2019

Looking ahead with: Patrick Goddard Virgin USA = Pier Eringa Prorail = Kirill Lipa Transmashholding=
Philippe Citroën Unife= Andy Byford NYCT Sabina Jeschke DB Yves Desjardins-Siciliano Via Rail
Elisabeth Werner DG Move = Clemens Först Rail Cargo Austria= Dean Dalla Valle Pacific National

January 2019 I Volume 59 Issue 1

IRJ
www.railjournal.com | @railjournal

The Railway in
International Railway Journal
 Bombardier and Together we move are trademarks of Bombardier Inc. or its subsidiaries.
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2019
Contents

The Railway in
International Railway Journal
January 2019
Volume 59 issue 1

37 European funds drive Balkan rail renaissance

Countries working hard to restore obsolete infrastructure
The Railway in 2019
4 Rail must seize the initiative in 2019
38 Moscow metro benefits from modernisation
Global trends Roman Latypov, first deputy CEO, Moscow Metro
6 19 rail projects to watch in 2019
From HS2 to Riyadh Metro, the highlights of the year ahead
North America
40 An Englishman in New York
10 Defining new approaches to efficient infrastructure Andy Byford, president, New York City Transit
TC Chew, global rail business leader, Arup
43 Integration and frequency at the heart of California rail plan
12 New urban transport modes need regulation California’s infrastructure plays catch up with large population
Shared mobility options look set to become a growing trend
46 Via Rail Canada prepares for high-frequncy operations
New fleet set to improve Canadian passenger operator’s services
48 Virgin Trains USA targets inter-city expansion
Industry
14 A challenging year ahead for Europe’s rail supply industry
Philippe Citroën, director general, Unife Patrick Goddard, president, Virgin Trains USA
16 Transmashholding targets further growth at home and abroad Asia
Kirill Lipa, CEO, Transmashholding 50 New government shakes up Malaysia’s investment priorities
18 Takeover sparks improved performance at Škoda Multiple projects on hold amid administrative restructuring
Petr Brzezina, CEO and chairman, Škoda Transportation 51 Indian Railways takes two steps forward, one step back
19 Kapsch proposes ‘Made in Europe’ initiative Major accident casts a shadow over IR’s safety improvements
Kari Kapsch, CEO, Kapsch CarrierCom
Australasia
Europe 52 Freight operators seek urgent policy reform
21 Light at the end of the tunnel for the Fourth Railway Package? Dean Dalla Valle, chair, Freight on Rail Group, and CEO, Pacific National
Elisabeth Werner, land transport director, DG Move 53a ONLINE EXTRA Australian passenger rail reinvigorated
23 DB’s troubles continue despite market growth Change in federal government approach offers fresh impetus to projects
While Germany’s rail market grows, DB financial difficulties grow
24 DB’s digitalisation plans take shape
Middle East
54 Rail regains momentum in the Gulf states
Sabina Jeschke, board member for digitalisation and technology, DB Recurring oil prices spark return to rail project development
27 Dispute raises questions over Swedish passenger market
Open-access operaters vye to access SJ’s online sales platform
South America
28 Rail Cargo Group performance bucks freight market trend 56 Brazil looks to private investors to overcome budgetary issues
Joubert Flores, president, ANPTrilhos
Clemens Först, CEO, Rail Cargo Group
31 ProRail focuses on capacity and speed Africa
Pier Eringa, CEO, ProRail 58 Are East Africa’s new railways viable?
33a ONLINE EXTRA Uncertainty reigns as Brexit drags on Chinese funding for infrastructure projects under the microscope
What will Britain’s EU departure mean for the rail industry?
34 Network Rail seeks improved efficiency in CP6 Also in this issue
Infrastructure manager finalises £35bn five-year funding plan 57 Full contact list 57 Advertisers index

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IRJ The Railway in 2019 3

 The Railway in 2019 | David Briginshaw
Rail must seize the
initiative in 2019
I
F ever there was time for rail
to surge forward it is now.
Rail has already turned itself
from a sunset to a growth
industry due to the increasing
recognition around the world
of its ability to cut congestion
in cities, offer a real alternative
to air travel, and carry
increasing quantities of freight
under the right conditions.
Rail claims to be the greenest
mode of powered transport, so
it should be in a strong
position and current initiatives
such as bi-mode, hydrogen or
battery-powered trains will
help to consolidate this.
This year has the potential
to give real impetus to the
global rail industry. The
United Nations’ (UN)
Intergovernmental Panel on
Climate Change warned on
October 8 that the world has
12 years to limit global
warming to 1.5oC or face an
environmental catastrophe.
Although the UN’s COP24
climate change conference in
Poland last month failed to
identify how countries will cut
emissions, it was agreed to put
the 2015 COP21 Paris
agreement into practice by
getting governments to
measure and verify their
efforts to cut emissions.
The European Commission
(EC) has adopted the goal for
the European Union (EU) to
become carbon neutral by
2050. Ms Elisabeth Werner,
land transport director with
the EC’s Directorate General
for Mobility and Transport,
says that rail is practically the
only way to decarbonise
transport, which should be
music to the ears of the
industry (p21).
Hopefully, this will translate
into greater rail investment,
but this is by no means
certain. Rail needs to continue
to demonstrate its green
credentials and fight its case
hard; it also needs to ensure it
provides good value-for-money.
4
There are still too many projects
which run over budget, such
as Crossrail in London and the
California high-speed scheme.
As we see in this issue, Mr TC
Chew from Arup has some
interesting ideas on how rail
projects can be delivered on-
time and to budget (p10).
Rail also has to become
smarter at increasing capacity
rather than simply laying
“
Rail has to become smarter at increasing
capacity rather than simply laying
additional tracks, which is extremely
expensive.
additional tracks, which is
extremely expensive.
Digitalisation will certainly
help, provided it happens
quickly, as will automation.
Australia has led the way with
the first fully automated
heavy-haul railway. The start
of the first ATO trials on the
Betuwe freight in the
Netherlands on December 19
is welcome news, while France
and Germany are also
committed to rail automation
as Europe’s leading railways
seek to improve efficiency and
address the potential threat
from autonomous road vehicles.
While rail freight is
prospering in some parts of
the world, such as North
America, Russia, India, and
Australia, with healthy market
shares, it continues to struggle
in Europe where rail’s overall
market share has been
flatlining for years. Werner
says poor punctuality and
reliability are often greater
deterrents to shippers
switching to rail rather than
the price or transit time.
At COP 24, the new Rail
Freight Forward association of
leading European rail freight
operators committed to
increasing rail’s share of freight
traffic in Europe from 18% to
30% by 2030, which has long
been the EU’s objective. As rail
emits nine-times less CO2 than
road, the aim is to cut CO2
emissions by 290 million
tonnes over 10 years. But this
will require a concerted effort
not only by the operators but
also infrastructure managers
and governments.
Recognising high-speed
rail’s ability to win traffic from
air, the EU says it is keen to
see more high-speed lines in
Europe to at least temper the
boom in short-haul flights.
Operating high-quality
inter-city rail services in the
160-200km/h speed range can
also win traffic to rail as Virgin
Trains USA is starting to
demonstrate in Florida (p48).
Its president, Mr Patrick
Goddard, says such projects
can be realised more quickly
and cheaply than 300km/h
lines resulting in a quicker
return on investment, which in
turn is more appealing to
private investors.
Looking at the prospects for
the rail supply industry, two
important mergers and
acquisitions are already on the
cards for 2019. Wabtec should
complete its takeover of GE
Transportation, which will
push it up the rankings of
the world’s top 10 railway
equipment suppliers to
around fifth position. The
Siemens Mobility-Alstom
merger is still being
scrutinised by competition
authorities around the world.
In order to satisfy the EU, the
two companies may be
forced to sell part of their
signalling business
and one of
their high-speed train
businesses. Even so, the
combined group would still
become the second largest rail
equipment supplier after
China’s CRRC. One of the
drivers of the Siemens-Alstom
merger is the desire to create a
European champion with
sufficient resources to compete
effectively with CRRC, even
though CRRC is still primarily
a supplier to the Chinese
domestic market.
Other companies to watch
in 2019 are Transmashholding
(p16), which has undergone a
reorganisation and is now
starting to develop its export
business, Stadler Rail which
continues to expand into new
markets, and the two Spanish
train builders, CAF and Talgo,
which will build factories in
Britain this year to satisfy one
of Europe’s strongest train
markets.
Rail could be on the cusp of
a major upturn, but it must
continue to drive forward
innovation, adopt new
technologies, streamline the
way it does business, reduce
costs, and possibly most
important of all, champion its
cause. After all this is what
rail’s competitors are already
doing.
db@railjournal.co.uk
 Global trends | projects
192019
rail projects to watch in
IRJ Pro market analyst Oscar Sinclair picks out the projects set to make the headlines in the year ahead.
Jakarta MRT
track to open in March, with
Indonesian and Japanese
contractors on the verge of
completion. It has taken five
years to construct and caused
chaos with the city’s already
heavy traffic. The line will
provide 170,000 passengers the
opportunity to avoid the
capital’s giant traffic jams.
Type: Metro
Jakarta plans to expand its
Country: Indonesia
MRT network to eventually
Construction Start: 2013
cover 108km by 2030.
Moscow - Kazan
Completion: 2019
High-Speed Line
Length: 15.7km
Cost: $US 1.5bn
Country: Russia
Type: High-speed
Construction Start: 2019
Indonesia’s first mass rapid
transit (MRT) rail system is on
6 IRJ The Railway in 2019
Completion: 2024 Ostlänken Phase 1
(Järna - Linköping)
Length: 762km
Cost: $US 21.4bn
Country: Sweden
Type: High-speed
The trillion Roubles line will
Construction Start: 2019
be the first segment of an
Completion: 2033
ambitious transnational high-
Length: 150km
speed railway set to connect
Cost: $US 6bn
Moscow with Beijing. The
construction agreement
The initial phase of a Y-shaped
covering the first section was
network that will link
announced in October and
Stockholm with Jönköping,
calls for work to begin on the
Gothenburg, and Malmö. The
301km alignment between
line is expected to have an
Zheleznodorozhny 21km east
operating speed of 320km/h,
of Moscow, and Gorokhovets.
reducing the 1h 40min
The line is being developed as
Stockholm - Linköping
a public-private partnership
journey time to under one
involving Russian Railways
(RZD) with Chinese backers. hour. A total of 27 tunnels with
 Type: High-speed Length: 66.2km
High Speed 2 Phase 1 (London - Construction Start: 2019 Cost: $US 4.3bn
Birmingham/Lichfield) Completion: 2024
Length: 385km
Country: Britain Cost: $US 15-18bn
The 66.2km line will improve

Type: High-speed
transport links between the

Construction Start: 2019

east and west of Dongguan.

Completion: 2026
The project that will offer an The line includes a 12km

Length: 193km
alternative way for Texans to underground section and will

Cost: $US 27.5bn

travel between their two
largest cities could enter
construction this year. The line
This is the first phase of a 338km Y-shaped high- was first announced in 2012
speed network that will link London with and trains will travel at speeds
central and northern England. The line will of up to 330km/h. Hopes of
serve new stations at Birmingham Interchange starting construction in 2016
and Curzon Street (pictured) with a link to the were pushed back for
West Coast Main Line near Lichfield. The line will numerous reasons. However,
begin at London Euston, which will undergo the project has been gathering
major reconstruction as part of the project, and momentum through 2018, and
run in bored tunnels beneath London’s western in September a $US 300m loan
suburbs. It is expected to cut the journey time was secured from two
between London and Birmingham from 1h Japanese entities. Texas
22min to 49 minutes. Services will be operated Central officials have said that
by a fleet of 60 high-speed trains. The contract to 2019 is the target date for the
supply and maintain the fleet, which is worth an start of construction. The
estimated £2.75bn, is due to be awarded by the project is expected to benefit
end of the year. 50,000 passengers and provide
10,000 direct jobs for each year
under construction.
serve 25 stations, four of
which will be interchanges.
The project will be developed
in two phases, with the first
52.1km section running from
Dongguan East station to
Changan New District South
station with 19 stations. Both
stages will open by 2024.
Delhi Metro Phase 4
Country: India
Type: Metro
Construction Start: 2019
Completion: 2024
Length: 110.8km
Cost: $US 8.3bn
The fourth stage of the
capital’s metro network has
been approved and is set to

Dongguan Line 3
a combined length of 20km the Qinghai - Tibet railway increase the existing 317km
will be required for the project. with the Southern Xinjiang network by a further 110km,

Brisbane Cross River Country: China

railway. Works began in 2014 adding six new lines. The new

Rail Type: Metro

and are expected to conclude phase is expected to add 1.5

Construction Start: 2019

in the next 12 months. The million daily passengers to the
Country: Australia Completion: 2024
project includes a 24.6km system’s ridership and connect
Type: Commuter Rail
bridge over Taitema Lake to the capital with outlying
Construction Start: 2019
Rail Baltica
avoid harming the fragile
Completion: 2024
ecology and the 13.1km Altyn-
Length: 10.2km
Tagh tunnel. The travel time
Cost: $US 3.9bn
between the two cities will be Country: Poland, Lithuania, Completion: 2030
reduced from 26 to 12 hours. Latvia, Estonia Length: 870km
Quito Line 1 Type: High-speed Cost: $US 5.65bn
Construction Start: 2019
The project will unlock a

Country: Ecuador
bottleneck at the core of the

Brisbane’s transport network,
providing a frequent service
and improved integration with
other transport systems. The
line will run from Dutton Park
to the east of Bowen Hills and
involves a 5.9km tunnel under
the Brisbane River and city
centre, together with the
construction of five stations.
Geku Railway
Type: Metro
A European Union and Trans-European Transport Networks
Construction Start: 2013
(TEN-T) priority project, Rail Baltica will connect the Baltic
Completion: 2019
States with the European standard-gauge network for the first
Length: 22.5km
time. The EU will fund 85% of the project, which is forecast to
Cost: $US 2bn
bring significant socio-economic benefits to the region,
estimated by Ernst & Young to be valued at É16.22bn.
Billed as one of the most
important infrastructure
projects in Ecuador’s history,
Quito Line 1 will be the
country’s first metro. The

(Korla - Golmud)
22.5km line will serve 15
stations with a forecast
Country: China ridership of around 378,000
Type: Main line passengers per day. The
Construction Start: 2014 project is expected to create
Completion: 2019 5000 direct jobs, according to
Length: 1214km the World Bank. Line 1 is due
Cost: $US 5.4bn to open in July, and three more
lines are proposed.
Texas Central Railway
(Dallas - Houston)
This huge project will connect
Golmud in Qinghai province

Country: United States

with Korla in Xinjiang
autonomous region, linking

IRJ The Railway in 2019 7

 Global trends | projects

Photo: Zephyr_P/Shutterstock.com
Bangkok - Padang Besar
Country: Thailand Completion: 2029
Type: High-speed Length: 983km
Construction Start: 2019 Cost: $US 9.9bn
The high-speed line will connect Bangkok and Padang Besar
at the Malay border. State Railway of Thailand (SRT) and the
Ministry of Transport (MoT) of Malaysia are jointly undertaking
the construction of the line. Trains will operate at up to
250km/h on the 982km. However, the project is still in its The world’s longest coal line Type: Metro
early stages of development and is expected to be completed will connect the ‘golden Construction Start: 2012
by 2029. Thailand plans to build up to 2506km of high-speed triangle’ region with central Completion: 2019
railways between the capital and the northern and southern China, offering a transport Length: 9.3km
regions by 2036. The plan is set to cost over Baht 1.5 trillion capacity of more than 200 Cost: $US 17.7bn
($US 47bn). High-speed services will run into Bangkok’s million tonnes per year. The
new main station at Bang Sue (pictured), which is currently line passes through seven Macau’s fully-automated light
under construction. provinces from Inner Mongolia metro will run on rubber tyres

Mengxi - Huazhong
to Jiangxi province, almost and has been under
regions, including Meerut. spanning the entire length of construction since 2012. Once
Country: China
Construction was expected to the country. The project completed it will serve Taipa,
Type: Heavy haul
begin in 2017 but due to includes construction of a Macao Peninsula and Cotai.
Construction Start: 2013
22.8km tunnel in Henan.

Macau-Taipa metro
delays in gaining approvals The opening date is still
from Delhi’s government the Completion: 2019 unclear although it is likely to
project was pushed back and Length: 1817km be commissioned in 2019. A
work will now begin in 2019. Cost: $US 27bn Country: China second phase is planned and

Riyadh Metro
Country: Saudi Arabia Completion: 2021
Type: Metro Length: 176km
Construction Start: 2014 Cost: $US 22.5bn
The Saudi capital’s metro system will consist of six fully
automated lines totalling 176km and serving 85 stations. The
system has been built in anticipation of Riyadh’s population
growth, which is expected to pass 8 million in the next 10 years,
and will become the foundation of the city’s transport system,
while integrating with an 85km BRT network. Dynamic testing
began in April 2018, when an Alstom metropolis train (pictured)
ran under its own power on a short section of the Purple Line.
Photo: Alstom

The first sections are due to open this year and the network will
be fully operational by 2021. A contract to extend the Yellow Line
to King Khalid International Airport was awarded in October 2018.

8 IRJ The Railway in 2019

 Copenhagen - Køge - Ringsted
the network could be extended
to five lines in the longer-term.

Shatin - Central Link Country: Denmark Construction Start: 2014 Length: 60km
Type: High-speed Completion: 2019 Cost: $US 1.78bn
Country: China
Type: Metro
Construction Start: 2012
Denmark’s first high-speed line is set to open in May and a new Danish rail speed record of

Completion: 2019
255.2km/h was set during testing on November 6 2018. Up to 24 trains per hour will operate on

Length: 17km
the double-track line at speeds of up to 250km/h. The line will relieve congestion and the

Cost: $US 12.4bn

bottleneck between Copenhagen and Ringsted. The decision to construct the line prompted the
adoption of the ‘one-hour target,’ to reduce journey times between Denmark’s largest cities to
one hour.
The Shatin to Central link is an
expansion of Hong Kong’s
MTR metro network. The
city’s costliest project has been
plagued with scandals and
deception, and is likely to be
delayed over safety concerns.
Three non-compliance reports
were issued to the contractor
Leighton Contractors (Asia) in
August and police have been
called to investigate the huge
discrepancies and conflicting
reports on the work at Hung

Photo: Banedanmark
Hom station. The project was
initially scheduled to open in
mid-2019 but is “very likely”
to be further delayed
according to the secretary for
transport and housing, Mr
Frank Chan.
Ankara - Sivas HSL Alexandria - Aswan HSL
commissioned by the end of journey time from 12 to 2 hours. this year. The 900km line will
the year, with most civil works follow the Nile and connect

Country: Turkey
on the line already completed.
Type: High-speed
The 406km line encompasses
Construction Start: 2008
many bridges and viaducts
Completion: 2019
and a total of 50km of tunnels
Length: 406km
and trains will travel at speeds
Cost: $US 5.4bn
up to 300km/h. The new
alignment will reduce the
distance between the two cities
The project is set to be from 603km to 405km and the
Alexandria, Cairo and Aswan.
Country: Egypt
Phase 1 will run from
Type: High-speed
Alexandria to Cairo and is
Construction Start: 2019 estimated to cost É2.4bn
Completion: 2024
including rolling stock. IRJ
Length: 900km
To gain access to extensive data on
Cost: $US 10bn projects, fleet orders, and tenders,
Construction of the Alexandria subscribe to IRJ Pro. For more
- Aswan HSL is due to begin information, visit irjpro.com.

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IRJ The Railway in 2019 9

Defining new approaches to efficient infrastructure
Global trends | system design
TC Chew, global rail business
leader for Arup, talks to
I
Keith Barrow
NFRASTRUCTURE investment has
become a useful lever for the world’s
most dynamic economies, both in
terms of the short-term impact of
construction on growth and the longer-
term benefits of enhanced connectivity
and greater mobility.
Behind every infrastructure success
story there is a clear vision of what that
project can deliver in terms of economic
and societal benefits and how it functions
as part of a cohesive network. TC Chew,
global rail business leader for Arup,
argues that clarity of purpose in the
formative stages of project development
can deliver extraordinary results with
benefits extending over many decades.
“Foresight is very important,” says
Chew. “Despite his controversial
departure, people will remember the
10
foresight of [China’s former] railway
minister Mr Liu Zhijun and his drive to
push for the construction of thousands
of kilometres of high-speed line in a
very short period. If Singapore hadn’t
had the foresight to build its rail network
- and an all-bus system was proposed -
the city would have ground to a halt.
Singapore will have a 230km network at
the end of 2019 and 360km in 2030.”
Despite the rise of autonomous
vehicles (AVs), Chew argues that rail
has a much greater role to play in
mobility in an increasingly urbanised
world. According to the United
Nations, the global urban population
increased from 751 million in 1950 to 4.2
billion in 2018. By 2050, 68% of the
world’s population will be urban
dwellers. “This is creating all kinds of
infrastructure challenges for governments
- sewage, electricity, water, and mobility,”
Chew says. “Working patterns might
change as we become more digitally
connected, but people still want to
travel and meet. What other facility can
provide that as well as rail?”
“AVs could never replace mass transit.
There’s a place for AVs but I don’t believe
they alone will solve the problem of
congestion, they will create other issues.”
Yet despite the need to provide
sustainable mass transit for growing
populations, governments often face
significant hurdles when it comes to
financing urban rail projects. “Rail is
often not a bankable option for many
cities,” Chew says. “Making it bankable
is a case of looking at farebox and non-
farebox revenues, and looking at how
much you can realistically expect to
bring in.”
Chew notes that authorities can
deliver better value-for-money by
integrating their urban rail plans more
closely with broader land-use strategies.
“If the city planner and the transport
planner come together to work on a
solution that is suitable for a specific
city you enable a much greater
development of the available space and
cost-effective infrastructure,” he
explains. “Most politicians like to have
a legacy, such as iconic stations, but
inevitably that has a cost to bear. Cost-
effectiveness should always be in the
mind of the station designer because it’s
costly to build underground.
“More partnerships between the
public and private sectors could go
some way towards defraying costs. If
underground stations are effectively
linked to adjacent developments, the
private sector may be willing to provide
part of the cost of the station. There’s no
magic wand. We’re spending taxpayers’
money so we’re keen to ensure design
is cost effective.”
Chew highlights the Project 13
approach to delivering major
infrastructure schemes, which was
initially set out in the Institution of Civil
Engineers report From Transactions to
Enterprises in March 2017 as an
innovative alternative to traditional
infrastructure business models.
According to the report, the transactional
model for infrastructure projects
prevents efficient delivery, stifles
innovation and fails to provide high-
performing networks.
Project 13 is based on an enterprise
model, which is defined as “a long-term
relationship between owners, investors,
integrators, advisers and suppliers”
which are “commercially-incentivised
to deliver better outcomes for users
from infrastructure investment.”
The asset owner is at the heart of the
model and leads the enterprise.
Suppliers have direct relationships with
the owner, while an integrator ensures
all tiers of the supply chain work
together as a single team. This means
reward and profit in the enterprise are
based on value added to the overall
outcomes and not time spent on the
project. All stakeholders have a greater
understanding of costs and risk, with
commercial incentives to jointly manage
risk, rather than simply shifting it
between different players in the project.
Data management
Chew also highlights the power of
data in optimising the operation and
maintenance of mass transit systems.
“Sensor technology is no longer cost-
prohibitive and embedding sensor
technology can enable you to do a lot of
positive things,” he says. “Data capture
has become something that is generally
easy to do on the railway. The next
stage is data analytics, and perhaps in
the future we can also apply AI. This
will enable us to take a much more
intelligent approach to the management
of railway assets. The potential benefits
in terms of performance and efficiency
are staggering and I think we will see a
great transformation in the coming
years. Good reliable data can give you
intelligent design and service provision.”
With new ways of disseminating real-
time operational data to the end user,
passenger flows can be optimised,
easing the strain on pinch points in the
network. “On the [London Underground]
Victoria Line there’s a train every 100
seconds in the peak so it’s easy to
decide if you’ll squeeze onto a busy
train or wait for the next one and hope
it’s less crowded, but you don’t know
for sure if there will be more space on
that train,” Chew says. “Technology has
now reached the point where transit
loading information can be transmitted.
This has the potential to completely
change travel patterns and ease the
burden on bottlenecks in the system,
because people will be able to choose
less busy routes and trains.”
Transport for London (TfL) is an
example of an operator that has
harnessed the explosive growth in
smartphone usage by using third-party
apps to reinvent how it communicates
with the passenger. In September 2017
TfL launched an app for ticketing but
opted not to include a journey planner
because third-party developers were
already using its data to build high-
quality journey planning apps. Today,
more than 600 apps use TfL data.
Chew argues that the smartphone
offers a huge opportunity for rail
operators to engage with passengers
and build trust, particularly when
handling service disruptions. “Rail
really needs to offer stakeholders a clear
understanding of the challenges it faces
on a day-to-day basis, and I think the
industry has often been slow to react to
that,” he says. The public needs to
know and understand that yes, we
aren’t perfect, but we are trying our
level best to deliver a good service for
you. Perturbations are going to happen
and your customers will judge you on
how well you are able to communicate
when they do.”
“Technology is forcing a change.
People expect to be informed, and big
data has become an important factor in
ensuring rail users understand the
status of the network. By making non-
personal data available for third-party
apps, operators are showing that they
can respond to evolving end-user
expectations.”
On the maintenance side, big data is
also allowing engineers to model asset
health in new ways. The ability to
generate, build and manage a digital
twin of a piece of infrastructure through
Building Information Management
(BIM) has the potential to significantly
alter the way physical assets are
maintained, potentially delivering
improvements in efficiency and
availability. “Without question, BIM is
the way to go in future maintenance
and asset management,” Chew says.
“Rail is a complex system with linear
infrastructure and furniture and
components dotted along the route and
that ability to produce a digital twin is a
useful way to track where things are.
“The question is who will take care of
the data? How do you legislate for the
actions of humans in the system? It’s
vital to ensure data is updated
regularly, or your model stops being
relevant. I think there’s potential to
reduce costs on new lines in the initial
period of asset maintenance and
operation. What happens beyond that is
very much down to the management of
data and the upkeep of the model.
For Chew, this highlights one of the
fundamental challenges of
digitalisation. “Technology is simply an
enabler - success is always down to
people,” he says. “One must never
overlook the importance of the people
who look after the technology and the
asset. They are an essential part of the
effectiveness of the operation.” IRJ Photo: Shutterstock/Maison Photography
11
New urban transport modes need regulation
Global trends | urban transport
The growth of shared mobility options to enhance connectivity to and from major rail stations looks set to be a
major public transport trend in 2019. But as Kevin Smith reports, authorities risk exacerbating urban
F
congestion if they fail to regulate these new modes.
IRST and last-mile connectivity has
always been the Achilles’ heel of
any railway operation. While
trains are able to deliver large volumes
of people quickly and effectively from
point to point, passengers’ homes or
offices are often some distance from the
station, and when it comes down to a
straightforward choice, it is hard to
match the convenience and flexibility of
simply jumping in your car and turning
the key.
However, there are signs that the
public’s acceptance of private mobility
is beginning to shift.
The financial challenges of owning a
car - rising petrol prices and insurance
costs - as well as the problem of
securing a parking space and urban
congestion are increasingly putting
people off driving. Environmental
concerns are also encouraging people to
move away from personal transport
based on the internal combustion
engine and embrace green and shared
mobility options.
This is reflected in a variety of trends
in different countries around the world.
Populations are becoming ever more
urbanised making it easier for people to
access public transport infrastructure.
For example, 29% of Italy’s population
Shared electric scooters are a fun and clean way of getting around, but does their use and
application need greater regulation?
12
now lives within 1km of a station and
73% are within 5km. Young people in
particular are also not as star struck by
the thought of owning a car as much as
previous generations. In Sweden, just
10% of 18-year-olds in Stockholm have
a driving licence. And in the United
States, the bastion of car ownership, the
number of 16-year-olds applying for
driving licenses has dropped by 50% in
the last decade.
“The private car is an under-utilised
resource,” Mr Francisco Furtado,
modeller/analyst at the International
Transport Forum, told the 1st Door-to-
Door Solutions Workshop hosted by the
International Union of Railways (UIC)
in Warsaw on November 14. “On average
they are used for 50 minutes per day
and by 1.2 users on each occasion. Why
have we accepted this? Because it is
convenient and there is a level of flexibility
that we can’t run away from. But what
if mobility companies are able to offer
similar convenience and flexibility as
the private car but use these resources
in a more efficient way?”
In the past, people have been
reluctant to embrace shared mobility
because the level of service is perceived
to be inferior to that offered by the
private car. However, digitalisation is
providing the means to bridge this gap.
The workshop presented a number of
shared mobility concepts which are
offering high-quality services, and are
growing in popularity in cities around
the world.
For example, Car2Go, Daimler
Group’s car sharing service, now has a
fleet of 14,000 vehicles in 25 cities. The
service has 3.5 million users, which is
increasing 25% year-on-year, and a
Car2Go vehicle is now hired every second.
Registered users are able to access
vehicles using a smartphone app, from
which they pay for the service which is
charged depending on the type of
vehicle and the distance travelled. Mr
Gianni Martino, managing director and
country manager Europe South at
Car2Go, told the workshop that the
service is designed for individuals but
also corporate clients, many of which he
says have replaced their own car fleets
in favour of the concept.
Public bike-sharing operator
NextBike along with US electric scooter-
sharing pioneer Lime, which has
expanded significantly in Europe in
recent months, uses the same app-based
model for service access and payment.
Lime recently became France’s most
downloaded travel app following its
launch in Paris, Lyon and Bordeaux.
Other tech companies are working on
integrating these services together. Urbi
is a single app which integrates 53
providers and seven modes of transport,
offering users the best possible connection
options.
This trend for sharing and integration
is not lost on railways.
For example, Italian State Railways
(FS) presented its partnership with
MyTaxi, a consolidated taxi booking
service, which is supported in over 500
European cities, with Trenitalia users
benefitting from discounts on their
connecting journey. The operator is also
working with Lastminute.com to offer
discounts on hotels, and with car
sharing company Enjoy. This partnership
commenced in 2013 and the company’s
vehicles are the same colour as the
operator’s Frecciarossa high-speed
trains and feature the high-speed logo
on the side.
In addition, Mr Luigi Contestabile,
IRJ The Railway in 2019
station service development manager, at
Italian Rail Network (RFI), presented
plans to redevelop the road entrance to
Garibaldi station in Milan to better
facilitate shared mobility options such
as bikes, cars and scooters, and the
station space in general.
areas is important to the operator, the
functions of which have been scaled
back substantially under the reforms to
the Norwegian rail sector.
Yet there is one caveat to the
emergence of these new modes of
transport: the importance of political
In the United States, for example, these
ride-hailing services are estimated to
have tripled for-hire vehicle mileage
within the space of just a few years.
Studying the issue in a report
released in July, US transport analyst
Mr Bruce Schaller warns that if cities
don’t take steps to curb car traffic and

“
prioritise spatially-efficient modes like

Mobility as a Service (MaaS) provides the means for

transit and cycling, Uber and Lyft will

urban transport administrations to channel their

continue to exacerbate urban traffic
congestion and weaken surface transit

residents’ movements by offering clear integrated

systems.
Mobility as a Service (MaaS) provides

multi-modal transport options.

