Emerging Europe opportunities in the Railways sector
There are many common opportunities across Emerging Europe in the railway sector. Among the priorities are: infrastructure development and upgrade, stations refurbishment, modernisation and maintenance of the railway tracks, rolling stock renewal, privatisations (expected for CFR Freight in Romania), metro developments (Bulgaria, Romania) and high speed line – first phases (Poland, Romania, Bulgaria in the near future).
The European Funding available for the development of the railway transport corridors represents an extraordinary opportunity for companies interested in bidding and engaging in large projects (for infrastructure developments for both railways and metro, high speed line, stations refurbishment). There are also certain weaknesses EE countries have to face in order to make the railway sector competitive: make this transport means more reliable and flexible, make it more customer oriented and increase interoperability while increasing investment.
Austria’s major investment in rail infrastructure is dominated by the Brenner Basis Tunnel valued at Euro 14.5 billion. Opportunities exist in supply and post completion running of the project. Other rail infrastructure projects include the new Vienna Central Railway Station and 20 other station upgrades as well as the doubling of rail capacity to the south towards Italy, as part of a TENS southern corridor project. In terms of rolling stock, both Siemens and Bombardier have significant carriage and bogie manufacturing and the Austrian State Railways, manufacture the Taurus Locomotive under contract from Siemens. In addition there are a number of Tier 2 component suppliers in Austria including Liebherr, IFE and Knorr as well as key infrastructure developers and designers.
Bulgaria’s railway network is undergoing extensive modernisation, with € billions of EU funding allocated up to 2020. Plovdiv – Svilengrad and Plovdiv – Bourgas lines are currently being upgraded, and the preliminary design and EIA phases have been completed for the Vidin – Sofia project (€2.6 billion) which will connect to the new Danube Bridge. The second line of the Sofia Underground was opened in August 2012, with tenders expected for the third line in 2013-14. In addition, €300 million has been allocated to upgrade passenger rolling stock, and an EU-funded project has been initiated to link Varna and Bourgas to the Greek ports of Kavala and Alexandroupolis. All of these projects represent a major opportunity for UK expertise.
Railways represent a strategic sector in Croatia and one in which quite a lot will be happening in terms of investments and new tenders being launched in the short and medium term. The railways are in urgent need of modernisation as there has been minimal investment in railways infrastructure right across the country. The Croatian Government has singled out upgrade of the railway network as one of its key priorities and has devised a financing plan for these projects – some using EU funds, some government funded and some private sector financed.
There are 4 capital projects planned worth 4,7 billion Euro, with the most valuable one being reconstruction of Rijeka-Karlovac-Zagreb-Koprivnica-Botovo railway as part of the Croatia-Hungary cross-border project valued at 3,65 billion Euro. The second most important project refers to the Vinkovci-Serbian border, part of Corridor X, for which the EIB bank allocates EUR 31 Million out of the total cost of 65 million Euros.
Additionally, 50 million Euro has been planned for the construction of 20 new diesel-electric locomotives, and approximately 20 million Euro worth of projects tied to the maintenance of the railway network in Croatia. In terms of rolling stock, both Bombardier and Siemens have a strong local presence. Bombardier delivered 8 tilting trains to Croatian Railways in 2004 and Siemens is actively looking for joint ventures with Croatian rolling stock producers Koncar and Gredelj.
Train transportation is common in the Czech Republic, with over 9,500 km rail network spread across the country and over 470,000 passengers travelling every day. Almost all of the rail network is government owned and rail operation is government handled. The key three government owned companies are: Czech Railways (Ceske drahy), Railway Infrastructure Administration (Sprava zeleznicni dopravny cesty) and CD Cargo. The process of opening up Czech railway services to private competition has begun. The first private trains appeared in September 2011. The Railway Infrastructure Administration announced a tender worth CZK 7.5 bn to lay new track between Rokycany and Pilsen as part of the EU transport corridor financed by EU funding. The project – 11 km of new track, the renovation of an additional 10 km of track and the construction of a 4 km tunnel is the country’s largest infrastructure project in the last 20 years.
The Hungarian rail sector offers a number of significant opportunities. The focus is on developing railway infrastructure including maintenance of tracks, refurbishing railway stations and upgrading electrification and the signalling systems. The operator in the Western part of Hungary has received funding for electrification and upgrade of two lines worth £55mn. Hungary has also been planning to introduce GSM-R and ETCS as part of the ERTMS for some time. This project, worth an estimated £138mn, is currently in the planning stage and is expected to go live in 2014. There are a number of major conferences in Hungary which the UKTI team can help your company access.
Visitors to Poland will know there is a lot of work to be done to reform the country’s rail infrastructure – both in track and rolling stock. The scale of the work is significant but so is the opportunity for British companies from SMEs to multinationals. Due to a huge rise in passenger numbers and a need to reform to meet European standards, the Polish Government’s investment plan for Poland’s rail network is comprised of 100 projects with around £5bn to be spent until 2013 on modernisation and maintenance of railway tracks and around £6bn investment funds available for infrastructure between 2014 and 2020. Major challenges such as station upgrades, rolling stock renewal and high speed lines represent an enormous opportunity for UK expertise in the rail sector.
Development and rehabilitation of the rail transport corridors IV and IX are a priority for the Romanian Government aimed at ensuring interoperability with the other European transport infrastructures. The scale of the projects is huge. Over EUR 4,57 billion are available for the operational transport programme between 2007-2013 as European funding in Romania. Opportunities are: mainline upgrading programmes, railway station modernisation, metro developments, rehabilitation of the Bucharest railway ring and the first phase of a high speed line.
Slovakia has been upgrading its transport infrastructure including railways under the EU Transport Operational Programme. With transport infrastructure still lagging behind that of Western European countries, Slovakia has been focusing on modernisation of the railway track and other infrastructure and improvement/creation of public intermodal terminals. The EU’s operational programme will ensure the modernisation of approximately 200 km of railways. This will result in time savings of about 1 hour in passenger railway transport Another result will be an increase in the share of railway transport for freight. Funding of EUR 920 million is being made available, with EUR 780 million coming from the EU operational programme and the remainder being co-financed by the Slovak public sector.
The Slovenian Railway development programme is estimated to be worth 9bn Euro. It will comprise the construction of new high speed lines, upgrade of the existing ones, renewal of rolling stock and purchase of railway equipment (signalling etc). Slovenia has access to EU funding for such infrastructure projects up to around 3 bn Euro. There are opportunities for UK consultants as well as suppliers of railway equipment.
Getting into the market
Doing business in the railway sector may have cultural aspects for each individual country, though the European Union rules govern the business environment. A good route to markets is always by identifying an agent or a partner, especially for taking part in tenders for railway development projects and procurements. UKTI is always a good starting point if the market is new and the business environment and market conditions are not known.
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.
Andreea Radu, Andreea.Radu@fco.gov.uk, Tel: +40 (0)21 201 7364
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.
Railway Days 2013
Countries: Austria, Bulgaria, Croatia, Europe, and Romania