GRAVITY MODEL AND ECONOMIC ANALYSIS FOR REGIONAL RAIL IN THE EDMONTON – CALGARY CORRIDOR

The purpose of this analysis is to provide to the reader an understanding of the potential ridership of a regional rail system in the Calgary – Edmonton corridor, utilizing the existing Canadian Pacific Railway Right of Way.

This analysis uses data provided in the 2021 Alberta Census, and using Gravity Model equations to calculate what a Regional Rail System market level could reach. According to transport economic theory, the traffic between two cities is proportional to the populations of these two cities and inversely proportional to the square of the Generalized Cost considered as the sum of the cost and value of time to travel the distance separating them. Using the theoretical assumptions, we will obtain the percentage for Regional Rail System market share on each relation.

Using the Gravity Model calculations, we estimate regional rail ridership to be in the region of 5.2 million passengers per year. Due to the nature of Calgary being the financial and business hub, Edmonton being the Government centre with the Provincial Legislature, and the corridor being an established Industrial Corridor, the overall ridership can be estimated to be significantly larger than what is calculated through this Gravity Model. Therefore the economics of regional and express rail services would improve, creating an IRR greater than the calculated 9.51%. A Public Private Partnership venture could be engaged in, that would further improve the economics of regional and express passenger rail services in the corridor, creating an IRR greater than 20% depending upon the value of Federal and Provincial grants and funds, or amount of subsidy approved. More studies need to be done in order to explore all the solutions. Relations & Connections with Railways will be required in order to have access to the Right of Way and stations.