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Billions needed to make Hyperloop a reality

Hyperloop, passengers, pod, Dubai Christopher Pike/Reuters
Visitors try out the prototype of a Virgin Hyperloop passenger pod at a design unveiling in Dubai in 2018
  • Vacuum-tube project estimated to cost up to $40m per kilometre
  • ‘Massive amounts of cash’ needed over several decades
  • Virgin and DP World partner on researching cargo-only option

Middle East governments hoping to turn the world’s first Hyperloop into more than a pipe dream will have to “throw money at the project”, a transport expert has said.

Despite launching with huge fanfare, the concept has failed to materially advance, primarily because of a lack of public-sector backing, according to a report from Munich-based transport specialist Roland Berger. “Without such collaboration, the future of Hyperloop is uncertain,” it said.

“It’s not a safe bet that [Hyperloop] will happen,” said Santiago Castillo, a partner at Roland Berger.

“It’s a matter of throwing a lot of money at it and making sure that you take enough time as well to test everything properly.”

It is claimed the Hyperloop technology, first promoted by billionaire Elon Musk more than 10 years ago, could allow passengers to travel at more than 700 miles per hour in a floating pod that is thrust through giant low-pressure vacuum tubes either above or below ground.

In an interview with UAE state-run news agency Wam in 2019, Bibop Gresta, chairman of Hyperloop Transportation Technologies, estimated the cost to be between $20 million and $40 million per kilometre.

He forecast the first commercial Hyperloop system would be operational in Abu Dhabi by 2020.

Virgin Hyperloop, which has Dubai ports operator DP World as its largest shareholder, conducted the first human trial in November 2020 at its test site in Las Vegas, reaching a top speed of 172 km/h.

At the time, co-founder Josh Giegel, who took part in the trial, talked about developing a network that would take just 48 minutes to travel from Riyadh to Abu Dhabi.

“Virgin Hyperloop has shown that if you put in enough effort into this you can make good progress,” said Castillo. “For me, it’s very admirable what these guys have done, but the problem is, to continue you need massive amounts of cash.

“It’s a long-term thing. If you look at private equity firms, they want an exit in five to seven years. That’s not Hyperloop. This is more like 20-30 years. Who has the patience for that? It can only be a government.”

Virgin Hyperloop previously said that a Gulf-based Hyperloop network, powered by solar panels, could transport as many as 45 million passengers annually.

The firm has since announced that it will focus exclusively on cargo transportation to create DP World Cargospeed.

“It’s abundantly clear that potential customers are interested in cargo, while passenger is somewhat farther away,” a spokesperson said in February last year. “Focusing on (cargo) pallets is easier to do – there is less risk for passengers and less of a regulatory process.”

DP World was contacted for comment.

In July 2019, Virgin Hyperloop and the Saudi Economic City Authority signed an agreement to conduct a feasibility study to build a world-class Hyperloop Centre of Excellence.

This included an extended test and certification track, a research and development centre and a hyperloop manufacturing facility at King Abdullah Economic City.

Earlier this year the international Hyperloop Association – to be based in Brussels – was launched. Testing infrastructure is planned at a number of European locations.

The European Commission is working on a regulatory framework for Hyperloop systems.

According to a report in the South China Morning Post, a Chinese version of Musk’s vision could be operational by 2035, linking the 108-mile journey between Shanghai and Hangzhou in 15 minutes.

Governments across the Mena region are preparing to hand out $167 billion worth of contracts to fast-track their respective rail agendas.

But Ed James, head of content and analysis at research firm Meed, said Hyperloop was not part of those plans.

“The technical challenges are too substantial to overcome. The cost is enormous and I think it’s a bit of a step too far for most projects in the region.”