Issue 12 - May 2007

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World rail market is worth more than €100 billion

The worldwide rail market represents today an annual business volume of about 103.3 billion euros, with an overall annual growth rate predicted at 1.5% to 2% over the next decade, revealed Roland Berger Strategy Consultants in the Worldwide Rail Market Study commissioned by UNIFE, the Union of the European Railway Industries. Western Europe accounts for 26 billion euros, followed by Nafta region with 19 billion euros and Asia-Pacific with a market volume worth 15 billion euros. Railway Gazette International cited Mr André Navarri, Chairman of UNIFE and president of Bombardier Transportation, saying that “no generally-accepted overall view of the market has ever been published before”.

After examining rail infrastructure, rolling stock, control systems and services from five market segments (high speed, main line, light rail/tram, metro and freight) in 41 countries, the study found the rail industry as a key partner for sustainable development around the world. In comparison with other markets, rail represents around eight per cent of the annual automotive business, which was estimated at 1,350 billion euros. The consultants valued aircraft manufacturing, civil and military combined, at about 80 billion euros a year, and shipbuilding at around 35 billion euros a year.

(Source: Railway Gazette International )

Regional railfreight back to public

The government of Australian state of Victoria fulfilled an election promise by purchasing the regional freight rail network back from Pacific National, a subsidiary of Toll Holdings, for A$133.8 million. Transport minister Lynne Kosky was cited by ABC News as saying that Victoria's country railway tracks have fallen into serious disrepair, following the criticised state’s rail system privatisation in 1999.

The state-owned regional rail operator V/Line, which will take over responsibility, is expected to conduct a full safety audit before the loss-making rail network of 4,000 km will be benefiting from A$25 million for upgrading and maintaining tracks.

(Source: ABC News )

Modernisation plan for Pakistan Railways

Rehabilitation and improvement for infrastructure and rolling stock are the priorities of the modernisation plan for Pakistan Railways (PR), South Asia Logistics revealed. PR aims at providing rail links to all parts of the country and also short and economic connexions to neighbouring rail networks.

Dongfang of China and the ILF, a German - Spanish consortium, are to prepare two feasibility reports for the 750-km-long Havellian - Khunjrab railway track to connect China with Pakistan. The 290-km high-speed line Lahore - Rawalpindi will be constructed following the feasibility study conducted by M.R. Consult, a consortium of Spanish and Austrian companies.

(Source: South Asia Logistics )

Rail tunnel to link Spain to Morocco

Africa and Europe will be linked through two adjacent 39-km rail tunnels beneath the Straits of Gibraltar, where the Mediterranean is just 300 metres deep. BBC News quoted the Spanish Development Ministry saying that Spain and Morocco have agreed a preliminary three-year plan of works to start next year, with an estimated initial cost of US$30 million. The European Union is expected to provide financial assistance towards the US$16 billion total bill of the project.

(Source: BBC News )

RZD infrastructure budget

Russian Railways (RZD) will have a budget of RUB10,000 billion (US$386 billion) to develop its infrastructure up to 2030, International Transport Journal writes. A new line to link Sakhalin Island to the mainland and the reconstruction of the Trans-Korean railway from Khasan are the major projects of the new 20,000 km of rail track to be built.

RZD announced the restructuring of its infrastructure maintenance business over the next two years, as part of the country's ongoing railway reform programme to encourage foreign investment in modernisation of the national rail infrastructure, Railway Gazette International revealed. The first stage of the process will start in 2008 with track material supply departments restructured into four subsidiary companies and the establishment of a new Central Board for Track Management, which would then be converted into an independent track maintenance company as a second stage in 2009.

(Sources: International Transport Journal ; Railway Gazette International )

Sustainable growth for NS

Netherlands Railways (NS) reported a €372 million rise in revenue, from €3,474 million in 2005 to €3,846 million in 2006, whilst the number of passengers increased by 5% to 15.1 billion, for the second year in a row. The number of full-time jobs at NS rose from 23,626 at the end of 2005 to 24,961 at the end of 2006.

