Issue 4 – September 2006

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Government’s pledge to modernise Nigeria Railways

The Federal Government would commit the sum of $8.3 billion to the rehabilitation of Nigeria's 3,500 km neglected railway system, president Olusegun Obasanjo announced on 9 August 2006, quoted by Daily Trust. The President said that $2 billion out of the money would be obtained as soft loan from the Chinese Government. The contract for its first phase was expected to be signed for modernising the 1,126 km corridor from Lagos to Kano.

'No nation has achieved holistic development without a coherent, integrated, efficient and reliable transportation system', explained Nigerian President, according to Railway Gazette International. 'The construction of the rail line will employ tens of thousands of Nigerians immediately' he added.

(Sources: Daily Trust, Railway Gazette International)

Canadian Pacific triples profit

The Financial Post reported that Canadian Pacific Railway Ltd (CP) tripled its earnings in the second quarter compared with last year. The railway made a profit of $C 378 million ($US 331.7 million), up from $C 123 million for the second quarter of 2005. After spending $C 160 million to expand its railways in Western Canada, CP revealed a 2% growth in total revenue.

Canadian Pacific Railway is a transcontinental carrier operating in Canada and the U.S. Its 13,500-mile rail network serves the principal centres of Canada, from Montreal to Vancouver, and the U.S. Northeast and Midwest regions.

(Sources: Financial Post, Canadian Pacific Railway)

DSB privatization to start “within two years”

Danish transport minister Mr Flemming Hansen was quoted by International Railway Journal as saying that he was considering an initial sell-off of 25% of Danish State Railways (DSB) within one or two years as part of the privatisation of the state-owned railway company. With an annual turnover of 9.4 billion Danish crowns ($1.62 billion), DSB was previously targeted to be privatised by 2010.

British bus and railway operator Arriva, which already operates regional Danish routes, was reported to be interested in the shares, as part of the company’s strategy of increasing its railway operations in Scandinavia.

(Source: International Railway Journal)

First high speed line for Argentina

On 25 July 2006, the Argentine government announced that three consortia led by Alstom, Siemens, and the Spanish Construcciones y Auxuliares FFCC had bid to build Argentina’s first high-speed line, which is expected to cost between $US 700 million and $US 1 billion. According to International Railway Journal, the government is expecting to select in December 2006 the preferred bidder that should fund at least 50% of the estimated cost of the project.

(Source: International Railway Journal)

Korea to develop 400 km/h train

South Korea’s Ministry of Construction & Transport declared on July 27 its intention to develop a high speed train capable of running in service at 400 km/h. According to Railway Gazette International, the 320 km project is expected to take six years and will cost 76·6bn won.

A transport ministry official told the Korean Times that 'the development of updated technologies is essential amid global competition', emphasising that South Korea sees high speed rail as a future growth industry.

(Source: Railway Gazette International)

Bombardier to build trains for London

Bombardier announced that it has been awarded a £223 million (US$425 million) contract for the provision of 152 Electrostar electric trains to be operated on the East London Line and North London Railway. Transport for London, the London transport authority, will be expecting the delivery of the new units in July 2008, with the last unit delivered in May 2009.

The new vehicles will be manufactured at Bombardier’s production site at Derby. Bombardier Transportation employs over 4,000 people at production facilities in Derby and Plymouth and 24 maintenance, refurbishment and overhaul centres across the UK.

(Source: Bombardier, Inc.)

Federal Government vote for privatising DB

By the end of October, the Lower house of the German parliament will be reaching a decision on flotation of the state-owned rail operator Deutsche Bahn AG. Germany's federal court of auditors has recently recommended that the government split up Deutsche Bahn AG, according to Financial Times Deutschland. German media reported recently that the government may split Deutsche Bahn's railway network from the rest of the company to privatise it separately.

Both Transnet and GDBA unions are not happy to see the employment agreements invalidated if the railway company will be split into several companies and have called for token strikes. Norbert Hansen, head of the Transnet union, said strikes could begin as early as 28 September 2006.

Both Harmut Mehdorn, the chairman of Deutsche Bahn and the unions are reported to disagree with the government’s intention to selling only the transport operations and keeping the vast rail network wholly in public hands.

(Source: Financial Times Deutschland)

Spoornet unveils huge investment plans

South Africa's state-owned railway Spoornet has embarked on a five-year programme to improve performance and profitability. The South African government allocated R35bn (US$4.8 million) for capital projects on the railway over the next five years, according to Siyabonga Gama, the Spoornet Chief Executive, quoted by Railway Gazette International. Around 10% of this will go on 110 new electric locomotives, R25·9bn will go on sustaining and renewing the existing network and R4·4bn on expansion projects. Rand3 billion is to be spent on upgrading public transport to cope with demand generated by the 2010 football world cup.

Spoornet’s aim is to increase rail's share of the South African transport and logistics market to 30%, which would grow the rail sector's annual turnover from R15bn to around R40bn.

(Sources: Railway Gazette International, International Railway Journal)

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