THE European Commission’s objective of completing the rollout of ERTMS across its nine Core Network Corridors (CNCs) by 2030 could be in jeopardy because of the patchy nature of deployment and the reluctance of infrastructure managers and operators to invest in the technology, according to a report published on October 3 by the European Court of Auditors.
After visiting Denmark, Germany, Spain, Italy, the Netherlands and Poland to assess the planning, deployment and management of ERTMS implementation, the auditors concluded that deployment of the system in the EU “is at a low level and represents a patchwork, despite the fact that the ERTMS concept and vision to enhance interoperability is not generally questioned by the rail sector.”
Despite the strategic political decision to deploy a single signalling system across the whole of the EU, there was no overall cost estimate to establish the necessary funding and its sources. There is no legislative requirement for member states to decommission legacy national systems and the audit found that legal obligations are not always aligned with the priorities and deadlines of EU transport policy.
Infrastructure managers and operators have been reluctant to invest in ERTMS equipment because of the expense and the lack of an individual business case. Around €1.2bn was allocated in the EU budget between 2007 and 2013 to support member states’ investment in ERTMS, but this only represents a fraction of the cost of deployment.
The EC did not begin to study the actual cost of achieving its strategic vision for ERTMS until 2015, and even then, the assessment was limited to equipment and its installation cost on the core network corridors, which cover a total of around 51,000km. No consideration was given to the overall cost of deployment across the broader core network (66,700km) and the comprehensive network (123,000km), which are due to be fully equipped with ERTMS by 2030 and 2050 respectively.
The auditors extrapolated deployment costs from two visited member states (Denmark and the Netherlands) where national rollouts are currently underway. With an average cost for trackside systems of €1.44m per km on these two networks, the auditors calculated that the total cost of deployment across the core network could reach €80bn by 2030, with the cost of covering the comprehensive network by the middle of the century estimated at €190bn.
The report notes that these costs could decrease over time through technological advances, economies of scale, and greater competition between ERTMS suppliers. However, EU funding will still only account for a fraction of the cost – EU financial support for ERTMS projects in 2007-2020 amounts to €5bn – less than 5% of the cost of equipping the core network corridors.
Previous EC studies have pegged the cost of onboard equipment at between €375,000 and €550,000 per locomotive, with training costs estimated at the equivalent of €20,000 per locomotive. With the need to retrofit Europe’s existing fleet with an estimated 22,000 onboard units (OBUs), the bill for equipping locomotives and rolling stock could reach €11bn, and this figure excludes new fleets.
The audit found that retrofitment costs vary significantly depending on fleet size and the number of countries the vehicles are required to operate in. Constant evolution of the system, which results in the correction of software errors, adds “further significant costs.” In some cases, the auditors found the total cost per OBU could exceed e1m, excluding unavailability costs. The report cites an example in the Netherlands, where multi-system freight locomotives were equipped with ETCS baseline 2.3.0d at a cost of between €663,000 and €970,000 each.
A further compulsory software upgrade would be required on top of this when the infrastructure manager upgrades to baseline 3.
Over the last 20 years the rollout of ERTMS has been mandated at a European level through a string of legal documents, but the auditors argue that a lack of co-ordination within the “thicket of legal obligations, priorities and deadlines” has hindered progress.
ERTMS deployment is lagging far behind targets set just eight years ago. The 2009 European Deployment Plan (EDP) set the objective of rolling out trackside equipment on 10,000km of the six-corridor core ERTMS network by the end of 2015, increasing to 25,000km by December 2020. Yet by the end of last year member states had collectively managed to equip only 4121km, or just 8% of the nine core network corridors. Progress is most advanced on the Rhine-Alpine corridor, with 13% of lines equipped, while ERTMS deployment on the other eight corridors ranges from 5 to 12%.
This may be explained, at least in part, by poorly-targeted funding at a European level. The auditor’s analysis found that EU funding is not always concentrated on core network corridors. ERTMS is compulsory for route upgrading projects financed through cohesion funding, regardless of the line’s location or strategic importance. The auditor suggests this could lead to ineffective use of EU funds.
EU support for cross-border trackside deployment has also been sparse, despite EU policy and the Court’s recommendations in 2005 and 2010. In the six member states visited by the audit team, only six of the 31 projects reviewed were cross-border schemes.
Operators have been slow to equip their rolling stock with ETCS and only around 2700 units or 10% of the total EU fleet has been equipped so far. High-speed rolling stock operating mainly on domestic routes accounts for the bulk of this figure.
EU financial support for OBUs has primarily been consumed by passenger projects, and cohesion policy funding does not include any provision for equipping freight locomotives.
“We consider that this low level of deployment of ERTMS puts the achievement of the targets set for 2030 at risk as these targets are unlikely to be met and significantly undermines potential interoperability benefits. A close follow-up by the Commission of the recently-adopted EDP is necessary, as it is a prerequisite of successful deployment.”
