Hitachi Rail USA opened its new assembly facility Medley, Florida, in March, which is now building metro cars for Miami MetroRail. Hitachi Rail Italy (HRI) delivered the first trains for the Honolulu metro, Lima Line 2 and Taipei’s Circular Line, together with new trains for Genoa metro, while Milan Transport (ATM) ordered 15 more Leonardo metro trains. In August Trenitalia awarded HRI a framework contract to supply up to 300 Caravaggio double-deck EMUs in a deal with a maximum value of €2.6bn, with an initial order for 39 trains worth €333m.

Ansaldo STS clinched signalling contracts in Britain, Belgium, France, India, Malaysia, and the United States, where the company is supporting the continued rollout of Positive Train Control (PTC).

In Britain, the Intercity Express Programme (IEP) moved forward with the commissioning of maintenance facilities and the start of electric testing of class 800 trains on the Great Western Main Line (GWML), while there were further orders for AT 300 inter-city trains for Great Western Railway, TransPennine Express and Hull Trains The first AT 200 EMUs for ScotRail arrived in Europe, rolling stock assembly began at the new £82m Newton Aycliffe plant in northeast England, and Hitachi’s onboard ETCS equipment was approved for passenger service. Hitachi also submitted a joint bid with Bombardier for a contract to supply up to 3300 metro cars in London Underground’s New Tube for London Programme.

Dormer“I’m really pleased with the way the business is going, we’ve got a record backlog, 2016 will deliver record revenues, and our major programmes are on track,” Mr Alistair Dormer, global CEO of Hitachi Rail Systems told IRJ in London on November 8. “The transaction with AnsaldoBreda, the rebranding, the Ansaldo STS acquisition have also gone very well.”

After making a heavy investment in Britain and moving its global headquarters to London, Dormer admits the vote to leave the European Union has come as something as a surprise, although he remains cautiously optimistic about prospects for the British market. “Brexit was a shock we didn’t anticipate, we didn’t plan for it, we didn’t think it would happen, but we are where we are, and like the rest of industry in Britain we are waiting to see what will happen,” he says. “Newton Aycliffe is very busy, a number of deals are going through there and it will remain busy until 2019. We certainly see further opportunities in the British market, we are bidding with Bombardier on London Underground, which is a very exciting and interesting project, and there’s the High Speed 2 rolling stock tender coming in the early 2020s, so there’s certainly no need to be downbeat about the British market. The concern we would need to guard against would be if the economy really did suffer and the government didn’t have the money to continue to invest in the railways at the same rate.”

Italian integration

The integration of AnsaldoBreda into Hitachi under the HRI brand has been a key focus for Hitachi over the last year. Given its troubled recent history, Dormer is pleased with the progress AnsaldoBreda has made in restoring its business, a process which he points out was already underway before the takeover by Hitachi.

“When we looked at AnsaldoBreda four years ago we decided that it wasn’t right for Hitachi,” Dormer explains. “There were two reasons for this. One was that AnsaldoBreda was a bit of a mess and secondly, I don’t think Hitachi Rail was strong enough from a leadership point of view in Europe at that time. However, when we went back two years ago and had another look, we saw quite a transformation in the business. They still had their legacy problems - IC4 in Denmark and V250 in Belgium and the Netherlands were disastrous projects - but they were building ETR 1000 [high-speed trains] for Trenitalia in a very successful joint venture with Bombardier.”

Dormer credits this work with Bombardier for fuelling a turnaround in the business. “They taught AnsaldoBreda a lot in terms of transformation of processes in the factories, and the management team had done a really good job in terms of transforming the quality culture in the company,” he says. “We’ve been able to accelerate that and we’ve been able to import some of the quality practices that Japanese businesses use as standard.”

A key factor in the turnaround of AnsaldoBreda has been rebuilding the company’s relationship with its supply chain. “AnsaldoBreda was bottom of the queue when it came to suppliers in the past because they were very small, and therefore not as important as some of the big players, and because they probably weren’t the best at paying,” Dormer says. “Things are different with the Hitachi brand behind the business. We are a much bigger customer, we pay on time, but we demand quality and performance from our supply chain. We work very closely with suppliers and that has helped the company already but it will make a massive impact in the future.”

Dormer describes the contract to supply double-deck regional EMUs to Trenitalia as an important win for HRI, and one that will blend Japanese and Italian design to create a new product for the European market. Another key project for HRI is the contract to build 36 AT300 bi-mode long-distance trains for British operator GWR, which will be assembled at HRI’s Pistoia plant. While the production lines at Newton Aycliffe are busy assembling almost identical trains for the same operator, Dormer is confident the two plants will achieve consistency in build quality. “You don’t get true integration of businesses unless you work very closely together,” he says. “We have a product designed in Japan, which is being refined in Italy - because we have slightly different production techniques in Italy - and I think that actually improves the product. We know how important it is to deliver, so this is a project we are absolutely focussed on.”