In Switzerland, Swiss Federal
Railways (SBB) is launching SBB Green
Class. This monthly subscription service
will offer users a bundle of transport
options, including a rail pass, bike and
car-sharing options, and access to a
hybrid vehicle. With 4.5 million cars on
Switzerland’s roads, an increase of 1
million in the last 10 years, SBB
considers car sharing as the means to
cut overall car ownership and use,
thereby reducing greenhouse gas
emissions.
Norwegian State Railways (NSB) is
oversight and regulation, which so far
has failed to keep up with these new
business models and means of offering
transport.
Shared scooters are a clean and fun
way to help people get from A to B in
an urban environment. But there is
concern over increasing urban litter and
the relative chaos they have caused with
limited regulation of their application.
Then there are transport network
companies (TNCs). Uber and Lyft have
not replaced the traditional taxi service
around the world, they have added
the means for urban transport
administrations to channel their
residents’ movements by offering clear
integrated multi-modal transport options
for a complete journey, from A to B.
If delivered correctly, this promises to
provide sustainable transport options
which improve the urban environment.
Railways must be at the centre of this.
However, it is important that they and
the new mobility players share data and
trust each other so they all have their
role in a single system. There is a place
for TNCs and shared cars. However, the
last thing cities need is for their
residents to swap their private cars for
chauffeur-driven transport. The early
adopters of MaaS get this. It is
important as the concept develops, and

Have you got the tools to succeed?

on the verge of launching a car sharing more cars to city streets, helping to regulation is drawn up, that other
service in Oslo. Branching out into new exacerbate the congestion problem. urban areas follow their lead. IRJ

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as well as the latest global rail tenders.
To find out more visit irjpro.com or contact
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IRJ The Railway in 2019 13
A challenging year ahead for
Industry | Europe
Europe’s rail supply industry
Philippe Citroën, director
general of the European Rail
Supply Industry Association
T
(Unife), talks to David Briginshaw.
HIS year is supposed to be a
landmark for Europe’s railway
industry with adoption of the
European Union’s Fourth Railway
Package. However, with several
national governments dragging their
feet, the technical pillar will now only
be fully implemented EU-wide in 2020.
On top of this, several political events
are likely to have a major impact on
Europe’s railways.
Siemens unveiled its new-generation Mireo EMU at the Wildenrath test centre in Germany on December 6. Photo: Keith Fender
14
“2019 is shaping up to be a challenging
year, with Brexit in March, elections for
the European Parliament in May,
followed by a new EU commission after
the summer,” Mr Philippe Citroën, director
general of the European Rail Supply
Industry Association (Unife), told IRJ in
Brussels. Citroën fears that uncertainly
about Europe’s future political direction
could have negative consequences for
European transport policy.
Member states have until June 16 to
transpose the technical pillar of the Fourth
Railway Package into national law but
can defer this by up to one year if they
have given notice to the European
Commission (EC) and the EU Agency
for Railways. As IRJ went to press in
December, Austria, Belgium and Germany
were not expected to be ready, while
France, Italy and Spain might be ready
in time.
“This will create a complicated
situation,” Citroën says. For example, if
one member state has implemented the
Fourth Railway Package provisions
while its neighbouring countries have
not, operators of cross-border services
will not be able to benefit from
streamlined authorisation processes
until 2020. Nevertheless, Citroën says
the Agency’s One-Stop Shop must be
ready by February to take over
responsibility for vehicle authorisation,
single safety certification for train
operators, and ERTMS trackside
approvals. “This should reduce both
authorisation time and costs by around
20%,” Citroën says.
In addition, the Agency will be the
system authority for ERTMS, while Mr
Matthias Ruete, who was director
general of the EC’s Directorate General
for Mobility and Transport (DG Move)
from 2010 to 2014, will succeed Mr
Karel Vinck as ERTMS coordinator this
month. “Vinck gained wide respect for
his efforts to promote the deployment
of ERTMS across Europe, and we expect
to cooperate closely with Ruete, who
has a very good knowledge of the rail
sector,” Citroën says.
An additional challenge in 2019 will
be a full revision of almost all Technical
Specifications for Interoperability (TSI)
through the EC’s Railway Interoperability
and Safety Committee (Risc).
The future of Europe’s rail supply
industry is also under scrutiny, as
Citroën explains. “An expert group was
created by the EC at the beginning of
2018 to look into the competitiveness of
the European rail supply industry. The
group is composed of Unife, 30 rail
supply companies, representatives from
various rail stakeholders such as the
Community of European Railways and
Infrastructure Managers (CER), the
European Infrastructure Managers
association (EIM), CEN-Cenelec, and
IRJ The Railway in 2019
member states. It is expected to publish
its report in September.”
This year will also see decisions made
regarding research and innovation,
including whether there will be a
second Shift2Rail programme. Unife has
identified nine key themes for Shift2Rail
2: automated rail transport, mobility as
a seamless service, digitalisation,
moving towards a zero-emission
railway, maintenance of the future,
enhancing security, optimised
infrastructure, digitalisation of the
supply chain - Industry 4.0, and a new
certification framework. “There is good
impetus to extend Shift2Rail in the
framework of the Horizon Europe
Programme, but we would also like
urban operators to play a more active
role,” Citroën says.
Negotiations started in 2018 for the
EU budget for 2021-2027. This includes
the Connecting Europe Facility (CEF)
which has helped to fund many rail
projects. “A majority of member states
and the European Parliament are in
favour of a strong CEF,” explains
Citroën, who says that Unife fully
supports the Parliament’s call to
increase the CEF budget for transport.
“The big question is whether the
member states, the European Parliament
and the EC will manage to agree on the
final deal before the European elections
in May,” Citroën says. “We have high
hopes for the Romanian Presidency of
the EU, which starts in January, but we
also recognise that concluding the
negotiations will not be easy.”
“
We are not opposed to Chinese companies entering the
European market, but we want fair competition and
equal access to the Chinese market. Philippe Citroën
Meanwhile, the anticipated departure
of Britain from the EU, which is due to
happen on March 29, will also have
important implications for the future
EU budget, as well as for trade between
Britain and the rest of Europe and the
participation of UK-based companies in
EU-funded research activities.
Turning to procurement, Unife,
together with CER and EIM, says it will
continue to push the EC to adopt the
most economically-advantageous
tender (Meat) system for assessing and
awarding major contracts which takes
into account life-cycle costs and avoids
IRJ The Railway in 2019
contracts being awarded simply on the
basis of the lowest price. “It already
exists in the regulations, but it is not
mandatory,” Citroën explains. “We
want to push the public authorities to
introduce the Meat principle, although
we recognise it will be difficult for small
operators as it requires a lot of expertise
to implement it.”
Beyond Europe
The EU signed the Economic
Partnership Agreement (EPA) with
Japan in July 2018 which was ratified by
the European Parliament on December
12 and is expected to come into force in
February. “The EPA represents a unique
opportunity to tackle market access
barriers which European rail suppliers
have been facing in Japan for years,”
Citroën says. “Now it is time for Japan
to open its market and ensure that
procurement is done in a transparent
and non-discriminatory way according
to the rules of the WTO Agreement on
Government Procurement (GPA). We
want the EC to create a strong system to
monitor rail procurement, otherwise we
risk losing momentum. This is crucial to
ensure a tangible and long-term level
playing field.”
There are concerns in Europe about
the potential for Chinese state-owned
companies, and in particular the giant
train builder CRRC, to flood the market
with low-price equipment.
“We are not opposed to Chinese
companies entering the European market,
but we want fair competition and equal
access to the Chinese market,” Citroën
says. “We want to ensure that European
suppliers can sell their products in China.
This can only work if there is fair trade
based on a level playing field with
equal conditions in relation to public
procurement and state aid. We want to
be in a situation where we are not forced
to have a joint venture or to transfer
technology, as was the case in the past.”
Unfortunately, Unife says access to
the Chinese rail market has worsened,
with EU suppliers accounting for as
little as 18% of the market between 2015
and 2017. “Not only are some market
segments now effectively closed to
foreign suppliers, even in the case of
joint ventures, but additional
constraints, such as non-transparent
public procurement procedures and
increasing localisation - domestic
sourcing - requirements, have been
imposed on the market segments that
are still accessible,” Citroën says.
Unife says the Chinese government
has made advanced railway equipment
one of its 10 priority sectors under its
Made in China 2025 strategy, notably
with CRRC, signalling company CRSC
and railway construction companies
CRCC and CREC initiating long-term
strategies to access markets between
China and Europe as part of the Belt
and Road Initiative (BRI).
However, reports on December 12
indicate that China could be on the verge
of revising Made in China and granting
international companies greater access to
its economy. The move comes following
pressure from United States president,
Mr Donald Trump and a tariff dispute
between the two countries in 2018.
As it stands, a major emphasis of the
policy is to provide financial support to
prospective infrastructure projects
which support the BRI’s objectives. “In
the framework of the so-called 16+1,
China is offering to co-finance
investment in rail infrastructure in
partnership with several central and
eastern European countries, including
certain EU member states,” Citroën says.
The first example of this is the
Chinese-Hungarian joint venture to
rebuild the Hungarian section of the
Budapest - Belgrade line to create a
200km/h line equipped with GSM-R
and ETCS Level 2. The EC castigated
Hungary for granting construction
rights to Chinese companies while
neglecting European public tendering
requirements, and while the latest
tender for a 152km section respects EU
tendering regulations, the results of the
tender need to be transparent.
According to Unife’s 2018 World Rail
Market Study conducted by Roland
Berger, global rail market accessibility
will remain stable at 63% compared
with the previous period. However, the
situation is deteriorating in a number of
key markets and Unife wants the EU to
make use of “all instruments at its
disposal” to create a level playing field
for European companies.
The curse “may you live in interesting
times” looks set to afflict Europe for the
foreseeable future. Hopefully, Unife can
help to steer the European rail supply
industry through this turbulent period. IRJ
15
Transmashholding targets further
Industry | rolling stock
growth at home and abroad
Transmashholding CEO, Kirill
2
Lipa, speaks with Kevin Smith
018 was a boom year for Russia’s
largest locomotive and rolling stock
manufacturer Transmashholding
(TMH). By September, the company
was reporting a 40% increase in
production at its 14 plants across Russia
following a series of major domestic
contract awards in recent years which
are now coming to fruition.
One of the most significant is for 96
eight-car metro trains from Moscow
Metro (p38) awarded to TMH
subsidiary Metrowagonmash in 2014.
Delivery of the Roubles 133bn ($US
2.02bn) order commenced in 2017 and is
set to conclude in 2020.
Metrowagonmash overcame fierce
competition from international
suppliers for the contract and TMH
CEO, Mr Kirill Lipa, says the trains
offer enhanced energy consumption
performance, speed, comfort, and
passenger information. Indeed,
international visitors to last summer’s
football World Cup were among the
first to enjoy the train’s special features
such as onboard Wi-Fi and live television
coverage of World Cup matches.
It is a similar story in St Petersburg.
Here another TMH subsidiary, October
Electric Car Repair Plant (OEVRZ),
completed delivery of 27 new six-car
metro trains for use on Line 3 in June.
World Cup visitors were again some of
the first to use the new trains, which
feature asynchronous traction drive and
16
should cut energy consumption by up
to 30% compared with the previous
fleet. In addition, OEVRZ is supplying a
further 20 eight-car trains for the 113km
metro network under a Roubles 10bn
contract that will run until 2020.
For passenger coaches, Lipa says
Russian Railways (RZD) subsidiary,
Federal Passenger Company (FPC), has
increased demand by 30-40% in recent
years resulting in significant orders.
Among the recent highlights is a
contract for 293 coaches placed with
Tver Carriage Works (TVZ) in July. The
manufacturer was set to supply 676
coaches to FPC in 2018, up from 425 in
2017 and 234 in 2016. TMH is also
reporting an upsurge in orders from
industrial customers for coaches,
including postal vehicles while TVZ
agreed a contract with Central Suburban
Passenger Company in October to supply
15 seven-car EG2Tv Oriole EMUs for
the Moscow Central Diameters network.
Locomotives remain a mainstay of the
company’s business and demand here
also increased by 30% in 2018, a situation
which Lipa believes will continue into
2019.
“We have already produced the most
powerful diesel locomotive in Russia,
which is capable of hauling 7500-tonne
trains in the Baikal Region,” Lipa says.
“This is important for coal production,
which is growing. The infrastructure
there is limited by a single-track line, so
that is why it is important for them to
use more powerful locomotives.”
These units are equipped with GE
Transportation engines and Lipa reveals
that TMH’s locomotive offering is set to
be boosted by an upcoming agreement
to manufacture diesel engines in Russia
in partnership with the American
manufacturer. TMH is also working in a
joint venture with Hitachi to produce
metro vehicle traction systems in
Russia. The joint venture, in which
TMH holds a 51% stake and was
formed in May, is set to produce 200
traction systems annually at
Metrowagonmash’s production
facilities, and is targeting contracts in
Russia, the CIS and Europe.
Another key partnership agreed in
2018 was the takeover by TMH of
maintenance provider LocoTech-
Service. The company maintains 15,000
locomotives across Russia and has a 40-
year service agreement with RZD.
Critically, the merger marked a
complete restructuring of the holding
company of TMH. Instead of a 33%
stake in TMH, Alstom now holds 20%
in the new corporation, with 79.4% held
by companies owned by several
prominent Russian billionaires: TMH
board member and primary owner of
copper producer UGMK, Mr Iskander
Makhmudov; his business partner and
TMH president, Mr Andrei Bokarev; Mr
Dmitri Komissarov, and Lipa. Lipa and
Komissarov hold the remaining 0.6%
separately.
The two companies will remain
largely independent, but with demand
for overhauls also hitting historically
high numbers, Lipa says the merger is a
critical step towards diversifying TMH’s
offer and making the company more
competitive. “It provides us with the
opportunity to build a complete lifecycle
business,” he says, adding that together
the two companies are projected to post
revenues of Roubles 300bn in 2018.
International expansion
The integration will also support TMH’s
international expansion ambitions.
Here Lipa says the emphasis is on
developing a local presence in specific
target markets. “We understand that we
don’t want to be the fourth or fifth
competitor coming to the same tenders
with the same ideas,” Lipa says. “We
don’t believe that simply selling rolling
stock matches the strategy of local
companies.
“Our idea is to develop locally. TMH
is privately-owned so we have long
experience of developing this company
in Russia and we hope to do the same
outside of Russia. It is not a matter of
going somewhere and putting in a bid,
but trying to address the problems they
have, whether their fleet is old, or new,
but it is not working properly. The first
step is to do something to put it back
into use.”
Argentina is an early target for this
strategy. TMH has established a local
subsidiary which has secured a three-
year contract to repair and maintain 24
type SDD7 diesel locomotives and 160
passenger coaches supplied by CRRC in
IRJ The Railway in 2019
 Argentina’s president Mr Mauricio Macri (centre right) inaugurates TMH’s renovated depot at Mechita in Bragado, Buenos Aires in May 2018.
2013 for use on the San Martín Line
from Buenos Aires to Pilar. Maintenance
will be carried out at the existing depot
near Retiro San Martín station. TMH-
Argentina will also invest $US 3m to
modernise the rolling stock workshop
at Mechita near Bragado in Buenos
Aires province. Most employees will be
experienced Argentinian engineers and
technicians.
“
Our message to the client is that we are not selling you
something to then get out and leave the country.
We are here to be your partners forever. Kirill Lipa
“Our message to the client is that we
are not selling you something to then
get out and leave the country,” Lipa
says. “We are here to be your partners
forever, like we are in Russia. We are
with our client in good times, and we
are with our client in bad times.”
The next chapter in this story is South
Africa. On October 31, TMH confirmed
that it has purchased DCD Group’s
rolling stock facility in Boksburg for a
reported Rand 500m ($US 33.9m). The
45,000m2 plant, TMH’s first in Africa,
will be used for the assembly,
maintenance and modernisation of
rolling stock from clients across Africa.
Like Argentina, local players in South
Africa have experienced problems with
IRJ The Railway in 2019
Chinese suppliers and Lipa says it is
“exactly” TMH’s strategy to work in
these areas.
Elsewhere, Transmashholding-
Hungary secured a $US 1bn contract at
the end of September to supply 1300
coaches to Egyptian National Railways
over five years in what is the largest
rolling stock order in the railway’s
history. Half of the coaches will be
manufactured at Dunakeszi Jarmujavito
in Hungary in cooperation with TVZ,
while TVZ will produce the remainder
on a stand-alone basis. Final assembly
will take place at a facility which TMH
International will build in partnership
with the National Organisation for
Military Production in Egypt.
Closer to home, with Alstom
retaining a 20% stake in TMH, Lipa
says there is uncertainty about how the
pending Siemens-Alstom merger, which
is expected to be finalised in 2019, will
impact the company. While he does not
expect any dramatic changes, Lipa is
unclear if there will be any alterations
to the commercial and strategic
situation in Russia where both
companies are present, but are less
strong in the overall market.
Recent western sanctions are perhaps
of greater concern and Lipa admits that
the subsequent bank uncertainty over
the security of Russian investments has
placed companies like TMH “under
great pressure.”
The manufacturer’s response has been
to innovate and become more self-sufficient.
For example, TMH is improving
efficiency at its Russian manufacturing
plants by digitalising key processes.
This includes Locotech’s activities,
which is helping to increase capacity
without expanding facilities, and by
enhancing cooperation between each of
the company’s manufacturing plants.
“Right now, we are installing systems
which plan production automatically,”
Lipa says. “The computer does it for us
and that is why we believe we will get
some extra opportunities without
strong capex or investment.”
In addition, by embracing this
strategy, Lipa says TMH is better
positioned to continue operating
effectively even if its western partners
pull the plug on key contracts. Indeed,
with the company leaner, faster and
more flexible to demand, the signs are
that TMH will retain its current
momentum over the next 12 months.
“Rolling stock is not rocket science,”
Lipa says. “If Russia managed to launch
spaceships, I guess we will be able to
make rolling stock, even with the
sanctions.” IRJ
17
Takeover sparks improved performance at Škoda
Industry | rolling stock
Škoda Transportation CEO and
chairman, Petr Brzezina, talks to
2
David Burroughs.
018 has been a busy year for Škoda
Transportation. The Czech
company, which dates back to 1859
and began producing rail vehicles after
World War 1, was taken over by
investment company PPF in April, and
has since finalised a number of large
orders across Europe.
On June 20 2018, Škoda announced
that it had won a contract to supply 80
low-floor LRVs to Rhine Neckar
Transport (RNV) for use on tram lines
in and around Mannheim, Ludwigshafen
and Heidelberg. The contract includes
an option for 34 additional vehicles
with a base order valued at around
É250m, making it Škoda’s largest-ever
international LRV order.
This was followed in September 2018
by a Koruna 1.9bn ($US 825m) order
from the board of Ostrava Public
Transport (DPO) for 40 low-floor trams.
Five suppliers submitted offers for the
contract, but Škoda was reportedly the
only bidder to meet all requirements of
the tender. The Czech company also
offered the lowest-priced bid.
PPF’s purchase of Škoda announced
in November 2017 for an estimated
Koruna 10bn ended months of
speculation surrounding the future of
the manufacturer.
PPF is owned by Mr Peter Kellner, the
Czech Republic’s wealthiest person
who was worth an estimated $US 15.5bn
in 2018. The takeover included all of
Škoda’s assets, including property used
for operation and manufacturing under
the Škoda trademark.
18
“Since the end of April 2018, when
the acquisition of Škoda Transportation
by PPF Group was finalised, our
company has been entering a new era
of favourable conditions in every
aspect,” says Škoda CEO and chairman,
Mr Petr Brzezina, who was appointed
following the acquisition. “The level of
production revenue for 2018 and partly
2019 reflects the orders contracted two
years ago. In recent months, Škoda
Transportation has signed several
important contracts worth more than
É500m which demonstrates the focus
on our future growth.”
Before his appointment with Škoda,
Brzezina worked with ABB, General
Electric and Alstom, where he was
president for the Czech Republic and
Slovakia area focusing on transport and
energy between 2008 and 2015.
“The effect of PPF Group on Škoda
Transportation is very positive, because
PPF is a global investment group, one
of the largest investors in Central and
Eastern Europe,” he says. “They
continually support and develop their
strategic assets over an extended
period. Their investment in Škoda
Transportation is a strategic investment
for them, because they have already
announced their vision to actively
participate in the ongoing consolidation
trend in the rolling stock industry.”
In line with the long-term objective of
cementing its position in the Western
European rail market, Škoda became
the sole shareholder in Transtech Finland
in May 2018 when it purchased the
remaining 25% stake. This followed the
purchase of a majority share of the
company in 2015, and the company was
subsequently renamed Škoda Transtech.
“
The Siemens-Alstom consolidation sends a strong signal
not only in terms of the size of the combined operations,
but also in terms of the geographic footprint of their
activities. Petr Brzezina
“The acquisition enabled Škoda
Transportation to expand its product
portfolio with Artic trams, double-deck
driving trailers, 1524mm-gauge trains
and, last but not least, it helped us enter
the Nordic market where we are the
only rolling stock manufacturer,”
Brzezina says. “Škoda Transtech is an
important reinforcement for our group
in the effort to penetrate Western
European markets. In addition, thanks
to Škoda Transtech we were able to sign
important long-term contracts like the
contract for double-deck rolling stock
up to 200km/h for VR Group, and Artic
trams for Helsinki and Tampere.”
Škoda has also been pushing further
afield, and in September introduced a
new fleet of 14 battery-powered 28T
ForCity LRVs to Eskisehir, in northwest
Turkey, as part of a contract which it
won over local manufacturer Bozankaya.
This followed the introduction of a
Škoda-built fleet in the Turkish city of
Konya in 2015.
The LRVs are fitted with Škoda’s
Catfree catenary propulsion technology,
which uses high-performance nano-
lithium-titanium batteries that are
mounted on the roof of the vehicle and
provide around 3km of catenary-free
operation.
Market dynamics
Despite entering 2019 on the back of
this positive period, the year ahead is
not without its challenges. Brzezina
says the proposed merger between
Siemens and Alstom, which is expected
to be finalised in the first half of the
year subject to regulatory approval, will
change the global market dynamics.
“The Siemens-Alstom consolidation
sends a strong signal not only in terms
of the size of the combined operations,
but also in terms of the geographic
footprint of their activities,” Brzezina
says. “The merged group’s market
share will be three times bigger than its
nearest competitor in signalling and
rolling stock. The Chinese will continue
their export expansion. We must react
to this development and find our place
in this market. We believe we have
good things to offer and our experience,
technical knowledge, flexibility and
IRJ The Railway in 2019
Czech Railways (CD) launched a new fleet of class 650 Škoda RegioPanther EMUs for the Pilsen region on November 28. Photo: Quintus Vosman
good value for money will be the key
building blocks of our future strategy.”
Brzezina points to digitalisation as
one of several key factors that are
shaping the future of the rail industry,
Kapsch proposes ‘Made in Europe’ initiative
along with liberalisation, private
Kari Kapsch, CEO of Kapsch
W
CarrierCom, talks to Kevin Smith
HILE the slow pace of ETCS
deployment in Europe remains
a contentious issue, the rollout
of GSM-R, the telecoms element of
ERTMS, is an industry success story of
the past 20 years. Railways in Europe
and around the world have embraced
the 2G telecommunications technology,
which is proven to provide secure and
uninterrupted cab radio services.
IRJ The Railway in 2019
financing and urban growth. The ability
to deliver real-time analysis and
monitoring, identify problems before
they can cause delays, facilitate
automated and preventive maintenance,
and ensure that dispatchers have an
A handful of suppliers dominate the
GSM-R supply market. Austrian
telecommunications company Kapsch
joined them in 2010 following the
acquisition of the Carrier Networks
Division of Nortel and the supplier’s
GSM-R technology. The company has
installed GSM-R on more than 80,000
route-km around the world, including
national deployments in key rail
markets such as Austria, France, Britain,
and Germany, and on greenfield
projects in Saudi Arabia and China.
Despite its leading position in the
market, Kapsch CarrierCom CEO, Dr
Kari Kapsch, is concerned by the pace
of ERTMS deployment in Europe and
its impact on the supplier’s GSM-R
business. He is also worried about the
effect on the European railway
telecommunications supply sector in
general.
With no major projects in the
pipeline, and continuing hesitance over
ERTMS in some countries, Kapsch says
European suppliers could fall behind
their Asian rivals which are pushing
ahead with technological development.
“The whole railway industry in Europe
is still in a leading position but the
distance to Chinese competition is
accurate overview of the train’s location
are all areas the company is looking to
further develop in 2019.
“We are finalising our long-term strategy,
and 2019 will be an important year for
its implementation,” Brzezina says. IRJ
getting shorter day-by-day,” he says.
This for Kapsch is compounded by
China’s willingness to fund major
international infrastructure projects,
particularly in Asia and Africa, effectively
closing off these opportunities to
European suppliers.
This policy is also creeping into
eastern Europe. Serbia began work to
upgrade the 336km Belgrade - Budapest
main line in July. Serbia is financing the
work through a $US 297.6m loan from
China Exim Bank, while Hungary will
meet 85% of the expected Forints 550bn
($US 1.93bn) cost of its 152km section
through a loan from the same Chinese
bank. In exchange, Chinese companies
will carry out the work on a link
considered a key European connection
in the One Belt, One Road strategy.
The banks and the European Union
are unable to regulate such a project.
However, Kapsch says it is imperative
that there is competition. With Serbia a
candidate country and Hungary a full
member of the European Union, his
solution is to integrate technical
procedures in European projects that
secure local value and local content.
“This is not forbidden and would be
similar to the Made in USA initiative,
19
 Industry | telecoms
but instead, ‘Made in Europe,’” Kapsch
says. “We cannot stop competitors from
coming here, but if they do, they should
create value in Europe. This will also
help to keep know-how and competence
here in Europe. As a European
company going to work in China, we
have to partner with local companies. In
the US, to comply with Made in the
USA, we have to have our production
plants there. Such an initiative would
support the future of European
industry.”
Kapsch highlights trends in the wider
telecoms industry to support his point.
He says that while Europe traditionally
led in the telecommunications sector,
Chinese competitors such as Huawei
and ZTE are gaining a stronger foothold
in the market to the detriment of
European suppliers. “If we don’t pay
attention in the railway segment, the
same thing will happen,” Kapsch says.
‘A Made in Europe’ policy could
provide a key foothold for European
suppliers to lead the global railway
industry away from GSM-R to its
successor.
Kapsch says this next generation - the
so-called Future Railway Mobile
Communications System (FRMCS) -
will be based on 5G technology “for
20
sure.” However, he sees geographical
differences in the approach to
deployment. Asia is not waiting for the
next generation but looking at existing
IP-based 4G LTE technology and
Kapsch believes there will be several
major contracts around 2023-24 for
deployment in 2025-26.
Elsewhere, while 5G is the optimal
standard, Kapsch sees scalable and
interchangeable solutions as a practical
means of delivering a universal
network.
“
A Made in Europe’ policy could provide a key foothold
for European suppliers to lead the global railway
industry away from GSM-R to its successor. Kari Kapsch
“The core of our activities is the
development of adaptable
communications systems,” Kapsch says.
“The system should adapt to the
signalling and offer a general
communication system. LTE or 5G both
rely on the communications service and
it should offer a decoupled upgrade in
which you are able to retain the
signalling system but upgrade to an
applications and communications
system which will offer better value.
With ETCS you should be able to
change from GSM-R but with the API
infrastructure staying the same.”
As well as its own 5G research
activities, Kapsch is heavily engaged in
the European Union’s Shift2Rail joint
technology initiative. As an associate
member, Kapsch is leading work on
projects in Innovation Programme 2 -
Advanced Traffic Management and
Control System. This includes work on
the X2Rail projects, including the
development of an adaptable
communication system for all railways,
which it is leading, as well as work on
zero onsite testing, and cyber security.
Kapsch admits that it took some
persuading for the company to commit
to Shift2Rail, but he decided to do so
after realising the possible opportunities
from engaging in a cross-industry group.
“Through Shift2Rail different
companies are working on the same
targets and by sharing their know-how
and experience they are finding
solutions to common problems,”
Kapsch says. “A big plus for us is that
many of our customers are participating
in the Shift2Rail story. This open
integration is helping us to address the
needs of the customer by coming at
these problems from the same page.”
He adds that his big hope for the
Austrian presidency of the European
Union, which ended on December 31,
was to secure a mandate for a second
Shift2Rail initiative.
While technological research
progresses, more work is required to
solve what Kapsch considers the major
challenge to the next-generation system:
securing the radio frequencies that
these networks will require.
As railways prepare to upgrade,
Kapsch foresees the coexistence of
legacy and next-generation
telecommunications systems during a
transition period, with GSM-R expected
to remain operational until 2033-35.
With new networks set to host public
services, they will inevitably demand
higher bandwidth, which Kapsch says
will only be available by accessing new
frequencies. And with other industries
also battling to secure the bandwidth
they will require, most notably
autonomous cars, railways are in a fight.
Yet for Kapsch, for one reason or
another, the railway sector is not
engaged as it should be in this debate.
He says this was highlighted by
European transport commissioner, Ms
Violeta Bulc, during her address at
InnoTrans in September when she
called for the full-scale deployment of
ERTMS in Europe (IRJ November p24),
and Kapsch hopes the message had the
desired effect on those present. If not,
the question of frequency could rumble
on well into the next decade with
potentially crippling consequences for
the safety and security of railway.
“They have started to move but the
speed is very slow,” Kapsch says.
“There is an absence of leadership, and
that isn’t just at the European level.
They [railways] should be pushing at
the national level to both regulators and
local governments and informing them
of this issue. DB is fighting for
frequencies as are their French and
British colleagues. However, other
countries are counting their success on
what DB is doing. They need to do it on
their own.” IRJ
IRJ The Railway in 2019
Is there finally light at the end of the tunnel
for the Fourth Railway Package?
Werner says ERTMS remains a spending priority for DG Move. Photo: DB AG/Barteld Redaktion & Verlag.
Elisabeth Werner, land transport
director with the European
Commission’s Directorate
General for Mobility and
Transport (DG Move), talks to
T
David Briginshaw.
HE creation of a Single European
Railway Area (Sera) which sweeps
away national boundaries and
opens up the rail market to competition
has been a dream of European Union
policy makers since the early 1990s, but
this year and certainly by 2020 it should
become a reality thanks to the
implementation of the technical and
market pillars of the Fourth Railway
Package.
IRJ The Railway in 2019
“2019 is a very a special year because
of Sera and key dates for the Fourth
Railway Package,” Ms Elisabeth Werner,
land transport director with the
European Commission’s (EC)
Directorate General for Mobility and
Transport (DG Move), told IRJ in
Brussels. “In June the EU Agency for
Railways becomes a fully-fledged
organisation which should lead to a
massive simplification. For us it is very
important that the Agency becomes
very well respected especially for cross-
border issues.
“ I think we are well prepared on the EU side for the
technical pillar of the Fourth Railway Package, but I am
disappointed that some EU member states won’t start
until 2020. Elisabeth Werner
“I think we are well prepared on the
EU side for the technical pillar of the
Fourth Railway Package, but I am
disappointed that some EU member
states won’t start until 2020, so we
won’t get the full benefits until then.
“But I want to emphasise that we are
working on a smooth implementation
of the market pillar. We have learnt
from past experience that we need to
work with operators and infrastructure
Europe | policy
managers to ensure that everyone is
clear on what they have to do. It is also
important to strengthen regulatory
bodies to ensure a level playing field.
“2019 is also a critical year between
the old EU programme period [2014-
2020] and the new one [2021-2027].
We are proposing a new Shift2Rail
undertaking and discussing a new
Connecting Europe Facility (CEF). CEF
has been an enormous success. We have
spent almost all of the money, and we
have some key performance indicators
to show that journey times have been
reduced because of CEF spending.”
Werner says a real effort was made to
define the new budget last year and this
will continue in 2019. A key objective
will be to improve interoperability. “We
cannot afford to spend billions on
infrastructure projects if trains still have
to stop at borders,” Werner told IRJ. She
says DG Move has been working with
the EU Freight Corridors to achieve
breakthroughs. “These are not
21
 Europe | policy
legislative or big infrastructure projects,
but initiatives designed to have a major
impact on rail services,” Werner
explains. “We are working on things
such as brakes, train composition, and
language, so that we gain time and
reduce operating costs on the major
corridors. These are low hanging fruits.
“We are asking the rail sector to
identify operational hurdles, put them
in a logbook, and work out who is best
placed to solve the problems. We expect
some of them to be solved in 2019.
“The rail freight corridors still have
some unused potential, so we are
seriously considering how we can
develop them further. We will focus on
measuring the loading gauge along the
corridors. In spite of all of our efforts,
the data do not seem to accurately
reflect the real situation, leading to
ghost bottlenecks. We need to have
accurate, reliable and unbiased
parameters.”
Werner says she is very satisfied with
the concept and governance of the
“
We have ideas ready in the drawer for the new
Shift2Rail. The objectives still remain valid and just need
to be updated. Elisabeth Werner
TEN-T corridors because they are very
customer-focussed. “Some corridors are
more active than others,” she says.
“This is partly human nature, but it also
depends how much the member states
back them. We need to develop capacity
allocation and have better coordination
between infrastructure managers and
operators. We are proceeding to an
evaluation of the freight corridors and
public consultation to consider the next
step.”
Werner says ERTMS will continue to
be a spending priority for DG Move. “I
think 2019 will be an important year for
ERTMS,” Werner says. “We are still
only at 10% of where we want to be by
2030, and there is still more ERTMS
outside the EU than within it. We want
to encourage railways to adopt ERTMS.
There is a clear business case at the EU
level, and we are working to get the
costs down. We have been encouraging
member states to bring operators
together [to help achieve this].”
Werner paid tribute to Mr Karel
Vinck, the ERTMS coordinator, who
stepped down in December. “We now
22
have clear milestones for how many
kilometres should be equipped and by
when,” Werner says. “We now want to
do the same for the equipment of rolling
stock - this would be Karel’s legacy.”
Research
“Shift2Rail is very strongly supported
by the railway industry and illustrates
the benefits of public-private
partnerships (PPP) for research and
development,” Werner told delegates at
the European Rail Research Advisory
Council (Errac) plenary session on
November 30. “We have received an
impressive number of letters of support
for a future programme. The entire
Commission is very keen to continue
joint research with the rail sector.
“We are looking at the lessons learnt
from Shift2Rail. We want to include
urban mobility players, small and
medium-size enterprises, and the
newest EU member states. We see
digitisation and deep decarbonisation
as major priorities for rail. Automation
will produce greater reliability and the
ability to react quickly and have better
resilience.”
For passenger rail, Werner wants to
see more multimodal information and
ticketing especially in urban areas. “Rail
is vital for densely-populated areas,”
she says. “We are not simply innovating
for more beautiful railways, we need to
serve the customers better.
“We have ideas ready in the drawer
for the new Shift2Rail. The objectives
still remain valid and just need to be
updated.”
Werner listed some of the key
objectives for Shift2Rail 2:
= a 50% reduction in life-cycle costs
= increasing capacity, reliability and
punctuality, and
= removing obstacles to intermodality
to create Sera.
“We want to invest more in smart
infrastructure rather than hard
infrastructure especially for the next CEF
programme,” Werner told Errac delegates.
The EC has adopted the goal for the
EU to become carbon neutral by 2050.
“Rail is practically the only way we
have to decarbonise transport,” Werner
told Errac delegates.
“This is a clear call to use rail more
for freight,” Werner explained to IRJ.
“We are really engaging with shippers
and logistics companies to reduce their
carbon footprint. It is often not the cost
or speed which deters freight shippers
from switching to rail, but poor
punctuality and reliability. We need
investment to improve the links to ports
and terminals.
“We need behavioural changes to
achieve our decarbonisation targets,
and we need to see whether additional
measures are necessary to reach our
goals.”
The long hot summer and dry
autumn in 2018 has led to low water
levels in the River Rhine which has
seriously curtailed barge traffic on this
important north-south freight artery.
Werner says even though the situation
was known about in July, rail has been
unable to come to the rescue. “This
shows that our transport system is very
strained in its capacity especially in
densely-populated Western Europe and
there is very little flexibility.” The
Rastatt blockage of the Mannheim -
Basle main line in 2017 also demonstrated
rail’s inability to deal effectively with
such incidents. “We need more
diversionary routes which are up to the
standards we need,” Werner says. She
also wants to speed up railway
transformation and modernisation, and
points to the recent Italian initiative to
introduce high-speed freight trains as a
way to break into new markets.
“Multimodality is intuitively the right
thing, but it needs a push,” Werner
says. “We are working on electronic
freight documents, for example, and rail
needs to take part. We are also
continuing our work on multimodal
data - intelligent transport systems.”
Passenger transport in Europe is also
facing capacity issues. “We have terrible
congestion in the European airspace,
and 2018 has been one of the worst
years,” Werner told Errac delegates.
“This is why we strongly support high-
speed lines linking EU capitals. We
would be extremely happy to have
more high-speed rail links. A new link
is being discussed between Amsterdam
and Berlin, and this is something we
would support.
“People want door-to-door
connectivity, and we need to take it to
the next step. We want to eliminate
national borders with European trains
running on a European network,”
Werner concludes. IRJ
IRJ The Railway in 2019

