The Railway In

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

IRJ

January 2019 I Volume 59 Issue 1 www.railjournal.com | @railjournal

The Railway in

International Railway Journal

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2019 Contents

The Railway in

International Railway Journal

January 2019 Volume 59 issue 1

The Railway in 2019

Rail must seize the initiative in 2019

4

Global trends 6

10 12

19 rail projects to watch in 2019

16 18 19

23 24 27 28 31

33a 34

Moscow metro benefits from modernisation

Roman Latypov, first deputy CEO, Moscow Metro

North America

TC Chew, global rail business leader, Arup

43

Defining new approaches to efficient infrastructure New urban transport modes need regulation

Shared mobility options look set to become a growing trend

A challenging year ahead for Europe’s rail supply industry

Philippe Citroën, director general, Unife

Transmashholding targets further growth at home and abroad

40 46 48

Kirill Lipa, CEO, Transmashholding

Asia

Petr Brzezina, CEO and chairman, Škoda Transportation

51

Takeover sparks improved performance at Škoda Kapsch proposes ‘Made in Europe’ initiative

Kari Kapsch, CEO, Kapsch CarrierCom

Europe 21

38

European funds drive Balkan rail renaissance

Countries working hard to restore obsolete infrastructure

From HS2 to Riyadh Metro, the highlights of the year ahead

Industry 14

37

Light at the end of the tunnel for the Fourth Railway Package?

Elisabeth Werner, land transport director, DG Move

DB’s troubles continue despite market growth

While Germany’s rail market grows, DB financial difficulties grow

DB’s digitalisation plans take shape

Sabina Jeschke, board member for digitalisation and technology, DB

Dispute raises questions over Swedish passenger market

Open-access operaters vye to access SJ’s online sales platform

Rail Cargo Group performance bucks freight market trend

Clemens Först, CEO, Rail Cargo Group

ProRail focuses on capacity and speed

Pier Eringa, CEO, ProRail

ONLINE EXTRA Uncertainty reigns as Brexit drags on What will Britain’s EU departure mean for the rail industry?

Network Rail seeks improved efficiency in CP6

Infrastructure manager finalises £35bn five-year funding plan

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An Englishman in New York

Andy Byford, president, New York City Transit

Integration and frequency at the heart of California rail plan

California’s infrastructure plays catch up with large population

Via Rail Canada prepares for high-frequncy operations

New fleet set to improve Canadian passenger operator’s services

Virgin Trains USA targets inter-city expansion

Patrick Goddard, president, Virgin Trains USA

New government shakes up Malaysia’s investment priorities

Multiple projects on hold amid administrative restructuring

Indian Railways takes two steps forward, one step back

Major accident casts a shadow over IR’s safety improvements

Australasia 52

53a

Freight operators seek urgent policy reform

Dean Dalla Valle, chair, Freight on Rail Group, and CEO, Pacific National

ONLINE EXTRA Australian passenger rail reinvigorated

Change in federal government approach offers fresh impetus to projects

Middle East 54

Rail regains momentum in the Gulf states

Recurring oil prices spark return to rail project development

South America 56

Brazil looks to private investors to overcome budgetary issues

Joubert Flores, president, ANPTrilhos

Africa 58

Are East Africa’s new railways viable?

Chinese funding for infrastructure projects under the microscope

Also in this issue 57

Full contact list

57

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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.

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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 ontime and to budget (p10). Rail also has to become smarter at increasing capacity rather than simply laying

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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

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

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.

[email protected]

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

Type: Metro Country: Indonesia Construction Start: 2013 Completion: 2019 Length: 15.7km Cost: $US 1.5bn Indonesia’s first mass rapid transit (MRT) rail system is on

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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. Jakarta plans to expand its MRT network to eventually cover 108km by 2030.

Moscow - Kazan High-Speed Line

Country: Russia Type: High-speed Construction Start: 2019

Completion: 2024 Length: 762km Cost: $US 21.4bn

The trillion Roubles line will be the first segment of an ambitious transnational highspeed railway set to connect Moscow with Beijing. The construction agreement covering the first section was announced in October and calls for work to begin on the 301km alignment between Zheleznodorozhny 21km east of Moscow, and Gorokhovets. The line is being developed as a public-private partnership involving Russian Railways (RZD) with Chinese backers.

