May 18, 2016

ERTMS: a threat to Scandinavian rail freight?

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DENMARK's largest rail freight operator DB Cargo Scandinavia (DBCS) has warned it could be forced to pull out of the market because of the cost of equipping its locomotives with ETCS.

Mr Gottfried Eymer, CEO of DBCS, told delegates at the SmartRail Europe conference in Amsterdam on April 19 that equipping the company's fleet of 30 electric locomotives (two types from two suppliers) at a cost of almost €900,000 apiece risks "killing the business" and that an exit from the market is "one of the scenarios" now under consideration.

Eymer argues that the "low level of maturity and stability" in ERTMS makes it impossible for rail freight operators to invest in equipping their locomotives.

The earliest the industry can deliver a first-in-class prototype for DBCS's Bombardier class 185 Traxx locomotives is mid-2020 and Eymer says it is unclear whether Alstom will be able to deliver equipment to the required baseline (SRS 3.4.0 or 3.5.0), which means SRS 3.3.0 could be used.

DB Cargo Denmark"High costs are driven by the small fleet size, ability to retrofit different locomotive types, and the monopolistic behaviour of suppliers, who do not grant access to their specific train control system or specific national features," Eymer says. "Onboard equipment for 30 locomotives is a problem - you need to equip 1000 locomotives before you achieve economies of scale."

A spokesman for Danish infrastructure manager Banedanmark told IRJ that operators' concerns about the rollout are being taken "very seriously" and a compensation scheme is currently being developed which would enable the Danish state to partially reimburse freight operators for the cost of onboard equipment. However, EU legislation on state aid prevents the government from covering more than half of the total cost, and the EU itself can only provide limited financial support. The Connecting Europe Facility will only fund up to 50% of the €250,000 eligible cost set by the EU as the upper limit for onboard ETCS equipment.

This means that while the Danish government will cover 100% of the cost of equipping passenger vehicles, freight operators are likely to be left with a chunk of the bill.

DBCS is also critical of Danish Banedanmark and its Swedish counterpart Trafikverket for what it perceives as a failure to harmonise ERTMS deployment plans. The entire Danish network is due to be equipped with ERTMS by 2021, but in Sweden the legacy signalling system will remain in operation on the main international freight artery from Malmö towards Stockholm and central Sweden until 2023.

Banedanmark insists it has "done its utmost" to coordinate the rollout with Trafikverket and Øresundsbron, which owns infrastructure on the Øresund link between the two countries. The ERTMS Øresund project is being implemented under a joint project agreement (JPA) between the three parties, which was signed in 2013, and activities within the JPA are managed by a steering committee, which meets 4-5 times a year, as well as several working groups. The planning group prepares "coordinated and common" deployment schedules in compliance with the JPA's binding Racif (responsible, accountable, consulted, informed, financing) matrix.

DBCS says Specific Transition Modules (STM) on its locomotives will need to be upgraded because of the retention of the legacy system in Sweden and because Banedanmark plans to remove the class B ATC signalling system as it rolls out ETCS on a section-by-section basis. With the phased nature of the deployment, each locomotive will need to be fitted with German signalling equipment, ETCS and a Danish STM, which DB Cargo claims is not economic for a 400km trip.

Banedanmark argues that no amount of coordination between infrastructure managers would completely eliminate the need for an STM upgrade. "Unfortunately this is not realistic as it would require simultaneous commissioning of the entire corridor and equipping the locomotives," Banedanmark says. "Alternatively locomotives could be equipped 6-12 months before commissioning of the entire corridor and then taken out of service during the transition, but this is not viable for the operators either."

Eymer insists that the transitional situation penalises current freight operators. "Anyone who enters the market from the early 2020s onwards will not be faced with the costs of transition," he says. "If you do everything you can to increase the costs of the rail system, there will be no customers left to pay for it."

Eymer is calling on the Danish government to delay full implementation of the ERTMS programme until suppliers can provide "tested and homologated" baseline 3 release 2 (SRS 3.5.0) equipment to limit the technical and financial risk to operators. He also advocates the retention of the legacy signalling system until 2021, but Banedanmark asserts that this would be "far from optimal" economically.

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