DB’s troubles continue despite market growth
T
Keith Fender, regional editor
HE German rail market continued
to grow in 2018. Figures for the
first half of the year issued by the
Federal Statistical Office Destatis
showed expansion in the long-distance
segment of 3.8% to 71 million
passengers and 0.9% in regional and
urban rail to 1.3 billion passengers.
Rail freight also rebounded after the
disruption caused by the Rastatt tunnel
collapse in late 2017. The sector is likely
to show long-term growth for 2018, not
least as Europe’s long hot summer led
to exceptionally low water levels in the
Rhine, which caused freight to switch
from barges to rail. However, Rastatt
will distort year-on-year comparisons.
In contrast with the overall picture,
German Rail (DB) has publicly admitted
that it is in a difficult financial and
operational position, which is likely to
persist in 2019.
In mid-December DB was reportedly
planning to increase its debt ceiling to
É24bn from the previous É20.4bn
agreed with the German government.
Profitability is declining, and is forecast
to deteriorate further despite increasing
turnover - É21.6bn for DB group in the
first six months of 2018, up 2.3%
compared with the same period in 2017.
This situation is reflected in the
difficult trading environment impacting
some of DB’s German rail businesses.
DB Cargo made losses in Germany and
several other important markets,
including Britain. DB Regio, once a
major source of profitability, has lost
momentum due to structural changes in
the market. For example, many German
states have established rolling stock
companies or pools to lower the
barriers to entry for DB’s competitors,
making it tougher for DB to win
regional concessions. In 2018 DB Regio
lost the Hannover S-Bahn operation
contract, the first time it has ceded an S-
Bahn contract to a competitor. Transdev
will replace DB from 2021 with a fleet of
64 new Stadler Flirt EMUs.
Despite significant attention and
expenditure, the on-time performance
and reliability of DB’s long-distance
business has not improved, and continues
to drag down customer satisfaction.
DB’s only long-distance open access
competitor, Flixtrain, expanded services
on its routes in 2018 and is now offering
up to two train pairs daily on two day-
IRJ The Railway in 2019
The weak performance of DB Cargo and DB Regio is translating into poor financial results for DB.
time routes. Flixtrain also operates an
overnight service at weekends and plans
to launch two more routes in 2019.
The financial impact of the changing
market means that DB will need to find
new sources of cash to finance investment.
One option is selling stakes of up to
100% in its DB Arriva subsidiary, which
operates passenger services outside of
Germany, and global logistics arm, DB
Schenker. Decisions are expected in
2019. However, previous plans to sell
stakes in both companies were scrapped
in late 2016 following political opposition.
In spite of these woes, DB confirmed
a further É1bn order for new ICE4
trains and the refurbishment of older
ICE stock in late 2018. DB will introduce
more ICE4 trains during 2019 as well as
the next batch of its IC2 double-deck
push pull trains on the Karlsruhe -
Nürnberg and Stuttgart - Singen/Zürich
routes. DB is clearly relying on new
trains to enhance reliability.
Regional contracts
Regional services in several areas of
Germany will undergo major changes
in 2019.
In Baden-Württemberg, new fleets of
Bombardier Talent and Stadler Flirt
EMUs will enter service around Stuttgart.
Abellio and British firm Go-Ahead,
with its first venture in the German
market, are set to operate the services.
These contracts are the first of many
over the next few years in the state that
will result in new trains replacing older
DB Regio rolling stock, which in many
cases are no longer operated by DB.
In the Ruhr region, Abellio will operate
Europe | Germany
Photo: Keith Fender
the first of the new RheinRuhr Express
(RRX) Siemens Desiro HC EMUs.
Delivery of the entire fleet of 82 trains,
which will be operated by both Abellio
and National Express, will conclude in
December 2020. Infrastructure work to
permit increased RRX services is
underway in multiple locations.
In late 2018, the federal government
published its transport infrastructure
plans for the period to 2030. Included
are multiple upgrading projects for
existing routes and some electrification
in the south and east to create better
connections with neighbouring
countries such as Poland and the Czech
Republic, including a new Dresden -
Prague high-speed line.
However, 2019’s planned infrastructure
changes are relatively limited. Several
regional routes will re-open to passengers,
including Joachimsthal - Templin,
northeast of Berlin, and Bad Bentheim -
Neuenhaus near the Dutch border. In
Bavaria, new northern connections to
Munich Airport opened on December 9,
enabling direct services to Regensburg.
Several light rail expansion projects
are also set to conclude during the year.
In Ulm, an entirely new second tram
line opened in December 2018 with a
fleet of Siemens Avenio LRVs. Smaller
extensions will open in Heidelberg and
Freiburg while in Chemnitz, the tram-
train network is set for significant
expansion in December when services
are extended using an existing non-
electrified heavy rail route. In addition,
new tram fleets will enter service in
cities across the country to replace life-
expired vehicles and enable service
expansion. IRJ
23
DB’s digitalisation plans take shape
Europe | Germany
Sabina Jeschke, German Rail
(DB) board member for
digitalisation and technology,
G
speaks with Kevin Smith.
ERMAN Rail (DB) had a tough
time in 2018. Poor service
reliability coupled with worse-
than-expected half-year results put the
railway’s performance under intense
scrutiny.
CEO Dr Richard Lutz admitted in
September that DB had instigated
emergency spending controls as the
company sought to avoid another profit
warning and slow the increase in its
debts, which are nearing É20bn.
Domestic media reports in December
found that despite increasing turnover,
DB was set to increase its debt ceiling to
É24bn as profits continued to slow (p23).
However, behind the scenes, DB is
working hard to prepare itself for the
future, and ultimately deliver the high
level of service that passengers and
other railway users expect.
This is emphasised by the DB 2020+
strategy. Issued in 2012 and updated in
2016, among the document’s priorities
is the adoption of new technologies and
working strategies throughout the
organisation. A dedicated technology
strategy was subsequently adopted in
early 2018 and the catalyst for this work
is the TecEX technology initiative.
TecEX consolidates the group’s
technology expertise and maps out how
new technologies will affect rail
operations. The programme consists of
11 core projects transferred from the
strategy, which range from improving
existing processes to developing and
24
introducing brand new solutions.
Examples include adopting alternative
drive systems, finding a substitute for
glyphosate used in HVAC systems, and
the introduction of condition-based
maintenance practices, all of which are
designed as group-wide programmes,
and not just for one operator or specific
situation.
Digitalisation is the foundation of
many of these projects. And the
importance of the strategy, and
digitalisation, to DB’s future is reflected
in the appointment of Professor Sabina
Jeschke as the first DB board member
for digitalisation and technology in 2017.
Jeschke specialises in transport and
mobility, the Internet of Things, robotics
and automation technologies, and
Artificial Intelligence (AI). She previously
served as director of the IMA/ZLW &
IfU Cybernetics Lab at the RWTH
University of Aachen from 2009-2017, as
a professor within the department of
electrical engineering at the University
of Stuttgart, and at TU Berlin as a
professor in the university’s media centre.
Jeschke also has extensive industry
experience through various projects and
partnerships with renowned companies.
For example, she established a think
tank for the use of AI at Volvo in
Gothenburg during a sabbatical in 2017.
At DB, Jeschke says the goal for her
division is to expand the group’s
technological and digitalisation expertise
to help the railway develop smart,
integrated mobility solutions that make
it easier for passengers to arrange their
daily commutes and simplify their lives.
In the past, Jeschke says the railway
was the driver of change in society,
describing it as the preeminent startup
during the Industrial Revolution.
However, with society on the cusp of
another technological shift, she believes
rail could play a major role again as
part of the upcoming connected
mobility revolution.
“As the most transport-efficient,
energy-efficient and eco-friendly mode,
rail serves as a pillar, and many new
forms of mobility and mobility services
are making a place for themselves
around it,” Jeschke says. “We need to
take the unique technical expertise we
have gained in our 180 years of railway
experience and tie it into technology in
today’s 4.0 era. We are a mobility
services provider and logistic specialist,
but we are also a tech company and we
have to be absolute experts when it
comes to our technology.”
To achieve this, DB is embracing
digital technologies such as sensors,
connectivity, robotics, data lakes,
blockchain, cloud computing and AI,
and establishing in-house innovation
networks. These are interdisciplinary,
span business units, are rooted in
technology, and use agile working
methods.
DB is also working closely with
national and international partners to
harness these new technologies,
including other railways. For example,
DB is extending its long-term
collaborations with JR East and Swiss
Federal Railways (SBB) into new areas,
and is partnering on digitalisation
specifically with French National
Railways (SNCF) and Sweden’s SJ. DB
is similarly engaged in Europe’s
Shift2Rail research programme,
working alongside railways,
manufacturers and research institutions,
and has a close relationship with the
association of German university
railway research departments.
Mindbox
At home, DB is engaged in the Berlin
start-up scene. The Mindbox incubator
has been running for three years,
providing young entrepreneurs with
the space to develop their ideas for
service enhancements for rail
customers. Participants receive 100 days
of mentoring, coaching, and access to
work spaces, as well as É25,000 in start-
up funding and a start-up manager who
serves as a liaison between the startup
and the DB network.
“Eight hundred start-ups from 30
countries have applied to work with DB
since Mindbox was established,”
Jeschke says. “Over 50 start-ups have
participated in the programme so far
and we are currently working with
around 30 companies on specific
products and innovations relating to
train travel. Around half of the start-ups
that go through the Mindbox continue
to work with us after the programme
ends.”
Among the products from Mindbox
which DB is currently developing for
implementation is an illuminated
platform edge. This will help
passengers as they board trains and will
enable shorter stops, stabilising on-time
IRJ The Railway in 2019
rates. DB is also benefitting from
digitalisation and new technologies
from the work conducted by new
business units in both rail and road.
This includes the first autonomous
buses used for public transport in
Germany, the world’s first truck
platoons operated in regular traffic, and
the first use of multicopters for track,
bridge and station surveys. In addition,
the company is equipping switches,
escalators, and elevators with sensors
for predictive maintenance. “Many of
these digital solutions are still in the
the effects, but we will be laying the
crucial technological groundwork in
2019 to achieve these medium and long-
term goals.”
At the core of Digital Rail for Germany
is the development of digital signalling
and specifically the deployment of
ETCS. DB has been a slow starter with
ETCS but is finally changing course -
the system is already deployed on the
high-speed line between Munich and
Berlin, which opened at the end of 2017,
while the company established its first
digital signalling facility in Saxony at
and powerful real-time tracking systems,
which will enable fully digitalised rail
operation in the future. DB is also
targeting automated operation.
“Preparations are underway in
Hamburg to launch the first highly-
automated S-Bahn in Germany,”
Jeschke says. “By October 2021, four
trains and a 23km section of S-Bahn
Line 21 between Berliner Tor and
Bergedorf/Aumühle stations will be
equipped with digital ETCS control-
command and signalling technology.
This will provide the technical basis for
highly-automated operation on this
route section.”

“ Many of these digital solutions are still in the pilot stage,

A crucial challenge facing DB is
harnessing the array of data it now has

but prototypes are providing us with the valuable

available. Jeschke says DB should
merge its data structures and is touting

experience and information we need to expand their use.

a “data lakes” strategy pioneered by
tech giants such as Google and

Sabina Jeschke
pilot stage, but prototypes are
providing us with the valuable
experience and information we need to
expand their use,” Jeschke says.
In 2019, DB is targeting continuing
improvements to Wi-Fi at stations and
is set to test seamless mobile internet
the beginning of 2018 with a second
entering service in northern Germany
recently.
Jeschke says ETCS is the foundation
for future technologies such as highly-
developed sensors for object recognition
Facebook, as well as young “digital
native” companies from around the
world.
Jeschke says the storage concept used
by data lakes is fundamentally different
from that used by traditional relational
databases, which DB has relied on since
the 1980s. Here the user decides what
the ultimate goal is, but the database is
unable to respond to new questions not

Photo: DB AG/Volker Emersleben

access for passengers. This will enable
customers to stay on the DB network
after they leave the train without
having to login again.
DB is also planning to develop more
Blockchain applications having
established a 28-strong blockchain team
at its IT organisation in 2018. In addition,
teams are hard at work to develop AI
applications, which Jeschke expects to
become an overarching theme of
upcoming development efforts.
For example, she highlights the
opportunities to utilise AI in the event
of a tree falling on the track. While she
says it is conceivable that the track could
be fitted with a weight sensor to detect
the tree, and the track or even the tree
could inform the control centre or an
approaching train of the situation, AI
could take control by triggering actions,
such braking the train even before the
driver is able to see the tree.
“In the future, trains will communicate
digitally with other trains as well as
signals and points,” Jeschke says. “It’s
still a vision but we are working hard
on making it a reality.
“This falls under our Digital Rail for
Germany programme. The goal of the
programme is to increase the capacity
of the existing network by up to 20%.
It will take some time for us to feel all Through the TecEX programme, DB is integrating new technologies into its everyday processes.

