High Speed Rail Business Plan [Sample Template]

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Do you want to start a railway business and need to write a plan? If YES, here is a sample high speed rail business plan template & FREE feasibility report. High speed rail provides fast, efficient transportation so commuters can save time, energy, and money. This type of rail transport is extremely reliable and operates in all weather conditions and is never subject to congestion because it can operate on schedule every day without delay – especially during rush hour and peak travel times.

Why Invest in a High Speed Rail Project?

This fast train spurs the revitalization of cities by encouraging high density, mixed-use real estate development around the stations. It also fosters economic development in second-tier cities along train routes. HSR links cities together into integrated regions that can then function as a single stronger economy. It also broadens labor markets and offers workers a wider network of employers to choose from.

It encourages and enables the development of technology clusters with fast easy access between locations. High speed rails also expand visitor markets and tourism while increasing visitor spending. It is also known to lower foreign trade deficit by hundreds of billions of dollars each year from purchasing foreign oil.

The many benefits HSR delivers spread throughout regions that have HSR, encouraging economic development across a larger area. Building high-speed rail will create hundreds of thousands of jobs. According to reports, for every $1 billion in investment it creates 24,000 jobs.

These are highly skilled jobs that will revitalize the domestic rail industries supplying transportation products and services. Many additional jobs are created through the commerce fostered through the economic activity and development which they spark.

High-speed rail can deliver people from one downtown to another as fast as or faster than air travel. Although these constructions are basically funded by the Federal government due to the massive costs involved, there a thousand and one reason why contractors should battle it out to secure these construction, expansion or maintenance contracts.

Aside its enormous benefits to the economy and the lives of citizens, it presents a lucrative opportunity for any experienced and willing entrepreneur.

A Sample High Speed Rail Business Plan Template

1. Industry Overview

The Canadian rail industry is made up of predominantly freight rail traffic, but also includes intercity passenger rail, commuter train services in three cities, as well as several urban light rail or metro systems. There are also a number tourist rail lines throughout the country.

According to industry data, Canada operated on over 62,000 kilometers of track and employed over 30,000 people in 2016. These figures have been trending down in recent years however and even more so over the last few decades – falling by around 16 and 25 percent respectively since the year 2000.

But, irrespective of the decline in infrastructure, freight rail traffic rail in Canada has increased over the mid-term. Revenue ton-miles have grown by around 25 percent since 2004 to reach almost 295 billion in 2017.

Over the same time period, intermodal traffic grew by just over 60 percent, reaching just under 3.5 million units in 2017. But, in the last five years the number of revenue-ton miles has stayed broadly flat on average, and has actually decreased from a high of 306 billion in 2014.

Reports have it that two companies dominate the Canadian freight rail segment – Canadian National Railway and Canadian Pacific Railway. In 2017, these companies reported 237 and 143 billion revenue ton-miles respectively (these figures also include international shipments, particularly in the united states).

As with the overall industry, the companies’ revenue ton-miles have seen little to no change on average over the last five years. The total revenue in 2017 for these publicly-traded companies was 12.3 and 6.4 billion Canadian dollars respectively.

Note that passenger rail in Canada is much smaller than freight rail. In 2017, commuter and tourist rail operated on 4,850 kilometers of track, while intercity trains operated on around 12,000 kilometers of track. The primary operator in Canada’s intercity passenger rail segment is Via Rail, who is an independent state-owned corporation with a mandate to provide intercity services.

In 2017 they reported total revenue from passenger services of around 366 million Canadian dollars – much lower than the freight rail companies. Revenue from commuter and light rail in urban areas at this time was much higher, at a combined 3.9 billion dollars for all operators, but still far behind the revenue generated from freight rail services.

2. Executive Summary

OC Transpo last year developed the Connect Ontario Program to guide how the company will continue to improve delivery of high speed rail transportation services to the people of Ontario.

In response to direction from the program, this plan outline how Mentor Construction Company (MCC) will embark on this project by striking a balance between sustainable staffing levels of engineering, technical employees, and helping OC Transpo achieve its aim of connecting the various cities in Ontario by 2031.

The Plan also addresses how Mentor Construction will continue to provide a high-quality workforce to deliver billions of dollars of rail transportation programs and projects funded by Connect Ontario. OC Transpo operates, in addition to bus service, one of Ontario’s two light rail transit lines, the O-Train in Ottawa.