Last year, NS sold Nedtrain Consulting to Lloyd’s Register Rail in the UK for €32 million. NedRailways, a fully owned subsidiary of the NS Group, has acquired a strong position on the British railway market, with two rail concessions (Merseyrail and Northern Rail).

(Source: NS )

Major projects in Morocco

Moroccan State Railways (ONCFM) will be granted major investments, but also restructured to allow private investments in train operations and construction of new lines, said Mohammed Rabie Khlie, director general of ONCFM, quoted by Railway Gazette International. The government envisages US$2 billion investments for the 2005-2009 contract-programme in upgrading the rail network and increasing capacity.

The two key projects involve the construction of a 45 km route connecting Tanger with a new port on the Mediterranean coast and the 117 km Taourirt - Nador route, both likely to be operational in 2008. The high-speed plan is for building 1 500 km lines by 2030, one route for the Atlantic corridor from Tanger to Agadir, and the second one linking Rabat to Alger, Tunis and Tripoli.

The new legislation that came into force in 2005 set out the legal framework for the replacement of state-owned ONCFM by a new limited company, SMCF, also wholly-owned by the state. SMCF will be responsible for both railway infrastructure management and operation of railway services under the terms of a 50-year concession agreement.

ONFCM reported a US$320 million turnover in 2006, 6% up on the year before, 23.5 million passenger-journeys, up 12% increase over 2005, with freight traffic reaching 35 million tonnes.

(Source: Railway Gazette International )

Railfreight companies for sale in Eastern Europe

State-owned railway companies in the Czech Republic and Hungary are planning to completely or partially privatise their freight operators, according to International Transport Journal. The Czech state railway CD intends to sell a minority stake after separating its railfreight business.

Railfreight operator Railion (Germany), Poland's state-owned PKP and Austria's federal railway (OBB) are reportedly interested in MAV Cargo (Hungary), expected to be sold for 120 million euros.

(Source: International Transport Journal )

Russia-Alaska multi-purpose tunnel

Russia plans to build the world’s longest tunnel – a high-speed railway, highway and pipelines, as well as power and fibre-optic cables link – under the Bering Strait to Alaska, according to MosNews. Viktor Razbegin, deputy head of industrial research at the Russian Economy Ministry, said that state organisations and private companies in partnership would build and operate the route, known as TKM-World Link. Russian Railways, national power utility Unified Energy System and state-controlled pipeline operator Transneft are reported to be interested in the project, together with companies from Japan, China and Korea.

The planned 109-km tunnel will be part of the 6,000-km transport corridor that would supply the U.S. with oil, natural gas and electricity from Siberia. It may be completed within 15 to 20 years and its estimated US$65 billion cost could be recovered in 30 years.

(Source: MosNews )

Rail investment in Brazil

The federal government’s Growth Acceleration Plan (PAC), unveiled by Brazil’s president Mr Lula da Silva, envisages Reais 7.86 billion (US$3.71 billion) investment in rail infrastructure over the next for years. As only 10% of this allocation will come from public funds, all major constructions are to be funded through long-term loans and public-private partnerships (PPP). However, the total investment for the 2007-2010 period will reach Reais 18 billion (US$8.5 billion) by adding the already planned investments by private railways of Reais 2.5 billion (US$1.18 billion) per year, according to International Railway Journal.

The Brazilian federal audit court (TCU) gave the green light to construction of a high-speed train link between São Paulo and Rio de Janeiro, Intelligent Transport Systems International (ITS) revealed. The estimated US$9.7 billion cost of the 400km-long railway line is to be funded through private investment, although the federal government might part-finance the project through the national investment bank BNDES.

The Italian consortium Italplan's engineering and financing project is reportedly to be offered under a 35-year concession, placing full responsibility for the line's construction on the private partner. It will require US$1.13 billion from the concessionaire, with the remaining funds coming from loans.

(Source: International Railway Journal; Intelligent Transport Systems (ITS) International)

If you have any feedback, please contact Gabriel Craciun, ITF Senior Researcher (railinfo@itf.org.uk)

Related documents:
Railway News Issue 12 - May 2007 (33kb PDF)

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