IRJ The Railway in 2019 25

 Europe | Germany
considered when the structure was
built. In contrast, through data lakes,
companies collect the data and users
decide later on, through their queries,
what questions or analyses they want to
use the data for.
For DB this might include combining
geodata, data from vehicle maintenance
activities and other data in a raw form
in a data lake where it is used to create
forecasts for arrivals. “With data lakes
we achieve the flexibility to store and
process different raw data for different
applications and departures of trains,”
Jeschke says. “The same data lake may
also be suitable for other IT applications.
AI can play a role in this by going
beyond surveying the data to
automating decisions and processes.”
Performance
The market is currently awash with
new digital technological innovations
which promise to improve rail
companies’ performance in all areas.
Selecting the right technology or
solution has become a major challenge
of the digitalisation revolution. For
Jeschke it is critical that DB is able to
determine how relevant certain
innovations are to the business in order
for it become a technology leader in the
rail industry in its own right.
To do this she says DB itself must be
“absolute experts” when it comes to its
technology. For instance, she says it
essential for DB experts to have the
understanding to critique what they are
offered - if one supplier says that a
certain alternative drive system cannot
Illuminated platform surface door indicators are among the early innovations from the Mindbox.
26
exceed 150km/h, it does not mean that disruption becoming public knowledge
all systems are limited to this speed. through social media, and the
To bridge the gap with the supply conventional media all too ready to
chain, Jeschke says that from spring this criticise the railway’s performance.
year, DB will make its Advanced Train Rail then is in a unique, and some
Lab available to the industry as a might say, disadvantageous position
“
With data lakes we achieve the flexibility to store and
process different raw data for different applications and
departures of trains. Sabina Jeschke
laboratory for road testing high-speed compared with other modes. However,
train components. Jeschke also new technology might again provide
highlights DB’s work alongside other the answer to this conundrum.
European railway transport companies Quantum computing processes could
to establish the Initiative Round Table soon enable DB to create a “digital
Rail, which is designed to advance both twin” of its entire system, enabling the
the railway and suppliers’ objective to company to run multiple experiments
improve quality, delivery times and on its system concurrently and offer
ordering processes, to cut costs and brand new information for timetable
save time. “Our purchasing planning, fleet management, and
organisation gives companies the predictive maintenance. “Computing
chance to qualify as a supplier for DB in power is extremely important to DB,”
a clearly defined process,” Jeschke says. Jeschke says. “However, if we break it
“Thanks to our expertise we are also down to the business unit level, its
able to assist with vehicle projects and benefits are still too vague. We need the
we recently signed a working paper right team and, above all, we need to
with CRRC to ramp up collaboration cooperate with industrial and scientific
between our two companies.” partners who will handle it.”
Testing new technologies is a major Many established big companies have
challenge for any railway, which unlike been criticised all too frequently in
car manufacturers, only have a single recent years for failing to respond to
live system to work with. DB effectively new trends in a rapidly changing
has 5 million daily testers, with every business climate. The rail industry in
particular has a track record for being
Photo: DB AG/Andreas Varnhorn
extremely slow to adapt to new
innovations and ways of working.
Indeed, tech companies and start-ups,
which are nimble in their approach and
are willing to take risks to reach their
objectives, are regarded as a new gold
standard in modern business.
However, in this new era, Jeschke
says she is increasingly seeing larger
companies embrace data lake strategies
and AI. They have also formed new
partnerships, including with startups,
which have led to different and
unconventional ways of working, and is
producing positive results.
DB, through TecEX, is among these
companies. And as it heads into 2019,
Jeschke feels the railway is on course to
thrive in the new digital world and
become a technology leader in its own
right. “This comprehensive
reorganisation is a major challenge for
traditional companies, but it is also a
great opportunity,” she says. IRJ
IRJ The Railway in 2019

Online distribution dispute raises questions
over Swedish passenger market opening
S
Keith Barrow, senior editor
Photo: Keith Barrow
WEDEN has long been ahead of
the curve in the liberalisation of its
railways, and the country began
setting a precedent for reforms across
Europe as long ago as 1963, when the
Transport Policy Act separated Swedish
State Railways (SJ) activities into
commercial and subsidised segments.
A quarter of a century later, SJ’s
infrastructure was hived off with the
creation of an independent company,
Banverket (now Trafikverket), with
county public transport authorities
taking responsibility for the specification
and procurement of regional train services.
This left SJ to pursue its commercial
objectives as an operator of freight and
passenger services, helping to strengthen
the company’s balance sheet. Further
reform in 2000 split the SJ group into
seven companies, several of which were
later privatised, with the passenger
division retaining the SJ moniker.
SJ enjoyed a monopoly of the inter-
city passenger market until full
liberalisation in 2010. Initially the impact
on the market was nuanced, with small
operators such as Blå Tåget and Snälltåget
providing only limited competition for
SJ. However, everything changed in
March 2015, when the launch of MTR
Express, with its brand new bright red
Stadler trains, shook up the Stockholm -
Gothenburg market - SJ’s flagship route.
Suddenly the gloves were off.
While the most visible signs of
competition are out on the tracks, the
battle lines between the incumbent and
the newcomers have been drawn in
cyberspace. Over the last decade, SJ has
progressively developed its online
journey planning and distribution system
and today the company’s website, SJ.se,
attracts more than a million users a
week, with 97% of SJ tickets purchased
through online sales channels.
SJ.se is therefore by far the dominant
sales channel for train tickets in Sweden
and access to this portal has become an
issue of growing contention for open-
access operators. During its set-up phase,
MTR Express sought access to SJ.se and,
given that Blå Tåget and Snälltåget fares
were already in the system, assumed it
too would be allowed into the fold.
However, SJ refused to show MTR
IRJ The Railway in 2019
Saga Rail cites the lack of an efficient sales channel for suspending services after just four months.
Express times and fares on the site,
prompting the newcomer to file a complaint
with the Swedish Competition Authority
(KKV). In May 2014 the KKV rejected
MTR’s claim that SJ had violated the
Competition Act by refusing to sell
tickets for MTR Express services on its
website, ruling that “a company has the
right to choose its trading partners.”
The authority concluded that access to
SJ’s website is not essential for an open-
access operator to enter the Stockholm -
Gothenburg market and compete
effectively. Undeterred, MTR pressed on
with its preparations for launch.
In April 2018, armed with three years
of revenue and ridership data, MTR
Express decided it would make a second
attempt to force SJ’s hand and filed a
second complaint with the KKV. MTR
Express argues that SJ’s online sales
infrastructure was developed at a time
when it was a monopoly operator and
this legacy, combined with the incumbent’s
brand equity among Swedish consumers,
gives the company an unfair advantage.
SJ has no real online competition from
third-party distributors, yet is under no
legal obligation to sell the tickets of
other operators on its site.
MTR Express argues this is having a
negative impact on its financial
performance, despite growing ridership.
Revenues in the 2017 financial year
increased by 25%, reaching nearly SKr
250m ($US 28m), but net losses stood at
SKr 94m after financial items.
Last summer SJ executive vice-president
and head of product division, Mrs Caroline
Åstrand, told IRJ that she believes the
KVV will come to the same conclusion
it reached five years ago and the status
Europe | Sweden
quo will continue (IRJ August 2018 p20).
However, this time MTR Express is
not the only voice speaking out against
SJ. On June 10, Swedish start-up Saga
Rail suspended its weekend-only
Stockholm - Linköping service less than
four months after launch and filed its
own complaint against SJ with the KKV,
claiming that SJ’s refusal to display its
times and fares was making its business
unviable. “We had a business plan, to
be profitable within two years,” says
Saga Rail CEO, Mr Mats Nyblom.
“Without an efficient sales channel we
would never be profitable.”
According to Nyblom, SJ charges
third-party operators a 7% fee on all tickets
sold through its online booking portal.
Nyblom argues that restricting access
to the dominant online sales channel is
counter to the overall objectives of market
opening, which has been supported by
successive Swedish governments.
“Vertical separation has created a lot of
administration,” he says. “If we’ve gone
to all this effort restructuring the
railways why are we not concerned
about creating an open market? If you
don’t want competition there’s really no
need to separate infrastructure from
operations. We need proper access to a
market of millions of people if our
business is going to be viable.”
Nyblom says the dispute “could
become a political question” if the KKV
rules in favour of the open-access
operators. If the judgement goes against
them, the new entrants may find
themselves reassessing their prospects
in the Swedish market. 2019 will be a
make-or-break year for competition in
the cradle of railway liberalisation. IRJ
27
Rail Cargo Group performance
Europe | freight

bucks freight market trend

compelling story that is also understood
by non-experts. We will use simple
communication, modern-means of
communication, social media, events
and so on, to really transport this
message forward.”
The cross-sector desire to collaborate
reflects the condition of the overall
market. Först says that while RCG is
operating profitably, other major rail
freight operators and some logistics
companies are recording negative
results. “It looks like the logistics
industry did not profit from a prosperous
European economy,” he says.
Först says RCG is expected to report
revenues of around É2.3bn in 2018, an
Clemens Först, CEO, Rail Cargo
import-export transit services on
diagonal routes from Austria and
Hungary. He also reports growth in
north-south freight flows via the
Brenner Pass, and east-west flows from
Italy to Romania and the Balkans. There
is also substantial growth from Poland
to the Balkans and Turkey.
A key initiative to harvest this growth
is the introduction of shuttle-trains,
including new services between the
Rhine-Ruhr and Austria, and
improvements to existing shuttles
between Austria, Greece and Turkey.
In addition, RCG is dramatically
expanding its intermodal offer,
announcing plans in November to add

L
Group, talks to Kevin Smith
ONG-touted as the backbone of a
sustainable European freight
network, rail’s overall share of the
logistics market continues to stagnate at
around 16-17%, much to the frustration
of European politicians and rail freight
operators.
But in 2019 the sector is looking to
retake the initiative. Joining the groups
promoting sustainability and the
environment at COP24 in Katowice last
month was a new rail industry collective,
which officially launched a year of
promotional activities at the Polish city’s
railway station during the summit.
Rail Freight Forward (RFF) is aiming
to promote the sector’s cause by
improving communication with the
wider public and business community
about the benefits of rail freight.
Members include major incumbent
railways and smaller private operators
(see panel) and is backed by the
Community of European Railways and
Infrastructure Managers (CER),
International Union of Railways (UIC),
European Rail Freight Association
(Erfa), and the Association of German
Transport Companies (VDV). According
to Mr Clemens Först, CEO of ÖBB
freight subsidiary, Rail Cargo Group
(RCG), RFF is set to serve as a cross-
sector pressure group which can help to
speed up the development of rail
freight flows across the continent.
“We realise as a railway sector that
we have not been loud enough,” Först
says. “We didn’t manage to tell a
increase of 5-6% and well ahead of the new connections between the
market’s GDP growth of 1-2%. The Netherlands and Austria; Hungary and
company will also record “double- northern Italy; and Turkey and Poland.
digit” Ebit growth and “triple-digit” This will supplement the new twice-
Ebitda figures for the year. “We are very weekly Vienna - Picadena, Italy service,
proud to be the only big rail logistics which improves connections from
company which has been consistently markets in northern Italy to Austria,
operationally positive since 2012. Hungary, Czech Republic, Slovakia,
“We also expect to grow in 2019,” he Bulgaria and Romania; a bi-weekly
says. “At the moment, the volumes service between the port of Rotterdam
remain strong, the growth is there, so
we expect similar growth in 2019 as we
have seen in 2018.”
Först credits the improved profitability
to RCG’s ability to increase traffic on
international routes, helping to secure
business from other railway operators
by offering a better service and from
road carriers.
The operator has done this by pulling
“most of the levers available to us,” but
particularly by improving productivity.
Först adds that RCG has introduced
high single-digit and some double-digit
price increases in 2018 to sustain this
profitability level into the future.
The RCG network is centred on the
company’s domestic markets of Austria
and Hungary, and four geographical
points which form what Först describes
as a parallelogram: the ports of Zeebrugge,
Antwerp, Rotterdam, and Amsterdam,
and the Rhine-Ruhr area in the northwest;
Poland and antennas to Russia and China
in the northeast; the Balkans, Greece
and Turkey with links to Iran in the
southeast; and Slovenia and Italy in the
southwest with connections to the ports
of Koper, Rijeka, Trieste and Ravenna.
Först says the lines connecting these
corners are the real growth drivers for
RCG. The strongest freight flows are

28 IRJ The Railway in 2019

and the Bilk intermodal terminal in
Budapest; and a weekly service
between Lodz, Poland, and the Halkali
intermodal terminal in Istanbul. The
operator also reports major success with
its services to China, growing from just
Critical to this approach is a new
product marketing strategy. The
network is now called TransNET, with EVALUATION
conventional or intermodal rail freight
service connections labelled, TransFER.
“Everything will be branded and

L
50-60 trains in 2017, to exceed a target communicated in that consistent

RO
NT
of more than 400 trains in 2018. method,” Först says, adding that such a

CO
“ We don’t just sell you station-to-station, but we sell you
3A
XES

complete end-to-end transport, including first and last

MO
TIO
N

mile, including transhipment, innovative wagon materials,

and customer service. Clemens Först

“Our strategic position in the market
is as a rail freight logistics provider,”
Först says. “The time when we
considered ourselves as a carrier are
long gone. We envision ourselves as a
rail forwarding company and an
intermodal operator. We don’t just sell
you station-to-station, but we sell you
complete end-to-end transport,
including first and last mile, including
transhipment, innovative wagon
materials, and customer service, which
exceeds the customer service of a
normal railway carrier.”
strategy is all about the rail operator
doing its homework and adjusting to
market demand.
This is no more evident than in its
plan for the development of single
wagonload freight traffic. Accounting
for around 50% of all traffic volumes in
Motion
Europe, this form of rail freight
continues to suffer from inefficiencies,
particularly relating to first and last
mile operations.
Evolution
Först says RCG is addressing this Surveying your world accurately
through its shuttle train strategy, which brings great advantages.
connects shunting yards that are a
We’re constantly developing
new inertial sensing technology,
enabling cost-effective
real-world solutions.

PRECISION MEMS ENABLING

NORTH FINDING
FOG-GRADE PERFORMANCE
COST-EFFECTIVE
NAVIGATION CORE
QUALITY TECHNICAL SUPPORT
DURING INTEGRATION
IDEAL WHERE
SPACE IS AT A
PREMIUM

www.siliconsensing.com
#motionevolution

RCG has increased traffic at the expense of rail freight operators and road carriers. Photo: Marco Stellini

IRJ The Railway in 2019 29

 Europe | freight
Rail Freight Forward
coalition members
BLS Cargo
CD Cargo
CFL Multimodal
DB Cargo
GreenCargo
Lineas
LTE Group
Mercitalia
Ost-West Logistik
PKP Cargo
Rail Cargo Group
SBB Cargo
SNCF Logistics
ZSSK Cargo.
significant distance apart. “That way we
can make single wagonload more
attractive in terms of transit times and
cost,” he says. “Running a single
wagonload system the same way we
did 100 years ago is like not doing our
homework and assessing a 21st century
customers’ needs. Doing direct shuttle
trains, decreasing transit times between
Antwerp and Austria from 48 to 16
hours is part of doing our homework.”
A new in-house wagon innovation
could further revolutionise single
wagonload in the next two years and
beyond as fleets across Europe reach life
expiry. The TransANT wagon has been
developed by RCG in partnership with
Voestalpine and built by ZOS Trnava in
cooperation with TS Slovakia in
Slovakia. One of 10 prototype wagons
was shown at InnoTrans in Berlin in
September (IRJ November 2018 p27).
The prototypes feature a lightweight
steel frame, which can increase
payloads by up to four tonnes, while
the length of the wagon can vary to
between 10m and 21m. A customisable
structure is available for use on top of
the wagon structure, varying from four
structures for bulk products to
something akin to a lorry trailer.
Each of these prototypes is currently
in active service and Först says the plan
is to start production of a first batch in
2019 for a full rollout alongside the
prototype wagons in 2020.
“The key differentiator with other
modular concepts on the market right
now is that they are used only in block
trains,” Först says. “They cannot be
used in single wagonload because the
interface between the platform wagon
and the structure doesn’t support the
forces which a wagon experiences in
single wagonload. TransANT is
different.”
Further efficiency improvements are
on the way through the complete end-
30
to-end digitalisation of RCG’s processes.
RCG is partnering with established and
large companies as well as start-ups to
deliver innovation, which includes
introducing GPS sensors on RCG’s
entire wagon fleet and fitting sub fleets
with sensors to monitor conditions such
as temperature and humidity, door
opening and closing, and the weight of
the load. The operator is also working
on internal improvements by introducing
new technologies and enhancing
resource utilisation to make more
intelligent planning and dispatch
choices, and optimising wagon use.
While RCG and many other operators
doing their homework is all very well,
Först says this is not sufficient to change
the overall market situation in a
significant way. The entire sector is
hamstrung by several key factors which
will require collective effort at the
European level.
Specifically, interoperability is a
critical issue facing European rail
freight operators. While rail is more
“
Running a single wagonload system the same way we did
100 years ago is like not doing our homework and
assessing a 21st century customers’ needs. Clemens Först
cost-effective point-to-point than road,
the price of first and last mile transfers
continues to drive customers away. Rail
is increasingly hindered by
infrastructure bottlenecks and access to
suitable paths in light of the growth of
passenger traffic. On cross-border
routes, an operator requires a license to
operate in each country as well as
having to certify a locomotive for
operation and employing a driver who
speaks the local language and is trained
on the required track sections. For a
comparative road journey, you need a
driver with minimal training who is
free to use any road as he pleases.
Introducing a level playing field
between rail and road so shippers are
offered a fair price is another critical
issue. Here the true macroeconomic
costs of road - such as CO2 and NOx
emissions, safety and noise - are not
paid for by the shipper but by society,
giving road a seemingly unfair
economic advantage.
“If you add these microeconomic
costs, the cost reverses in a significant
number of cases,” Först says. “We need
to have a situation in which the shipper
still decides which mode he is using
dependent on the price he gets. But this
decision should result in a
macroeconomically optimum transport
mix for Europe. I don’t want to make
road more expensive - if you do, you
immediately lose shippers. I would like
to make rail cheaper to reflect the fact
that a lot of these external costs are
already internalised because we are
safer, greener etc.”
While the European corridor policy
has concentrated investment, Först says
power remains with national governments,
with limited leverage at the European
level to really change things.
“The key challenge is that rail freight
has not been and is still not top of the
agenda of political decision makers,”
Först says. “There are obviously a
couple of countries, including Austria
and Switzerland, where the topic of
sustainable transport policy is very
present, and you see this with modal
shares where Austria is at 30% and
Switzerland is even a bit above.
Unfortunately, these countries are in the
minority.”
Yet there are signs in some key
national markets that the tide is
turning. Först points to Germany’s
Master Plan for Rail Freight, which
includes infrastructure investment in
new and expanded routes and promises
to halve track access charges to promote
modal shift and innovation. The
German government is justifying the
policy as part of its efforts to cut road
traffic and reduce emissions. The
Netherlands has adopted similar
legislation while Italy is subsidising
some single wagonload freight.
By piggybacking onto these efforts,
Först is optimistic that RFF will help to
make the sector’s case in areas of
Europe that are not yet onboard. By
convincing decision makers that the
sector is worthy of investment, they
hope to finally make a real difference.
“Through RFF, we believe we can
finally move our cause beyond the
tipping point,” he says.
2019 then might yet be the year that
European rail freight finally turns the
corner. IRJ
IRJ The Railway in 2019
ProRail focuses on capacity and speed as
Dutch ridership surge continues
Pier Eringa, CEO of ProRail, talks
T
to Keith Barrow.
HE start of the 2019 timetable on
December 9 brought more new
stations and services onto the
Dutch network, providing a little more
capacity in a country where passenger
traffic has surged in recent years but
inevitably adding to the strain on an
already intensively-used infrastructure.
Over the next year the country’s 12
main line passenger operators and 28
freight operators will run a record 165
Prorail is using concrete blocks at level crossings to accelerate their closure, a move which has drawn criticism.
IRJ The Railway in 2019
Europe | Netherlands
million train-km, compared with 129
million train-km in 2004. The network
will play host to more than 2.2 million
passenger services and there will be 8%
more freight trains than last year.
Despite the growing pressure on the
network, infrastructure manager ProRail
has recently emerged from a period
where punctuality was consistently
below 90%, with the number of trains
arriving at their destination within
three minutes reaching 92.1% on the
core network (excluding HSL South) in
the first half of 2018.
However, sustaining performance at
this level will be extremely difficult
given the pressures on the system. With
ridership forecast to grow by a further
40% over the next decade, ProRail
warned last August that congestion
could severely impact train performance
by 2030 unless serious efforts are made
to tackle bottlenecks. “I think when you
are reaching 92-93% on your main lines
it’s very difficult to go higher,” ProRail
CEO, Mr Pier Eringa, told IRJ in an
exclusive interview in Brussels in
November. “Our infrastructure is
performing well but it’s getting older.
There’s a discussion now about the
balance between maintenance of
existing infrastructure assets and
replacement. Running more trains
inevitably means more maintenance.”
In a country with extremely
challenging ground conditions and the
highest population density in Europe,
ProRail is under pressure to achieve
capacity gains without resorting to major
civil engineering. “Of course, you can
build more tracks and there are places
in the Netherlands where it would be
easy to do this, but in areas like the
Randstad conurbation, where extra
capacity is needed most, it’s going to be
difficult,” Eringa explains. “Our
challenge therefore is to run more trains
on the existing tracks. Only 10% of
travel in the Netherlands is by train and
the network is already extremely busy.
We want to see more people switch
from cars to trains, but we have to
invest in infrastructure. Not only more
infrastructure but also using the
existing system better.”
Eringa sees the adoption of ERTMS as
a key enabler in the quest for more
capacity and a foundation for further
digitalisation of railway infrastructure.
In January 2016, the Dutch government
delayed the national rollout programme,
which would have equipped most of
the national network with ETCS Level 2
by 2028, to allow more time for planning.
31
 Europe | freight
The government is expected to
announce its final decision on the scope
of the programme in the spring.
ProRail has partnered with British
infrastructure manager Network Rail to
study the longer-term potential of
ERTMS through the Hybrid Level 3
project, which was launched in 2013
and led to a successful field
demonstrator in 2017. Hybrid Level 3
uses existing track circuits and axle
counter sections to create virtual blocks
- sub-sections which can shorten the
operating headway significantly
without substantial investment.
As this issue of IRJ went to press,
ProRail was due to start trials with
Automatic Train Operation (ATO) on
the Betuweroute dedicated freight line,
which is equipped with ERTMS Level 2
and has no level crossings. ATO trials
are also planned with passenger trains
on regional lines in the northern
province of Groningen. “ATO will help
us to get more capacity and increase
safety,” says Eringa. “The goal is to use
technology to support the driver, not to
take him out of the cab.”
Congestion
While it continues to test technologies
that could deliver capacity benefits in
the future, ProRail is having to find
other solutions to the congestion issues
it faces today. With increasing traffic
and more rolling stock on the network,
movements to and from stabling and
maintenance facilities have contributed
to the congestion around stations. As
land use pressures make the
construction of new stabling sidings
difficult in many urban areas, ProRail is
Prorail and NS are studying options to accelerate services between the Randstad conurbation and the north of the country. Photo: Quintus Vosman
32
adopting a carrot-and-stick approach to
ensure existing capacity around depots
and sidings is used as efficiently as
possible. A concept dubbed “parking as
a service” being developed by ProRail
would incentivise train operators to
take a more collaborative approach,
enabling the infrastructure manager to
optimise capacity usage and allocation.
ProRail’s 2020 Network Statement,
which was published in December,
includes new tariffs for shunting
operations around stations, with
operators charged by the minute for
these movements. This is intended to
push operators into improving train
planning around stabling moves.
Another innovation is the Timetable
Redesign (TTR) tool, which enables
ProRail to achieve a greater degree of
precision in the planning of train
movements. With TTR, it expects to
have more opportunities for ad hoc
operation of trains without affecting the
standard timetable structure. From 2020
ProRail will begin scheduling trains in
six-second increments in a bid to maintain
a high level of punctuality as traffic
growth continues.
Track layouts have come under the
spotlight in the quest for improved
reliability and ProRail has instigated a
programme of switch removals in a bid
to boost performance. “I’m not an
engineer but I say we need fewer
switches because they are a weak point
in our infrastructure,” Eringa says. “A
lot of people don’t like this because
they feel we are removing flexibility. We
say you don’t need the flexibility if you
make better plans that are simpler and
more robust. We removed a lot of switches
at Amsterdam Central last year and
we’ve seen improvements in reliability
and punctuality since we did that.”
Level crossings have again come
under intense scrutiny in the
Netherlands following a collision
between a train and an electric cart at
Oss near Nijmegen on September 20,
which led to the death of four children.
Just weeks before the tragedy the Dutch
Research Council for Safety (OVV)
warned that the high number of level
crossings remaining in the Netherlands
was not compatible with the intensity of
service on the core network and called
on the government to halve the number
of crossings within a decade.
In November state secretary to the
Dutch Ministry of Infrastructure, Mrs
Stientje van Velthoven, told parliament
that the programme to phase out all
remaining ungated level crossings on
the national network will be completed
within five years instead of 10. In recent
years ProRail has made progress in
reducing the number of ungated level
crossings but 135 remain in use. The
Ministry of Infrastructure has made
É60m available to accelerate the closure
plan and upgrade safety measures at
those crossings that cannot be closed.
In November, ProRail attracted
criticism when it began sealing off the
most dangerous ungated crossings with
concrete blocks without going through
the official closure procedure with the
landowner. “I am getting rid of level
crossings, that’s one of my duties,”
Eringa says. “Between Amsterdam and
Eindhoven we now have six inter-city
trains an hour in each direction as well
as local trains and freight. As the
network gets busier, the crossings may
be closed for longer than they are open
IRJ The Railway in 2019
and people don’t like to be kept waiting.
We still have a lot of crossings with no
active safety systems and we don’t like
that, it’s too risky.”
As the number of trains operating on
the network increases, so too does the
impact on infrastructure while access to
the track for maintenance becomes
more difficult, meaning more work is
carried out at night. ProRail typically
makes around 2500 maintenance
interventions on the network every
year, with more than 80% of this work
conducted during the hours of
darkness. Eringa says this is creating
challenges for its contractors, which are
struggling to recruit enough staff to
meet demand. “Who wants to work at
night, at the weekend and in the
holidays? Young people don’t like that,
it’s not attractive, and it makes things
more expensive for us. So should we do
all the maintenance at these times?
Could we work during the day as well?
Passengers don’t want fewer trains and
the operators don’t want less capacity,
so we need to think about clever
maintenance. There are a lot of lines
where we have 15 minutes between
trains. Is it possible to do some
maintenance in those times?
“When you look at a Formula 1 pit
stop it only takes seconds. Why can’t
we think that way? If you have a team
standing ready and a safety system in
place, the team moves onto the track
and they’ve done the job by the time
the train is due. If we do that a few
times a day we can get a lot of things
done that we would normally do at
night. People will say ‘how can you
possibly work safely that way? There
are already technologies out there that
would protect the workers, and we
should look at what has been done in
other safety-critical sectors - a lot of
things that work elsewhere would work
for us on the railway.”
High-frequency
In and around the Randstad
conurbation ProRail is working with NS
on the implementation of the PHS high-
frequency operation programme, which
will enable 10-minute-interval inter-city
services on key corridors. The concept
was introduced on the Amsterdam -
Utrecht - Eindhoven route in December
2017 and will be extended to the
Schiphol - Nijmegen corridor in
December 2021 and Breda - Eindhoven
in December 2024. However, in
November Eringa announced plans to
take PHS a step further to enable inter-
city services to run at 7.5-minute intervals.
IRJ The Railway in 2019
Eringa says digitalisation will enable
the network to reliably support such
high-intensity operation, but he believes
these measures in isolation will not be
enough to satisfy projected mobility
demand in the Randstad. “In the west
we are going to need a denser network,
whether that means heavy rail or light
rail,” he explains. “ProRail is in the
business of heavy rail, but maybe light
rail would allow us to achieve more in
some parts of the network - for example
if you converted a couple of tracks
between Schiphol and Amsterdam. This
“
Passengers don’t want fewer trains and the operators
don’t want less capacity, so we need to think about
clever maintenance. Pier Eringa
might be difficult for NS, but you could
increase the frequency there by running
lighter trains under a light rail safety
regime.”
Alongside the need for more capacity
within the Randstad Eringa argues that
the government needs to focus on
improving rail links between the
conurbation and outlying regions. Longer-
distance domestic services are currently
limited to a maximum of 140km/h by
the legacy Dutch ATB train protection
system and Eringa claims this means
journey times are unacceptably long.
In the coming months NS plans to
carry out test runs to establish the
viability of accelerating services
between Amsterdam and the northern
city of Groningen. This will be achieved
by skipping stops and running at
160km/h on the Hanze Line, which is
equipped with both ATB and ETCS
Level 2, offering a 15-minute saving on
the scheduled two-hour journey time.
Journey times between Groningen and
the Randstad have long been a source
of political debate, and with 200km/h
Inter-City New Generation (ICNG)
trains due to enter service from 2021
onwards, NS will have the rolling stock
capable of meeting these aspirations.
“People are moving into the Randstad
and it’s very crowded and housing is
very expensive,” Eringa says. “This is a
small country, so faster inter-city trains
between the north and west would
make it easier for people to live and
work in other parts of the Netherlands.
140km/h is fine for short distances, but
when you are looking at longer
distances such as Groningen - Amsterdam,
which is about 200km, it means a two-
hour trip. Dutch people will accept a
one-hour commute but not two.
“As the infrastructure manager we
have to prepare for the prospect of
running trains at 200km/h. We aren’t
doing this yet. It’s easy for NS to order
200km/h trains now, but when we
don’t invest in infrastructure for
operation at that speed, the infrastructure
becomes a bottleneck. At that point NS
is going to say, ‘OK, we’re ready for fast
trains but ProRail isn’t.’”
Looking further afield, both NS and
ProRail are pushing for improvements
to international passenger services,
particularly between the Netherlands
and Germany. Last September, Eringa,
NS CEO, Mr Roger van Boxtel, and
regional politicians travelled to
InnoTrans on a special Amsterdam -
Berlin service, which reached the
German capital in 5h 53min, 27 minutes
faster than normal scheduled trains.
“My ideal is that the train becomes
more important at a European level,”
Eringa says. “We need faster
connections between Amsterdam and
Berlin - six-and-a-half hours for about
500km is ridiculous. It’s about systems,
it’s about regulation, but it’s also about
governments and the choices they
make. If we want to make railways a
success in Europe we need a central
authority that says OK, we listen to
every member state, but we have to
work together and we have to be able to
compromise to develop an
interoperable international network.”
One item that is on the Dutch
government’s agenda is a proposal to
change ProRail’s status from a state-
owned company to a public body (ZBO).
Public consultation began in October
and the proposals would require approval
by an act of parliament. These changes
would pull ProRail closer into the orbit
of the Ministry of Infrastructure and by
extension the government, which argues
the measure would provide greater
transparency in how ProRail uses public
money. If the legislation is approved, the
new structure could be introduced by
2021. In the meantime, ProRail
continues to focus on the challenges of
running one of Europe’s most
intensively-used railway networks. IRJ
33
January Brexit_Layout 1 20/12/2018 14:39 Page 34
Uncertainty reigns as Brexit drags on
Europe | Britain
As Britain prepares for Brexit, David Burroughs asks what the departure will mean for the country’s rail
T
industry. The short answer? No one really knows.
WO-and-a-half years on from the
moment Britain announced it was
leaving the European Union (EU)
following a referendum on June 23
2016, the world is yet to see what it will
look like or how it will work.
That comes despite months of
negotiations between the British
government and the European
Commission (EC), a general election, a
change in prime minister and countless
proposals on everything from a hard
Brexit to no Brexit.
Instead, there is a strong sense of
uncertainty among politicians,
businesses and the general public about
what Brexit will look like as the
deadline of March 29, set by the current
As the clock ticks down on Britain’s exit from the EU, railway companies, like the rest of the country, still don’t know how they will be affected.
33a
British prime minister Mrs Theresa May
as the day Britain will officially leave
the EU, barrels ever closer.
In a volatile situation changing daily,
many companies based in Britain, as
well as those that do business within
and across its borders, are becoming
increasingly concerned about what it
will mean for them.
May has told parliament that Brexit
has come down to three options: the
withdrawal agreement she has
negotiated with the EU - along with a
É39bn divorce bill; a “no-deal Brexit”
which would see the country crash out
of the union on March 29 without any
sort of relationship negotiated with the
EU at all; or a reversal of Brexit
altogether, which the European Court of
Justice ruled on December 10 was still a
possibility if called for “democratically.”
But even those seemingly
straightforward options were thrown
into chaos on December 12 when May’s
Conservative Party announced a vote of
no confidence in her leadership, which
she survived 200 votes to 117 before
heading back to the EC and European
heads of state in an attempt to gain
reassurances regarding the so-called
Northern Ireland backstop.
While agreed on by the European
Council and May’s cabinet, the
withdrawal agreement, which would
see Britain remain in the customs union
while an agreement is reached on the
Photo: Lucian Bodnar
IRJ The Railway in 2019
January Brexit_Layout 1 20/12/2018 14:39 Page 35