The company is looking to provide high speed rail systems to enable fast, efficient transportation so commuters can save time, energy, and money. Mentor Construction Company offers comprehensive services designed to allow the company do whatever it takes to finish a project.

Some of these services include; design work, remodeling and alterations, permitting, site preparation, welding, Impact Assessments, painting, and utilities installation. In addition, skills Mentor Construction Company lacks can be subcontracted.

Mentor Construction Company (MCC) is a Canadian-based construction company formed from the merger of North Welding& General Construction and Ivory General Contractors. The company has successfully operated in the Ontario area for the past ten years working on both small and large scale construction, repair, and alteration projects focusing on Power generation plants contracting.

With the growing acceptance and necessity of HSR and the desire to improve overall profit margins, the company is planning to shift its target market from power plants clients to the larger transportation customers. This business plan will lay out our goals and tasks to make this transition successful and create enough market shares to succeed in this highly competitive market.

Last year, MCC delivered $21.9 million Cad of work nationally and supported the delivery of works undertaken by the Bruce Nuclear Generating Station own works delivery teams. It is on course to deliver $9.6 million CAD of works for this control period (2016 – 2022) making it one of the largest infrastructure organizations in the Canada.

MCC focuses on delivery of all works that are seen as large and complex, this includes all enhancements and major renewals, with some of the less complex and smaller works delivered by the Bruce Nuclear Generating Station experts themselves. Mentor Construction Company, processes and capability framework are still being utilized by the Bruce Nuclear Generating Station to maintain their plants and works.

3. Our Products and Services

MCC offers a comprehensive package of services designed to allow our client work with one of our managers and create a project the company can carry forward to completion.

We offer good quality and cost effective service in engineering, design, procurement, project management, construction and construction management, environmental consulting, management consulting, quality assurance and quality control, information management, operations and maintenance and process technology development.

Our approach to contracts always enables us to convert features into our client’s benefits; the company needs to offer real benefits rather than only define the features to our clients.

The benefits we offer include many intangibles: reliability, optimizing our client’s profit potential, confidentiality, guaranteed quality, continuous improvements, technology transfer, and cost effectiveness. Long-term customer satisfaction is the most critical component of the services offered by our company.

4. Our Mission and Vision Statement

Our vision at MCC is to provide construction services of uncompromising quality.
We also plan to seek mutually beneficial and enduring relationships in all the commitments that we make, ensuring that they are straightforward and honest.
Our mission at MCC is to be responsible corporate citizens, fulfilling our obligations as an integral member of the society.
We believe that all our business decisions will offer appropriate weight and consideration to social and environmental impacts.

Our Business Structure

Connect Ontario HSR Construction will consist of Mr. Albert Nicholas and Mr. Tom Evans. Mr. Nicholas will concentrate on client contacts along with overall management of the project. Mr. Evans will be the General Project Manager, coordinating all project management and concentrating on cost controls, suppliers, day-to-day project supervision, labor relations, etc.

Mrs. Janet Scooch will be the finance manager, handling on-site wage and workers satisfaction, invoicing, permitting, and general book keeping. Most of our labor needs will be met through Quick Contractors – a Canadian temporary labor company. We plan to expand personnel as soon as the projects commence. These personnel may include;

Project Manager
Director of Field Operations
Safety and Security Manager
Construction Superintendent
Construction Manager/Supervisor
Track Laborers

5. Job Roles and Responsibilities

Project Manger

Planning, organizing and working with technical groups in the delivery of project deliverable requirements
Completing civil engineering analyses and review including: evaluating vertical and horizontal grade and track alignments; quantity and construction cost estimates; engineering design reports; technical specifications; material and equipment selection; cost estimates; construction contract documentation; compilation of design/construction drawings; etc.
Providing support to other managers in the coordination and management of projects, including carrying out specific project management tasks as assigned by the senior project managers
Interfacing and communicating with the company on project specific tasks
Providing support to business development and strategic initiatives, including preparation of proposals
Participating with senior leaders in the establishment of short and long term plans for the development and growth of the group in the region
Providing support to other departments in the development and delivery of project requirements
Through project efforts and involvement in industry activities, develope and maintain client relations
Actively participating in and supporting internal and external development and training activities
As appropriate, supporting the development of more junior staff within the project
Support to business initiatives and projects within the Ontario Canada region.