Earlier this year a new edition of the EDP pushed the 2015 deadline back to 2023, with no fixed milestones for deployment thereafter (with the exception of the 2030 core network target).
The new EDP is given a cautious welcome, but the auditor argues that the plan does not go far enough to fully address many of the challenges facing the successful implementation of ERTMS. As with the previous plan, no overall cost assessment is given for deployment. The plan is not linked to a dedicated funding source and the potential sources of funding are not defined, which means other incentives must be found for the sector to meet its targets.
There is also no legally-binding deadline for the decommissioning of national systems.
The auditor argues that high up-front investment costs and a lack of immediate benefits for those bearing the financial impact of deployment, problems with compatibility between different versions, and the need to satisfy diverse requirements of operators and infrastructure managers have resulted in a “patchwork” of deployment.
“This puts not only the achievement of the deployment targets set for 2030 and investments made so far at risk, but also the realisation of a single railway area as one of the Commission’s major policy objectives,” the auditor says. “It may also adversely affect the competitiveness of rail transport as compared with road haulage.”
The auditors found infrastructure managers have largely been reluctant to invest in ERTMS because of the lack of an individual business case. In 2016 the EC developed a positive aggregate business case for ERTMS on the nine core corridors, but this showed that most of the potential benefits of this investment are only likely to materialise in the longer-term. Furthermore, this analysis failed to clarify whether the benefits of ERTMS will equal or exceed the costs imposed on individual infrastructure managers and operators.
The auditor also observes that one system is expected to meet the diverse needs of all infrastructure managers and operators. Despite their differing priorities and the varying age of their assets, all stakeholders must converge on a common signalling technology according to the same deadlines. Here the report cites the example of Germany, a country that has been reluctant to invest in ERTMS, primarily because of the presence of two existing high-performance systems, LZB and PZB, effectively extinguishes the business case. LZB is installed on 2600km of track, enables 300km/h operation, and will not reach the end of its useful life until 2030. PZB covers 32,000km of conventional lines and is considered by infrastructure manager DB Network to be a strong performer in terms of safety and capacity. PZB therefore looks set to remain in use in Germany beyond 2030.
“According to the stakeholders interviewed, the obsolescence of national signalling systems will eventually trigger the overall deployment of ERTMS,” the report states. “However, co-ordinated timing is a decisive factor for ERTMS to be successfully deployed.”
The Fourth Railway Package recently brought a major change in the governance of ERTMS, establishing the EU Agency for Railways as the formal systems authority. The agency is now responsible for issuing safety authorisation for vehicles and ERTMS subsystems used in more than one member state, and from mid-2019 onwards will also verify the specification of trackside systems in tenders issued by infrastructure managers.
However, the report questions whether the agency has the administrative capacity to act as systems authority for a project on this scale. It raises concerns over the agency’s role in the supervision of notified bodies and national safety authorities, as it may not be possible for the agency to anticipate compatibility issues with applicable TSIs from tendering documents.
To address the weaknesses in deployment of ERTMS, the report concludes with eight recommendations:
- the EC and the member states should analyse the total cost of deployment by the end of 2018, taking into account both the core network and the comprehensive network, in order to introduce a single signalling system throughout the EU
- the EC should seek agreement with member states by the end of 2018 on realistic, coordinated and legally-binding targets for the phasing out of national signalling systems
- the EC and the member states should work with rail stakeholders and the ERTMS suppliers to examine diverse financial mechanisms that could support individual business cases for ERTMS deployment, reducing reliance on the EU budget
- the EC should work with the EU Agency for Railways and ERTMS suppliers to ensure ERTMS specifications remain stable, incompatibilities between existing versions of trackside systems are eliminated, and future compatibility is achieved on all ERTMS-equipped routes
- the EC should assess by mid-2018 whether the EU Agency for Railways has the necessary resources to act as an efficient and effective system authority and fulfil its enhanced role in the deployment of ERTMS as specified in the Fourth Railway Package
- member states should align their national deployment plans and the EC should monitor and enforce implementation of the new European Deployment plan, with milestones to allow proper monitoring of member states’ progress with ERTMS deployment
- the EC should adopt Connecting Europe Facility (CEF) funding procedures from 2020 onwards to better reflect the lifecycle of ERTMS deployments and maximise the use of EU funding available for the system, and
- EU funding should target cross-border or core network deployments for trackside equipment, while funding for onboard equipment should be directed towards vehicles used primarily for international operations.
ERTMS is a critical component of the EC’s ambition to create a Single European Railway Area, and this report highlights the huge and complex political, technical and financial obstacles that still need to be overcome before the dream of seamless international rail transport across Europe’s borders can be realised. While it is the Commission’s job to think on an international scale, it is the job of other ERTMS stakeholders to prioritise policy and business objectives at a national or regional level. The immediate priority must be to unite these diverse interests behind a common vision for ERTMS which addresses the strategic weaknesses that have so far undermined deployment.