Rail concession in Ethiopia

Chemin de Fer Djibouti-Ethiopien (Djibouti-Ethiopia Railway or CDE), which operates a 781 km single track railway from Addis Ababa to the port of Djibouti, is looking for another concessionaire, according to The Infrastructure Consortium for Africa, a tripartite relationship between bilateral donors, multilateral agencies and African institutions.

In 2007, Hifab International completed a pre-feasibility study of the rehabilitation of the railway line, expected to create a sustainable transportation corridor, acting as a competitive alternative to road transportation in providing access to the Red Sea port.
The South African company Comazar failed to meet the deadline to submit a revised financial proposal in June 2007 and lost its status as the preferred bidder.

The Ethiopian and Djibouti governments, which have jointly owned CDE since 1981, are cooperating in an effort to enhance their cross-border transportation capacity, and the project is expected to contribute to poverty reduction by improving market access and transport conditions. The European Union has already provided a €40 million grant for additional necessary rehabilitation, including replacing bridges and sections of the line.

(Source: The Infrastructure Consortium for Africa, http://www.icafrica.org/)

Germany enters the UK passengers market

German state owned Deutsche Bahn (DB) has acquired Laing Rail, owners of Chiltern Railways, which will become part of DB Regio AG, the division of DB responsible for operating regional and local services. The only other contender was the Dutch government owned railway NS (Nederlandsche Spoorwegen).  

The reported £127 million purchase means that DB will also become the joint owner of the new rail operator Wrexham, Shropshire and Marylebone Railway Ltd, a 50/50 joint venture between Laing and Renaissance Trains, and of the London Overground Rail Operations Ltd, itself a 50/50 joint venture between Laing Rail and The MTR Corporation of Hong Kong.

Dr Karl-Friedrich Rausch, Member of the DB Management Board and Chairman of the Passenger Transport Division was quoted as saying: “It will allow us to substantially strengthen our position in the European market along with providing the basis for further growth.”

Reuters UK reports that Deutsche Bank AG is part of a consortium that includes US insurer AIG and Australian infrastructure investor Babcock & Brown, bidding for the UK rolling stock leasing company Angel Trains, which Royal Bank of Scotland wants to sell for more than £3 billion.

(Sources: Chiltern Railways, http://www.chilternrailways.co.uk/; Reuters UK, http://uk.reuters.com/)

Statistics on rail employment in the USA

US Class I railroads employed 161,252 workers in December 2007, down 1.9 percent compared with December 2006, according to Railway Age. The number of train and engine employees decreased by 5.23% to 66,056, whilst maintenance of way and structures employment went up by 2.15% to 34,730, and maintenance of equipment and stores employment recorded a moderate increase of 0.64% to 30,724.

(Source: Railway Age, http://www.railwayage.com/)

Kuwait plans rail and metro network

The Kuwaiti government will spend US$11 billion from its oil revenues to build a rail network and a metro system for its capital. Reuters quoted Saeed Dashti, chairman of the body coordinating the development plans of the Kuwait Overland Transport Union, saying that the 500 km railway will be part of the planned network across the Gulf region. Relevant ministers are expected to approve the projects by May, to allow the construction to start in 2009 and finish by 2017.

(Source: Reuters, http://www.reuters.com/)

BDZ targeted by foreign operators

State owned Deutsche Bahn AG (Germany) and Osterreichische Bundesbahnen OBB (Austria) expressed their interest in the freight division of Bulgarian Railways (BDZ), which has been split from the passenger operations. Deutsche Bahn has a cooperation agreement with BDZ since 2006, while OBB signed last year a memorandum with Bulgaria's railway infrastructure company, The Sophia Echo newspaper writes.

DB and OBB have already secured the technical permits that would allow them to launch operations in the Bulgarian rail market as soon as the BDZ’s monopoly will lapse in 2010.

(Source: The Sophia Echo, http://www.sofiaecho.com/)

RDZ to issue bonds

Russian Railways (RZD) plans to raise 125 billion roubles (U$5.1 billion), including 80 billion roubles (U$3.3 billion) in bonds and Eurobonds. RIA Novosti cited RZD president Vladimir Yakunin saying that the rail monopoly will issue $1 billion in Eurobonds in March.

On February 15 2008, the Board of directors of RZD passed a resolution to take up loans of 325 billion roubles (US$13 billion) in 2008-2010.

(Sources: RIA Novosti, http://en.rian.ru/; RZD, http://www.eng.rzd.ru/)

Zambia to cancel railway concession

Railway Systems of Zambia (RSZ) could lose the right to operate Zambia’s rail network and to provide rail services vital for the country’s mining sector because of its poor management, said Zambian president Levy Mwanawasa. Finance minister Ng'andu Magande told Reuters that the government was seeking US$40 million “from Western financiers” to pay RSZ for the loss of the concession.

RSZ is a subsidiary of South Africa’s New Limpopo Bridge Investments (NLBI) and operates a significant network for mining lines to Zimbabwe, South Africa, the Democratic Republic of Congo and Tanzania. The company won the Zambian 20-year concession in 2003, but has been the object of constant complaints from the government for failing to improve the quality of its freight services.

(Source: Reuters Africa, http://africa.reuters.com/)

KCSM to invest in Mexico

The KCSM (Kansas City Southern de Mexico) railway plans to invest over US$200 million in 2008 in several projects involving infrastructure, maintenance and development of its railway service in Mexico. KCSM’s International Intermodal Corridor, which starts in Lazaro Cardenas (Mexico) and crosses through the industrial heart of Mexico into the USA, remains a priority for the company.

KCSM is part of the international transportation holding Kansas City Southern (KCS), based in Kansas City (USA), which has railroad investments in the USA, Mexico and Panama.

(Source: KCSM, http://www.kcsr.com)

RAIL4CHEM to be sold to Veolia

The privately owned rail cargo company RAIL4CHEM is to be sold to Veolia Cargo (Paris) for an undisclosed price. The transaction is expected to be finalised during the first half of 2008, pending the approval of the relevant antitrust authorities.

RAIL4CHEM was set up in 2000 under a joint ownership and has become one of the major private cargo providers in Europe, with sales of over Euro 80 million last year. RAIL4CHEM Group employs approximately 180 people, and has permits in Germany, the Netherlands, Belgium, France and Switzerland. It also provides transport services to Poland, Czech Republic, Austria, Hungary, Italy, and Slovakia.

Veolia Cargo is primarily involved in medium and long-distance rail-freight transportation (national and cross-border services), and is a subsidiary of Veolia Transport, specialized in rail-based logistics.  In 2007, Veolia Cargo employed 1000 people and generated revenue of Euro 122 million.

(Source: RAIL4CHEM, http://www.rail4chem.com/)

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