 0.70 0.64 4.50
GDP Impact 4.97 1.45 1.66 8.08
Output 5.26 1.80 1.70 8.76
Employment (FTE-Years) 69.00 18.00 24.00 111.00
14.00
12.00 150.00
5.8. Implementation
The implementation of the full-scale test facility will be similar to what will be done for the half-scale version.
However, the main difference will reside in the greater scale of the project, as well as the different rules to
comply with during the construction and operations period.
The different work packages will be the following:
WP 1: Preparation and construction of the test track (2022-2023)
• M# 1.1: Site identification, final design, regulatory approval
• M# 1.2: Suppliers selected
• M# 1.3: Site preparation and service road construction completed
• M# 1.4: First section built 100% in compliance with TransPod’s specs
WP 2: Technical building construction (2022-2023)
These tests will aim to control and push the final iteration of the TransPod system to its technical limits in
order to evaluate all the failure modes of the technology. This intensive testing will allow to build the safest
system possible to be certified and later commercialised. Similarly, to the R&D project and the half-scale
test track, this project will be managed by TransPod Canada in collaboration with industrial partners and
infrastructure companies. Partners such as Hatch will be providing advisory services during the construction
and testing of the full-scale system in order to ensure compliance and prepare certification.
Market share
A standard TransPod hyperloop pod can load between 5 and 15 tonnes of freight or 27 to 40 passengers
and reach a maximum velocity of 1200 km/h. The TransPod system would operate between several
terminals loading up the pods and unloading the upcoming pods.
Passenger
The TransPod system will offer an alternative to cars, buses, trains and planes by providing frequent
departures (up to 1 pod every minute) and will operate like a network between cities. Previous high-speed
rail studies have concluded that there will be enough ridership for a high-speed line in the corridor by 2030,
which is exactly the timeline sought after for the implementation of a TransPod line. This new mode of
transport will capture ridership originally forecasted by the studies and generate induced trips due to the
greater travel time savings provided by the system. This new mode of transport will rarely suffer from
interruptions due to weather-related factors, contrarily to high-speed rail systems. As a result, frequency
and reliability will be ensured in the corridor and provide strong incentives to commuters to switch their
transportation habits. Previous studies by TransPod have identified that the system would generate enough
profits to recover infrastructure costs rapidly.
6.3. Budget
Budget overview
The detailed budget of the line will be determined during the feasibility study and refined after the detailed
design and procurement phases. However, we have drafted an initial estimation based on our metrics.
TransPod’s infrastructure cost per kilometre was estimated to reach $28.89 million CAD. As a comparison,
the cost per km of 24 of the world’s leading HSR systems varies between 4.7 million and 39.5 million EUR
(2005) with a mean value of 18 million EUR (2005), corresponding to 35 million CAD (2017). These costs
exclude rolling stock, planning, and land costs. Rolling stock costs for TransPod hyperloop systems are
relatively small compared to the total infrastructure costs, similarly to the cost ratio observed on current
high-speed rail systems. The cost of acquisition of a single pod (following TransPod’s design) was
estimated at $10M CAD.
The TransPod technology positions itself as being in the global cost range of existing high-speed rail
systems, with a significant speed increase, thus a greater efficiency. Indeed, infrastructure costs may vary
given the location chosen for the project. The main advantage of this infrastructure is its ability to be adapted
depending on the terrain profile and property rights of the proposed route. For instance, building elevated
on piers does not cut fields or properties in half contrary to existing rail systems. Furthermore, and thanks
to the possibility to modify the height of each pier, the horizontal tube alignment required is much less
demanding than rail alignment needed today for high-speed rail, often requiring additional civil works along
the track. The TransPod infrastructure can be built elevated, underground or as a shallow trench
(particularly useful to minimise cost on flat terrain).
PBS and Description Object Type REF Cost/km
2 A-01 Pier Type A (38U / Km) B 1 $3,011,000
2 A-02 Galvanized Metal Ladder B 1 $262,000
2 A-03 Galvanized Catwalk B 1 $1,344,000
2 A-04 Tube - Diameter 4m; 1000m E 1 $11,063,000
2 A-05 Solar Panels E 1 $2,310,000
2 A-06 Emergency Exits (2U / 1km) B 1 $1,504,000
2 A-07 Service Road R 1 $1,660,000
• Finance: Major insurance companies, pension funds, banks, etc. have the capability to finance
such project. Some of them have already shown an interest.
• Build: Construction companies will be involved in the partnership to oversee and build the line.