Ostlänken Phase 1 (Järna - Linköping)

Country: Sweden Type: High-speed Construction Start: 2019 Completion: 2033 Length: 150km Cost: $US 6bn

The initial phase of a Y-shaped network that will link Stockholm with Jönköping, Gothenburg, and Malmö. The line is expected to have an operating speed of 320km/h, reducing the 1h 40min Stockholm - Linköping journey time to under one hour. A total of 27 tunnels with

IRJ The Railway in 2019

High Speed 2 Phase 1 (London Birmingham/Lichfield) Country: Britain Type: High-speed Construction Start: 2019 Completion: 2026 Length: 193km Cost: $US 27.5bn

This is the first phase of a 338km Y-shaped highspeed network that will link London with central and northern England. The line will serve new stations at Birmingham Interchange and Curzon Street (pictured) with a link to the West Coast Main Line near Lichfield. The line will begin at London Euston, which will undergo major reconstruction as part of the project, and run in bored tunnels beneath London’s western suburbs. It is expected to cut the journey time between London and Birmingham from 1h 22min to 49 minutes. Services will be operated by a fleet of 60 high-speed trains. The contract to supply and maintain the fleet, which is worth an estimated £2.75bn, is due to be awarded by the end of the year.

a combined length of 20km will be required for the project.

Brisbane Cross River Rail Country: Australia Type: Commuter Rail Construction Start: 2019 Completion: 2024 Length: 10.2km Cost: $US 3.9bn

The project will unlock a 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.

the Qinghai - Tibet railway with the Southern Xinjiang railway. Works began in 2014 and are expected to conclude in the next 12 months. The project includes a 24.6km bridge over Taitema Lake to avoid harming the fragile ecology and the 13.1km AltynTagh tunnel. The travel time between the two cities will be reduced from 26 to 12 hours.

Quito Line 1

Country: Ecuador Type: Metro Construction Start: 2013 Completion: 2019 Length: 22.5km Cost: $US 2bn

Country: China Type: Main line Construction Start: 2014 Completion: 2019 Length: 1214km Cost: $US 5.4bn

Billed as one of the most important infrastructure projects in Ecuador’s history, Quito Line 1 will be the country’s first metro. The 22.5km line will serve 15 stations with a forecast ridership of around 378,000 passengers per day. The project is expected to create 5000 direct jobs, according to the World Bank. Line 1 is due to open in July, and three more lines are proposed.

This huge project will connect Golmud in Qinghai province with Korla in Xinjiang autonomous region, linking

Country: United States

Geku Railway (Korla - Golmud)

IRJ The Railway in 2019

Type: High-speed Construction Start: 2019 Completion: 2024 Length: 385km Cost: $US 15-18bn The project that will offer an alternative way for Texans to travel between their two largest cities could enter construction this year. The line was first announced in 2012 and trains will travel at speeds of up to 330km/h. Hopes of starting construction in 2016 were pushed back for numerous reasons. However, the project has been gathering momentum through 2018, and in September a $US 300m loan was secured from two Japanese entities. Texas Central officials have said that 2019 is the target date for the start of construction. The project is expected to benefit 50,000 passengers and provide 10,000 direct jobs for each year under construction.

Dongguan Line 3

Country: China Type: Metro Construction Start: 2019 Completion: 2024

Rail Baltica

Country: Poland, Lithuania, Latvia, Estonia Type: High-speed Construction Start: 2019

Length: 66.2km Cost: $US 4.3bn The 66.2km line will improve transport links between the east and west of Dongguan. The line includes a 12km underground section and will 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 increase the existing 317km network by a further 110km, adding six new lines. The new phase is expected to add 1.5 million daily passengers to the system’s ridership and connect the capital with outlying

Completion: 2030 Length: 870km Cost: $US 5.65bn

A European Union and Trans-European Transport Networks (TEN-T) priority project, Rail Baltica will connect the Baltic States with the European standard-gauge network for the first time. The EU will fund 85% of the project, which is forecast to bring significant socio-economic benefits to the region, estimated by Ernst & Young to be valued at É16.22bn.

