After decades of decline, the government of Argentina has drawn up plans to invest $US 16.6bn in the country’s railway network by 2023. Keith Barrow explains how international expertise - and finance - will play a vital role in realising this bold vision.
Commercial operations officially began on the UAE's inaugural main line railway at the start of the year. Kevin Smith spoke exclusively with Shadi Malak, acting CEO of Etihad Rail DB, and Niko Warbanoff, CEO of DB International, about the challenges of operating this remarkable line.
Rolling stock using Saudi Arabia's North-South Railway has suffered from severe wheel-wear issues since the line opened in 2011. Success in overcoming this problem provides lessons for the design of future desert heavy-haul networks as Thomas Hewitt, project manager rolling stock at Canarail, explains.
THE board of Chicago Transit Authority (CTA) voted on March 9 to award CSR Sifang America JV, a subsidiary of China's CRRC Corporation, a contract to supply up to 846 metro cars, which will be assembled at a purpose-built facility in the city.
With domestic economic growth slowing, China is aiming to boost exports from its rapidly developing technological sector, including rail. Kevin Smith looks at what 2016 might have in store for China and its impact on the railway landscape in east Asia.
INNOVATION is the key to success as it will improve our competitiveness by providing leading-edge technologies. We have to make sure we are always one step ahead of others when it comes to technology and know-how - especially in the areas of energy efficiency, productivity/throughput, asset utilisation, improvements in infrastructure and rolling stock availability, travel experience for passengers, and, last but not least, climate and environmental friendliness.
THE European rail supply industry is a diverse and geographically-widespread industry comprising thousands of SMEs and major industrial champions. Employing around 400,000 people throughout the European Union (EU) and with absolute sales of €47bn per annum, it accounts for 46% of the global accessible market for rail products.
WITH significant changes in ownership structure, the shape of the railway supply industry has altered radically over the last 12 months, and further mergers and acquisitions look likely in 2016.
In January 2015 Equistone Partners Europe and French state investment agency BpiFrance confirmed they would take part in a €10m capital increase in the owner of Compin, France, enabling the seat manufacturer to acquire Spanish competitor Fainsa.
April saw British engineering and environmental specialist Ricardo purchase Lloyd's Register Group's railway consulting unit Lloyd's Register Rail for £42.5m, while in May, Greenbrier Companies acquired a 19.5% stake in Brazilian supplier Amsted-Maxion Hortolândia, South America's largest freight wagon manufacturer, for $US 15m.
The merger of the world's two largest rolling stock manufacturers CNR and CSR was completed on June 1 creating the giant CRRC Corporation. The total value of the combined assets of CNR and CSR in 2014 was Yuan 299.7bn ($US 46.9bn), and the two companies had a combined turnover of Yuan 224bn in 2014. The company continues to pursue a rigorous agenda of international expansion establishing a Sino-US Institute of Rail Transit in cooperation with universities, and breaking ground on its first assembly plant in the US in September. CRRC also opened a new joint-venture rolling stock plant in Turkey and a factory in Malaysia to serve the Asean market.
Another Asian rolling stock supplier expanding its business to the west is India's Titagarh Wagons, which completed its purchase of a 90% stake in Firema, Italy, in July. Italy's Adler Plastic will hold the remaining 10% stake in the company, which plans to invest €20m over the next 3-5 years and expand its activities in rolling stock supply, traction and electrical equipment, and train maintenance.
Wabtec confirmed on July 27 that it had entered exclusive negotiations for the acquisition of the entire share capital in Faiveley Transport. The transaction values Faiveley at €1.7bn and will create one of the world's largest rail equipment suppliers with combined sales of around €4bn. The share purchase agreement was signed in October although with regulatory approvals pending in various countries the deal is not expected to reach financial close until the second quarter of this year.
Wabtec also continued to expand its portfolio with the purchase of a number of smaller companies including US wayside sensor supplier Track IQ, US signalling contractor Railroad Controls, and Spanish suspension and vibration control system manufacturer Metalocaucho.
Škoda Transportation announced on August 4 that it had reached an agreement to acquire a controlling stake in Finnish rolling stock manufacturer Transtech for an undisclosed sum in a deal which strengthens Škoda's position in the Scandinavian market.
In September the US government approved Nokia's acquisition of a 50% stake in Alcatel-Lucent and the deal is due to be finalised in the first half of this year. Elsewhere, GE Capital sold its wagon leasing unit GE Railcar Services to Wells Fargo subsidiary First Union Rail, with the tank wagon fleet going to Berkshire Hathaway-owned Marmon Holdings, while FreightCar America sold its wagon maintenance unit to Appalachian Railcar Services for $US 20m.
As part of its strategy to expand its European transport business, Mitsubishi Electric signed an agreement in October to acquire Polish rolling stock electrical equipment supplier Medcom, while Progress Rail purchased track fastening supplier Rail Product Solutions and diesel engine fuel injection specialist Haynes Corporation. In Norway, Eltel reached an agreement to acquire signalling maintenance and project management business VETE Signaltjenester.
On November 2 Hitachi confirmed that it had completed its acquisition of Finmeccanica's rail portfolio including AnsaldoBreda and a 40% stake in Ansaldo STS, significantly expanding its rolling stock production capacity in Europe and strengthening its position in the signalling and traffic management market. Hitachi paid €30m for AnsaldoBreda and €9.50 per share for Ansaldo STS, valuing this part of the deal at €761m.
The same week Alstom announced it had completed the €12.4bn sale of its energy business to General Electric (GE), a move which leaves the company focusing entirely on rail transport. Alstom is using €700m from the sale to acquire GE's signalling business, which is expected to boost its signalling sales by 40% and increase its geographical coverage in this market. Alstom also acquired Balfour Beatty's share in Signalling Solutions, a 50-50 joint-venture established by the two companies in 2007 to bid for signalling contracts in Britain and Ireland.
In addition, Alstom has strengthened its position in the rolling stock refurbishment and heavy maintenance sector with the acquisition of Motala Train, Sweden, and a 51% stake in South Africa's Commuter Transport & Locomotive Engineering.
On November 4 the executive board of Vossloh signed a contract with Stadler Rail for the sale of its Rail Vehicles business unit for €48m in cash together with the assumption of €124m in debt liabilities. The transfer came into economic effect on July 1 and financial close is anticipated in the first quarter of this year. Vossloh is refocusing its business on track products and activities under a medium-term strategy which will also see the disposal of Vossloh Locomotives and Vossloh Electrical Systems by 2017.
Finally, on November 19 Canadian pension fund Caisse de Dépôt et Placement du Québec (CDPQ) announced that it has entered into a definitive agreement with Bombardier to acquire a 30% stake in Bombardier Transportation for $C 1.5bn ($US 1.1bn) in a deal which values the company at $C 5bn.