• Rolling stock manufacturer: In this situation, TransPod will provide the technology and the
specifications related to the construction of the line.
• Government: The implication of the Government in the PPP guarantees the business model and
the cost of the ticket for the final user.
According to the Residential and Civil Construction Alliance of Alberta, governments have systematically
underinvested in infrastructure, and continued underinvestment in infrastructure puts an average 1.1%
annual GDP growth at risk. Given the record government deficits in much of Canada, due in part to the one-
time stimulus investment, governments and public owners will more than ever before be eager to find ways
to obtain greatest value for money. Because of downsizing and outsourcing many conclude that there is
insufficient capacity and expertise within the public sector to deliver the volume of infrastructure that is
needed. The private sector has proven itself willing and very capable of providing the necessary expertise
and resources. PPPs are one vehicle through which the private sector can deliver its expertise.
15.00
Economic impacts from construction on Job creation from construction on
13.00 the Alberta economy (B. of CAD) the Alberta economy
10.89
11.00 (in 000s of FTE)
1.12 35.00
8.77 11.06
9.00
1.94 3.59 25.00
7.00 12.45
2.90 15.00
5.00
2.48 14.53
3.00 6.19 5.00
0.39 3.93
0.83
1.00 1.26 -5.00 Employment (FTE-Years)
Environmental benefits
An important benefit for society will be the reduced CO2 emissions
engendered by a modal shift from airplanes and road vehicles to the
hyperloop system. Overall, a TransPod line between Calgary and
Edmonton could remove 200,000 to 385,000 tonnes of CO2 every
year. Not only will this CO2 emissions reduction help Alberta reach
Reducing CO2 its carbon targets but will also help in reducing the spread of other
emissions by 200,000 pollutants such as methane or nitrous oxide, that can harm human
health and induce global warming.
to 385,000 tonnes
every year
Multiplier effect on Alberta’s industries
Because of its intensive use of infrastructures, the transport sector
is an important component of the economy and a common tool used
for development. This is even more so in a global economy where
economic opportunities have been increasingly related to the
mobility of people, goods and information. A relation between the
quantity and quality of transport infrastructure and the level of
economic development is apparent. High-density transport
infrastructure and highly connected networks are commonly
associated with high levels of development. When transport systems
are efficient, they provide economic and social opportunities and
benefits that result in positive multipliers effects such as better
Productivity gains accessibility to markets, employment and additional investments.
When transport systems are deficient in terms of capacity or
across industries reliability, they can have an economic cost such as reduced or
missed opportunities and lower quality of life. A high-speed freight
line between Calgary, Red Deer, and Edmonton has the potential to
generate a strong multiplier effect on the province’s many industries.
This multiplier effect will create indirect and induced jobs not only
amongst users of the freight line, but also in side-sectors. Overall,
the quality of life of Albertans will be substantially enhanced.
* Numbers may vary depending on the
reference year
Feasibility studies
Feasibility studies, or assessment studies, will confirm the need for the construction of a hyperloop corridor.
Our analysts will work with external and independent partners (such as renowned consulting firms) to
conduct such studies. The objective is to present an overview of the infrastructure in a dedicated country,
then, to identify the needs for transportation systems and to assess the benefits that a hyperloop line would
bring to the country. Then, the feasibility studies will stress out the economic and environmental benefits
for the region, and finally the studies will reveal the cost of the infrastructure and the scope of work. Of
course, if the study reveals that the project is not viable, we will focus on other more profitable corridors.
6.6. Timeline
Although it is very preliminary to present a detailed timeline for this project, we have estimated that the
construction could be achieved in a five years’ timeframe.
3. 2008 Economic Benefits and Market Assessment for Development of HSR Service Calgary/Edmonton
Corridor (3 documents)
https://drive.google.com/drive/folders/1i15Lu75euM01_if_JD9ts4wqUkmESdLx?usp=sharing%20Inc
5. 2014 The Feasibility of Establishing a HSR Transit System in Alberta - Standing Committee on
Alberta's Economic Future
https://drive.google.com/file/d/0B6QvXHw7cJQ2dzlfcjd5MGxoSGc/view?usp=sharing
2010 Edmonton - Calgary high-speed Rail Map - Tems Inc.
EXECUTIVE SUMMARY
Hyperloop is a proposed mode of freight and passenger transportation that uses a vacuum tube
system to propel pods at high speeds (over 1,000 km/h) over long distances. While the idea of
using a vacuum tube to transport people and goods has been around for over a century, hyperloop
has recently been made popular by Tesla and SpaceX founder Elon Musk, when he announced
in 2012 that the hyperloop would be the “fifth mode of transport” (the others being: roadway, water,
air and rail). Several hyperloop companies have emerged since Musk’s 2012 announcement
including Virgin Hyperloop One, Hyperloop Transportation Technologies (HTT), DGWHyperloop,
and TransPod. There are no functioning hyperloops in service, and only two test tracks in the
world – the Virgin Hyperloop One 500 m test track in the Nevada Desert and the SpaceX subscale
model in Hawthorne, California.