Texas Central Railway (Dallas - Houston)

7

Country: Thailand Type: High-speed Construction Start: 2019

Completion: 2029 Length: 983km 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 early stages of development and is expected to be completed by 2029. Thailand plans to build up to 2506km of high-speed railways between the capital and the northern and southern regions by 2036. The plan is set to cost over Baht 1.5 trillion ($US 47bn). High-speed services will run into Bangkok’s new main station at Bang Sue (pictured), which is currently under construction. regions, including Meerut. Construction was expected to begin in 2017 but due to delays in gaining approvals from Delhi’s government the project was pushed back and work will now begin in 2019.

Riyadh Metro

Country: Saudi Arabia Type: Metro Construction Start: 2014

Mengxi - Huazhong Country: China Type: Heavy haul Construction Start: 2013 Completion: 2019 Length: 1817km Cost: $US 27bn

Macau-Taipa metro Country: China

Type: Metro Construction Start: 2012 Completion: 2019 Length: 9.3km Cost: $US 17.7bn Macau’s fully-automated light metro will run on rubber tyres and has been under construction since 2012. Once completed it will serve Taipa, Macao Peninsula and Cotai. The opening date is still unclear although it is likely to be commissioned in 2019. A second phase is planned and

Completion: 2021 Length: 176km 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. 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.

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The world’s longest coal line will connect the ‘golden triangle’ region with central China, offering a transport capacity of more than 200 million tonnes per year. The line passes through seven provinces from Inner Mongolia to Jiangxi province, almost spanning the entire length of the country. The project includes construction of a 22.8km tunnel in Henan.

Photo: Alstom

Bangkok - Padang Besar

Photo: Zephyr_P/Shutterstock.com

Global trends | projects

IRJ The Railway in 2019

Shatin - Central Link

Country: China Type: Metro Construction Start: 2012 Completion: 2019 Length: 17km Cost: $US 12.4bn

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 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

Country: Turkey Type: High-speed Construction Start: 2008 Completion: 2019 Length: 406km Cost: $US 5.4bn The project is set to be

Copenhagen - Køge - Ringsted Country: Denmark Type: High-speed

Construction Start: 2014 Completion: 2019

Length: 60km Cost: $US 1.78bn

Denmark’s first high-speed line is set to open in May and a new Danish rail speed record of 255.2km/h was set during testing on November 6 2018. Up to 24 trains per hour will operate on the double-track line at speeds of up to 250km/h. The line will relieve congestion and the 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.

Photo: Banedanmark

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

commissioned by the end of the year, with most civil works on the line already completed. The 406km line encompasses many bridges and viaducts and a total of 50km of tunnels and trains will travel at speeds up to 300km/h. The new alignment will reduce the distance between the two cities from 603km to 405km and the

Alexandria - Aswan HSL journey time from 12 to 2 hours.

Country: Egypt Type: High-speed Construction Start: 2019 Completion: 2024 Length: 900km Cost: $US 10bn Construction of the Alexandria - Aswan HSL is due to begin

this year. The 900km line will follow the Nile and connect Alexandria, Cairo and Aswan. Phase 1 will run from Alexandria to Cairo and is estimated to cost É2.4bn including rolling stock. IRJ To gain access to extensive data on projects, fleet orders, and tenders, subscribe to IRJ Pro. For more information, visit irjpro.com.

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IRJ The Railway in 2019

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Defining new approaches to efficient infrastructure Global trends | system design

TC Chew, global rail business leader for Arup, talks to Keith Barrow

I

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 longerterm 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

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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 nonfarebox 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. Costeffectiveness 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 highperforming networks. Project 13 is based on an enterprise model, which is defined as “a long-term relationship between owners, investors,

Data management

Chew also highlights the power of data in optimising the operation and maintenance of mass transit systems. “Sensor technology is no longer costprohibitive 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 realtime 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 highquality 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 nonpersonal 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

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.

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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 congestion if they fail to regulate these new modes.

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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

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-toDoor 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

Shared electric scooters are a fun and clean way of getting around, but does their use and application need greater regulation?

