Monday, January 09, 2017

The stage is set for rail to deliver

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DURING the past year, several major policy initiatives such as global agreements on climate change and sustainability, and Europe’s Fourth Railway Package, have been concluded. We also saw the completion of the Gotthard Base Tunnel in Switzerland, continuing rail and metro expansion in China, the completion of several metro projects in India, and the approval of high-speed lines in Britain, Russia, and Malaysia/Singapore. The Shift2Rail research programme in Europe is also now in full swing. These are all positive developments which should strengthen rail’s market position, but only if railways can seize these opportunities.

As Mr Jean-Pierre Loubinoux, director general of the International Union of Railways (UIC), points out, last year’s landmark UN agreements on sustainable development goals and climate change provide an excellent opportunity which the rail sector must not miss. It is now up to rail to make the case for investment so that it can truly become the backbone of sustainable development.

Loubinoux makes the point that adopting a sustainable transport policy is no more expensive than current unsustainable investment strategies, it just requires a redirection of infrastructure spending towards more environmentally-friendly modes like rail. But the benefits could be massive both financially and in terms of cutting emissions.

The challenge is getting politicians to rethink their transport policies. We have already seen evidence of this, as the steady increase in rail investment around the world demonstrates. The danger is that the current move to the right in North America and Europe could make this a lot harder, so it is up to the rail sector to maintain the pressure on politicians.

Some elements of becoming greener, such as reducing fuel consumption, make eminent business sense. Given that rail is already environmentally friendly, the biggest contribution it can make to a more sustainable future is to encourage more people and freight to switch from road and air to rail. This is a win-win scenario as it not only benefits the environment but it also drives up revenue, but it will only happen if railways provide more attractive, reliable, and affordable services.

Poland is good example of what can be achieved when a government rebalances its transport policy. Poland’s huge rail network was allowed to shrink and decay in the dash to build roads following the end of communism. But now, increasing investment coupled with a vibrant, liberalised market is producing results. The only fly in the ointment is a move to reintegrate infrastructure and operations by merging the two main elements of the former Polish State Railways (PKP), which would create difficulties for other operators.

The European Union’s Fourth Railway Package, which has now been approved albeit with a watered-down market pillar, is aimed at driving growth by creating a single market for rail. Some countries have already jumped the gun by opening their markets to domestic passenger competition. But there is no need to wait for the Fourth Railway Package deadlines as markets can be liberalised now. Generally, where this has happened, service quality has improved, operating costs have fallen, and traffic has grown. Competition also brings in new ideas and methods of working, but it needs to be fair, which is what the Fourth Railway Package is designed to achieve.

Regiojet and Leo Express in the Czech Republic, Westbahn in Austria, and NTV in Italy are good examples of private companies willing to risk all in the passenger rail market. Locomore, the world’s first crowdfunded train operator, is Europe’s newest entrant as it has just started its first long-distance service in the challenging German market. Later this year, All Aboard Florida will launch the first private inter-city service in the United States for several decades. If it is successful, it could transform attitudes to passenger rail not only in the United States but elsewhere.

Again, railways do not have to wait for research initiatives like Shift2Rail to advance railway technology and produce new products, as there are a lot of smart systems already available. GE Transportation, for example, has some exciting technology. By increasing the average speed of each US freight train by 1.6km/h, and reducing the time trains are stationary by 1%, GE estimates the industry could save as much as
$US 4.7bn, which is huge in comparison with the investment in the technology.

GE believes that within the next few years, digital tools will take railway productivity and efficiency to new levels, and increasing productivity could be as simple as pushing an update through a digital rail network.

Components are increasingly becoming smart, but the systems need connecting to produce a step change in reliability, and railways are making greater use of measuring systems to learn more about the state of their fixed assets. It is now a matter of making far better use of this knowledge as Hitachi’s Alistair Dormer points out. This is the impact which digitalisation could have.

Finally, the world’s first automatic heavy-haul railway in Australia is expected to switch to driverless operation this year, and other mainline railways are seriously considering automatic train operation (ATO). ATO is already well established on metros, and the achievement in Australia should make it lot easier for main line railways to adopt the technology. We need to make this happen if rail wants to remain competitive when autonomous driving becomes mainstream.

David Briginshaw

David Briginshaw joined IRJ in 1982 as associate editor, and was appointed editor-in-chief in 2001. He has travelled the world extensively interviewing many of the CEOs and senior managers of the world's railways and transit systems which has given him an in-depth knowledge of the global railway industry.