In 2017, a hyperloop company approached The City of Calgary looking to establish a research
office, and construct a 10 km test track in Alberta. The hyperloop company investigated several
locations for tests tracks outside of Calgary city limits. Administration supports the development
of a privately funded test track outside the city boundary due to the economic and research
benefits that could arise from its development. However, due to the hyperloop technology still
being in a conceptual/developmental stage, regional plans should not be changed to account for
it, and the development of a test track within city boundaries is not recommended.
The decision to allow for the construction and operation of a hyperloop test track falls outside of
The City of Calgary’s jurisdiction. The Government of Alberta is in ongoing discussions with the
hyperloop company regarding the company’s interest in moving forward with a safe and suitable
hyperloop test track location in the province.
If a hyperloop test track does move forward near Calgary, The City will be able to provide
transportation data, staff expertise and can work to understand how The City can assist in its
success. In reviewing the Hyperloop concept administration consulted with Calgary Economic
Development, Innovate Calgary, University of Calgary, TransPod, Delta Loop, State of Nevada,
City of Edmonton and the Provincial and Federal Governments.
ADMINISTRATION RECOMMENDATION:
That the SPC on Transportation and Transit recommend that Council receive this report for
information.
Approval(s): Thompson, Michael concurs with this report. Author: Sedor, Andrew
On 2018 June 25, Council approved a deferral report to defer the Hyperloop Development and
Testing in Calgary report to no later than the 2018 October meeting of the SPC on Transportation
and Transit.
BACKGROUND
Hyperloop
Hyperloop is a proposed mode of freight and passenger transportation that uses a vacuum tube
system to propel pods at high speeds (over 1,000 km/h) over long distances. The hyperloop
technology serves as a potential future alternative to high-speed rail (HSR). While the idea of
using a vacuum tube to transport people and goods has been around for over a century, hyperloop
has recently been made popular by Tesla and SpaceX founder Elon Musk, when he announced
in 2012 that the hyperloop would be the “fifth mode of transport” (the others being: roadway, water,
air and rail). Several hyperloop companies have emerged since Musk’s 2012 announcement
including Virgin Hyperloop One, Hyperloop Transportation Technologies (HTT), DGWHyperloop,
and TransPod.
Hyperloop test tracks
There are no operating hyperloops in existence and currently only two test tracks in the world:
1. Virgin Hyperloop One’s 500 m test track is in the desert 30 minutes north of Las Vegas.
In conversations with the State of Nevada, this location was deemed acceptable as it did
not endanger the public or property; in case of an accident, only the surrounding desert
would be impacted. The Nevada government was supportive of the test track largely due
to the private capital investment of over $120 million USD and the creation of 100 new
jobs.
2. A 1.6 km subscale model (a six-foot outer diameter) has been constructed adjacent to
SpaceX’s headquarters in Hawthorne, California. Since 2015, SpaceX has hosted a
university hyperloop pod competition, which challenges university teams to design and
build the best / fastest transport pod and test it at the test track.
Approval(s): Thompson, Michael concurs with this report. Author: Sedor, Andrew
Strategic Alignment
The only City document that references the hyperloop technology is the Future of Transportation
report. The Calgary Transportation Plan looks at high speed rail connections to Edmonton.
Future of Transportation – The hyperloop technology is identified as a “medium impact”
technology that is in the “concept / prototype stage”. It was recommended that regional plans
should not be modified for the technology, and The City should monitor developments with the
technology.
Hyperloop test tracks and research centres could attract specialized engineers and researchers
in addition to the direct and indirect construction jobs.
Once proven, hyperloop technologies may provide significant travel time savings for people and
businesses and could reduce CO2 emissions.
Financial Capacity
Current and Future Operating Budget:
The information contained in this report contains no decisions that would impact operational
budgets.