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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 scootersharing 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.

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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

Mobility as a Service (MaaS) provides the means for urban transport administrations to channel their

residents’ movements by offering clear integrated 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 on the verge of launching a car sharing service in Oslo. Branching out into new

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 more cars to city streets, helping to exacerbate the congestion problem.

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 transit and cycling, Uber and Lyft will continue to exacerbate urban traffic congestion and weaken surface transit systems. Mobility as a Service (MaaS) provides 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 regulation is drawn up, that other urban areas follow their lead. IRJ

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A challenging year ahead for Europe’s rail supply industry Industry | Europe

Philippe Citroën, director general of the European Rail Supply Industry Association (Unife), talks to David Briginshaw.

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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.

“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

Siemens unveiled its new-generation Mireo EMU at the Wildenrath test centre in Germany on December 6. Photo: Keith Fender

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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.”

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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,

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

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

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Transmashholding targets further growth at home and abroad Industry | rolling stock

Transmashholding CEO, Kirill Lipa, speaks with Kevin Smith

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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

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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 LocoTechService. The company maintains 15,000

locomotives across Russia and has a 40year 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 threeyear 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. TMHArgentina 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.

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Chinese suppliers and Lipa says it is “exactly” TMH’s strategy to work in these areas. Elsewhere, TransmashholdingHungary 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

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

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

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Takeover sparks improved performance at Škoda Industry | rolling stock

Škoda Transportation CEO and chairman, Petr Brzezina, talks to David Burroughs.

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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.

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“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.

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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 nanolithium-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

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,”

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, along with liberalisation, private

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

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

Kapsch proposes ‘Made in Europe’ initiative

Kari Kapsch, CEO of Kapsch CarrierCom, talks to Kevin Smith

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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

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

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,

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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

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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.

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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.

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

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?

Europe | policy

Werner says ERTMS remains a spending priority for DG Move. Photo: DB AG/Barteld Redaktion & Verlag.

“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 crossborder issues.

Elisabeth Werner, land transport director with the European Commission’s Directorate General for Mobility and Transport (DG Move), talks to David Briginshaw.

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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

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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 [20142020] 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

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

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

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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

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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

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

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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.”

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 highspeed 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

Europe | Germany

DB’s troubles continue despite market growth

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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 SBahn 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

Photo: Keith Fender

Keith Fender, regional editor

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

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 tramtrain network is set for significant expansion in December when services are extended using an existing nonelectrified heavy rail route. In addition, new tram fleets will enter service in cities across the country to replace lifeexpired vehicles and enable service expansion. IRJ

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DB’s digitalisation plans take shape Europe | Germany

Sabina Jeschke, German Rail (DB) board member for digitalisation and technology, speaks with Kevin Smith.

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ERMAN Rail (DB) had a tough time in 2018. Poor service reliability coupled with worsethan-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

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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 startup 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

Many of these digital solutions are still in the pilot stage, but prototypes are providing us with the valuable

experience and information we need to expand their use. 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 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

IRJ The Railway in 2019

the beginning of 2018 with a second entering service in northern Germany recently. Jeschke says ETCS is the foundation for future technologies such as highlydeveloped sensors for object recognition

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 highlyautomated 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 controlcommand and signalling technology. This will provide the technical basis for highly-automated operation on this route section.” A crucial challenge facing DB is harnessing the array of data it now has available. Jeschke says DB should merge its data structures and is touting a “data lakes” strategy pioneered by tech giants such as Google and 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

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the effects, but we will be laying the crucial technological groundwork in 2019 to achieve these medium and longterm 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

Through the TecEX programme, DB is integrating new technologies into its everyday processes.

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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

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process different raw data for different applications and departures of trains. Sabina Jeschke

laboratory for road testing high-speed train components. Jeschke also highlights DB’s work alongside other European railway transport companies to establish the Initiative Round Table Rail, which is designed to advance both the railway and suppliers’ objective to improve quality, delivery times and ordering processes, to cut costs and save time. “Our purchasing organisation gives companies the chance to qualify as a supplier for DB in a clearly defined process,” Jeschke says. “Thanks to our expertise we are also able to assist with vehicle projects and we recently signed a working paper with CRRC to ramp up collaboration between our two companies.” Testing new technologies is a major challenge for any railway, which unlike car manufacturers, only have a single live system to work with. DB effectively has 5 million daily testers, with every

Illuminated platform surface door indicators are among the early innovations from the Mindbox.