Director of Field Operations

Build, manage, and communicate project schedules to the Project Manager, manage project timelines for each project from start to finish. Support, monitor and document progress along the way in alignment with the Project Schedule.
Support 3 week look ahead implementation and adherence to the scheduled by the field operations
Evaluate project resource needs ensuring supply of materials and labor coincide with deadlines
Monitors and supports safety culture and implements improvement measures where deemed necessary. Leads investigations for any incidents along with the safety Manager.
Communicates with Unions and HR regarding required resource in alignment with the project schedule. Works with the Union Representatives on disciplinary actions and grievances.
Ensure Supervisors are leading project teams, such as, but not limited to: Managers, Superintendents & Foreman related to electrical, signal and civil scope of work
Work with Environmental Health and Safety to ensure strict safety guidelines are followed at each site. Monitor safety team performance and adherence to all applicable legislation and owner rules
Monitor and support quality control teams to verify quality of all performed work. Monitor tracking and documentation of Quality documentation.
Review and approve large invoices and submit to AP for approval. Verify with project team that backup documentation for invoices including receiving records and timesheets conform to company standards.
Communicate with Owner’s during progress meetings and other occasions as required.
Support to identify scope description for subcontractors.
Search and create relationships with new vendors that will improve pricing and efficiency
Works in the field and is hands-on with managers.
Plan, Schedule and execute work plans

Safety and Security Manager

Perform/review Safety analysis, including, Preliminary Hazard Analysis, Sub system Hazards Analysis, System Hazard Analysis, and Operations and Support Hazard Analysis;
Provide support for Safety Planning, including, Safety Management system development, Project Safety / Safety plan development, Operational Safety / Safety plan development, Safety Management System implementation;
Conduct Assurance Audits and Assessments for, Independent Competent Person, Independent Safety Assessment, Independent Verification and Validation, and Design Verification;
Undertaking and checking of HAZOP and HAZID studies;
Undertaking and assessment of Qualitative and Quantitative risk assessment;
Implementation and checking of detailed analysis including, FMECA, FTA.
Responsible for Operational Safety Analysis and operational compliance;
Assessment of operational safety across technical and operational process aspects;
Development and review of operational plans and procedures for safety operations;
Support Incident Management Planning and Investigation, as well as, Emergency and Crisis management process development and review;
Interface within the systems engineering disciplines (Track, Traction Power, Signal/Train Control, Communications, Integrated Control Systems, Rolling Stock, etc.);
Interface with Structure/Station/Facilities/Tunnel in the railway environment;
Other duties as assigned/required.

Construction Superintendent

Ensures adequate resources are in place including scheduling labor, equipment, materials.
Performs in-depth review of drawings, designs and contract documentation to become familiar with all details, notes and requirements.
Supervises total construction and maintenance effort in the field to ensure work is in accordance with design, budget and schedule. Monitors quality standards of all work, including sub-contractor performance.
Assigns work to the various crews. Responsible for productivity of workers and efficient use of materials and equipment
Reports production quantities to the office and reviews labor productivity reports on a weekly basis. Monitors and adheres to established budgets for the job.
Investigates alternative work methods and materials which will either improve efficiency and/or the quality of work performed.
Monitors job schedules and coordinates sub-contractors’ work and suppliers’ deliveries and equipment needs, taking appropriate action as necessary.
Ensures all field personnel comply with Company policies, project procedures, safety program and work rules, taking corrective action as necessary.