Like HRI, Ansaldo STS is generating record revenues and Dormer sees potential for further growth, particularly in the urban rail market. “This is quite a tough market because you need to be very good at managing risk and integration, but Ansaldo STS has really developed that skill and knowledge over the years,” he says. “We bought Ansaldo STS to grow it, both signalling and train control and the turnkey business are very important. What Ansaldo STS really needed was a high-quality rolling stock provider to work alongside and a connection between Ansaldo STS’s signalling technology and Hitachi’s IT technology.”

Hitachi has been developing a European supply chain since 2005 when it won its first major rolling stock contract in Europe, an order for 29 Javelin high-speed commuter trains for Southeastern Trains in Britain. However, while much of the technology was Japanese, European suppliers played a key role in delivering a train that met European requirements. “On the Javelin project we were very concerned about the safety case, compatibility with TSIs and compatibility with European systems, so we decided that whenever there was a system that interfaced with the catenary and the infrastructure we would buy European if possible,” says Dormer. “So we bought a Faiveley pantograph, Brecknell Willis shoegear, Scharfenberg couplings, and we built those relationships. We have even more European content in IEP and with a 27.5-year maintenance contract we really wanted our supply chain to be as close to us as possible to give us the service we need.”

With trains and their components generating ever-increasing quantities of data on in-service performance, Dormer sees opportunities to achieve significant gains in quality by sharing information with suppliers. “Part of the digital revolution in the future will be to build our supply chain for information,” he says. “A few years ago, a supplier would give you reliability figures for their products with no field data to back it up. They had an academic analysis of the reliability, but nothing to prove it because once they have supplied their product to the rolling stock manufacturer they are out of the feedback loop. There’s no reason why we shouldn’t bring our suppliers into that data flow so they can see the actual performance of their equipment. That can only improve things for the whole industry.”


Hitachi is projecting revenues of around €4.5bn for its international rail business in 2016, but this only represents around 3% of revenue for the overall group. The company’s rail activities are dwarfed by its vast information technology segment, which generated around €16.5bn in revenue in 2015. “The digital revolution is central to what Hitachi is doing in other sectors - we are doing a massive smart city project in Copenhagen, we have been developing a smart energy solution for Germany, and we have been working with the JR Group companies in Japan on smart monitoring and big data analytics,” Dormer says. “All of these aspects lend themselves to rail applications and there’s a great opportunity for rail to gain from the work being done in other sectors. It was exciting at InnoTrans to hear so many people talking about a digital revolution on the railway, especially German Rail (DB), because it is something that Hitachi is exceptionally keen on.”

Dormer argues that the real challenge for the industry is in the processing and interpretation of the vast quantities of data already generated on the railway - an opportunity which many are currently failing to exploit. “We have been collecting data on trains for years, but the industry has been very patchy in how well it has used that data,” he says. “We’re now in the era of very smart, predictive software that can look at data patterns and turn that data into knowledge. We are already seeing much better-informed data-based intervention in maintenance, based on the exact status of the health of our products.”

Dormer highlights Rio Tinto’s AutoHaul automation programme as a digitisation project which could have broad implications for the railway industry. In 2012 Ansaldo STS was awarded a contract to develop and implement an automated train management system for the 1300km Hammersley & Robe River heavy-haul railway in the Pilbara region of Western Australia, where 2.4km-long trains with a loaded weight of up to 30,000 tonnes link iron ore mines with the ports of Dampier and Cape Lambert. With trains from multiple mines feeding into a largely single-track line, an extreme environment, and unmanned level crossings - some of them in populated areas - conditions are much more akin to the main line than the metros where driverless technology has been applied previously.

Trains are currently running in attended mode with a driver in the cab and Dormer says he is hopeful that this pioneering project will achieve its objective this year with the start of driverless operation. “The system is working really well, it’s really about fine tuning at this stage,” he explains. “There are issues around how the system captures images when obstacle detection is triggered. There’s a bit of work we have to do there because the specification is quite high definition. We’re still refining the software for the driving engine. When you have three locomotives and 250 wagons, the system needs to understand the train dynamics, and when you work all that out you need to consider gradients and passing loops that are only just long enough to fit the trains. It’s pretty smart software to get all of that right.”

“This is an exciting time to be on the railway,” Dormer concludes. “Every year something changes, something new emerges. We have the technology, the energy, the ideas, and the momentum of a strongly growing company. We are able to attract talented people and harness good ideas, but it’s about how we take that forward and capitalise on the opportunities.”