Issue 17 - October 2007

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New brand for restructured Transnet

South Africa’s state-owned transport holding group Transnet has been restructured from a diversified group into a focused and integrated freight transport company. The new Transnet, employing more than 48,000 people, is a single, integrated structure, made up of five operating divisions:

Transnet Freight Rail (formerly Spoornet) - a freight transport and logistics company;
Transnet Rail Engineering (formerly the rolling stock manufacturing and repair business Transwerk);
Transnet National Ports Authority (formerly the NPA);
Transnet Port Terminals (formerly SAPO); and
Transnet Pipelines (formerly Petronet).

As part of the restructuring, Transnet transferred its passenger operations – including South African Airlines and Spoornet's passenger rail services - to the Department of Transport.

Ms Maria Ramos, Transnet’s Group Chief Executive, announced R78 billion (US$11.44 billion) investments over the next five years “to expand the capacity of ports, rail freight and pipeline assets”. Out of this total amount, Transnet Freight Rail will use R34 billion (US$5 billion) to upgrade and expand its 22,247 km rail network as well as to renew its rolling stock. In August, Transnet Freight Rail said it had abandoned earlier plans to vertically separate the company into operations and infrastructure divisions.

(Source: Transnet )

Financial success for Indian Railways

Indian Railways (IR) achieved an operating ratio of 78.7 per cent in the 2006-2007 financial year, comparable to that reported by the North American Class I railroads, according to Railway Gazette International. IR is operating approximately 11,000 passenger trains a day, and around 5,000 freight trains a week. In the 2006-2007 financial year, IR handled 6.2 billion passenger-journeys and moved 726 million tonnes of freight. Described as the “lifeblood of the nation”, IR is the world's second busiest railway after China in terms of passenger-km and third-busiest overall. Freight traffic accounts for 30 per cent of the market share and is expected to grow by 45 per cent in the new five-year plan, which started on 1 April this year.

Mr J P Batra, chairman of Indian Railways, was quoted as saying that “IR gets 67% of its earnings from freight traffic and 33% from passengers”. IR will use its own operating profit for investing a third of the around US$50 billion planned for the next five years, with another third coming from central government, and the rest to be provided through public-private partnership initiatives and borrowing.

(Source: Railway Gazette International )

Green light for the Third Railway Package

The Europe’s Council of Ministers has reached an agreement with the European Parliament over the Third Railway Package. As a result, the rail market for international passenger services will be opened up to competition from 1 January 2010, whilst domestic transport services might also be liberalised following a future assessment.

A European licence for train drivers, requiring minimum standards of medical fitness, education and professional skills, will come into force in 2009. The European Railway Agency will draw up a report on other staff performing safety-critical jobs that could be included within the scope of the directive.

The regulation on the rights and obligations of rail passengers covers train operators' liability for passengers and their luggage, and a basic right to transport for people with reduced mobility. In addition, passengers on international rail services could claim compensation of 25 per cent of the fare for a delay of 60 minutes or more and 50 per cent for a delay of 120 minutes or more, in the event of delays on cross-border services, but only if the operator can be held responsible for the delay. Although the same system of compensation would eventually apply to all long-distance services, Member States will be able to exempt, for five years, long-distance domestic rail services from the regulation's provisions on non-basic rights (e.g. the right to take a bicycle on the train). Urban, suburban and regional services may be granted an indefinite exemption from these provisions,

(Source: European Parliament )

Turkey – Georgia railway

The US$400 million railway project linking Turkey, Azerbaijan and Georgia (Kars –Akhalkalaki – Tbilisi - Baku) was due to start this year and be completed by the end of 2008. According to International Railway Journal, Azerbaijan has already paid US$40 million to a company that will construct the Georgian section of the line, and offered a low-interest loan of US$220 million to help fund the project. Turkey announced that it would finance the construction of the 68-km portion of the railway on its territory. The 258-km railway will be the shortest route for freight traffic between Asia and Europe and could become a competitor to the Trans-Siberian Railway.

(Source: International Railway Journal )

Cash needed for rail industry in the USA

The National Rail Freight Infrastructure Capacity and Investment study, commissioned by the Association of American Railroads (AAR), estimates the need for US$148 billion investments over the next 28 years, in order to meet the U.S. Department of Transportation’s projected 88 per cent increase in demand for rail freight transportation.
Rail tracks, signals, bridges, tunnels, yards and equipment of the 52,340 miles of primary rail freight corridors require maintenance and capacity expansion.