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disruption becoming public knowledge through social media, and the conventional media all too ready to criticise the railway’s performance. Rail then is in a unique, and some might say, disadvantageous position

With data lakes we achieve the flexibility to store and

Photo: DB AG/Andreas Varnhorn

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

exceed 150km/h, it does not mean that all systems are limited to this speed. To bridge the gap with the supply chain, Jeschke says that from spring this year, DB will make its Advanced Train Lab available to the industry as a

compared with other modes. However, new technology might again provide the answer to this conundrum. Quantum computing processes could soon enable DB to create a “digital twin” of its entire system, enabling the company to run multiple experiments on its system concurrently and offer brand new information for timetable planning, fleet management, and predictive maintenance. “Computing power is extremely important to DB,” Jeschke says. “However, if we break it down to the business unit level, its benefits are still too vague. We need the right team and, above all, we need to cooperate with industrial and scientific partners who will handle it.” Many established big companies have been criticised all too frequently in recent years for failing to respond to new trends in a rapidly changing business climate. The rail industry in particular has a track record for being 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

Europe | Sweden

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Keith Barrow, senior editor

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 intercity 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 openaccess 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

Photo: Keith Barrow

Online distribution dispute raises questions over Swedish passenger market opening

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 openaccess 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

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

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Rail Cargo Group performance bucks freight market trend Europe | freight

Clemens Först, CEO, Rail Cargo Group, talks to Kevin Smith

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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 crosssector 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

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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 increase of 5-6% and well ahead of the market’s GDP growth of 1-2%. The company will also record “doubledigit” Ebit growth and “triple-digit” Ebitda figures for the year. “We are very proud to be the only big rail logistics company which has been consistently operationally positive since 2012. “We also expect to grow in 2019,” he says. “At the moment, the volumes 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

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 new connections between the Netherlands and Austria; Hungary and northern Italy; and Turkey and Poland. This will supplement the new twiceweekly Vienna - Picadena, Italy service, which improves connections from markets in northern Italy to Austria, Hungary, Czech Republic, Slovakia, Bulgaria and Romania; a bi-weekly service between the port of Rotterdam

IRJ The Railway in 2019

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We don’t just sell you station-to-station, but we sell you complete end-to-end transport, including first and last

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Critical to this approach is a new product marketing strategy. The network is now called TransNET, with conventional or intermodal rail freight service connections labelled, TransFER. “Everything will be branded and communicated in that consistent method,” Först says, adding that such a

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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 50-60 trains in 2017, to exceed a target of more than 400 trains in 2018.

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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 Europe, this form of rail freight continues to suffer from inefficiencies, particularly relating to first and last mile operations. Först says RCG is addressing this through its shuttle train strategy, which connects shunting yards that are a

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

IRJ The Railway in 2019

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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-

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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

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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.

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

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

Europe | Netherlands

Pier Eringa, CEO of ProRail, talks to Keith Barrow.

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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

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.

Prorail is using concrete blocks at level crossings to accelerate their closure, a move which has drawn criticism.

IRJ The Railway in 2019

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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

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

Prorail and NS are studying options to accelerate services between the Randstad conurbation and the north of the country. Photo: Quintus Vosman

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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 highfrequency 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 intercity 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

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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

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. Longerdistance 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-

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 stateowned 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

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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 industry. The short answer? No one really knows. 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

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.