Irish border, has faced strong
opposition from parliament. On
December 10, May announced she was
postponing the “meaningful vote” due
on December 11 as it was likely to be
heavily defeated.
The strong division over the
agreement and Brexit in general has
resulted in calls for May to resign as
well as calls for a second referendum or
a general election to secure a mandate
from the general public.
Watching the negotiations from the
sidelines with little say in the matter,
but still due to be heavily affected by
the outcome, is the business
little less likely to invest, there’s just a
little more uncertainty about what they
should be doing to prepare for
whatever the result is.
“We’re sitting and watching, while in
the back of our minds the priority is to
ensure that the passenger and freight
chains can keep running smoothly to
deliver passengers and goods to their
destinations after Brexit.”
That doesn’t mean the industry has
been resting on its laurels. Instead, it
has been looking for ways to advise and
influence the outcome in any small way
it can.
That includes the RDG’s suggestion
British Pound tumbled to its weakest
level in 20 months on December 10.
“It’s difficult for us to comment while
there are so many tectonic plates
moving at the moment,” says Nisbet.
“All I would really stick to is a general
concern that as this process continues,
the uncertainty remains and the
potential for economic shocks to the
industry could increase.
“Every delay makes the possibility of
a no-deal Brexit a bigger threat and
obviously to a big industry like the rail
industry, we are worried for the
potential for a no deal because of the
uncertainty that will carry with it.”
That concern was echoed by the Rail

“
Industry Association (RIA), the body
representing Britain’s railway industry

The concerns for the rail industry are the concerns for
suppliers.
“No business likes uncertainty,” says

any industry watching the Brexit process grind its way

senior policy manager, Mr Damian
Testa, who has led RIA’s work on

through the political landscape, and that’s really

Brexit. “If you know what it is you can
plan for it, even if it’s suboptimal. If

uncertainty. Robert Nisbet

community, including the rail industry,
which is yet to see a clear way forward.
This situation inevitably affects long-
term planning and investor confidence.
“The concerns for the rail industry are
the concerns for any industry watching
the Brexit process grind its way through
the political landscape and that’s really
uncertainty, that’s what concerns us the
most,” says Rail Delivery Group (RDG)
regional director, Mr Robert Nisbet.
of creating new Railway Customs Areas
(RCAs) at rail freight terminals as far
inland as the Midlands to avoid the
need for a single border checkpoint,
removing the prospect of congestion on
the rail network in Kent.
Both the EU and Britain have stated
they are working to avoid a hard Brexit,
but as negotiations continue to stall,
businesses are preparing for the worst.
Following concerns that the country
you don’t know what it is, you don’t
want to spend your time planning for
something that doesn’t come to pass.
“There’s certainly a segment of our
members that is saying we don’t have
enough details. There are some common
sense things that you can do but there
are some things that are up in the air.
“The sensible view of a business
would be that you’re going to invest
when you know what it is you’re
investing in and what your return is
going to be, so you can see that
[uncertainty] is going to dampen
investment because you don’t want to
make the wrong investment.
“Particularly for some of our

W
“When there’s uncertainty they’re just a could exit the EU without a deal, the members that are multi-nationals,

Reviews to look at rail’s future in Britain

HILE the debate on Brexit is set to affect the rail industry has set out six outcomes it wants to see from the
industry’s external future relationship with Europe review:
and the rest of the world, two reviews are due to = customers at the heart: a reformed railway which unlocks

be completed this year which may have a significant a new generation of innovation and investment and, where
internal impact. it makes sense, offers choice for customers
In response to the disruption caused by the introduction = clear accountability: building a structure that creates

of the May 2018 timetable (p34), the British government has confidence in the railways’ leadership, making it clear
launched a comprehensive review of the structure of where the buck stops when things go wrong
Britain’s railways. Headed by British Airways chief = delivering value-for-money: avoiding a return to the days

executive, Mr Keith Williams, the government will publish a when running costs were deep in the red, lines were closed
white paper on the review’s recommendations with the aim and stations were boarded up
of implementing reforms from 2020 onwards. = driving economic growth: incentivising investment for

Billed by the Department for Transport (DfT) as the most the long-term, expanding the network and growing and re-
significant structural assessment of Britain’s railways since balancing Britain’s economy
privatisation in the mid-1990s, the Williams Review will = strengthening communities: ensuring towns and cities

“analyse all aspects of the industry, alongside the country’s across the country get the maximum benefit from a railway,
changing travel and work patterns,” while considering how and
track and train can be integrated more closely. = inspiring our people: ensuring those who work on the

RDG regional director, Mr Robert Nisbet, says the railway feel more involved and invested in the industry.

IRJ The Railway in 2019 33b

January Brexit_Layout 1 20/12/2018 14:39 Page 36

Europe | Britain

A ‘no deal’ Brexit is likely to severely impact trade between Britain and continental Europe

T
Fares review
they’ll have some headquarters in March 29 and lasting until December 31
mainland Europe. Some of the 2020. During this time, Britain will have
anecdotal stuff is that they are needing no formal say in making or amending
HE Rail Delivery Group (RDG)
to provide more confidence around EU rules and regulations, but will have
is also working with the
what the return on investment will be, to follow them to the letter. The
government to launch a review
purely because of the uncertainty advantage of transition is that it buys
into the country’s fare system,
around Brexit. It’s still OK to invest but more time for businesses and
which it says is outdated and
it’s another level of assurance that governments to prepare for a new
confusing for passengers.
they’re looking for because again, the regime, and smooths the path out of the
The RDG has called for “root and
degree of detail is not there.” EU as opposed to crashing out of it
branch reform” after research by
overnight.
Framework
KPMG found that only 34% of rail
In October, the Rail Safety and
customers were very confident they
Standards Board (RSSB) published a
had bought the best value ticket for
Even if Britain is able to pass the statement confirming that Britain will
their last journey and 29% were very
withdrawal agreement through continue to abide by EU rail standards
satisfied with the experience of
parliament, which as IRJ went to press and protocols after it leaves the EU,
buying their ticket.
was looking increasingly unlikely in its even in the event of a hard Brexit. This
“If you talk to passengers, you
current form, the British government was followed by two guidance papers
talk to industry and you talk to
will still need to negotiate a framework published by the Department for
government, everybody agrees that
for the future UK-EU relationship to Transport (DfT) outlining how rail
the fares system is overly
decide what trade between the two transport and rail safety standards
complicated, and almost preserves a
parties will look like. This will require would work in Britain following a hard
moment in time back in the 1990s
unanimous approval from the EC, Brexit.
when the railways were privatised,”
European Parliament, all 27 EU member “Regardless of whether the
Nisbet says.
states and the British parliament. government strikes a deal with the EU
Nisbet says the RDG is currently
That framework would be negotiated or not, the legal requirements designed
developing its proposals which it
during a transition period, referred to to promote common safety and
plans to present to government early
by the British government as an technical principles across all EU
this year.
“implementation period,” beginning on railways will still need to be met by
33c IRJ The Railway in 2019
January Brexit_Layout 1 20/12/2018 14:39 Page 37
British rail companies and suppliers,”
the RSSB states.
This means European Technical
Specifications for Interoperability (TSIs)
will continue to apply during the
transition period if Britain reaches a
deal with the EU. If no deal is reached,
TSIs will be adapted as domestic
legislation and published as National
Technical Specification Notices by the
secretary of state for transport.
European standards are only affected
by EU membership if they are referred
“
Regardless of whether the government strikes a deal
with the EU or not, the legal requirements designed to
promote common safety and technical principles across
all EU railways will still need to be met by British rail
companies and suppliers.
to in EU directives. According to RSSB,
this affects less than 20% of applicable
standards. The application of European
standards from CEN, Cenelec and ETSI,
as well as international standards such
as ISO, IEC and ITU, is unaffected by
Britain’s departure from the EU.
In the lead up to Brexit, RIA
published a Brexit position paper which
outlined its “key asks” from Brexit,
regardless of the type of withdrawal.
This included a commitment to the
clear and consistent application of
railway standards, a point largely
assured by the RSSB’s statement.
However, the DfT would retain the
flexibility to diverge from the TSIs in
specific circumstances - a move that
could be both beneficial and
detrimental to the industry.
“Looking at this dispassionately, you
wouldn’t expect any divergence to
happen on day one of Brexit, the issue
is going to be in the future when the EU
Agency for Railways either develops
new TSIs or it amends existing TSIs that
don’t reflect the GB network,” Testa
says. “That’s when you’re more likely
to see UK divergence and then it’s the
question of what does that mean
commercially and I guess it depends
what the divergence is but there is a
risk that you could end up creating a
two tier market.”
“If you’re outside of the UK you
almost need to have a product line for
the UK and a product line for the EU,
and the UK is obviously not as large a
IRJ The Railway in 2019
market as the EU, so does that dampen
the attractiveness of doing business in
the UK?
“The DfT will be the final pen-holder
on any decision to diverge but they are
very keen to have industry engagement
before they make their decision.”
Companies based in Britain will also
lose their right to act as a notified body,
which allows them to certify products
for use across the EU.
“You may well have got your product
approval from a UK notified body,
which will be valid on the March 29,
but - in a no deal scenario - from March
30, it won’t be recognised in the 27
member states. So you would then have
to get it recertified in a member state. If
you’ve never had to do that before
that’s a challenge, but also it’s an
additional cost to your business.”
Citizens’ rights
Immigration was a contentious issue
both before and after the referendum,
and continues to play a major part in
the negotiations, including what rights
European and British citizens will have
to live and work across borders.
Britain’s rail industry could be
heavily affected as around 20% of its
workforce comes from the EU. If a line
was drawn across the centre of
England, almost half of the rail supply
networks’ workforce south of that line
comes from the EU 27.
“Most of those jobs are the lower skill
level and skill level 2 and 3, so no one is
suggesting those workers are going to
disappear overnight, but what you can
see is as projects and programmes come
to an end, you may well see some
homeward migration and then there
may well be a challenge around
recruitment and retention,” Testa says.
The British government and the EC
have sought to give some assurances,
including that:
= British citizens in the EU, and EU
citizens in Britain, will retain their
residency and social security rights after
Brexit
= citizens who take up residency in
another EU country during the
transition period (including Britain) will
be allowed to stay in that country after
the transition, and
= anyone that stays in the same EU
country for five years will be allowed to
apply for permanent residence.
But whether those assurances will remain
in the event of a hard Brexit adds another
layer of complexity to the question.
While things may seem all doom-
and-gloom, Testa says RIA and the
industry are trying to remain positive
while looking to take advantage of
other opportunities that may arise.
“When we talk to the government,
what we say is there are challenges and
opportunities,” Testa says. “We’re very
keen to be positive so for us the
opportunities are increasing exports but
also it’s about including rail as part of
any future free trade agreements.”
The EU currently has around 50 free
trade agreements in place, which Britain
will cease to be a part of come March
30. Instead, it will have to begin
negotiations on new agreements -
which are typically years in the making
- while trading under World Trade
Organisation (WTO) rules.
RIA has also called clarity on the
future trading and operating
arrangements following Brexit. While
the British government has proposed a
common rule book for trading goods, it
is unclear how the trade of services will
be managed, a concern that adds layers
of complexity for rail companies, which
often operate contracts that combine
both goods and services.
Again, many of the requests from the
industry are not due to be decided until
the debate on the future relationship
framework, whenever that will be. Until
that happens, RIA is advising its
members to prepare for any eventuality.
“Whilst we don’t have the level of
detail that would be most helpful, there
are still some common sense things that
can be done to prepare whatever the
outcome,” Testa says.
That includes researching the WTO
tariff rules and regimes and how they
may be applied, to be prepared if they
do come into effect following a no-deal
Brexit.
As the debate rages on in the first few
weeks of 2019 with no end in sight, the
only thing that is certain is that the Brexit
conundrum will have an impact on
Britain and the EU for years to come.
What that impact will be, is yet to be
seen. IRJ
33d
Network Rail seeks improved efficiency in CP6
Europe | Britain
Network Rail (NR) is in the process of finalising Control Period 6, which outlines the infrastructure manager’s
spending allocation - some £35bn - for five years from April 1. Charles Robarts, NR’s director, planning and
regulation, explains the thinking behind the plan to David Burroughs.
T
HE past year has been difficult for
the nearly five million passengers
and businesses which rely on Britain’s
railway. Major disruptions caused by
the introduction of a new timetable in
May, coupled with the failure of Network
Rail (NR) to complete several major
projects on time and to budget, caused
frustration and anger among rail users.
However, with NR set to finalise its
plans for the next five-year funding
period, Control Period 6 (CP6), by the
end of March, the infrastructure manager
considers this as an opportunity to turn
the situation around and create a
marked improvement for freight
customers and passengers.
“We know that it’s been really tough
for passengers recently and we have an
opportunity to bring about real change,
focusing on putting passengers and
freight users at the front and centre of
what we do,” says Mr Charles Robarts,
NR director, planning and regulation.
34
“There are challenges ahead, but we
will make this funding work hard over
the next five years to deliver a better
and more reliable railway for the 4.7
million people and businesses that use
it every day.”
Each periodic review outlines the
outputs and funding available to NR for
a five-year period from the British
government and the devolved Welsh
and Scottish administrations, and how
specifically the money will be spent.
Two separate documents reflect the
different funding and legislative
requirements in Scotland.
The two-year process of developing
the CP6 began with the launch of the
Office of Rail and Road’s (ORR)
periodic review (PR18) in May 2016.
The strategy passed its final hurdle with
the release of ORR’s final determination
on October 31 last year, and NR is due
to release the final plan by March 31.
The review is the first to take place
Photo: Shutterstock/Joe Dunckley
since NR was reclassified as a public
sector body, meaning its funding is now
effectively fixed. In addition to NR’s
eight routes, an additional route,
Freight and National Passenger
Operators (FNPO), will be established
in CP6 to look after nationally-focused
operators whose interests extend across
NR’s geographical routes boundaries.
“While there are areas that still need
to be improved, the quality of these
plans is better than in the 2013 periodic
review (PR13), with a real sense that
each route management team feels fully
accountable for its plan,” the ORR says.
NR says the emphasis has changed
from CP5 in that individual routes have
a greater degree of freedom to decide
how funding is spent. Each route has
been allocated funding, ranging from
£1.9bn for Wales up to £8.7bn for
London North Western (LNW) (see
panel) and the hope is that this will
speed up decision making while also
IRJ The Railway in 2019
focusing management attention on local
issues. The System Operator (SO), a
specific business unit set up within the
company in 2017, will oversee the
effective planning and coordination of
the rail network.
“These plans have been informed by
ongoing customer engagement which
will continue through CP6, with routes
developing their understanding of
customer priorities,” Robarts says.
“Each route has developed its own plan
based on knowledge of its network and
its customers. Routes have developed
efficiency plans using a consistent
framework to allow comparison
between routes. The key effect of route
ownership will be increased confidence
that our CP6 plan has the right balance
between being challenging and
achievable.”
Robarts says the SO’s focus for CP6
includes:
= a more iterative and ‘modular’ form
of strategic planning, analysing the
future needs of the network and
working with the industry to advise
funders on the options for how the
network should develop over the
longer-term, which should be better-
aligned with key franchising and rolling
stock decisions and informed by more
effective stakeholder engagement
= improved provision of advice to a
wider number of funders relating to
future projects and franchising decisions
= a more accurate and resilient
timetable, and
= more automated timetable processes
and a move towards ‘per second’
timetabling rather than the current
practice of planning the timetable in 30-
second increments. This will be
delivered through increased investment
in NR’s technological capabilities.
“We recognise the need to take
account of the lessons learnt from the
ongoing investigation into the May 2018
timetable change in the development of
our CP6 SO plan, and anticipate that
the steps set out in the SO strategic
CP6 expenditure in England and Wales in £m
Geographical Operations Renewals
routes support &
Anglia 1185 1588
LNEEM 2624 3322
LNW 3411 3203
Southeast 2018 2346
Wales 678 957
Wessex 1030 1455
Western 1289 1627
Scotland 1249 2061
IRJ The Railway in 2019
plan, and actions undertaken since, are
likely to complement the lessons
learnt,” Robarts says. “The SO is in the
process of updating its CP6 plans
consistent with ORR’s Final Determination,
which will be set out in the overall CP6
plan to be published by March 31.”
A major criticism of NR in the past
has been its lack of efficiency, with the
ORR noting in its final determination
for England and Wales that NR has
performed poorly when carrying out
renewals.
A 2017 ORR report attributed this to
inadequate preparation at the start of
“
Significant improvements in our business planning at a
route level will drive more efficient delivery in CP6.
Charles Robarts
CP5, and noted that NR’s efficiency
improvement plans included in PR13
were not well-founded. The report
states NR’s response to the problem
was too slow and there was increased
pressure on access to the railway to
carry out work.
NR appears to have addressed this
situation in its CP6 planning. The ORR
found that NR is committed to
delivering efficiencies of £2.6bn over the
five-year period corresponding to a 10%
efficiency improvement.
“Our response to ORR’s draft
determination included an increase of
around £500m of cost savings,
compared with our February 2018 CP6
Strategic Business Plan,” Robarts says.
“By the end of CP6 these savings will
represent a reduction in our operating,
maintenance and renewals costs of
around 12%, or nearly 10% once
headwinds have been accounted for.
Significant improvements in our
business planning at a route level will
Other (power supply Total
industry costs, rates
maintenance and risk)
1054 3826
1985 7931
2109 8724
1689 6052
349 1984
964 3449
933 3846
362 3672
drive more efficient delivery in CP6.
Efficiency savings will also be achieved
through smarter working, more efficient
use of the railway and better technology.”
ORR noted that NR could still further
improve efficiency, but said on balance
it had decided to accept the routes’
proposals for CP6. ORR says the
expected improvements will also allow
a heightened rate of renewals,
supporting asset sustainability.
At the same time, the regulator raised
concerns about the profile of
expenditure, which it says continues to
show a significant ramp up of work in
the middle of CP6, with a reduction
over the longer-term.
“If risks are managed effectively, the
release of the risk funds will allow
increased spend in the later years of the
control period, which would act to
smooth the spending profile,” ORR says
in its final determination. “This is, of
course, not guaranteed. Reflecting this,
we expect NR to improve engagement
with the supply chain, and the
information available on the likely
volume and nature of work in each
year. This will be particularly important
given the potential impacts from Brexit.”
CP6 includes a focus on staffing
levels, and NR has set an ambitious
target of increasing the number of
women in the workforce by 50%.
“We plan to achieve these targets by
tackling unconscious bias in the
recruitment process, introducing
diverse recruitment panels, and
encouraging young women and girls to
study Stem (science, technology,
engineering and mathematics)
subjects,” comments NR director of
diversity and inclusion, Ms Loraine
Martins. “Our extensive early
engagement programme is led by
women as role models who can address
any misconceptions girls may have
about rail.”
The Scotland route is divested with
separate funding and a requirement to
meet the Scottish government’s High-
Level Output Specification (HLOS), and
ORR has therefore published a separate
final determination specifically for the
route. Included in the HLOS is a
35
 Europe | Britain
requirement to meet 92.5% of the Public
Performance Measure (PPM) over CP6,
which NR says it does not expect to
achieve until the third year of CP6,
based on current performance.
“ORR has noted that if the Scotland
route fails to deliver this target, it will
take into account the route’s
implementation of the recommendations
from the Donovan Review,” Robarts
says. “This will inform its consideration
of whether the Scotland route has done
everything reasonably practicable to
achieve the 92.5% PPM, along with the
other steps it has said it will take to
improve performance.”
Donovan Review
A review carried out in April 2018 by
Mr Nick Donovan, previously Northern
Powerhouse Rail director for Transport
for the North, studied ScotRail’s
processes and made 20 recommendations
to improve performance on the Scottish
network.
The HLOS has also charged NR with
making rail freight more attractive to
businesses across Scotland and
facilitating 7.5% growth by the end of
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36
CP6, for which Robarts says NR is
developing a plan.
“This will demonstrate how NR and
the freight industry will take all
reasonable steps to facilitate growth of
7.5% in rail freight traffic carried on the
Scotland route by the end of CP6,”
Robarts says. “This plan is being
developed by the FNPO route as part of
NR’s overall CP6 plan update and will
be finalised by March 31.”
The final determination includes a
turnaround from the draft CP6 in the
amount NR will spend on research and
development (R&D), which the ORR
says was originally poorly justified.
“In response to our challenge, NR has
revised its plans, provided significant
supporting evidence and updated its
proposed governance arrangements,”
ORR says. “In light of this new
evidence, we support a Britain-wide
fund of £245m, of which £26m will be
funded from the Scotland route
settlement, for R&D in CP6.”
The expenditure is still subject to the
finalisation of suitable governance
arrangements that also need to be
agreed with ORR. The regulator says it
will be looking at how that governance
supports third-party funding and
accommodates the interests of
passengers, freight customers, funders
and train operators.
“We have focussed on R&D activity
that drives improvement of infrastructure
management with a heavy emphasis -
55% - on asset sustainability, which we
estimate will drive at least £2.2bn of
benefits in reduced renewals over the
next 20 years across the whole network,”
Robarts says.
Along with the final CP6 report, in
which NR will show how it will
incorporate the changes required by the
ORR in its final determination, the
infrastructure manager is also due to
publish the final CP6 price lists by
March 31. This will include updating
billing systems and contracts to reflect
ORR’s decisions on CP6.
With Britain apparently set on a path
to leaving the European Union on
March 29 with or without a deal, the
landscape is set to change dramatically
in 2019. Coupled with the timetabling
review and the Williams review, NR is
in for an interesting time over the next
five years. As the ORR says, CP6 is
about a return to basics, and getting
IRJ The Railway in 2019
European funds drive Balkan railway renaissance
R
Branislav Pekic, correspondent
ENEWED interest in the overhaul
of obsolete infrastructure and
rolling stock in the western Balkans
is being met with significant investment
in countries across the region. This process
is set to continue in 2019 and the
coming years.
The trend has partly been fuelled by
the European Union (EU), which, in
many cases, has provided finance to
refurbish existing lines or construct new
infrastructure on strategic pan-
European transport corridors.
Investment in rail infrastructure to
improve the efficiency of transport and
logistics is considered a catalyst for
economic growth and a means to boost
exports. Increased passenger traffic is
only a secondary motive, in a region
where bus transport dominates.
Serbia probably has the most
ambitious and concrete plans. After
reconstructing 280km of regional lines
in 2018, the country is planning to
overhaul an additional 318km this year
to complete work on the regional
network. This will increase line speeds
to 60-100km/h.
Work is planned on the following routes:
= Niš - Zajecar (108km)
= Lapovo - Kraljevo (84km)
= Subotica - Senta (38.5km)
= Markovac - Resavica (53km)
= Kumane - Banatsko Miloševo (28.5km
section of the Zrenjanin - Kikinda line),
and
= Kikinda - MSK Kikinda line (6km).
Work will also continue on a high-speed
line between Belgrade and Novi Sad, part
of the wider Belgrade - Budapest line,
financed by both Russia and China.
Other key projects include the
reconstruction of the Niš - Dimitovgrad
railway, which is funded by a European
Investment Bank (EIB) loan; Niš -
Brestovac, which is funded by the EU’s
Instrument for Pre-Accession Assistance;
and Jajinci - Mala Krsna, which is
supported by the European Bank for
Reconstruction and Development (EBRD).
In addition, two more rail freight
operators will enter the market in 2019,
taking the total to five - Serbia Cargo,
Kombinovani Transport, Despotia,
Eurorail Logistics and Neo Cargo
Logistic (NCL).
Albania is planning its most serious
investment in the railway sector for 20
years. Priority projects include the
rehabilitation of the 151km Tirana -
IRJ The Railway in 2019
Europe | The Balkans
Open-access freight operators are beginning to appear in Serbia. Photo: David Gubler
Durres - Elbasan - Pogradec line and
the construction of a new 2.8km line
from Lini to the Macedonian border.
The line is part of the Pan-European
Corridor VIII and viewed as a key
development for multimodal transport.
Once work is completed in mid-2021,
the railway will connect Tirana, Skopje
and Sofia and the port of Durrës on the
Adriatic Sea with the Black Sea ports of
Burgas and Varna. There are also plans
to link Pogradec to the Greek rail network.
The priority project in Slovenia is the
construction of second track on the
27km Divaca - Koper line, a É1bn
scheme which includes eight tunnels,
two bridges and viaducts, all of which
will be completed by 2025.
Koper is the largest freight hub in the
northern Adriatic, but the existing rail
connection is operating at capacity.
However, work to double-track the line
will be demanding and expensive as it
passes through hilly terrain. According
to local reports, neighbour Hungary has
already pulled out of the project and it
remains to be seen whether the EIB will
go ahead with a É250m financing deal.
Work is also underway on projects to
upgrade the rest of the network, which
are worth É700m. The goal is to reduce
train delays and increase annual
passenger numbers from 14 million to
22 million over the next seven years.
One of the key projects is the Maribor -
Šentilj line, which is planned to be
completed by the end of 2022. Slovenia
is also planning to completely renew its
passenger fleet by 2023.
For Macedonia, 2019 will also be a
year of capital investment in transport
infrastructure, including rail.
Investments should reach É537.8m
with most of the funds going towards
the construction of the line to Bulgaria
and the modernisation of Pan-European
Corridor X. Work is also planned on the
second section of the Beljakovce - Kriva
Palanka line and on the Kumanovo -
Beljakovce line, while a pre-feasibility
study will be launched for the Skopje -
Kicevo section.
In Croatia, liberalisation of passenger
services will continue. State-owned
operator HZ Passenger should expect
competition in the market, which could
lead to the introduction of new services.
There are also plans to open railway
infrastructure maintenance contracts to
bids from private companies.
Numerous network modernisation
projects are underway, with priority
given to the Pannonian and
Mediterranean corridors, for which
É2bn of EU funds has been secured.
These include the Rijeka - Zagreb line,
which should be completed by 2030 at
an estimated cost of É1.6bn. This will
cut rail journeys to Vienna to 2 hours
and Belgrade to 3.5 hours.
ŽPCG in Montenegro has reached an
agreement with rolling stock financing
entity, Eurofima, for a É10m loan at a
favourable credit rate to support the
overhaul of rolling stock, which will
help to improve both local and
international passenger services. The
funds will also support investment in
15 new or used passenger coaches while
an additional É13m will be invested in
three new EMUs.
Kosovo is preparing tenders for the
rehabilitation of two lines, work which
will be funded by its own sources and
the EBRD. These include the line from
Pristina to Hani i Elezit on the border
with Macedonia and the Pristina -
Leshak (Serbia border) line. The plan is
to modernise the network by 2022, and
increase line speeds to 80-120 km/h. IRJ
37
Moscow metro benefits from modernisation
Europe | Moscow
Roman Latypov, Moscow Metro
first deputy CEO of strategic
development and client work,
K
talks to David Burroughs.
NOWN for its grand stations and
impressive architecture, Moscow
Metro is a busy operation
transporting 8.5 million passengers
daily. Accounting for 65% of all public
transport journeys in a city of 12 million
residents, more than half of the Russian
capital’s population uses the sprawling
- and growing - network.
The 448km system, already one of the
largest in the world with more than
12,000 trains in operation every day and
a peak headway of 90 seconds on
several lines, is continuing to grow with
services extending to new transport
interchanges on the outskirts of the city
to relieve pressure on central stations.
Of the network’s 260 stations, more
than 70 were opened in the last seven
years including two new depots and 15
stations on the Big Circle Line (Line 11 -
BCL), Lublinsko - Dmitrovskaya Line 10
and Kalininsko-Solntsevskaya Line 8 in
2018.
“By 2020, 95% of all Moscovites will
have stations within walking distance
from their homes and offices, and for
these reasons we expect the annual
ridership to continue to grow,” says Mr
Roman Latypov, Moscow Metro first
deputy CEO of strategic development
and client work.
“For example, in 2016 we launched
operation on the Moscow Central Circle
(Line 14 - MCC). By the end of 2018 the
MCC is transporting more than 470,000
passengers every day while in 2017,
daily ridership was more than 420,000.”
38
The MCC is operated by Russian
Railways (RZD) under a contact from
Moscow Metro, with a unified fare
system with the rest of the network.
Latypov says the 31-station BCL is
currently Moscow Metro’s biggest
project, and at 70km long, will be the
longest orbital metro line in the world.
“The new circle will be used by about
one million passengers daily,” Latypov
says. “The first section of this line from
Petrovskiy Park to Delovoy Tsentr
opened in February 2018, and already
transports about 80,000 passengers
daily, which is 1.5 times more than the
ridership during the first days after the
opening. The full circle will be put into
operation in 2023.”
The Solntsevskaya Line is also due to
be extended to Vnukovo airport by
2023, making it the first airport in
Russia with a direct metro connection.
“Connecting new stations to the
existing network is organised during
special technical shifts,” Latypov says.
“For example, we closed only one metro
station for the weekend to integrate
Belomorskaya station into the
Zamoskvoretskaya Line. Contractors
work to a very tight schedule but we
can’t leave our passengers without
regular transport services.
“Complicated works are currently
underway to integrate the Kozhukhovskaya
(Nekrasovskaya) Line into the network.
Here we are talking about the construction
of an entire line and its connection to
two sections to the network. The line is
being built under the existing metro tracks.
We will need more time and several
technical shifts to cope with this task.”
While it continues to build new lines,
Moscow Metro is also undertaking
track renewals to improve the reliability
of its network and replaced around
140km of rails and 17,000 sleepers in
2018.
Continuous welded rail has been
used to reduce noise at stations, with a
goal of installing it on more than 590
track-km by 2021.
Latypov says more than 40% of the
fleet has been replaced with more than
1900 new cars since 2010, while the
acquisition of another 1600 cars, due to
be delivered by 2020, will push that
figure to 60%.
Central to this renewal has been the
introduction of the Moskva train, which
was largely designed and built in
Russia by Metrowagonmash and began
operation in 2017 on the Tagansko-
Krasnopresnenskaya Line, the
network’s busiest line. It has since gone
into service on the Kaluzhsko-
Rizhskaya Line, another busy route.
The type 81-765/766/767 vehicles,
which offer 15% more capacity than
their predecessors, have USB charging
points, interactive touch-screen route
maps, full-width gangways and an
upgraded HVAC system, while the
driving cars have special areas for
wheelchairs.
The bilingual passenger information
system helps passengers locate stations,
build routes and calculate trip times in
both Russian and English. The LED
interior lighting in the car adjusts
automatically, from bright and cold in
the morning to help passengers wake
up, to warm and yellow in the evening
to help passengers relax.
There are now 102 Moskva trains in
service, and the fleet modernisation
programme will continue in 2019. Under
existing contracts, Metrowagonmash
will provide Moscow Metro with 552
Moskva cars for use on the Tagansko-
Krasnopresnenskaya and Kaluzhsko-
Rizhskaya lines as well as sections of
the network currently under construction.
A version of the Moskva adapted for
surface operation is also in use on the
Filyovskaya Line, which - unusually for
the network - has large sections above
ground.
Revenue growth
Steady growth in passenger numbers
has resulted in an increase in fare
revenue, which grew from Roubles
33.7bn ($US 505.9m) in 2010 to Roubles
57.4bn in 2017. Moscow Metro is also
developing commercial services to
generate non-fare revenue. These
include promoting the network as a
space to shoot advertisements and
movies as well as leasing areas for
shopping malls, which together
generated Roubles 3.5bn in 2017, up
from Roubles 1.9bn in 2010.
Subsidies allocated from the city budget
have increased from Roubles 20.7bn in
2010 to Roubles 47.2bn in 2017, which
includes Roubles 3.1bn towards studies
required to develop the MCC.
The biggest challenge - and achievement
- of 2018 was ensuring the network was
able to cope while Russia hosted the
Fifa World Cup, which saw an
additional 300,000 passengers using the
metro daily.
IRJ The Railway in 2019
 “During the days of the tournament
our system became the main mode of
transport for both citizens and football
guests,” Latypov says. “We didn’t have
any serious incidents or delays during
this period. A lot of time, effort and
money was invested in the
modernisation of the whole transport
system, including the creation of
unified city navigation tools, the
“
By 2020, 95% of all Moscovites will have stations within
walking distance from their homes and offices, and for
these reasons we expect the annual ridership to continue
to grow. Roman Latypov
construction of new stations, constant
maintenance of infrastructure, and the
modernisation of rolling stock.”
Special turnstiles were also installed
at 28 stations which enabled fans to use
their RFID-equipped ID tags as tickets.
The passenger information systems
on trains installed across the network,
which showed the football games live
during the tournament, have also been
updated to show informative content
produced by the Moskva 24 TV channel
as well as information about each
station, interchanges to other modes of
transport, and schedule changes. The
real-time information on the displays is
synchronised with the official Moscow
Metro mobile app, which has been
updated to allow users to build routes
Moscow Metro has introduced 102 Moskva
metro trains so far with 552 cars set to follow.
IRJ The Railway in 2019
and calculate trip times as well as top
up travel cards and find sightseeing
attractions. The app has now been
downloaded more than 1.5 million times.
“We have equipped all stations with a
contactless payment system,” Latypov
says. “Moscow is home to 12 million
inhabitants and is a destination for 21
million tourists annually. We understand
that some of the Moscovites who use
the system from time to time and the
tourists don’t have the time and desire
to study the fares and principles of our
ticketing system in detail. Now, there is
at least one turnstile at every station
which allows them to pay for the trip
using a bank card or smartphone.”
Moscow Metro has launched a project
to renew signage and navigation aids,
which includes creating a standardised
style and providing more information
in English, while stations are now
equipped with maps of the surrounding
area. New ATMs and vending machines
have been installed at stations, while
new shopping malls are opening in the
entrance passages.
“We have also realised a big project
dedicated to the entrance halls’
renovation,” Latypov says. “This year
we finished main works on more than
50 stations. We made our entrance halls
more convenient: renovated the stairs,
installed more comfortable ramps and
adapted infrastructure for the physically
impaired.”
While the last few years have been a
success, Latypov expects 2019 to bring
its own challenges.
By the end of 2019 or at the beginning
of 2020, the company is planning to
launch two Moscow Central Diameters
(MCD): existing main line tracks through
the city which will be integrated with
Moscow Metro and the MCC as part of
a combined project between the Moscow
Government, RZD and the Moscow Metro.
Moscow Metro is also planning to
gradually move the departments
responsible for traffic management to a
unified operations control centre (OCC),
and will begin testing a new ticket
system at the end of 2019 which will
allow passengers to use a personalised
“Troika” card to control their account,
block cards and transfer funds from one
card to another.
Other goals for the year include
reducing headways on the MCC from
five to four minutes, as well as continuing
rolling stock and station renewal.
“Moscow Metro is among the leading
world metros in many indicators,”
Latypov says. “These results are
possible due to the professional work of
60,000 employees. In 2019 we will do
our best to realise all current projects
and develop new ones, to make the
journeys on our network more
convenient and pleasant.” IRJ
39
An Englishman in New York
North America | New York
Andy Byford, president of New
York City Transit, speaks with
William Vantuono, editor-in-
N
chief, Railway Age.
EW York City’s iconic subway
has received a barrage of
criticism in recent years. Under-
funded and under pressure, the city is
in desperate need of solutions to bring
its 115-year-old network into a good
state of repair and to improve reliability
for its 5.5 million daily riders.
The situation came to a head in the
summer of 2017. On June 27 a train
derailed, injuring 40 people. This
followed a series of failures as ageing
equipment struggled to cope with
demand. State governor, Mr Andrew
Cuomo, declared a state of emergency,
and promised that a rescue plan by
Metropolitan Transportation Authority
(MTA) would finally solve the subway’s
problems.
Mr Andy Byford is the man charged
with doing exactly this. Byford joined
the New York Metropolitan
Transportation Authority (MTA) as
president of New York City Transit
(NYCT), the agency responsible for the
subway as well as the city’s buses,
paratransit services and the Staten
Island Railway, one year ago. Byford
has forged a rail transit career on three
continents, joining NYCT after a five-
year term as CEO of the Toronto Transit
Commission (TTC), North America’s
third-largest transit system.
Byford began his transit career at
London Underground where, over 14
40
years, he rose to the position of general
manager of the Central, Bakerloo and
Victoria lines, overseeing increases in
customer satisfaction and operational
performance. He then became chief
operating officer of NSW RailCorp,
operator of Australia’s largest transit
system, in Sydney. At TTC, among
other accomplishments, he introduced
Communications-Based Train Control
(CBTC) and completed the $US 2.5bn
Toronto York Spadina Subway extension.
By his own account, New York may
very well be Byford’s last stop, as it has
been his lifelong ambition to run the
city’s metro.
When he arrived NYCT was in the
midst of a crisis. “The greatest city in
the world relies on a transit system in a
state of emergency,” he told IRJ. “It
needs a fundamental recast, a top-to-
bottom modernisation. It’s an honour to
be trusted with the huge responsibility
to modernise the system and bring it to
the high levels of performance and
customer service that New Yorkers truly
deserve and rightfully expect.”
The ambitious “Fast Forward”
programme, which Byford initiated
soon after his arrival, will cost an
estimated $US 20-30bn - a figure the
city and state’s politicians are finding
difficult to swallow. Never mind, says
Byford: “We need to bite the bullet and
get on with the work.”
Among the critical projects are
“
The greatest city in the world relies on a transit system in
a state of emergency. It needs a fundamental recast, a
top-to-bottom modernisation. Andy Byford
deploying CBTC across the entire
system - which still uses automatic
block signals and enforces train
movements with pneumatic trip-stops -
within 10 years. “We’ve got to embrace
new technology,” Byford says. “At our
current pace, deploying one line at a
time, it will take 50 or 60 years. That’s
not acceptable. We need to go out and
buy proven products, and we are open
for business. Try me.”
In a recent CBS 60-Minutes
documentary profile, Byford comes
across as accessible and down to earth,
almost to the point of being disarming.
Wearing a name tag and a warm smile,
he rides the trains, talking to customers
and employees, even picking up a piece
of trash on a station platform. It wasn’t
a performance for the cameras. It’s who
Byford is. Anyone who doubts whether
this genteel Brit can survive in a rough
place like New York City, shouldn’t.
He’s just being himself. No pretences.
And only one agenda: fix what’s broken.
While funding the Fast Forward plan
to aggressively modernise the entire
subway system over the next few years
appears an almost impossibly high
hurdle, Byford is undeterred.
“Our efforts at making our case
continue unabated,” he says. “We know
our first priority is to get our customers
from A to B, quickly, safely, and reliably,
but there are also improvements that
we can deliver right now to other
aspects of our service.”
Byford’s quarterly Customer
Commitment “is simple and concise,”
he says. “It’s a straightforward list of
items we’re vowing to get done right
away, things for which our customers
can hold us to account. It’s our way of
being transparent and showing New
Yorkers that we can create incremental
improvements that make a difference in
their everyday lives.”
Among these items are refurbishing
turnouts at critical, high-traffic locations;
installing new public address systems
at 13 stations; deep cleaning of 15
stations in critical need of attention; and
installation of continuously welded rail.
Fast Forward focuses on four major
priorities that Byford identified on his
first day in office: “transforming the
subway, reimagining the city’s public
bus network, improving accessibility for
IRJ The Railway in 2019
all modes, and engaging and empowering
NYC Transit’s workforce to deliver the
best service possible.”
These priorities are underpinned by
“three foundations of corporate
philosophy” that Byford and his staff
“are working to make the norm at
NYCT: agility and accountability; safety,
security and resilience; and customer
service and communication.”
“As I said when my appointment was
announced, what is needed isn’t mere
tinkering, a few tweaks here and there,”
Byford wrote in the Fast Forward plan’s
opening statement. “What must happen
is sustained investment on a massive
scale if we are to deliver New Yorkers
the service they deserve and the transit
system this city and state need. Now is
the time to think big and transform our
network so it works for all New Yorkers.”
Plan highlights
Among the plan’s highlights are:
= Installation of new signalling and
track infrastructure to optimise
reliability, performance and safety: the
plan says that within five years, CBTC
Byford is targeting the rollout of CBTC on 11 additional New York subway network lines within the next 10 years. Photo: Shutterstock/hopenamtogo
IRJ The Railway in 2019
will be installed on five additional lines,
benefitting 3 million daily riders.
Within 10 years, CBTC will cover 11
additional lines, benefiting 5 million
daily riders. This work will also require
refurbishment, replacement or upgrading
of myriad supporting infrastructure and
equipment such as power systems,
shops and yards, and rolling stock.
= Deliver a fully accessible subway
system: within five years, more than 50
new stations will be made accessible,
ensuring that all subway riders will not
be more than two stops away from an
accessible station. Within 10 years, this
will expand to a total of more than 130
additional stations, with the remaining
possible stations completed by 2034.
Elevator and escalator maintenance and
repairs are also being enhanced along
with improvements to customer
services, including new sensitivity
training for all employees in the next
year, and better information about
elevator and escalator outages and
alternative routes.
= Critical structural and functional
repairs, maintenance and improvements:
these will be performed at more than
150 stations over the course of five
years, and at more than 300 stations
within 10 years.
= A new fleet of trains: within five
years, riders will be benefit from more
than 650 new subway cars, and more
than 1200 refurbished vehicles. Within
10 years, the plan calls for another 3000
new subway vehicles.
= Improving efficiency and reducing
costs: the plan embraces the efficient
use of capital funding and overhauling
processes to enable faster, more efficient
project delivery as well as improving
measurement, tracking and public
reporting on performance. This includes
clearer lines of accountability and
strengthened project management to
improve adherence to schedule and
budget, improving the design process to
reduce unnecessary change orders,
simplifying the procurement process,
and modernising the supply chain.
= Embracing and increasing capacity
for innovation: the plan will support a
new “innovation unit” that incubates
new solutions to improve the customer
experience and operational efficiency,
improve the integration of new
41
 North America | New York
technology in operations, explore the
increased use of PPPs and pursue and
expand upon recommendations from
MTA’s Genius Transit Challenge.
= Advancing environmental
sustainability and resilience: the plan
maintains efforts to require environmental
“
What must happen is sustained investment on a massive
scale if we are to deliver New Yorkers the service they
deserve and the transit system this city and state need.
Andy Byford
sustainability in new construction
including using Leadership in Energy
and Environmental Design (LEED)-
certified specifications, and building
upon an extensive asset recovery and
recycling programmes that diverts
50,000 tonnes of waste from landfills
annually. Resiliency equipment and
42
planning efforts started after Superstorm
Sandy in 2012 will continue.
= A modern approach to safety: NYCT
is working closely with the New York
City Police Department to support its
expansion of a “neighbourhood policing”
model to the subway network, as well
as to enhance enforcement against
assault and other crimes in the transit
system. NYCT will also establish a 24/7
confidential safety reporting hotline for
employees to strengthen the safety
culture. Enhanced security measures
using the latest detection technologies
and collaboration with law enforcement
26-27 February 2019
Dubai International
Convention &
Exhibition Centre
will continue to keep the transit system
and its users safe.
= Improving customer service and
communication: the plan includes a
new “Strategy and Customer
Experience” division to ensure the
interests of customers are considered in
all decisions. Improvements include
performance tracking dashboards, train
and bus arrival info, wayfinders and
roaming station agents. Within the next
five years, screens will be installed at all
stations and on more than 3000 subway
cars to provide real-time location-
specific information. The authority will
also launch a new mobile-friendly
website and app. The quality assurance
of public address systems in stations, on
trains and on buses will be strengthened.
Whether NYCT can deliver these
improvements really depends on
whether the funds are available. Byford
has a track record for delivery and has
put forward the blueprint. It is now up
to the politicians to agree on what is
best for the transit-dependent “Big
Apple,” its eight million residents, and
the hundreds of thousands who pour in
each day to work, or enjoy New York’s
art, music and culture. It’s a huge task. IRJ
IRJ The Railway in 2019
Integration and frequency at the
North America | California

