Economic Effects of Cologne (Köln) - Frankfurt High Speed Rail

by Natalia Costin

The Cologne – Frankfurt high speed rail started operating in 2002 .The Speed of the train, running at 320 km/h, reduced the journey from 2hr 15 min to over an hour. The number of passengers willing to travel increased significantly by 2010 to around 20-25 million from 9 million. With high speed rail, travel time between Frankfurt and Cologne is 55 percent faster than with old track and 35 percent faster than with travel by car.  As a result of a new ICF we would expect some economic changes in Cologne and Frankfurt, however our expectations would be wrong because an economic impact was present just in the cities situated on the line of high speed rail which were: Limburg, Siegburg and Montabaur.

Travel Time Treatment

 

Research from LSE looked at prosperity and growth of intermediate stations, Limburg and Montabaur and compared the economic performance of those towns with more then 3,000 other municipals in the neighborhoods . During four year period of fast train activity the economic growth grew by at least 2, 7 percentage more in those two cities that are on the route compared to unconnected neighbors.  Additionally in Limburg and Montabaur in the market potential indicator is present an increase of about 30%. 

ICE train stations in Limburg and Montabaur are most often used for work purpose, to travel daily to Frankfurt. This point highlights that high speed rail Cologne- Frankfurt has an important effect on job creation in both regions. For example per day there is approximately 80 percent of daily commuters from Limburg and 60 percent from Montabaur.  Additionally the attractiveness of ICE increases with time.  Figure 1 show that Cologne and Frankfurt can be reached now by roughly 40 minutes train rides from Limburg and Montabaur, “making their location central with respect to two of the major regional economic agglomerations with a total population of approx. 15 million”. 

High speed rail motivate people to move closer to its route. There was a survey taken in Montabaur and Limburg which could provide an explanation for inflow of new residence.  The results of survey highlight the point that about 20 percent of Montabaur commuters and roughly 15 percent of Limburg commuters moved closer to high speed rail because of improved speed and accessibility it offers. 

In case of another intermediate station Siegburg, investigations of the Geographical Institute of Bonn University have shown that roughly 90 percent of passengers travel with high speed rail to and from Frankfurt. Additionally it was observed that partly as a result of Inter-City Express real estate investment increased there. Studies of Bonn University stated that Inter-City Express in Siegburg as well increased the inflow of population similarly to Montabaur and Limburg. For example 3 percent of Siegburg population has chosen the location based just on high speed rail access.

Frankfurt as a result of Inter-City Express had attracted more commuters compared to Cologne. There were not that many trips for example from Siegburg to Cologne as from Siegburg to Frankfurt. Frankfurt was more attractive place for commuters because in Frankfurt there is larger labor market. It is interesting to mention that there is no evidence of formation of megapolis between Frankfurt and Cologne, as someone would expect. The reason could be reduced business interaction between both regions because Cologne is a cultural center while Frankfurt is a financial and banking center.

In conclusion in main regions Cologne and Frankfurt no significant changes in economic impact were described as a result of Inter-City Express. However the increase in accessibility of high speed intermediate stations such as Limburg, Siegburg and Montabaur to Frankfurt and Cologne promoted rise in economic development. The increase in market access influenced on the increase in GDP, higher employment possibilities, increase in real estate price, variation in access to market and reduced travel time.  

Why are Transport Projects so Important for Our Economic Development?

By Evgenia Ivanova

As the US President Barack Obama has once said: “A major new high-speed rail line will generate many thousands of construction jobs over several years, as well as permanent jobs for rail employees and increased economic activity in the destinations these trains serve.” The quote is indeed true and it made me think how we rarely have the chance to stop for a moment and consider the positive economic benefits of transport projects. Their tremendous impact on the way we live not only shortens the distance and brings us close together but they also alter our environment through agglomeration formation. The high-speed rail (HSR) serving the road between Cologne and Frankfurt in Germany is an excellent example to illustrate my point.

Opened for the first time in 2002 as an Inter-City Express (ICE) high-speed passenger dedicated line, it serves the 177 kilometers distance between Cologne and Frankfurt. With trains running at a speed of 320 km/h, this ICE has reduced the rail time from 2h 15 min to just a bit over an hour for the non-stop services. Less than ten years after the first train started operating, there are plenty of evidence for the positive effects that the ICE line brought for the regional development and the labor markets of the smaller towns interconnected by the service.

Evidence of Agglomeration Formation and Development Impacts

With the construction of the line we observe an increased intra-regional accessibility, where the cities form a band and each city pair is no more than 40 minutes away from each other, thus giving the opportunity of daily commuting. A number of recent studies have analysed the economic effects of better transport accessibility as a result of high speed rails and concluded that there is a tendency of 0.25% growth in GDP for any 1% increase in market access. The existence of the HSR has indeed confirmed the results of these studies and transformed the region by boosting its economic growth and allowing for agglomeration formation (Figure 1).

Figure 1

The most remarkable was the regional economic transformation of the two intermediate stations Montabaur and Limburg on the route. The two cities are located exactly between two major agglomerations - the Rhine-Main area and the Rhine-Ruhr conurbations – and each of them has become more reachable to the traditional employment center-cities Cologne, Frankfurt as well as Wiesbaden. Despite the proximity of the regions around Montabaur and Limburg to large metropolitan areas, until the opening of HSR in 2002, they have preserved their rural character, with high quality of life and affordable land and rent prices. Several months after the beginning of the train services the regions started growing in migration attractiveness due to the lower prices of living there and the lower costs of commuting to the megalopolis cities.

Since Frankfurt is the main employment market in the region and an important hub on the road, which has a better connection and more frequent services especially during rush hours, it attracts the majority of commuters from Montabaur, Limburg and the surroundings. I should mention here that 80% of daily commuters from Limburg and about 60% of commuters from Montabaur travel to Frankfurt using the ICE line. Also a significant number of people chose to reallocate to the smaller towns from the neighboring large agglomerations, which strengthens the recent trend of people moving from the core metropolitan areas to the periphery, seeking higher quality and lower land prices and at the same time having the advantages of shorter and cheaper commuting to their work places.

The impact of the HSR on Montabaur, Limberg and the surrounding regions has been indeed positive. The population gains through the migration of new residents are tremendously important and beneficial, having in mind the demographic problems which Germany, similar to the rest of Europe, is facing nowadays.

Since the line is relatively new, functioning for less than 10 years, there is still no economic boom observed in the regions connected by it. However, the significance of the urbanization tendencies, the residential migration and the increase in the real estate prices as a result of it, give positive prospects and make us optimistic about the future development of the cities.