The future of rail

To find out more, EUI spoke with three key industry figures: Eskil Sellgren, Managing Director, WSP Civils, and; Dr Klaus Milz, Vice President, and Janis Vitins, Director, Bombardier Transportation.

EUI. The EU structural fund package is pouring millions of Euros into infrastructure investment in the new accession states. How will railways benefit from this investment?

ES. The railway market in Europe continues to be strong. The driving forces are often political with the objective to reduce pollution and traffic congestion as the risk for changes in the climate. The railway is one of the most important means for a sustainable transport system.

The ongoing enlargement of the European Union requires integration of the new member states in many areas, transport infrastructure being one of the most important. Substantial grants and funds from the EU budget are directed to railway projects. Investments are mainly focused on railway corridors that will make up a modern European transport network. Among the new member states Poland, Hungary and Czech Republic have the most advanced plans for their railways and best chance of projects being realised. The accession countries, Romania and Bulgaria, also look promising since their networks are in a very bad state and therefore will be a high priority. The railway is a very efficient and environment friendly way of transport people and freight, which means that railways are the future transport system.

BT. According to EU principles, the governments of the member states have the right to decide about the internal allocation of the funds based on Strategic National Development Plans. Despite the recommendation of the European Commission to share the funds equally between road and rail infrastructure, most countries invest a majority of the funds received to road and neglect rail infrastructure. This endangers the market share of rail transport, which – due to historical reasons – is still higher than in Western Europe. Presently, many EEU countries have very high track access fees.

Insufficient investment in rail infrastructure, delayed reforms of the railway companies and a lack of modernisation (also in rolling stock), do not contribute to an improvement of the necessary competitive position of rail transport in these countries.

EUI. How much investment do you think is needed in the railway infrastructure of the community as a whole, and the accession states in particular?

BT. A full use of 50 percent of the available structural and cohesion funds as well as investment of the TEN funds, in combination with intelligent financing in the frame of PPP projects (following the good practice of Spain), would stabilise the situation of rail.

ES. Member states with a Gross National Income (GNI) less than 90 percent of the EU average will receive assistance through the Cohesion Fund. Regions with a per capita Gross Domestic Product (GDP) less than 75 percent of the EU-25 average will qualify for the ERDF. Co-financing from these funds can amount to 85 percent of the project cost. The funds have a budget of €308 billion for 2007-2013. This is only an indication that it is a huge investment programme in this sector.

EUI. Are there any issues with the technological compatibility of rail networks across European borders? If so how can these issues be solved?

ES. The European rail industry is faced with huge investments and challenges. The introduction of common systems and procedures for achieving interoperability is the key to further development of the railway business. One of the most important steps to this goal is the rollout of ERTMS, the European Rail Traffic Management System.

BT. Yes, there are many issues. There are differences in the power supply systems, loading gauges, train safety systems, country-specific railway equipment etc., due to country-specific standards and homologations. Solutions are on the way through the EU “interoperability” legislation and harmonisation of technical and operational standards, by multisystem locomotives and trains (developed by the industry), by “cross-homologation”, and by introducing the joint train control and signalling system ETCS/ERTMS Europe-wide.

EUI. As investment pours into the Eastern states, trade between them and the more established Western states is set to increase. How much of this trade is likely to be taken by rail?

BT. There are increasing traffic flows between the east and the west, particularly with container trains and bulk trains for oil/coal. The whole increase of transport volumes is estimated at 50 percent until 2015. Only when the measures described under the answer to the first question are implemented will rail have a chance to participate sufficiently in the growth of overall transport.

ES. Railways play an important role in the EU enlargement process. In Eastern Europe railways formerly enjoyed a privileged position in that all long-distance transport was obliged to use railway. The integration of new member states includes upgrading their transport infrastructure to EU-standards and connecting them to the European network. The decline in railway freight in Western Europe over several decades has now been stopped and the market share of railway transport has stabilised and is in some segments growing. Railway passenger transport is today competing successfully with road and air on medium distances with modern, comfortable, high-speed trains. Around big congested cities, commuter trains are increasing their market share. As the EU has declared railways to be one of the most important means for a sustainable transport system in the common market, an increasing part of the trade is likely to be taken by train.

EUI. If rail usage grows how can the efficiency of rail networks be optimised? Can better technology and organisation squeeze more capacity out of existing systems?

BT. Rail transport has to become cross border transport like its competitors, road and air, without entrepreneurial breaks of responsibilities at borders. The European networks have to guarantee free access to all rail operators. With multisystem locomotives, asset utilisation is much increased. Additionally, specific freight locomotives have lower overall costs than universal locos so far used. Also, modern locomotives and wagons are expected to have lower overall costs due to the much lower energy, service and maintenance costs.

ES. Two of the key factors are ERTMS and a much better cooperation within the EU.

EUI. What areas do you see your own company being most involved in European rail networks – what solutions do you offer?

ES. Due to considerable investments over the last decade, there are many companies operating on the European railway market for technical consulting services. The market expansion is also based on the outsourcing and divestment of services from national railway administrations. This has created new strong players in several countries, which are looking to the international market more and more. WSP is one of these – hopefully one of the main players on the European rail market during the coming decades. We have a lot of experience in planning, design and maintenance management in the rail sector.

BT. Bombardier Transportation is a forerunner in mutisystem vehicles, with the highest energy efficiency and low maintenance and lifecycle costs. We are also a leading partner in the development and implementation of ETCS/ERTMS. We have platforms that provide optimal locos ¬– electric- and diesel-driven multiple units for each application – giving high commonality savings and helping to save the environment.

EUI. Maintaining and improving existing networks is one thing, but building new railways is very expensive – do you think we will ever see new railways built in Europe, and if so where will they be?

ES. The railways in many of the new member states in the EU are in general in very bad condition and need urgent modernisation. Substantial parts of the available EU cohesion and structural funds will be allocated to these countries. Investment continues to be directed chiefly at upgrading the international transit corridors. The mayor part of the investments in these countries will be maintaining and improving the existing networks, but there will also be a need for investments in new railway lines in these and other countries in Europe for example depending on development of new regions.

BT. On a European level, the TEN planning is an example for successful new railway lines, especially connecting national networks, which are important for the development and further integration of the EU. Transport market oriented lines are also on the agenda of different national transport plans.
The high-speed networks in France, Germany, Spain and Italy are good examples for national action. In Switzerland there is a big investment for the trans-alpine routes. The Netherlands also shows that feasible investments are possible: look at the Betuwe Line and HSL Zuid. And in Sweden there are new railway lines: Bothnia Line. There is much potential for railways to grow!

However, the preconditions are: a sustainable transport policy with fair conditions for the competition between the modes, liberalised railway markets all over the EU, and adequate investment in the rail infrastructure.

Eskil Sellgren, Managing Director, WSP Civils
Dr Klaus Milz, Vice President, Bombardier Transportation
Janis Vitins, Director, Bombardier Transportation