heart of California rail plan

With a rapidly increasing and largely-urbanised population, dynamic economy and huge pressure on natural
resources, California’s transport network is struggling to meet 21st century needs. Keith Barrow looks at the
state’s plans to put rail at the heart of an integrated, high-frequency and sustainable transport system.

C
An Amtrak California Sacramento - Oakland service rolls through Jack London Square, Oakland. Photo: Keith Barrow

ALIFORNIA has the largest
population and the largest
economy of any US state, but for
decades infrastructure has struggled to
keep pace with growth. A report by the
Bay Area Council puts the cost of
California’s unfunded infrastructure
needs at up to $US 737bn and possibly
as much as $US 765bn.
According to a 2016 report by the
National Transportation Research
Group, vehicle miles travelled on the
state’s highway network increased by
15% between 2000 and 2015 and is
forecast to grow by another 15% by
2030. The state is paying a high price
for this - estimates from the Texas
Transportation Institute (TTI) indicate
the value of lost time and wasted fuel
as a result of traffic congestion in
California is around $US 28bn a year
and the average driver in the Los
Angeles Basin spends up to 80 hours a
year sitting in traffic jams.
Infrastructure is also under pressure
IRJ The Railway in 2019
from a growing population, which
increased 16% between 2000 and 2015
to reach 39.1 million and is forecast to
reach 50 million by 2040. In addition,
house prices are more than double the
national average and still climbing,
driving the rise of the so-called super
commuter, who spends 90 minutes or
more each day travelling to and from
work. Five of the top-10 US cities with
the highest proportion of super
commuters are in California.
The lure of California’s cities is growing
and 83% of the state’s population are
city dwellers. Increasingly, the highest-
paid jobs are concentrated in the so-
called superstar cities - including Los
Angeles and San Francisco - a trend
driven in part by the meteoric rise of the
state’s tech industries.
All this is adding to the intense pressure
on resources and the environment. The
2018 wildfire season was the worst on
record, killing 100 people and providing
a sobering reminder of the risks
California faces from climate change.
The state has set a target of reducing
greenhouse gas emissions to 40% below
1990 levels by 2030, a goal that is unlikely
to be reached without a fundamental
rethink of how Californians move.
These megatrends have helped to
mould the state government’s
California Transportation Plan 2040
(CTP). This encompasses seven mode-
specific plans, including the latest
California State Rail Plan (CSRP) which
was published in September 2018, and
aims to take a whole-system approach
to planning with the aim of building an
integrated multimodal network.
The CSRP notes that a lack of
integration between modes, in terms of
timetables, physical connections and
payment systems, make multimodal
journeys difficult, while uncompetitive
journey times and low frequencies
make rail an unattractive option in
some areas. The 2040 vision aims to
overcome many of these barriers.
43
 North America | California
This process starts with optiming
existing rail links. “We already have a
lot of rail right-of-way in California so a
big focus in the plan is to get the most
out of these corridors,” explains Mr
Chad Edison, deputy secretary for
California State Transportation Agency
(CalSTA). “We need to lower infrastructure
costs state-wide - it’s too expensive to
do it all with air and highway. We’re
also responding to megaregional issues
such as long commutes and the cost of
housing. The rail plan is not about
longer trips, it’s about stations that
promote good access to jobs and
housing and infrastructure that are
integrated with land use strategies.
Local governments tend to support
placing new housing close to existing or
future transit hubs because if you have
a system of park-and-ride lots where
everyone has to drive part of their
journey you don’t have an efficient
transportation system. We want to tie
together services in a way that is user
friendly, providing more travel options
for more people.”
The state’s 2040 Vision for rail calls
for the development of a “pulsed
system” with a timetable of regular-
interval train services running in an
hourly or half-hourly service pattern,
fed by express buses connecting small
and remote markets to the rail network
via efficient hubs. On mixed-traffic
corridors, which are generally owned
by the freight railways, the plan aims to
provide sufficient capacity to ensure
higher-frequency passenger operations
do not reduce the efficiency and
Siemens is supplying SC-44 Charger diesel locomotives for corridor services in California.
44
flexibility of freight operations. Different physical design of stations and networks
service levels are considered for selected for buses and LRT to ensure we have
routes, with regional as well as inter- seamless interchange between modes.
city and commuter rail services sharing We also need the right combination of
infrastructure. design, technology and finessed schedules.”
California’s passenger rail scene is a
Phased plan
multi-stakeholder environment with
numerous agencies playing a role in
decision making and funding allocation The CSRP sets out a three-phase
at local, regional and state levels. The approach for delivering California’s
CSRP emphasises the need for close 2040 vision for an integrated network:
integration between agencies to avoid = Short-Term (by 2022): improvements
overlapping or duplicate investments already at the planning stage for which
and ensure that projects meet the long- funding for construction and
term needs of the communities they are implementation is largely committed.
intended to serve. “Coordination is These improvements are intended to
about integration between different serve as the foundation for integrating
agencies and also improving the the rail network. The short-term plan
productivity of the system,” Edison identifies the region-specific service
says. “We need to implement projects in planning studies required to implement
a way that is future-proof.” the mid-term and long-term vision. The
Coordination also extends to the fares short-term programme also aims to
system, and the CSRP calls for a much address the significant existing rail
higher degree of integration and freight bottlenecks.
multimodal ticketing to meet the goal of = Mid-Term (by 2027): the state
door-to-door service. California coordinates actions with rail partners to
Department of Transportation grow passenger services to a level that
(Caltrans) has set a target of tripling maximises use of the capacity available
bicycle trips and doubling walking and on existing rail infrastructure, with
public transport journeys by 2030, while targeted infrastructure investments that
the CSRP envisages increasing inter-city tie services together and provide new
rail ridership from 115,000 to 1.3 million access to different regions, including
passengers a day (including the high- regions that now have only limited rail
speed network) by 2040. “If we can get access. Key rail freight corridors will
the first and last mile right, we can meet also benefit from capacity enhancements.
the ridership goals of the CSRP,” = Long-Term (by 2040): the long-term
explains Mr Kyle Gradinger, assistant capital plan includes the infrastructure
division chief of the Caltrans Division elements required to support the service
of Rail and Mass Transportation. “This and connectivity goals of the state’s
means we need to look carefully at the 2040 vision, and to maximise the
performance and market capture
potential of passenger rail. Additional
Photo: Pi.1415926535/Wikipedia CC by SA 3.0
investments are planned in the freight
network at this stage to accommodate
high-frequency passenger services.
According to the CSRP, state support
for network and station planning will
ensure that stations are pedestrian and
bicycle-friendly and accessible to public
transit systems, promoting car-free
travel in many areas. The state will also
seek to coordinate bus and rail
schedules to ensure good connections at
stations with lower-frequency services.
By 2027, there will be a minimum
two-hourly-interval service on the core
rail network, including integrated bus
connections to destinations such as
Redding and Reno, Nevada, with
hourly services on key corridors.
Caltrans says its 2027 plan is based on
funding levels “reasonably expected
from sources currently available at the
federal, state, and local levels.”
The 2027 plan also begins to leverage
the initial stage of the high-speed
IRJ The Railway in 2019
 “ The rail plan is not
about longer trips, it’s
about stations that
promote access to
jobs and housing and
infrastructure that are
integrated with land
use strategies.
Chad Edison
network with “HSR revenue service-
ready corridors” in the Central Valley
(Madera - Bakersfield) and Silicon
Valley (San Francisco - Gilroy), the latter
taking advantage of the electrification of
Caltrain’s San Francisco - San Jose line.
In its 2018 business plan, California
High-Speed Rail Authority (CHSRA)
says early interim services on the
Silicon Valley and the Central Valley
sections could begin in 2027.
Connecting the two sections via the
Pacheo Pass tunnels would provide
workers in San Francisco and Silicon
Valley with access to more affordable
housing in cities such as Gilroy, Merced
and Fresno. High-speed rail will reduce
the San Francisco - Fresno journey time
to around an hour, compared with the
current drive of up to three hours.
Between 2027 and 2040 California
aims to expand the high-speed network
beyond it’s initial operating segments,
expand network capacity to fully
achieve its integrated service goals,
establish regional rail networks, and
further boost frequencies on core routes.
In addition to enhancements within
the state, CSRP expresses California’s
commitment to maintaining long-
distance Amtrak connections with
Oregon, Nevada, Arizona and further
afield, which provide the only
passenger rail service in some areas of
the state. The state will also continue to
work with Nevada High Speed Rail
Authority and Virgn Trains USA to
support the development of a privately-
financed high-speed line linking Las
Vegas with Victorville east of Los
Angeles, where it will meet the
California HSR system.
Turning the 2040 Vision into reality
IRJ The Railway in 2019
naturally depends on the ability to tap
into stable, long-term funding, requiring
support from a range of stakeholders at
federal, state and local levels.
At the top of the tree, the administration
of president, Mr Donald Trump, has
sought to defund grant programmes
and slash Amtrak funding, although it
has come up against resistance from
Congress, where there is a degree of
bipartisan support for rail. Trump’s
proposal to scrap the Transportation
Investment Generating Economic
Recovery (Tiger) grant funding
programme, which had been introduced
by the Obama administration, was
rejected by Congress. The US Department
of Transportation (USDOT) subsequently
amended the funding award criteria
with measures including higher weighting
for projects involving private finance.
At this point, Tiger gave way to a clunky
new acronym - Better Utilising Investments
to Leverage Development (Build).
Build has a budget of $US 1.5bn for
the 2019 financial year but attracted 851
applications from local and state
governments seeking nearly $US 11bn,
highlighting the huge disparity between
supply and demand for federal grant
funding. With just 11.2% of the budget
going to transit and 9.6% to rail freight
projects, Build is a feeble response to
the transport investment challenges
facing cities and states across the US.
Like many states, funding for rail
investment in California is drawn from
a wide variety of sources at local and
state levels. “We’re currently investing
around $US 4bn in projects benefiting
intercity-rail and the corridor services
that share operations with them, and
about $3bn on commuter rail only
45
 North America | California
corridors,” Edison explains. “Only about
$US 900 million of that is federal cash.
“The federal government isn’t as big
a partner as we’d like it to be but we are
well poised for future competitive grant
funding programmes. Priorities change
from one year to the next and we try to
align our plans with what is available.
The CSRP is important in this context
because the federal government wants
state rail plans to be updated every four
years.”
Taxing carbon
A key mechanism for funding rail
projects in California is the Transit and
Intercity Rail Capital Program (TIRCP),
which is used to disburse funds from
the state’s Greenhouse Gas Reduction
Fund and the Road Repair and
Accountability Act of 2017 or Senate Bill
1 (SB1). TIRCP receives 10% of the
auction proceeds from all California Air
Resource Board’s Cap-and-Trade
auctions, ensuring the state’s largest
greenhouse gas emitters pay for low-
carbon transport investment. SB1
meanwhile will channel $US 7.6bn into
transit projects over 10 years.
TIRCP has four key aims:
= reduce greenhouse gas emissions
= expand and improve rail services to
increase ridership
= integrate the rail services of various
operators, including integration with
the high-speed network, and
= improve safety.
Via Rail Canada prepares for high-frequency operation
In April 2018 CalSTA awarded 28
T
Keith Barrow
senior editor
HERE was some seasonal cheer for
passenger rail proponents in
eastern Canada on December 12,
when Via Rail Canada announced it
had awarded Siemens Canada a $C
989m ($US 741m) contract to supply 32
inter-city trains for the Quebec City -
Montreal - Toronto - Windsor corridor.
The fleet will enter service from 2022,
replacing life-expired equipment and
providing more than 9100 seats, a
significant increase in capacity for Via
Rail’s flagship route.
The announcement came two months
after Via Rail celebrated its 40th birthday
as the national passenger operator.
Established as a Crown Corporation in
1977, Via Rail took over the operation of
the remaining loss-making Canadian
46
TIRCP grants totalling more than $US
2.6bn for transit and rail projects
together with an additional $US 1.7bn
for seven major projects through multi-
year funding agreements.
Many of the projects selected to receive
funding will promote closer integration
of the public transport network. The
extension of Bay Area Rapid Transit
(Bart) to San Jose and Santa Clara will
establish San Jose Diridon station as a
key hub in the Bay Area public transport
network, with links to inter-city rail,
commuter rail, light rail and bus services.
The extension of Sonoma Marin Area
Rapid Transit (Smart) to Larkspur will
give the commuter rail line an interchange
with ferries to downtown San Francisco.
In the Central Valley, grants will support
the integration of Altamont Commuter
Express (Ace) and San Joaquin inter-city
rail services while providing new links
to Ceres and Sacramento.
Alongside the myriad sources of
public funds, California sees opportunities
for private sector participation in the
development of the rail network. “We
already have a big private sector
investor, the freight railroads, and we
are creating an operator-neutral set of
investments, particularly with high-
speed rail,” Edison says.
“There are a lot of other opportunities
for private sector participation in areas
such as fleet acquisition and financing,”
Gradinger adds. “We’ve attracted a lot
of interest from both the US and abroad
during 2018.”
California’s ability to deliver the
Pacific and Canadian National (CN)
passenger services in October 1978.
Through consolidation and eliminating
duplication of transcontinental services,
the finances of Canada’s passenger rail
operations could be significantly
improved, enabling Via Rail to invest in
new equipment with the aim of turning
a profit on its more promising routes.
In reality, Via Rail spent much of its
first 40 years embroiled in a political
tug-of-war. In 1981 the administration
of prime minister Mr Pierre Trudeau
slashed Via Rail’s budget, leading to
swingeing service cuts, which were
partially reversed by the government of
Mr Brian Mulroney four years later. The
axe fell again in 1990 when the operator’s
budget was slashed from $C 600m to
$C 350m, triggering another round of
savage cutbacks which severed cities
such as Calgary, Regina and Thunder
Bay from the passenger rail map.
measures proposed in the CSRP may be
hindered by several external factors.
Massive investments are required to
bring water infrastructure up to a
standard that begins to meet the needs
of its current population, let alone the
extra 10 million people who will call
California home by 2040. California was
the first US state to establish the right to
water, and keeping supplies flowing to
homes and businesses is a top priority
at all levels of government. State and
local governments are grappling with
debts of $US 1.3 trillion, with an
estimated $US 1 trillion in pension
liabilities on top of this. Then there’s the
question of maintaining tax revenues at
stable rates - California currently ranks
10th in the highest-taxed US states and
some funding sources therefore could
be vulnerable to political changes.
Nonetheless, the recent extension of
the Cap-and-Trade programme to 2030
indicates a determination at state level
to provide stable sources of funding.
Public support for transit investment
also remains solid. According to an
analysis of 2018 transport ballot
measures by the Eno Center for
Transportation, voters in the state have
approved $US 8.6bn for transport
investment in ballots this year.
The state rail plan offers a vision of
how rail can become much more closely
aligned with the daily mobility needs of
Californians, and finally provide a
viable, sustainable alternative to the car
for a much greater proportion of the
population. IRJ
With far less passenger revenue and
meagre government support, Via Rail
limped on through the 1990s and 2000s,
with further pressure on the budget
unleashing service cutbacks in Quebec
and British Columbia in 2012. Via Rail
has continued to grapple with the
everyday challenges of ancient rolling
stock and inadequate fleet capacity,
which has constrained its ability to
respond to market demand on its core
route through southern Ontario and
Quebec.
However, under the stewardship of
current CEO, Mr Yves Desjardins-
Siciliano, Via Rail has experienced
something of a turnaround in
patronage, helping to strengthen the
case for much-needed capital
investment. “In 2014 we brought
together a team to turn around the
company on two fronts,” Desjardins-
Siciliano said at Terrapinn’s World Rail
IRJ The Railway in 2019