Construction Manager/Supervisor

Development of construction and staging requirement for specific pieces of work within and aligned with the Integrated Work, Resource and Access Plan necessary for the efficient timely implementation of all work to meet delivery requirements.
To minimize access requirements and disruption to the operational railway through the integrated construction planning of all projects such that the required access necessary for the delivery of the work is determined and shared by all parties.
To handover at T-13 an agreed resourced deliverable constructible plan to delivery; that contractors have agreed to work to, that is fully resourced, and the necessary access is agreed and available for.
To develop and manage agreed construction standards and access times necessary for the efficient delivery of work.
To adapt and find solutions with contractors and projects for deviations to the plan when unplanned events occur.
To review the constructability and staging of all required work with designers, projects and contractors and determine the necessary implementation requirements, including commissioning’s.
Attendance at different technical and commercial project working groups.
Review of Project deliverables including design reports, drawings, construction strategies, execution plans, etc. as required understanding the status of deliverables provided by PPP and other contractors.
Working with and at contractor’s offices the development of constructible packages of work, recognizing resourcing and access requirements. Attendance on site as required.
Monitoring the progress of design development, construction, commissioning to be aware of emerging issues and able to identify risks including quantification and strategies for mitigation.
Providing commercial and contract administration guidance to the project team as required.
Keep senior management and others routinely informed of project status and all developments that impact schedule, safety and reputation through regular reports.

Track Laborer

Participate in group discussions including unit meetings, job briefings, safety meetings or process reviews.
Remove and replace track and track components (e.g. ties, rails, bars, etc.)
Replace or repair track switches with specific components.
Slide and align tie plates.
Drill holes through rails for insertion of bolts and tighten or loosen bolts at joints that hold ends or rails together.
Cut rails to specific lengths.
Receive instructions, requests, orders, and information.
Adjust, lift and roll rails.
Sort track material for loading and unloading.
Install and repair street and railroad crossings.
Cut brush and vegetation from the right-of-way.
Spray switches, angle bars and joints with oil for lubrication.
Install and remove rail anchors with hand tools.
Work safely to prevent on the job accidents and injuries.

6. SWOT Analysis

At MCC, we understand the importance of establishing presence in the market and the need for progress. Personal relationships are important and memories are long. Project and market development timeframes in Canada are lengthy: three to four years or more; however, this timeframe can be compressed by a strong local partner.

This implies the need for establishing a joint venture company rather than going it alone. Even under normal circumstances, the company needs to enter the market on the basis of a long-term strategic calculus, with commitment and resources. Below is a summary of our SWOT Analysis;

Strength

We have secured at least five large scale commercial contracts over the past three years. We boast of enormous experience and expertise in the construction company, and our project management reviews are top notch.

Weakness

As a company previously servicing power plant clients, it will take us time to adjust business settings to our new clients. We have put together an extensive 3 months program to ensure smooth transition and effective delivery.

Opportunities

HSR links cities together into integrated regions that can then function as a single stronger economy. It also broadens labor markets and offers workers a wider network of employers to choose from. With its growing acceptance, HSR construction provides a lucrative chance to boost profit margins and also help develop our society.

Threat

According to our SWOT analysis, the slow adoption rate of new technologies and products in these parts of the world does not favor our intended approaches at MCC. It also noted that capacity & capability within OC Transpo and across the supply chain can hamper progress.

7. MARKET ANALYSIS

Project Trend

The announcement of the Connect Ontario project shows that Canada is the only G7 nation without a high-speed rail system. The only two such systems in the world are profitable. The Tokyo – Osaka and the Paris – Lyon runs are self-sufficient. These lines join communities with combined populations of 32 million and 12.7 million people, respectively.

In addition, several million tourists use the routes each year. The Tokyo – Osaka line serves over 150 million passengers per year. At peak, it runs 13 trains per hour in both directions with 3-minute gaps. The population in the Toronto – Windsor service area corridor is 7 million.

The first phase is the development of the Terms of Reference (ToR), which will guide the Environmental Assessment (EA). Simply put, the ToR will determine what will be considered through the EA process. Anything not included in the ToR will be “off limits” for EA discussions.

More detailed cost estimates are required through the Environmental Assessment process. Costs need to include all impacts including cost of subsidies, land expropriation costs, impacts of reduced crossings including municipal costs of crossing and/or school and emergency services realignment, costs to farms, etc.

The EA for Connect Ontario EA is in the design phase. Although OC Transpo messaging indicates the Terms of Reference for the EA includes an approach to “an assessment of alternatives”. The same messaging includes that the company is “starting work on a number of fronts to deliver HSR”. Generally, the service area for the HSR proposal would agree that fast and efficient public transportation is important.

However, consideration of costs versus benefits and, in particular, the costs of the impact on rural communities, farms and municipalities leads to calls for a thorough review of alternatives. Many municipalities have put forward motions to call for a thorough review of other possible rail options as part of the EA.