Approval(s): Thompson, Michael concurs with this report. Author: Sedor, Andrew
Risk Assessment
It was determined that a hyperloop test track should be outside city limits. Construction of a test
track away from built up areas is consistent to what is occurring globally with other hyperloop test
tracks.
ATTACHMENT(S)
1. Hyperloop Stakeholder Engagement
Approval(s): Thompson, Michael concurs with this report. Author: Sedor, Andrew
“Hyperloop vehicles could allow a more frequent freight distribution and thus the
possibility to close one distribution centre in one of the two cities and double the
capacity of one of the current distribution centres to save on costs and replace cargo
planes”
- DHL Canada
“For us, hyperloop could be interesting for same-day shipping which is what a truck
cannot do today… or with a really high cost as it becomes a personalised service.
Today, cut-off times (shipping deadlines) are around 6pm as we need to sort parcels
for night shipping. If we reduce the transit time, cut-offs can be pushed back to 10pm
and parcels would still arrive in the morning”
- UPS Canada
The companies interviewed considered hyperloop as an interesting alternative to their existing air and road
fleet in Canada. Congestion was considered to be one of the main cost drivers for the companies in terms
of delayed deliveries, as well as weather hazards. Allowing a faster transfer of goods from one city to the
Methodology
Cost-Benefit Analysis (CBA) is an analytical tool used by public organisations for judging impacts of an
investment decision by assessing its costs and benefits to evaluate the welfare change attributable to it.
(European Commission, 2014). CBA are considered as a reference for transport investment appraisal
(Janic, 2003). Most modern academic textbooks would summarise the process of CBA in the following
manner: 1. Specify the set of alternative projects; 2. Decide whose benefits and costs count; 3. Identify the
impact categories, catalogue them, and select measurement indicators; 4. Predict the impacts quantitatively
over the life of the project; 5. Monetise (dollar value) all impacts; 6. Discount benefits and costs to obtain
present values; 7. Compute the net present value of each alternative; 8. Perform sensitivity analysis; 9.
Make a recommendation. (Boardman, Greenberg, Vining, & Weimer, 2010). Although this process allows
to build up relevant estimates, most CBA includes risk mitigation tools such as sensitivity analysis and
break-even calculations to ensure a fair assessment of investment projects (Makowsky & Wagner, 2009).
This CBA was performed according to the methodology shown by Boardman et al. (2010), the reference
textbook used for the CBA course offered at Harvard University6. Additional methods were taken from more
advanced analyses such as Eco Train (2011) and European Commission (2014). Whilst the validity of this
methodology can be challenged, the analysis yielded coherent results aligned with the methods despite the
limited time and data access.
This CBA relies on secondary data acquired from Statistics Canada, and the Alberta Ministry of
Transportation. Additional data was collected from interviews, white papers and research papers on
transportation economics. The data collected was compiled into several excel files in order to provide a
basis for the analysis. Prior to undertaking the CBA, the different impact categories (see literature review)
were determined:
Table 1: Hyperloop Cost-Benefit impact categories
Costs Benefits
Infrastructure Costs Revenues
O/M costs Environmental Benefits
Costs on the trucking industry Travel Time Savings
Safety Benefits
Each measurement was realised with the traffic data from the Canadian corridor studied. Infrastructure
costs were determined following TransPod’s framework developed with its partners which takes into
account quotes from TransPod’s suppliers. Operating costs were forecasted using TransPod’s system
design and the cost structure of Canadian class 1 freight railways. The substitution costs induced on the
trucking industry were forecasted with the data provided by Statistics Canada and consultation with
transportation experts . Revenues of the systems were determined with the expected capacity based on
the system’s specifications, the industry’s standard pricing by tonnes/km, and the quantity of time-sensitive
goods diverted from trucking. As this CBA’s scope was to provide a simplified overview of the impacts of
6
See course syllabus: https://www.hks.harvard.edu/syllabus/API-139M.pdf
Proposed route
The route studied in the CBA is a mixed quadra to dual tube bidirectional hyperloop line located within the
Calgary - Edmonton corridor, following TransPod’s infrastructure requirements. The line starts at a central
distribution centre located on the southern part of Calgary. The line then moves northbound to the Calgary
airport which then merges with an airfreight distribution centre. From the airport, the four tube line merges
into a bidirectional dual tube configuration and continues up north to Edmonton. Midway, the line bifurcates
at Red Deer and continues northbound to the Edmonton airport. The Edmonton airport freight terminal is
connected to the hyperloop line which then continues towards Edmonton’s central hyperloop depot. This
line configuration was chosen due to its ability to relieve freight congestion inside urban centres and
facilitate intramodality with airports in order to increase the flow of merchandise in and out of the province.