Via Rail’s turnaround strategy has correlated with a near 40% ridership increase in four years. The operator is now implementing major fleet expansion.
Festival in Amsterdam in November.
“Firstly, we moved from a transportation
to a marketing organisation to grow
ridership and revenue. We’ve grown
close to 40% in the last four years.
Secondly, we developed a long-term
plan, including a new fleet for the Quebec
City - Windsor corridor, and the
government of Canada allowed us to go
forward with that.”
Desjardins-Siciliano says a collective
approach to improving service quality
has helped to make the train a more
attractive option. “We needed to look at
what we could control, and one thing
we could control was our attitude,” he
says. “We have to ensure people are
well treated in our care. We’re
welcoming the public into our home
and if you show empathy and
sympathy people will come back to you
more often and pay more money. Over
the last four years employees have
really bought into that strategy.”
Via Rail has now experienced 11
consecutive quarters of ridership
growth. In the third quarter of 2018
passenger numbers increased 6.2%
year-on-year, while passenger revenues
climbed 5.1%. Ridership and revenues
on the Québec City - Windsor corridor
rose by 8.3% and 11.0% respectively.
With more trains in its fleet, Via Rail
will be able to step up frequencies on
the corridor, but both speeds and
headways for inter-city passenger
services are constrained by the need to
share track with freight trains, which
IRJ The Railway in 2019
North America | Canada
have priority on CN infrastructure.
Breaking free of these shackles is central
to Via Rail’s plans to offer a service that
provides a genuinely compelling
alternative to the car.
Alongside its request for funding for
new trains, Via Rail submitted
proposals for the so-called High
Frequency Rail project, which would
see passenger services between Quebec
City, Montreal, Ottawa and Toronto
running at higher speeds on dedicated
tracks, much of it making use of
existing alignments. Via Rail says this
would enable it to triple frequencies,
reduce journey times by a quarter and
increase on-time performance to 95%.
The $C 4bn project would boost
corridor ridership to an estimated 9.9
million passengers by 2030 and
eliminate government subsidy for the
route (currently $C 150m a year) by
2024.
While the fleet renewal programme is
entirely government-funded, Via Rail
envisages attracting private financing
for its infrastructure plans. “There are a
lot of pension funds looking for long-
term infrastructure investments,” says
Desjardins-Siciliano. “Canada is very
steady politically with good economic
performance. Raising money is not a
big concern.
“This project will allow us to service
the market in a way that gives people
the flexibility to choose rail.”
Desjardins-Siciliano says he expects
the federal government to make a final
Photo: Stephen C Host
decision on the project by April, and if
it gets the go-ahead, Via Rail could be
running trains at 177km/h on the Quebec
City - Windsor corridor by 2023.
Long-distance
Despite extensive trimming of the
network, transcontinental services
remain a feature of the Via Rail system
and long-distance trains continue to
bring in tourist dollars and provide
vital links to remote communities.
Via Rail is investing $C 154m in the
modernisation of 75 long-distance
coaches, including some vehicles
acquired from the United States to
strengthen the fleet. This includes a
major upgrade of 17 Heritage coaches
to make them fully-accessible for
passengers with reduced mobility. Via
Rail says the modernisation of the
stainless steel Heritage coaches will
extend their life “by a few decades” and
is aligned with the company’s “reuse-
recycle-repurpose” policy.
Via Rail’s fortunes are still inextricably
linked to government policy and
October’s federal election will set the
budgetary agenda for the next five
years. As the last four decades have
proved beyond doubt, nothing is ever
politically certain for Canada’s national
passenger rail operator. But with major
capital investment finally starting to
flow and a robust business plan in
place, Via Rail may well reach its half
century in better shape than ever. IRJ
47
Virgin USA targets inter-city expansion
North America | passenger

Orlando and Tampa, with a station at
Disney World. That 141km line is
expected to cost $US 1.7bn. The one-
way fare will be $US 35, compared with
$US 100 for Miami - Orlando.
While the outlook for Brightline was
already good, its prospects took a leap
forward on November 16 with the
announcement that the company had
signed a 40-year strategic partnership
and trademark licensing agreement
with the Virgin Group, including
rebranding as Virgin Trains USA. The
company also filed a prospectus with
the US Securities and Exchange
Commission in preparation for an
operated by Virgin Trains USA grew
42% in the second quarter of 2018
compared with the first quarter, and
increased by another 50% in the third
quarter compared with the second
quarter, although Virgin Trains USA’s
base figures were not available.
Following the completion of the West
Palm Beach to Orlando section, the
company expects to carry up to 6.6
million passengers annually along the
entire Miami - Orlando route, with an
additional 2.9 million passengers
forecast on the Orlando - Tampa section.
In the financial results released for the
first nine months of 2018, the company

Patrick Goddard, president of

Initial Public Offering (IPO) on the recorded $US 5.2m in operating
Nasdaq Stock Exchange. revenue, including $US 4.7m from

Virgin Trains USA, talks to

While some details of the IPO are yet passengers and customers, but that was

W
David Burroughs
HEN a passenger service was
first announced in March 2012
by All Aboard Florida, the
inter-city passenger subsidiary of Florida
East Coast Railway (FEC), it was billed
as a way to “transform the way people
travel throughout the state, offering a
faster, safer, and more enjoyable mode
of transportation between Florida’s two
largest metropolitan areas.”
Details of an initial three-stop service
connecting Miami, Fort Lauderdale and
West Palm Beach were released in July
2014, with the service using the existing
320km FEC freight line between Miami
and Cocoa and continuing on a new
to be released, including the quantity
and value of shares and the amount
Virgin Trains USA expects to raise from
the offering, the company has already
outlined $US 7.4bn worth of projects it
intends to fund with the proceeds,
either partially or fully, including the
projects in Florida and a high-speed line
from southern California to Las Vegas.
Corvina Holdings, an investment
holding company with the Virgin
Group, will also purchase an
undisclosed number of shares, giving it
a minority stake in the company, while
the company will remain majority-
owned by Fortress Investment Group
which was co-founded by Mr Wes
Edens, Virgin Trains USA’s chairman.
“It’s been an historic year for us,” Mr
Patrick Goddard told IRJ in an interview
heavily offset by its operating expenses
of $US 82m leaving it with a net loss of
$US 87m after interest payments.
Goddard says it is normal for inter-
city passenger services to experience a
ramp-up period of around three years
before reaching a mature ridership
level. Acela, Eurostar and Italo averaged
29% of the mature level of ridership in
the first year, 81% in the second year,
and 86% in the third year before they
stabilised, Virgin Trains USA says.
Estimates prepared by Louis Berger
show that the full line could generate
$US 810m in total revenue annually in
its first stabilised year, either by the
fourth quarter of 2023 or the first quarter
of 2024. That includes $US 700m in ticket
revenue and an additional $US 110m in
revenue from other streams such as food

Possible corridors
64km line to Orlando International before the IPO was announced. Goddard
Airport following the route of State was appointed Brightline president in
Highway 528. January 2018 and has overseen the
Virgin Trains USA’s Distance Population
networks (km) (millions)
The service eventually launched nearly service launch and the company’s
Miami - Orlando 378.1 8.7
four years later than originally planned, expansion.
Orlando - Tampa 135.1 5.6
on January 13 2018, with 11 trains a day The premise guiding the company is
Las Vegas - Southern 434.5 15.6
operating under the Brightline brand simple: it plans to offer express passenger
California
between West Palm Beach and Fort services along 300-550km corridors in
Viable Corridors
Lauderdale. Services were extended to the United States (see panel) that are
Houston - Dallas 386.2 14.3
Miami Central in May, while frequency considered “too short to fly, too long to
Atlanta - Charlotte 386.2 8.4
was ramped up in August to provide drive.”
Chicago - St Louis 498.8 12.3
hourly services along the route. “There are about 10 corridors in the
Los Angeles - San 193.1 16.7
The work to extend the line to US that we think are suitable for inter-
Diego
Orlando at a cost of $US 2.1bn is now city rail projects like ours,” Goddard
Portland - Seattle - 257.4 8.8
underway, with services expected to says. “We think the top three are Acela
Vancouver
begin in 2021. The company confirmed in the northeast (the intercity passenger
San Antonio - Austin - 225.3 12
in November it had begun negotiations service operated by Amtrak), Virgin
Dallas
with the Florida Department of Trains USA connecting Miami and
Houston - San 225.3 11.5
Transportation and the Central Florida Orlando and eventually Tampa, and the
Antonio - Austin
Expressway Authority (CFX) to lease third most intuitive is Southern
Washington DC - 362.1 31.4
property owned by the state and CFX to California to Las Vegas.”
New York - Boston
develop a high-speed line along the Passenger numbers on the Miami to
Interstate 4 highway corridor between West Palm Beach service currently

48 IRJ The Railway in 2019


and beverage, parking, naming rights,
sponsorships and partnerships,
merchandise, advertising and other fees.
“There’s never been a service like
ours in south Florida, so there’s no
comparison,” Goddard says. “When the
Acela was introduced, it replaced a
regional system that already existed so
you had some sort of idea, and
culturally people had an inkling of
what train travel is all about.”
Instead, the company has been
working to provide a service that is
sufficiently comfortable, affordable and
fast to entice passengers out of their
cars and onto the train, at least just to
experience it. So far this strategy is
paying off, with market segments like
business travellers and commuters
growing steadily by 5% to 10% weekly.
“With commuters and business
customers, you’re literally prying their
white-knuckled hands off the steering
wheel to get them on the train, and that
kind of progress is very, very
encouraging,” Goddard says.
Las Vegas
Now that the service has been
established in Florida, Virgin Trains
USA is looking to take its business
model further afield and on September
18 confirmed it had acquired
XpressWest, a high-speed project with
rights to develop a $US 3.6bn federally-
approved corridor connecting Southern
California with Las Vegas.
“We think that it is a long and
unpleasant drive, and less than 10% of
IRJ The Railway in 2019
A Brightline set at West Palm Beach station.
Photo: Shutterstock/Thomas Barrat
that market flies from Southern
California to Vegas, so we think it’s an
ideal opportunity to get people off the
highway and onto a train, cut their
travel time by we think 30-50% at
probably the same cost as parking their
car at a Vegas hotel for the weekend.
It’s just one of those very intuitive
markets and we think it’s one of the top
markets, plus it’s already permitted.”
Virgin Trains USA is assessing whether
any of those permits need to be updated,
and expects to begin construction this
year. It predicts a stabilised ridership of
11.3 million passengers annually, which
will generate an estimated $US 863m in
revenue per year.
Virgin Trains USA has also entered
into a $US 150m agreement to purchase
15 hectares of land adjacent to the Las
Vegas strip to construct its Las Vegas
station and a mixed-use development,
while it expects to build its Southern
California station in Victorville, with
future connections to the Metrolink
commuter rail network serving the Los
Angeles area.
While its focus is on offering a rail
service, the wider business opportunities
such as real estate development also
play a large part in Virgin Trains USA’s
business plan. The company is currently
developing around 140,000m2 of mixed-
use office, residential, retail and parking
facilities at and around its stations in
Miami, Fort Lauderdale and West Palm
Beach. Food and beverage, fashion,
fitness and life-style brands are already
leasing or negotiating a lease for space
near the stations.
Establishing the operation in Florida
and demonstrating the business case
has created a proof-of-concept, Goddard
says, and shown that a balance can be
struck that improves the journey time
experienced by cars while avoiding a
large outlay in cost needed to establish
a full high-speed network. Goddard
points to the California HSR project,
which has experienced soaring costs
and an extended timeline, as an example.
“50 years ago, while we were building
highways, Europe and Asia were building
high-speed rail systems,” Goddard says.
“It’s a different time now, and the
opportunity to do true high-speed grade
separated stuff, that’s hard,” he says.
He says passengers are happy to settle
for a service that will halve their journey
time, instead of calling for significant
reduction through high-speed services
that may be years in the making.
“It would be nice to get from Los
Angeles to Las Vegas in 30 minutes, but
an hour and 20 minutes is still better
than four hours in a car,” Goddard says.
“I think there’s a very interesting
paradigm that we’ve identified and
acted on, that we think we can replicate
around the country, and I don’t think
anybody else is really thinking about it.
“You sacrifice a little bit of travel time
to actually get the project done in three
years. We built 70 miles [112km] here in
three years. We believe LA - Vegas
could be done in about three years. You
could never do that in an elevated
environment. I think there’s a big
opportunity to improve inter-city
mobility around the US and I think
we’re at the leading edge of that.”
It is this innovative spirit that caught
the attention of Virgin founder, Sir
Richard Branson, who says he spent 10
years looking for a similar opportunity
to change the passenger rail industry in
America before visiting Edens in 2017.
“We transformed domestic air travel
with Virgin America,” says Branson.
“Tens of millions of Americans travel on
the railways every day, and we have
tried for over a decade to find an
opportunity to provide them with that
same excellent service experience.
Virgin Trains USA is at the forefront of
innovation in this market, and the ideal
partner for Virgin to work with to alter
perceptions and travelling habits across
the United States.”
Time will tell whether Virgin Trains
USA can capture the regular market
share it will need to be viable, but how
things turn out in 2019 will be a strong
indicator as to whether private
passenger rail can work in the United
States. IRJ
49
New government shakes up Malaysia’s
Asia | Malaysia
rail investment priorities
M
Kevin Smith, Managing Editor
ALAYSIA’s rail infrastructure
development programme took
a dramatic turn in May 2018
following the election of a new government
committed to reducing the national debt.
The administration acted almost
immediately to block the Ringgits 60-
70bn ($US 14.4-16.8bn) blue-ribbon
Kuala Lumpur - Singapore high-speed
project, condemning the cost and the
limited benefits of the scheme.
However, with the project for the
350km line at the procurement phase,
getting out of the legally-binding HSR
Bilateral Agreement with Singapore
proved difficult. By September,
Malaysia and Singapore had agreed to
suspend the scheme for five years. In
return Malaysia will meet the costs of
the suspension and agreed to bear
Singapore’s costs of fulfilling the
bilateral agreement if it decides not to
proceed with construction by a deadline
of May 31 2020. In the meantime, both
governments are seeking to reduce the
cost of the scheme.
A KTM class 93 inter-city EMU leaves Kuala
Lumpur station. Photo: Shutterstock/KYTan
50
The administration also looks set to
abandon another flagship rail project of
the previous government, the East
Coast Rail Link (ECRL). Work was
suspended in July and prime minister,
Dr Mahathir Mohamad, confirmed on
August 13 that he is seeking to cancel a
contract for the construction of the
Ringgits 55bn project, a year after his
predecessor Mr Najib Razak launched
civil works.
Mathathir says he wants the
government to pull-out of Chinese-
financed infrastructure projects,
including ECRL, claiming the project
was overpriced and economically
unviable. However, discussions with
the contractor, China Communication
Construction Company, were still
underway in November, with the
Malaysian government stating that it
was trying not to upset the Chinese firm.
A notable measure in the reform
programme is the replacement of the
Land Public Transport Commission
(Spad) with the Land Public Transport
Agency (Apad) from January 1.
Apad will continue Spad’s work to
plan and develop projects, including
metro, light rail, heavy rail and bus
schemes, although the government has
promised to streamline the body’s work
and promote greater efficiency. Spad’s
functions in enforcement and licensing
will become the responsibility of the
Road Transport Department.
Proponent
While it is reviewing capital
expenditure, the new government
remains a proponent of urban public
transport development as part of its
economic development strategy which
raises living standards and productivity.
However, the administration is adamant
that this should not come at any cost.
Kuala Lumpur has benefitted from a
steady expansion of its urban rail
network in recent years under the
direction of public transport operator,
Prasarana. However, this agency has
also experienced major changes in 2018.
CEO Mr Azmi Abdul Aziz departed
the company in January and was
replaced by Ms Masnizam Hisham. But
as the agency’s financial troubles
became apparent, her tenure proved
IRJ The Railway in 2019
short-lived. She was replaced by Mr
Hazlan Mohamed Hussain in September,
who was issued with a mandate to
enhance the level of service on offer and
to ensure the company operates on a
sustainable financial footing.
This appears far from straightforward.
Prasarana is facing severe cash-flow
problems - it reported a loss of Ringgits
2.5bn based on revenues of Ringgits
846m in 2017. Hisham said that cost-
saving measures introduced during her
tenure were expected to save the agency
Ringgits 200m by the end of 2018. The
operator is also looking to increase
ridership and non-fare revenues while
reducing the cost of capital projects
underway, which have ballooned out of
control.
This includes the embattled 36km
LRT-3 light metro line from Damansara
to Klang. Work came to a near standstill
on the project in 2018 as costs rose to
Ringgits 31.65bn in March 2018 from an
initial projection of Ringgits 16bn.
The construction cost has been
revised to Ringgits 16.6bn, including a
Indian Railways takes two steps forward, one step back
T
Srinand Jha, correspondent
HE ghastly deaths of 59 festival-
goers in a freak accident near the
northern Indian city of Amritsar in
October cast a pale of shadow over
Indian Railways’ (IR) recent safety
improvements.
In the last seven months of the year,
3402 of the network’s 3479 unmanned
level crossings had been eliminated,
while 3758 of 37,689 bridges that are
over 100-years-old have been repaired
or rebuilt. The results of such efforts
were clearly visible: before Amritsar, 29
rail-related accidents had been reported
- down from 57 deaths in 2017.
While the passenger safety graph
shows improvement, IR remains in
difficulty. The railway’s Operating Ratio
has deteriorated due to the continuing
loss of freight traffic to road, air and
pipelines as well as falling earnings
from passenger services. Couple this
with the spiralling costs of wages, pensions
and working expenses, and after the
first two quarters of fiscal 2018, IR’s
Operating Ratio was at a high of 117.31%.
Successful trials of the Train-18 - a
domestically-developed distributed-
traction inter-city train - is seen as one
of IR’s big positives of 2018.
IRJ The Railway in 2019
a renegotiated Ringgits 11.86bn civil
works contract with MRCB George
Kent. This includes a contingency of
Ringgits 400m, which if not used will
reduce the value of the contract. The
remaining Ringgits 4.8bn accounts for
land acquisition, interest during
construction and others. Prasarana will
also scale back the train fleet and
eliminate five stations. Completion of
the project is now scheduled for
February 2024, four years later than
originally planned.
The operator came to a similar
agreement for the 52.2km MRT-2
automated metro line from Sungai
Buloh to Serdang and Putrajaya in
October. Instead of acting as a project-
delivery partner, MMC Gamuda is now
a turnkey contractor for the 38.7km
elevated portion of the project, which
will be delivered under a Ringgits
17.42bn contract, construction of which
began in September 2016. The
agreement with the contractor for the
13.5km underground section between
Jalan Ipoh and Kuchai Lama has been
The Chennai-based Integral Coach
Factory (ICF) is now planning to
develop a mainline EMU for short-
distance inter-city services, ICF
chairman and managing director, Mr
Sudhanshu Mani confirmed.
High-speed
The scaling up of construction
activities on the Mumbai - Ahmadabad
high-speed corridor is similarly
encouraging. “Tenders for civil
construction will shortly be floated,
while 90% of the land required has
already been acquired,” confirmed a
National High-Speed Rail Corporation
Limited (NHSRCL) spokesman. “The
project is on target and will meet its
completion deadline of 2024.”
There are also signs that the Dedicated
Freight Corridor (DFC) project - India’s
largest rail infrastructure scheme - has
sprung back to life after a long hiatus.
In November, the Dedicated Freight
Corridor Corporation of India
(DFCCIL) completed trial runs on the
194km section from Bhadan to Khurja
in India’s northern state of Uttar
Pradesh on the Eastern DFC. This
follows the operation by DFCCIL of the
first double-stack container freight train
on the 190km stretch from Ateli to
terminated, with the government set to
retender all unfinished work through an
international open tender. The move is
expected to reduce the cost of the
project by Ringgits 5.22bn, or 23%.
While Prasarana was targeting further
expansion of the network following the
conclusion of these projects, it remains
to be seen whether the government, and
Apad, will move ahead with the
previously agreed timeline.
The country’s 2019 budget issued on
November 2 indicates that tackling the
national debt will dictate the direction
of the economy. Indeed, the government
is looking to shift away from policies
that prioritise state investment to
generate growth to private sector-led
economic development and job creation.
After the excesses and controversies
of the Razak regime, which have since
unravelled in a wave of embezzlement
and corruption allegations and charges,
this is a welcome change in direction for
many observers. However, it remains to
be seen what it will mean in the long-
term for the country’s rail sector. IRJ
Phulera on the Japanese International
Cooperation Agency (Jica)-funded
Western DFC in August.
IR’s challenges are many. But upgrading
and modernising its infrastructure
remains a formidable task.
While the state-owned company has
focused capacity enhancement on
doubling, tripling and quadrupling
track on key routes in recent years, the
task needs to be pursued with bigger
gusto in the coming year.
Of equal importance is cutting
bureaucratic red tape to ensure that big-
ticket projects do not suffer unnecessary
delays. IR’s Rs 25bn ($US 357m) plan to
import modern trains from European or
Japanese vendors, for instance, has been
pending for over two years. Signalling
upgrade plans have also not moved
forward while work on the construction
of the Chenab bridge in Jammu and
Kashmir - billed as the world’s highest
rail bridge - has been at a standstill
because of reported differences between
the contractor and the supervising
agency. No less significant, the task of
restructuring rail bureaucracy remains
incomplete.
IR again faces a year of challenges in
2019. It remains to be seen whether
solutions to any of its fundamental
issues can be found. IRJ
51
Freight operators seek urgent policy reforms
Australasia | Australia
Dean Dalla Valle, chair of
Freight on Rail Group (Forg) of
Australia and CEO of Pacific
T
National, talks to Mark Carter.
HE Australian rail freight task has
grown by 115% over the past decade
and rail now accounts for more than
half of Australia’s freight transport activity,
up from approximately 36% in 2000.
While this increase is founded
primarily on growth in the transport of
iron-ore and coal, rail remains central to
moving many other commodities. With
the exception of the iron-ore traffic that
runs on privately-owned vertically-
integrated networks, most other traffic
is carried on common user networks.
In 2016-17 intermodal tonnages grew
on all sectors of the north-south inter-
state network, particularly between
Sydney and Melbourne, while non-
intermodal volumes grew on most of
the inter-state network.
However, there is a sense within the
industry that despite rail’s obvious
benefits over road transport in areas
such as energy efficiency, safety, cost-
effectiveness and congestion, government
at all levels remains slow to adopt a
number of key policy reforms.
The Freight on Rail Group (Forg) was
established in 2015 to engage with
federal and state governments and key
stakeholders on the major public policy
issues affecting rail freight in Australia.
Comprising Australia’s major rail
freight operators and track owners and
managers, FORG has highlighted five
critical policy areas needed to rapidly
improve the efficiency and profitability
of Australia’s rail freight sector. Forg is
urging state and federal governments to
52
immediately start tackling these much-
needed reforms in 2019.
Launching the policy initiative, Forg
chair and Pacific National CEO, Mr Dean
Dalla Valle, says that while governments
are getting it right on rail infrastructure,
other policies impacting the sector are
“languishing in the age of steam.”
“At a time when Australians want
safer roads, less traffic congestion and
lower carbon emissions, government
policies are largely geared to rolling-out
heavier and longer trucks,” he says.
“As a case in point, Australia’s
National Heavy Vehicle Regulator
recently approved the roll-out of a 105-
tonne 36.5m-long B-Quad truck on select
routes between Victoria and Queensland.
Don’t get me wrong, I see the obvious
freight productivity benefits, but what’s
the upper limit for the size and weight
of trucks on Australian roads?”
“The trucking industry must be
congratulated for the strength and
intensity of its advocacy. Unfortunately,
rail freight has become tangled in nests
of technical jargon and is jumping at
perceived safety risks that modern-day
technology has largely eliminated.”
Forg describes how an experienced
freight train driver in New South Wales
(NSW) can be subjected to up to 18
months of extra training to operate on a
similarly-configured rail corridor in
another state or territory.
“
Policies aren’t keeping pace with the delivery of
upgraded rail infrastructure or the range of new and
improved technologies. Dean Dalla Valle
In contrast, a NSW truck driver can
move from operating a semi-trailer to
handling a multi-trailer combination in
just two days, at minimal cost and with
immediate access to thousands of
kilometres of road across the country.
“What is particularly worrying, is
that policies aren’t keeping pace with
the delivery of upgraded rail infrastructure
or the range of new and improved
technologies available to the sector,”
Dalla Valle says.
Forg is calling on the Transport and
Infrastructure Council (TIC) of Australia
- made up of the nation’s transport, freight
and roads ministers - to urgently consider
several initiatives to revitalise rail freight
policy, including higher government
priority for delivering enhanced rail
freight efficiency and productivity.
Dalla Valle says this should include a
programme of work in 2019 that
streamlines federal and state regulations
to fully utilise the proven benefits of rail
freight throughout Australia’s transport
supply chain.
Forg is also seeking the development
of polices to deliver new innovations
and efficiencies, and to do so, is calling
for the rail freight sector to have a level
playing field compared with other
transport modes such as road and sea.
“This can only be achieved by a new era
of closer collaboration between
government agencies which regulate
rail networks, and the private
companies which operate on those
networks,” Dalla Valle says.
Wider role
In addition, Forg sees a wider role for
the Office of the National Rail Safety
Regulator (ONRSR) to not only focus on
safety compliance and enforcement, but
also the advancement of efficiency and
productivity initiatives in the sector.
Dalla Valle points out that the road
sector’s National Heavy Vehicle
Regulator is founded on the principles
of a “safe, efficient and productive heavy
vehicle industry serving the needs of
Australia,” and questions why the rail
freight sector does not enjoy the same
level of ingrained institutional support.
He also stresses the importance of
involving other federal and state
government agencies in the regulation
of rail freight and urges them to work
closer with industry. He highlights the
emergence of dedicated freight divisions
within government transport agencies
in recent years as “encouraging,” but
says deeper engagement with private
rail freight operators is needed.
Harmonisation of operating procedures
and training requirements for freight
IRJ The Railway in 2019
train drivers and crews across state and
territory borders by 2021 is another key
policy change Dalla Valle says Forg will
pursue.
“Outside of the busy shared rail
networks of Sydney, Melbourne and
Brisbane, there are very few major
variations or surprises to how a freight
train operates on a given railway
route,” Dalla Valle says. “In the last
decade, advances in communication
and signalling technologies like
sophisticated global positioning
systems and state-of-the-art network
control systems have dramatically
improved train operating safety.
“During long-haul inter-state trips,
train drivers will travel on multiple rail
networks, each having a raft of different
codes, standards and communication
protocols that must be adhered to. This
is an area ripe for simplification,
modernisation and harmonisation.”
Dalla Valle adds that the rail freight
sector regulation needs to be aligned
with actual risk, not perceived risk and
certainly not outdated historical risks.
Forg is also calling on the Productivity
Commission to investigate and quantify
the impacts of mandated train driver
hours on the rail freight sector, notably
in Queensland and NSW.
“The trucking and aviation sectors in
Australia have shifted towards greater
use of risk-based approaches to fatigue
management, but rail continues to be
Despite growing traffic, there is a sense that the government is slow at adopting policies that will encourage an even greater shift of freight to rail.
IRJ The Railway in 2019
subjected to overly-prescriptive and
complex rules which often produce
perverse safety outcomes,” Dalla Valle
says. “For example, changing over train
crews when outer limits of service are
reached, irrespective of the location of a
train on the network, results in staff
driving back and forth on roads
between depots and locomotives;
creating unnecessary road safety risks
and added operating costs.
“Freight trains can often be delayed
on the network because of problems
beyond the control of operators.
Mandated hours for train drivers are
inflexible; removing the ability for freight
operators to deal with these unforeseen
events with any degree of agility.”
Report
A 2017 Deloitte Access Economics
report found that for every tonne of
freight hauled, road freight produces
14-times greater accident costs than rail
and 16-times more carbon emissions.
Therefore, Forg is calling on
governments to recognise rail freight
sector’s significant contribution to
reducing both accident costs and carbon
emissions in Australia’s transport
supply chain. “I don’t see any of these
factors being adequately built into
charging models for transport,” Dalla
Valle says. “Long-overdue and much-
needed reforms in the critical policy
area of heavy vehicle road usage
pricing have largely come to a grinding
halt and regulators continue to be
preoccupied with targeting diesel
emissions from freight locomotives.”
The Australian government’s own
figures suggest freight and passenger
rail transport accounts for a mere 4% of
total transport sector greenhouse gas
emissions. In comparison, the report
found heavy vehicles accounted for
more than 20%, with this predicted to
grow to almost 30% by 2030.
Dalla Valle maintains ‘policy
prejudice’ against rail will result in
added regulatory burdens for freight
operators, needlessly driving up
operating and compliance costs in the
sector.
He says rail freight operators have
worked hard over the last two years to
develop a detailed and comprehensive
national code of practice for diesel
emissions for existing and new
locomotives. And as the sector heads
into 2019 he called on governments to
acknowledge this work and respond
accordingly.
“The code has been endorsed by the
Rail Industry Safety and Standards
Board and is set to be rolled out in
December this year - I sincerely hope
governments across the country
recognise the efforts of industry, as
opposed to reinventing the wheel,”
Dalla Valle says. IRJ
Photo: Mark Carter
53
January Aussie Passenger_Layout 1 20/12/2018 14:13 Page 54
Australian passenger rail reinvigorated
Australasia | passenger
F
Mark Carter, regional editor
OR many years, passenger rail in
Australia has been the poor cousin
when it comes to service and
infrastructure upgrades, a situation not
helped by the federal government’s
generally negative attitude to public
transport.
Recently, however, partially through
the perseverance of state governments,
but also through a remarkable reversal
of policy at the federal level, passenger
rail is back on the agenda. Several major
projects are well advanced and some key
rolling stock orders are in the pipeline.
In a first for Australia, Sydney’s fully-
automated $A 8bn ($US 5.76bn) North
West Metro link between Rouse Hill
and Chatswood will commence operations
by the middle of 2019. Tunnel boring
machines (TBMs) are in the ground as
construction progresses on stage 2 of
the metro project, the $A 12bn Sydney
Metro City & Southwest extension.
TBMs are also active in Melbourne,
excavating the twin 9km tunnels for the
Metro Tunnel project, which is aiming
to create additional capacity on the
suburban network.
A number of level crossings at major
intersections in Melbourne were
replaced with viaducts in 2018. Dubbed
‘skyrail’, the work is part of the state
government’s major upgrade of the
Cranbourne and Pakenham commuter
lines and a broader programme to
remove up to 50 level crossings in the
metropolitan area.
In Western Australia, two TBMs are
excavating 8km tunnels that will form
part of the $A 1.2bn rail link to Perth
53a
Airport. While the project was due to
open in 2020 this was pushed back to
2021 in December after a leak damaged
a 26m section of one of the tunnels,
causing a sink hole to form.
Two other projects in the state have
recently been reviewed by Infrastructure
Australia: the 14.5km Yanchep rail
extension, which is ranked as a “high
priority,” and the 17km Thornlie-Cockburn
rail proposal deemed a “priority.”
The long-delayed electrification of the
40km Adelaide - Gawler suburban line
in South Australia received $A 615m in
government funding commitments in
2018, with the federal government
providing $A 395m and the state $A
220m. Work is now planned to start
during 2019.
Commuters across New South Wales
are also set to benefit from new train
deliveries on several fronts during the
year, beginning with 22 driverless trains
built in India by Alstom for the new
metro services, the last of which will
arrive in early 2019.
Not far behind is the first delivery
from Hyundai Rotem of double-deck
inter-city EMUs under a $A 2.8bn order.
The sets will initially enter service on
the Central Coast and Newcastle line in
late 2019.
An announcement is expected early
in the year of the successful bidder for
the replacement of the XPT fleet, and
other trains that provide regional long-
distance services in New South Wales.
The three shortlisted consortia are led
by Downer, Bombardier and CAF. Transport
for NSW aims to award a contract in
2019, with the first trains expected to
enter service in the early 2020s.
In Victoria, the first of the High
Capacity Metro Trains broke cover in
early December prior to commencement
of testing. Downer/CRRC is assembling
65 seven-car EMUs locally, which will
provide additional network capacity in
conjunction with the Pakenham and
Metro Tunnel infrastructure projects.
2019 will also be significant for light
rail with new systems in Canberra and
Newcastle set to commence operations
early in the new year. However, Sydney’s
extension of the existing network
through the city and to the southeast
has not fared so well, with ongoing
contractual and logistics delays pushing
completion back to May 2020. A final
business case for the Stage 3A extension
of the highly-successful Gold Coast
Light Rail in Queensland is expected
shortly with the federal government
already committing $A 112m to the project.
With a renewed focus on congestion
issues and public transport, in particular
heavy rail, state governments are
suddenly getting more ambitious in
their search for solutions. In Victoria
plans have been floated for a $A 50bn
orbital heavy rail urban line linking the
existing radial network of commuter
lines, while the government and private
sector have offers on the table to fund
the proposed $A 15bn direct link to
Melbourne’s main airport.
The New South Wales government
also says that it is time to revisit higher
speed rail options of at least 200km/h.
A $A 4m study was announced in
December to look at yet uncosted
options to upgrade existing links from
Sydney to several regional centres
within a 300km radius. Momentum, it
seems, is building for the Australian
passenger train. IRJ
Photo: David Gubler
IRJ Print Ad_Layout 1 25/05/2017 12:12 Page 1