Specifically, high-performance rail (HPR) is noted as requiring consideration. The high-performance rail concept involves doubling tracks on existing infrastructure. It would include dedicated passenger and freight lines that travel up to 176 km/h allowing for the retention of level and farm crossings.

It would preserve existing VIA Rail service. In effect, the potential cost and damage to farms and communities would be avoided. The concept of High-Speed Rail, Phase One, is to enable people to travel quickly between London, Kitchener-Waterloo (KW), Guelph and Toronto. In effect, the concept perpetuates and accelerates Ontario’s move to a commuting society with Toronto as the destination for all economic activity.

8. Our Target Market

OC Transpo last year developed the Connect Ontario Program to guide how the company will continue to improve delivery of high speed rail transportation services to the people of Ontario. This rail will provide fast, efficient transportation so commuters can save time, energy, and money.

Ontario is Canada’s most populous province, with 38.3 percent of the country’s population, and is the second-largest province in total area. It is also the fourth-largest jurisdiction in total area when the territories of the Northwest Territories and Nunavut are included.

It is home to the nation’s capital city, Ottawa, and the nation’s most populous city, Toronto, which is also Ontario’s provincial capital. In the 2016 census, Ontario had a population of 13,448,494 living in 5,169,174 of its 5,598,391 total dwellings, a 4.6 percent change from its 2011 population of 12,851,821.

Our Competitive Advantage

In the construction industry the primary ways to compete are through low cost or better project management. One of the most important processes for winning a contract is the bid process. MCC has a unique competitive edge over most of its competitors.

Mr. Tom Evans, MCC’s General Projects Manager, is the nephew of Lincoln Brown, who owns Page Suppliers, one of Southern Ontario major construction material suppliers. Through this relationship, MCC has been able to gain a very advantageous supplier contract allowing MCC to obtain its materials at a significant discount.

With this advantage, the company can underbid its rivals and achieve a low cost leadership role. Also our approach to contracts always enables us to convert features into our client’s benefits; the company needs to offer real benefits rather than only define the features to our clients.

9. SALES AND MARKETING STRATEGY

Sources of Income

We at MCC will generate revenue streams from a combination of project fund disbursement and payment in 5 stages or installments. One of our objectives at MCC is to develop a follow-up strategy to gauge performance with all our projects.

We also plan to continuously formalize and measure cross-functional working communication so as to ensure that the various departments work harmoniously towards attainment of project objectives. We will also instill a culture of continuous improvement in beating standards of satisfaction and efficiency.

Marketing Strategy and Sales Strategy

The most critical part of this project is not the marketing, but the bidding process, in which companies offer their designs, services, material quality, project timeline estimates, and costs. The company that offers the best combination of these variables is the most likely to get the contract.

Therefore very detailed project planning, including supply agreements, labor needs, subcontractors, presentation, and other factors, is crucial for MCC in winning contracts.

We will be designing a standardized method just like in our previous contracts, with an emphasis on quality, timeliness, and low cost to outbid our competitors. Our promotion strategy at MCC will be based majorly on informing prospective clients of our existence and making the right information available to our target customer.

We at MCC plan to leverage an aggressive promotional campaign to introduce our products and services to the market. Our intention will be to gain advantage of several media sources in announcing our products and services and in the process enforcing awareness of our existence.

10. Startup Expenditure (Budget)

The concept of High-Speed Rail, Phase One, is to enable people to travel quickly between London, Kitchener-Waterloo (KW), Guelph and Toronto. In effect, the concept perpetuates and accelerates Ontario’s move to a commuting society with Toronto as the destination for all economic activity.

The recent Connect Ontario budget provided for an $11 billion investment for Phase One, which would connect London and Toronto by 2025. The full High-Speed Rail line would eventually be completed at Windsor for a construction cost of $21 billion.

The 250 km/h train would be part of an expanded public transit system including a GO Regional Express Rail (RER) project to expand two-way service across the GO rail network. A number of GO’s current lines only operate into Toronto in the morning and return in the afternoon.

Fast, efficient and cost-effective public transportation is vital to both rural and urban Ontario. Improved rail transportation is one piece of a comprehensive, integrated transportation system for all of Ontario. Travel times have been compared for station stops for HSR versus automobile travel.