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Photo: Lucian Bodnar

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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

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

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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

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. Robert Nisbet

community, including the rail industry, which is yet to see a clear way forward. This situation inevitably affects longterm 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. “When there’s uncertainty they’re just a

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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 could exit the EU without a deal, the

Reviews to look at rail’s future in Britain HILE the debate on Brexit is set to affect the rail industry’s external future relationship with Europe and the rest of the world, two reviews are due to be completed this year which may have a significant internal impact. In response to the disruption caused by the introduction of the May 2018 timetable (p34), the British government has launched a comprehensive review of the structure of Britain’s railways. Headed by British Airways chief executive, Mr Keith Williams, the government will publish a white paper on the review’s recommendations with the aim of implementing reforms from 2020 onwards. Billed by the Department for Transport (DfT) as the most significant structural assessment of Britain’s railways since privatisation in the mid-1990s, the Williams Review will “analyse all aspects of the industry, alongside the country’s changing travel and work patterns,” while considering how track and train can be integrated more closely. RDG regional director, Mr Robert Nisbet, says the

IRJ The Railway in 2019

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 suppliers. “No business likes uncertainty,” says senior policy manager, Mr Damian Testa, who has led RIA’s work on Brexit. “If you know what it is you can plan for it, even if it’s suboptimal. If 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 members that are multi-nationals,

industry has set out six outcomes it wants to see from the review: = customers at the heart: a reformed railway which unlocks a new generation of innovation and investment and, where it makes sense, offers choice for customers = clear accountability: building a structure that creates confidence in the railways’ leadership, making it clear where the buck stops when things go wrong = delivering value-for-money: avoiding a return to the days when running costs were deep in the red, lines were closed and stations were boarded up = driving economic growth: incentivising investment for the long-term, expanding the network and growing and rebalancing Britain’s economy = strengthening communities: ensuring towns and cities across the country get the maximum benefit from a railway, and = inspiring our people: ensuring those who work on the railway feel more involved and invested in the industry.

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Europe | Britain

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

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Fares review

HE Rail Delivery Group (RDG) is also working with the government to launch a review into the country’s fare system, which it says is outdated and confusing for passengers. The RDG has called for “root and branch reform” after research by KPMG found that only 34% of rail customers were very confident they had bought the best value ticket for their last journey and 29% were very satisfied with the experience of buying their ticket. “If you talk to passengers, you talk to industry and you talk to government, everybody agrees that the fares system is overly complicated, and almost preserves a moment in time back in the 1990s when the railways were privatised,” Nisbet says. Nisbet says the RDG is currently developing its proposals which it plans to present to government early this year.

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they’ll have some headquarters in mainland Europe. Some of the anecdotal stuff is that they are needing to provide more confidence around what the return on investment will be, purely because of the uncertainty around Brexit. It’s still OK to invest but it’s another level of assurance that they’re looking for because again, the degree of detail is not there.”

Framework

Even if Britain is able to pass the withdrawal agreement through parliament, which as IRJ went to press was looking increasingly unlikely in its current form, the British government will still need to negotiate a framework for the future UK-EU relationship to decide what trade between the two parties will look like. This will require unanimous approval from the EC, European Parliament, all 27 EU member states and the British parliament. That framework would be negotiated during a transition period, referred to by the British government as an “implementation period,” beginning on

March 29 and lasting until December 31 2020. During this time, Britain will have no formal say in making or amending EU rules and regulations, but will have to follow them to the letter. The advantage of transition is that it buys more time for businesses and governments to prepare for a new regime, and smooths the path out of the EU as opposed to crashing out of it overnight. In October, the Rail Safety and Standards Board (RSSB) published a statement confirming that Britain will continue to abide by EU rail standards and protocols after it leaves the EU, even in the event of a hard Brexit. This was followed by two guidance papers published by the Department for Transport (DfT) outlining how rail transport and rail safety standards would work in Britain following a hard Brexit. “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

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

“

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,

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

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 doomand-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

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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.

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Photo: Shutterstock/Joe Dunckley

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.

“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

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 betteraligned 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 30second 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

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

CP6 expenditure in England and Wales in £m Geographical routes

Anglia LNEEM LNW Southeast Wales Wessex Western Scotland

Operations 1185 2624 3411 2018 678 1030 1289 1249

IRJ The Railway in 2019

Renewals support & 1588 3322 3203 2346 957 1455 1627 2061

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

Other (power supply industry costs, rates maintenance and risk) 1054 1985 2109 1689 349 964 933 362

Total 3826 7931 8724 6052 1984 3449 3846 3672

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 HighLevel 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

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

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European funds drive Balkan railway renaissance

Europe | The Balkans

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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 panEuropean 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

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, talks to David Burroughs.