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Rail regains momentum in the Gulf states
Middle East | GCC
With higher oil prices and diversified revenue sources, the Gulf states are picking up the pace on rail
T
investment with many major projects back on the agenda, as IRJ Pro market analyst Oscar Sinclair explains.
HE Middle East is on the cusp of
large-scale rail expansion, and
unlike previous attempts, many
socio-economic and political factors are
combining to create a sustainable
ecosystem for investment. Currently
6294km route-km is under construction
across the region, accounting for over
$US 105bn of investment, with an
estimated 8338.1 route-km set to be
constructed by 2035, according to data
from IRJ Pro Project Monitor.
The most prominent countries in the
Middle East are the Arab Gulf states,
which with the exception of Iraq, make
up the Gulf Cooperation Council (GCC).
The institution was formally established
in 1981 but is not economically integrated.
There are also significant political and
socio-economic differences between the
GCC states. Indeed, these have led to
differing attitudes towards public spending
on large-scale infrastructure projects.
For example, the region’s ‘petrostates’
have tended to ride the wave of high oil
prices to quickly develop flagship
projects, while others have struggled to
find multilateral and development
finance. The GCC economies rely on oil
and gas as their main exports and
source of fiscal revenue. So, when
global oil prices tumbled in 2014, with
crude as low as $US 26 per barrel,
around $US 360bn was wiped off
government balance sheets.
However, the 2014 shock has been
absorbed for the most part, and despite
current volatility in the oil market,
projects are once again picking up
speed, and in many cases are a higher
priority than before.
Rail projects in the region were once
placed in the discretionary category.
However, due to increased social pressures
this is no longer the case. Many countries
are experiencing large demographic
shifts such as population growth. With
youthful demographics, these states
need better infrastructure to support
employment and further economic
development.
Each of the GCC countries has differing
break even requirements when it comes
to oil price, impacting each country’s
ability to fund projects. The Gulf States
have taken on significant foreign currency
reserves and loaded up on sovereign
debt as hedges.
54
Indeed, some countries such as
Bahrain have no option but to raise debt
levels or cut funding. Bahrain needs oil
to trade at around $US 113 to breakeven,
and debt could go over 100% of GDP by
the end of 2019 if oil prices do not rise.
Despite these implications, many
countries have increased spending on
rail projects. Saudi Arabia has
consistently expanded its budget and
this year the country is expected to
spend just under $US 300bn. Dubai
increased infrastructure spending by 46.3%
in 2018 but has cut spending in 2019.
The introduction of new taxes, such
as VAT in both Saudi Arabia and the
United Arab Emirates last January, is
helping to boost revenues, while GCC
governments are starting to explore
alternative funding and procurement
options for projects.
Public-private-partnerships (PPP)
have re-emerged as a popular funding
model on the back of the oil price crash
in 2014. Governments have been
attracted by the mitigation of financial
risk associated with large projects. The
UAE and Kuwait introduced new PPP
laws in 2015, and Saudi Arabia, Qatar
and Oman are currently establishing
new frameworks.
The Gulf Railway
The region’s most ambitious project,
The Gulf Railway, is a proposed line
that will connect all GCC member
states, totalling 2177km, and is
estimated to cost up to $US 250bn. Each
of the states will be responsible for
implementing their own portion, with
the largest sections in the UAE and
Saudi Arabia.
The scheme was first proposed in
2009 with an original deadline of 2018.
However, the project has met many
financial obstacles, particularly during
periods of low oil prices, as well as
differing political interests among the
states involved with the deadline for
completion now set at 2023.
Considerable progress has been made
over the past year on the project,
including the 1200km section in the
UAE. The UAE‘s Ministry of Finance
and the Abu Dhabi Department of
Finance signed a deal to finance the
second stage of the UAE’s national rail
project in November. Stage 2 of the
Etihad Rail network will span 605km
and integrate the national system with
the GCC network, transporting up to 50
million tonnes of freight a year. The line
will run from Ghuweifat on the Saudi
border to Fujairah on the eastern coast,
connecting with Abu Dhabi and Dubai,
and to the Omani border. Preliminary
design works were completed earlier
last year and tenders for the civil works
are expected to float soon.
The final expansion will come under
stage 3 and serve the northern Emirates,
adding a further 250km to the network.
Egis has been appointed to provide
project management and consultancy
services for stages two and three, with
Jacobs Engineering providing the
engineering and design services. Stage
1, a 254km line from the gas fields in
the Al Dhafra region to the Gulf port of
Ruwais was completed in 2015.
The King Hamas Causeway is
Bahrain’s most significant Gulf Railway
project and will connect Bahrain with
Saudi Arabia. Construction is expected
to start in 2021 and take three years to
complete. The causeway is estimated to
cost $US 4bn and will include two
tracks connecting with the GCC’s rail
network along with road traffic lanes.
The project will extend 75km into both
countries and includes a 25km causeway
over the Persian Gulf. Consultancy bids
for the project have been issued and the
winner is expected to be announced in
the first quarter of the year.
Kuwait National Rail Road (KNRR),
the country’s chief project, will consist
of a national railway linking Kuwait
City with seaports and other GCC
states. The railway will serve both
freight and passengers and offer a top
speed of 120km/h.
The 575km network will be delivered
in two phases. Construction of phase 1,
a 111km stretch from Kuwait City to
Nuwaiseb on the Saudi border began in
August, and a 153km line connecting
Kuwait City with Boubyan port, is
expected to be completed in three to
four years. The project will be delivered
through a PPP, with a private consortium
holding 44% of the project company
and 50% of funding will be raised
through an IPO. The government will
hold the remaining 6%.
IRJ The Railway in 2019
 Saudi Arabia has been the most
aggressive GCC state in rail development
and plans to begin construction on 1100km
of lines in the next year, according to
data from IRJ Pro.
This includes its section of the GCC
network as well as the 950km Landbridge,
which will run from Riyadh to Jeddah.
The line is forecast to carry up to 8
million tonnes of freight per year and
was origninally scheduled for
completion in 2020. However, with
other major projects such as the
Haramain high-speed line taking
priority, this deadline was pushed back
Transit projects take shape in cities across the GCC
United Arab Emirates: In Abu Dhabi,
there are currently seven metro and
light rail projects under construction.
Abu Dhabi is planning to develop a
131km metro network, which includes
underground sections totalling 18km.
Two light rail lines are also planned
along with a BRT system. Phase 1 is
slated for completion in 2020 and will
span 60km. Subsequent phases will
add a further 70km. The project is
expected to cost around $US 2bn.
Dubai is currently extending its
metro Red Line by 18.5km along with
two projects ahead of Expo 2020 in
Jebel Al. A 20.6km Green Line
extension is also planned for
completion by 2020 along with the next
phase of the Al Sufouh Tramway.
Saudi Arabia: The first section of
Riyadh’s metro system is expected to
open this year. The network will
comprise six driverless lines totalling
176km with 85 stations. Riyadh has
seen exponential population growth
over the last three decades and is
expected to grow to 8 million people in
IRJ The Railway in 2019
and Saudi Railway Company (SAR) has
announced that it expects to launch
tenders for the project soon. The latest
estimated completion date is 2023.
Oman is similarly revisiting its plans
to develop a comprehensive freight rail
network, which was suspended ahead
of the announcement of construction
tenders for the first phase in 2016. The
network will span 2144km and connect
the country’s three deep-sea ports with
industrial areas along with the GCC
network.
Momentum is building once again for
rail in the Middle East. Higher oil
the next 10 years. The system will be a
fundamental pillar of the city’s transport
network.
The city of Jeddah is planning four
metro and five light rail lines.
Construction is expected to begin on
the first phase of the 149.5km metro
network this year.
Qatar: The capital Doha began
construction of the first phase of its
metro network in 2012. The initial
sections of the Red, Green and Gold
lines are due to be completed by 2020.
The network will ultimately consist of
four lines with an overall length of
300km and 100 stations. Doha metro
will be an integral part of the country’s
national transport network, with trains
operating at 100km/h, making it one
of the fastest driverless systems in the
world.
Lusail’s four-line 38.5km light rail
network is another key Qatari transit
project set to take major steps forward
this year ahead of the football World
Cup in 2022. The network will include
a 10km underground section and is
prices, demographic changes, economic
reprioritisation, a restructuring of the
legal and regulatory framework, and
the growth of PPP financing are all
combining to support a widespread rail
infrastructure expansion agenda.
With several key projects set to take
major steps forward in the next 12
months, the region is returning to its
status as one of the world’s hottest rail
markets. IRJ
Gain access to over 2200 projects as they
develop in over 100 countries with IRJ Pro.
For further information, visit www.irjpro.com
Photo: Shutterstock/S-F
forecast to carry 50,000 passengers per
day by 2021.
Kuwait: Kuwait City is planning to
build a metro network at an estimated
cost of $US 7bn. Five lines are
currently planned which will span
91.4km. The government will own 10%
of the project and raise 50% of the
funding through an initial public
offering (IPO). The remaining 40% will
be held by private developers.
Bahrain is planning to develop its
first metro project, at an estimated cost
of up to $US 2bn. The project will have
a total length of 109km and link the
region with the King Hamas Causeway.
It will be built in four stages and use
driverless trains capable of carrying up
to 43,000 passengers per hour across 20
stations. The project will be developed
under a PPP model, and tenders are
expected in the final quarter of this
year.
Oman is exploring options for light
rail in Muscat as well as a national
passenger network. However, these
plans remain in the early stages. IRJ
55
Brazil looks to private investors to
South America | Brazil
overcome budgetary constraints
Joubert Flores, president of
W
ANPTrilhos, talks to Renata Passos.
ITH a population of more than
209 million people, the fifth
largest on the planet, Brazil
faces major challenges when it comes to
urban mobility. While about 80% of its
population lives in cities, the country’s
metro networks have a combined
length of just 1105km according to data
from the National Association of
Passenger Rail Operators (ANPTrilhos).
Creating and expanding passenger
systems is one of the tasks of the new
government, which from this month
will begin managing the regional states,
including many which are currently
running a deficit.
“We have 25 metropolitan regions
with more than one million
inhabitants,” says Mr Joubert Flores,
president of ANPTrilhos. “One way to
solve this deficiency is to make existing
projects priorities. Although the country
suffers a large budget constraint, we
suggest giving priority to these
investments and, at the same time,
creating regulatory and guarantee
conditions that may make them more
attractive to private capital.”
For Flores, private management also
brings more flexibility. “Public
administration is slower and has a
number of rules that make activities
more expensive,” he says. “An example
is the labour issue, because it is almost
impossible for a public company to
dismiss an employee. Instead, operation
could be delegated to the private sector.
56
“But the government cannot give up
the responsibility for planning,
organisation and choice of priorities.
Despite having little money at the
moment, mobility should be considered
a constitutional right and solutions
need to be found.”
Flores says new lines totalling more
than 164km should be completed
within the next five years, equivalent to
15% of the current network.
After years of delays, the expansion
of the Salvador and Lauro de Freitas
metro system in the state of Bahia was
restarted following the release of a fresh
tender and private support. Today, it
has become one of the longest metro
networks in the country.
Since the signing of a concession
agreement for a public-private
partnership (PPP) in 2013, Reais 5.8bn
($US 1.4m) has been invested in the
system which has allowed work on
lines 1 and 2, the refurbishment of six
trains, the renovation and expansion of
bus terminals and the purchase of 34
new trains, as well as the implementation
of systems and the maintenance and
operation of the metro.
“The development of the system was
one of the fastest-built infrastructure
projects in Latin America,” says the
“
Brazil bet on road transport and we have nothing against
it, but you have to have a balance between the modes.
Joubert Flores
CEO of CCR Metrô Bahia, Mr Rodolfo
Gonzalez. “In four years, the Bahia
subway has reached 33km and entered
the ranking of the five systems that
expanded the most in the country in
2017. The system also accounted for
almost 50% of the growth of Brazil’s
passenger rail network, with the
expansion of Line 2, an increase of
14.4km and the inauguration of eight
stations in just one year.”
Now, the regional government of
Bahia plans to extend Line 1 by 4.66km
to Águas Claras/Cajazeiras, while a
study into the extension of Line 2 to
Lauro de Freitas station will be
launched after the target of 6000
passengers at peak times for six
consecutive months has been met.
Light rail is also gaining traction in
the country, according to Flores. He
cites the success of the project
implemented in Rio de Janeiro, which
in addition to creating a new means of
transport also revitalised areas of the
city that have been abandoned.
Future metro projects include the
expansion of the Brasília metro; the
implementation of the system in
Curitiba, Paraná; new lines in Porto
Alegre, Rio Grande do Sul, and Belo
Horizonte, Minas Gerais; and the
extension of Line 2 and the construction
of Line 3 in Rio de Janeiro.
Flores says a study by the National
Confederation of Transport (CNT)
identified the need for 850km of new
metro lines across all states, equivalent
to an investment of Reais 160bn.
“Brazil is a potential market for
investors because it is a continental
country, which has a strong need for
infrastructure, both for the movement
of people and the transport of freight,”
Flores says. “Brazil bet on road
transport and we have nothing against
it, but you have to have a balance
between the modes.”
Flores also points out that it is
necessary to consider the extremely low
rate of accidents on metros. “In Brazil,
about 50,000 people die each year in
road traffic accidents - this is equivalent
to a civil war,” he says. “In addition to
the deaths, there are also expenses with
hospital costs, days that the injured
person is off work or the aid they
receive from the government. With the
reduction of these costs, it is possible to
invest adequately.” IRJ
IRJ The Railway in 2019
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Are East Africa’s new railways viable?
Africa | finance
East African countries have been keen to accept international funding, particularly from China, to build new
T
standard-gauge railways rather than upgrading existing lines. However, as Shem Oirere reports, there are
serious doubts over the long-term viability of these new lines.
HE value of current railway
projects in East Africa has risen to
more than $US 12.1bn as
governments take advantage of funding
offered by foreign investors to build
new standard-gauge railways (SGR)
rather than upgrading existing metre-
gauge lines serving Ethiopia, Djibouti,
Kenya, Uganda and Tanzania.
The first two SGR lines financed and
built by China have opened linking
Nairobi and Mombasa in Kenya and
Addis Ababa, Ethiopia and Djibouti,
and more projects are in the pipeline in
these countries as well as Tanzania and
Uganda. However, rail freight’s share of
the market remains below 5% across the
region and there are concerns about the
economic value of ongoing and recently
completed projects.
The development of rail projects
comes at a time when nearly all East
African countries are experiencing a
surge in economic growth, although the
two developments are not related.
Ethiopia’s economy was expected to
grow at 8.5% in 2018 with China its
largest foreign investor and trading
partner. Tanzania’s growth rate is 7.2%,
Kenya’s 5.8% and Uganda’s 6.5%.
However, this growth does not
correspond with revenue collection in
these countries and railway budget
allocations for 2018. Tanzania, Kenya,
Uganda and Ethiopia face budget
deficits for the 2018-19 fiscal year and
have only allocated a small share of the
total project costs for this year. For
example, Kenya’s budget deficit in 2018
stands at $US 5.4bn, which equates to
5.7% of GDP. The share of national
budget deficits for Uganda, Ethiopia
and Tanzania to their GDPs stood at
4.8%, 3.3% and 3.4% respectively, and
all four countries are financing the
shortfalls through external borrowing.
Even with these deficits, Tanzania has
allocated $US 611m this year for the
construction of the 722km Dar es
Salaam - Morogoro - Makutupora SGR
line while Kenya has set aside
$US 734m in 2018-19 for construction of
the 120km SGR line linking Nairobi to
Naivasha. This is the first section of the
second phase of the Mombasa - Nairobi
- Malaba (Uganda border) SGR line.
East African governments have also
58
embraced PPPs as an option to finance
new railways, or in a few cases,
rehabilitate existing lines.
Despite East Africa embracing the
PPP model, China has emerged as the
leading financer of rail projects ahead of
international and African development
finance institutions (DFIs). Indeed,
China is financing one in every four
East African construction projects while
governments in the region are funding
15.5%, international DFIs 19.7% and
African DFIs 16.9%. Additional funding
comes from private equity funds, equity
financing from infrastructure project/
facility owners, and through PPPs.
China financed and built the Addis
Ababa - Diredawa - Djibouti SGR in
Ethiopia. In Kenya, China is also
financing the $US 1.5bn Nairobi -
Naivasha SGR line under a contract by
China Road and Bridge Corporation,
“
China is financing one in every four East African
construction projects while governments in the region
are funding 15.5%, international DFIs 19.7% and African
DFIs 16.9%.
which built the $US 3.8bn Mombasa -
Nairobi SGR line.
In Uganda, negotiations with the
China Exim-Bank are expected to be
completed soon to finance the 273km
SGR line between Malaba and Kampala,
which a Chinese company will build.
European financiers and lenders have
worked on some railway construction
projects in East Africa. For example,
Turkey’s Yapi Merkezi arranged finance
for the $US 1.7bn Awash - Weldiya -
Hara Gebeya SGR line in Ethiopia that
has attracted financing from a syndicate
of lenders from Europe, the United
States, the Middle East and Africa.
Other development partners are
expected to finance five lots totalling
1575km for the Dar es Salaam - Mwanza
SGR in Tanzania. Yapi Merkezi and
Mota-Engil won the contract for the
first two lots between Dar es Salaam
and Makutupora.
An emerging issue is whether the
new railways are economically viable.
Just months after commissioning the
487km Mombasa - Nairobi SGR, doubt
persists as to how it will carry enough
freight to generate sufficient revenue to
repay the Chinese loan. In an attempt to
generate traffic, last year the Kenyan
government instructed that all imports
through Mombasa switch to rail.
“There are concerns that East Africa
may not have adequate freight capacity
that can make the new SGR lines
economically viable,” says Mr Anil
Bhandari, a Nairobi-based transport
consultant. “Probably the first option
for expanding rail transport in the
region would have been to modernise
the existing metre-gauge network.”
However, efforts by Rift Valley
Railways, the concessionaire of the
Kenya/Uganda metre-gauge network,
to improve rail freight performance
flopped despite a $US 305m investment
programme. The concession has since
been terminated by the Kenyan and
Ugandan governments.
“Governments and development
partners can meet project financing
needs by better allocation of public
resources to projects with the highest
returns,” says Mr Jovin Mwemezi, a
corridor development expert at the East
Africa Community. “They can also
broaden sources of financing and
package more projects as PPPs.”
The Chinese seem set to stay in Africa,
and according to Mr Uwe Wissenbach,
the author of a recent working paper on
the SGR, China is likely to continue to
dominate infrastructure financing on
the continent. “It’s a major business
opportunity for Chinese companies as
their home market is becoming
saturated,” Wissenbach says. IRJ
IRJ The Railway in 2019
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