This rapid freight link could enable freight transport from Calgary to Edmonton in only 25 minutes instead
of four to five hours needed today.
Limitations
This CBA provides an overview of the potential economic impacts associated with the implementation of a
freight hyperloop system between Calgary and Edmonton. Economists are well aware of the complexity
associated with freight modelling, which requires specific mathematical models capable of simulating freight
Empirical findings:
Benefits
Environmental Benefits 266,291,589 142,339,640 90,635,250
Revenues 22,020,362,375 11,791,870,301 7,519,570,400
Time Savings 11,819,806,872 6,018,635,964 3,682,629,488
Safety Benefits 556,390,578 342,885,803 243,128,399
Total Benefits 34,662,851,413 18,295,731,707 11,535,963,536
The largest benefits identified are the potential revenues for the network operator. The operator is assumed
to be a public organisation. Policy makers could thus see substantial public revenues from developing this
system coming from either direct sale in the case of a complete or partial public ownership, otherwise
getting revenues through private operator’s royalties. This high profitability could very well strengthen the
business case for undertaking the development of such systems for both public and private organisations
as the initial investment required for the infrastructure costs could be repaid over a period of fewer than 30
years. The IRR of the project is 10.34%.
The second largest benefit will be the travel time savings associated with reduced road congestion and
faster delivery of goods. Customers’ welfare could increase substantially due to the ability to receive their
time-sensitive orders faster. These benefits extend to companies which will be able to save a substantial
amount of money due to faster delivery. Not only this will allow a more flexible supply chain but will also
reduce inventory costs for a wide variety of industries. Larger industry benefits could be foreseen if the
hyperloop gradually gets modified to ship intermodal containers, which will be directly loaded from ports
and airports. The reduction of congestion will ultimately allow both companies and consumers to enhance
their mobility. With regards to policy makers, the time savings impacts will increase the country’s
competitiveness by providing businesses with more flexibility, enhance supply chains and increase mobility.
Wider economic impacts following the changes in GDP and agglomeration economies should be evaluated
in the future to provide a broader view of the benefits of integrating new modes of transport.
10,000
8,000
6,000
ENPV (M CAD)
4,000
2,000
0
-2,000
-4,000
-6,000
-8,000
40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0%
CHANGE IN VARIABLE (%)
Infrastructure Costs O/M Costs Cost on Trucking
Environmental Benefits Operator Revenues Travel Time Savings
Safety Benefits
The main driver for a positive or negative NPV are the revenues forecasted by the model with a Switching
Value of 3.6%. This small value implies that a decrease of 3.6% in revenues could result in a negative NPV.
The price elasticity of demand for high-speed freight services will thus be crucial for the public or private
consortium operating the hyperloop line. While looking back at the primary data collected during this
research, freighters mentioned from the start the necessity of pricing the services as expensive as possible
given the time saved by shipping companies. The analysis also pinpointed that the Hyperloop could only
accommodate only half of the potential time-sensitive shipments circulating in the corridor, meaning that
the service could have the possibility to ramp-up the prices.
The second main impact drivers are the infrastructure costs with a switching value of 4.1%. Given this very
tiny margin of error, policy makers will likely have to deal with a project that will go over-budget easily. Given
the fact that the transport industry has a long history of exceeding infrastructure budgets, a small switching
value may imply a higher risk for policy makers. Finally, the third most important impact drivers are travel
time savings with a switching value of 7.1%. The importance of travel time savings can be criticized due to
the lack of standardised freight value of time among scholars and public institutions. Similarly, operating
costs scored a switching value of 7.8%. However, operating costs could be the first cost category depending
on the number of years used for the CBA, as well as the discount rate used. For the sake of this study, it
has been considered that a social discount rate of 5% was nearly impossible to achieve. Therefore,
operating costs may remain the second most sensitive cost category as these costs will likely evolve as the
technology gets developed in the future. Nevertheless, operating costs are considered to be an important
impact category in the CBA.
With a switching value of 23.6%, the costs on the trucking industry are still quite important for the decision
maker to consider. This switching value has been determined given the maximum impacts that a change
resistance of the trucking industry could have on the economy. This value assumes that the companies
whose activities will be directly substituted by hyperloop will undergo a net loss in their operations. However,
it is difficult to predict the degree of adaptation that trucking companies would have in response to a
substitution of their services. Furthermore, the construction of the hyperloop system and the industrial