K

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.”

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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 KaluzhskoRizhskaya 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 TaganskoKrasnopresnenskaya and KaluzhskoRizhskaya 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

“

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

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

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

Moscow Metro has introduced 102 Moskva metro trains so far with 552 cars set to follow.

IRJ The Railway in 2019

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An Englishman in New York North America | New York

Andy Byford, president of New York City Transit, speaks with William Vantuono, editor-inchief, Railway Age.

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EW York City’s iconic subway has received a barrage of criticism in recent years. Underfunded 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 fiveyear 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

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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-tobottom 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

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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.”

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.”

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

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

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

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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

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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

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

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

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 locationspecific 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

26-27 February 2019 Dubai International Convention & Exhibition Centre

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IRJ The Railway in 2019

Integration and frequency at the heart of California rail plan

North America | California

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.

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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 highestpaid jobs are concentrated in the socalled 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 modespecific 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.

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North America | California flexibility of freight operations. Different service levels are considered for selected routes, with regional as well as intercity and commuter rail services sharing infrastructure. California’s passenger rail scene is a multi-stakeholder environment with numerous agencies playing a role in decision making and funding allocation at local, regional and state levels. The CSRP emphasises the need for close integration between agencies to avoid overlapping or duplicate investments and ensure that projects meet the longterm needs of the communities they are intended to serve. “Coordination is about integration between different agencies and also improving the productivity of the system,” Edison says. “We need to implement projects in a way that is future-proof.” Coordination also extends to the fares system, and the CSRP calls for a much higher degree of integration and multimodal ticketing to meet the goal of door-to-door service. California Department of Transportation (Caltrans) has set a target of tripling bicycle trips and doubling walking and public transport journeys by 2030, while the CSRP envisages increasing inter-city rail ridership from 115,000 to 1.3 million passengers a day (including the highspeed network) by 2040. “If we can get the first and last mile right, we can meet the ridership goals of the CSRP,” explains Mr Kyle Gradinger, assistant division chief of the Caltrans Division of Rail and Mass Transportation. “This means we need to look carefully at the Photo: Pi.1415926535/Wikipedia CC by SA 3.0

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 regularinterval 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.

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physical design of stations and networks for buses and LRT to ensure we have seamless interchange between modes. We also need the right combination of design, technology and finessed schedules.”

Phased plan

The CSRP sets out a three-phase approach for delivering California’s 2040 vision for an integrated network: = Short-Term (by 2022): improvements already at the planning stage for which funding for construction and implementation is largely committed. These improvements are intended to serve as the foundation for integrating the rail network. The short-term plan identifies the region-specific service planning studies required to implement the mid-term and long-term vision. The short-term programme also aims to address the significant existing rail freight bottlenecks. = Mid-Term (by 2027): the state coordinates actions with rail partners to grow passenger services to a level that maximises use of the capacity available on existing rail infrastructure, with targeted infrastructure investments that tie services together and provide new access to different regions, including regions that now have only limited rail access. Key rail freight corridors will also benefit from capacity enhancements. = Long-Term (by 2040): the long-term capital plan includes the infrastructure elements required to support the service and connectivity goals of the state’s 2040 vision, and to maximise the performance and market capture potential of passenger rail. Additional 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

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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 serviceready 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 longdistance 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 privatelyfinanced 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

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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 lowcarbon 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. In April 2018 CalSTA awarded 28

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 multiyear 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 highspeed 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

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

Via Rail Canada prepares for high-frequency operation

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

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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.