The US Congress is discussing a bill to provide a 25 per cent tax credit for capital expenditures made by railroads, shippers, port terminals, trucking companies and other transportation businesses to build or expand track, intermodal facilities, yards or other rail infrastructure, or to acquire locomotives.

(Source: Association of American Railroads )

Shortlist for privatisation of INFRARAIL (Algeria)

The Algerian national rail operator SNTF (Société Nationale des Transports Ferroviaires) announced the eight companies shortlisted for the privatisation of its railway infrastructure subsidiary INFRARAIL Spa. Once they are informed of the technical details and bidding terms, Alstom Algeria, Orascom Construction (Egypt), Sateba Systems Vagneux and Seco-Rail (France), Mota Engil (Portugal), Russian Railways RZD (Russia), OHL (Spain), and Yapi Merkesi (Turkey) have three months to lodge their bids.

With an estimated 1.08 billion dinars (US$16.2 million) social capital, INFRARAIL Spa specialises in railway infrastructure projects (maintenance and construction), civil engineering and road maintenance.

(Source: SNTF )

Competition for the Bulgarian rail freight market

Globul Rail Trans, a metallurgical plant subsidiary, and Unitranskom, owned by SK Univertrans and Transwagon, have applied for a licence to operate freight trains in Bulgaria, International Transport Journal reports. Bulgarian state railway BDZ is already facing competition from other two rail operators: Bulmarket, a manufacturer and distributor company, and Bulgarian Railway Company (BRC), a subsidiary of Romania's private railway operator Grup Feroviar Roman. BRC is the first private railway company to be granted in April 2005 a licence to transport freight over Bulgaria's national rail network.

(Source: International Transport Journal )

Boost for Canadian railways

Canadian National Railway Company (CN) announced its intention to acquire key operations of Elgin, Joliet and Eastern Railway, which operates over 198 main line miles of track encircling the City of Chicago. The US$300 million acquisition from United States Steel Corporation is expected to be completed by mid-2008 if the application is approved by the US Surface Transportation Board (STB).

VIA Rail Canada, the national inter-city rail services provider, is to receive C$691.9 million (US$727 million) from the federal government, over the next five years. The company will allocate the money for infrastructure improvements and equipment refurbishments aimed to also reduce greenhouse gas emissions per passenger by improving fuel efficiency.

(Sources: Canadian National Railway Company ; VIA Rail Canada )

Armenian rail concession

In order to improve rail transport services, the government of Armenia decided to concession the Armenian Railway (AR) to a private operator as a vertically-integrated company. In 2006, AR carried 600,000 passengers and 2.7 million tonnes of freight in 2006 on its 736-km network.

Assets including rolling stock and facilities will be sold to the concessionaire, who will manage, operate and maintain the railway for a period of 30 years, under the terms of the concession contract. However, the government required open access to the rail infrastructure and separate accounts for operations and infrastructure. Canadian consultancy firm CPCS Transcom Limited, with expertise in engineering and financial management services, was selected to provide advice, training and guidelines for monitoring the concessioning process, which is expected to be finalised by early 2008.

(Source: Armenia Rail Concession )

Freight operators in Austria

The Austrian railway regulation authority Schienen Control announced a 7 per cent increase in rail transport performance (in tonne kilometres) in its first annual report for 2006, according to International Transport Journal. Private railways, including the Austrian-Hungarian Raaberbahn AG, accounted for one third of the freight market growth, whilst the Austrian state railway ÖBB's subsidiary Rail Cargo Austria (RCA) remains the major carrier.

(Source: International Transport Journal )

Overcrowded train kills five in Bangladesh

Five passengers were killed and at least 100 others were injured when five rear carriages of an express train derailed near Dhaka, in Bangladesh. The accident happened on 13 October 2007, when the Probhati Express, carrying about a thousand people and many riding atop the carriages, was on its way to Dhaka from the southern Bangladesh port city of Chittagong.

Arab News agency reports that collisions and derailments are common on Bangladesh’s aging railway system. In June, four people lost their lives and dozens were wounded following a collision between a train and a bus that ignored a stop signal at a crossing in northern Tangail town.

(Source: Arab News )

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

Related documents:
Railway News Issue 17 - October 2007 (47kb PDF)

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