For example, the Kitchener-Waterloo (KW) to Toronto time is estimated at 48 minutes versus the automobile time of 72 minutes. Likewise, KW to London is 25 versus 46 minutes. It is unclear, but this analysis may not account for the fact that the distance to HSR station stops increases significantly versus GO or passenger rail services now in effect.

It is not known if the estimated benefits account for increased automobile travel time and cost to get to an HSR stop. HSR stops are proposed at 50 to 100 Km. distance compared to 15-30 and 30-50 for passenger rail and GO, respectively. The HSR is estimated to provide a benefit of $20 billion over a 60-year span.

Generating/Receiving Project Funding

Mentor Construction Company (MCC) is a Canadian-based construction company formed from the merger of North Welding & General Construction and Ivory General Contractors. The company has successfully operated in the Ontario area for the past ten years working on both small and large scale construction, repair, and alteration projects focusing on Power generation plants contracting.

The Connect Ontario Project will be sponsored and owned strictly by OC Transpo. OC Transpo operates, in addition to bus service, one of Ontario’s two light rail transit lines, the O-Train in Ottawa. The company is looking to provide high speed rail systems to enable fast, efficient transportation so commuters can save time, energy, and money.

11. Sustainability and Expansion Strategy

At Mentor Construction Company, we strive to offer the finest quality design, site preparation, cost estimates, construction, repair, and alteration to clients needing large scale construction services. Currently, we have three major competitors within the Ontario area.

These are Morph General Contractors, Ore Specialty Construction, and Latium Construction. Each of these companies targets the same clients as MCC and each has a fine reputation for customer satisfaction. However, the market in Ontario is growing so fast that the demand is currently greater than supply especially with the construction of bridges and road networks.

This is an excellent opportunity to gain market share and a defensible position in the industry. One of the greatest limiting factors in this industry is its strong seasonality. During the winter months, contracts and production drop off sharply, increasing the company’s short-term risk of cash flow shortfall.

At MCC, we only have a small amount of debt and we intend it to stay that way. We expect to see increased profits from our market shift efforts by the end of Year 2.

Over the next three years we expect lower profits as we make inroads into this tough market. We estimate that we will be able to reduce marginal costs and increase overall profitability by Year 3 or Year 4 as we grow and take advantages of economies of scale.

Due to our former clientele base, we at MCC still work with all the major power plants and power transmission equipment suppliers on a project-by-project basis, although we will no longer represent any of them under an exclusive agreement. We also work with a number of reputable and experienced local engineering and construction companies under either a project-by-project or consortium basis.

This is done to reduce competition and risks and to provide clients with competitive pricing without cutting profits, as well as maximizing the local contents, and shifting the responsibility to provide bid bonds, performance bonds, and credit lines to the local partner. As a subsidiary company of Castle Group, MCC will utilize our parent company’s capabilities, experience, resources, and technologies as follows:

The world-class leaders in the design and construction of large scale projects
Full Engineering, Procurement, and Construction (EPC) capabilities.
Project engineering software and engineering design software both help ensure lowest cost and design of projects.
Construction management, environmental consulting, management consulting, quality assurance and quality control, information management, operations and maintenance and process technology development.

Check List/Milestone

Business Name Availability Check: Completed
Business Incorporation: Completed
Opening of Corporate Bank Accounts : Completed
Opening Online Payment Platforms: Completed
Application and Obtaining Tax Payer’s ID: In Progress
Application for business license and permit: Completed
Purchase of Insurance for the Business: Completed
Conducting feasibility studies: Completed
Leasing, renovating and equipping our facility: Completed
Generating part of the startup capital from the founder: Completed
Applications for Loan from our Bankers: In Progress
Writing of Business Plan: Completed
Drafting of Employee’s Handbook: Completed
Drafting of Contract Documents: In Progress
Design of The Company’s Logo: Completed
Printing of Promotional Materials: Completed
Recruitment of employees: In Progress
Purchase of software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
Creating Official Website for the Company: In Progress
Creating Awareness for the business (Business PR): In Progress
Health and Safety and Fire Safety Arrangement: In Progress
Establishing business relationship with banks, financial lending institutions, vendors and key players in the industry: In Progress