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 DesjardinsSiciliano, 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,” DesjardinsSiciliano said at Terrapinn’s World Rail

IRJ The Railway in 2019

Photo: Stephen C Host

North America | Canada

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

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 longterm 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

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 “reuserecycle-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

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Virgin USA targets inter-city expansion North America | passenger

Patrick Goddard, president of Virgin Trains USA, talks to David Burroughs

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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 64km line to Orlando International Airport following the route of State Highway 528. The service eventually launched nearly four years later than originally planned, on January 13 2018, with 11 trains a day operating under the Brightline brand between West Palm Beach and Fort Lauderdale. Services were extended to Miami Central in May, while frequency was ramped up in August to provide hourly services along the route. The work to extend the line to Orlando at a cost of $US 2.1bn is now underway, with services expected to begin in 2021. The company confirmed in November it had begun negotiations with the Florida Department of Transportation and the Central Florida Expressway Authority (CFX) to lease property owned by the state and CFX to develop a high-speed line along the Interstate 4 highway corridor between

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Orlando and Tampa, with a station at Disney World. That 141km line is expected to cost $US 1.7bn. The oneway 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 Initial Public Offering (IPO) on the Nasdaq Stock Exchange. While some details of the IPO are yet 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 majorityowned 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 before the IPO was announced. Goddard was appointed Brightline president in January 2018 and has overseen the service launch and the company’s expansion. The premise guiding the company is simple: it plans to offer express passenger services along 300-550km corridors in the United States (see panel) that are considered “too short to fly, too long to drive.” “There are about 10 corridors in the US that we think are suitable for intercity rail projects like ours,” Goddard says. “We think the top three are Acela in the northeast (the intercity passenger service operated by Amtrak), Virgin Trains USA connecting Miami and Orlando and eventually Tampa, and the third most intuitive is Southern California to Las Vegas.” Passenger numbers on the Miami to West Palm Beach service currently

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 recorded $US 5.2m in operating revenue, including $US 4.7m from passengers and customers, but that was 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 intercity 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 Virgin Trains USA’s Distance networks (km) Miami - Orlando 378.1 Orlando - Tampa 135.1 Las Vegas - Southern 434.5 California Viable Corridors Houston - Dallas 386.2 Atlanta - Charlotte 386.2 Chicago - St Louis 498.8 Los Angeles - San 193.1 Diego Portland - Seattle 257.4 Vancouver San Antonio - Austin - 225.3 Dallas Houston - San 225.3 Antonio - Austin Washington DC 362.1 New York - Boston

Population (millions) 8.7 5.6 15.6 14.3 8.4 12.3 16.7 8.8 12 11.5 31.4

IRJ The Railway in 2019

A Brightline set at West Palm Beach station. Photo: Shutterstock/Thomas Barrat

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 federallyapproved 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

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 mixeduse 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

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New government shakes up Malaysia’s rail investment priorities Asia | Malaysia

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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 6070bn ($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.

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 Chinesefinanced 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

A KTM class 93 inter-city EMU leaves Kuala Lumpur station. Photo: Shutterstock/KYTan

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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 costsaving 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

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 projectdelivery 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

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 longterm for the country’s rail sector. IRJ

Indian Railways takes two steps forward, one step back

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Srinand Jha, correspondent

HE ghastly deaths of 59 festivalgoers 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 distributedtraction inter-city train - is seen as one of IR’s big positives of 2018.

IRJ The Railway in 2019

The Chennai-based Integral Coach Factory (ICF) is now planning to develop a mainline EMU for shortdistance 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

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 bigticket 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

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Freight operators seek urgent policy reforms Australasia | Australia

Dean Dalla Valle, chair of Freight on Rail Group (Forg) of Australia and CEO of Pacific National, talks to Mark Carter.

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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 verticallyintegrated networks, most other traffic is carried on common user networks. In 2016-17 intermodal tonnages grew on all sectors of the north-south interstate network, particularly between Sydney and Melbourne, while nonintermodal 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, costeffectiveness 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

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immediately start tackling these muchneeded 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 105tonne 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.

“

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

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

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

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 muchneeded 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

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

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Australian passenger rail reinvigorated Australasia | passenger

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Mark Carter, regional editor

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

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 fullyautomated $A 8bn ($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

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 longdistance 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

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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 investment with many major projects back on the agenda, as IRJ Pro market analyst Oscar Sinclair explains.

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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.

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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

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

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

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

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

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

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Brazil looks to private investors to overcome budgetary constraints South America | Brazil

Joubert Flores, president of ANPTrilhos, talks to Renata Passos.

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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.

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“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

“

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

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

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 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.

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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 metregauge 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

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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,

“

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,

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.

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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