Our markets About

Our markets

Our public transport services across 12 countries span a wide range of operating environments, in locations with varying market characteristics. Here we give you an insight into those markets and the role Arriva plays.

United Kingdom

In the UK, where our plc headquarters are based, we are one of the largest bus operators and an operator of two rail franchises. Our operations in the UK are currently larger than in any other market in which we operate.

CP4: see page 42 for explanation Revenue 2009 down 5% to £1.7 billion Bus Rail reflecting the impact of CP4 £bn 2

1 58% 42%

0 2008 2009 Passenger and Passenger Non-passenger non-passenger revenue

O O 53 /O 47 /O

Order book 2009 down 8% to £6.0 billion as Bus/ rail split rail contracts run off £m £bn 1,200 Bus 8 1,000 Rail 6 800 600 4 400 2 200 0 0 2011 2018 2010 2012 2016 2015 2017 2013 2008 2009 2014

14 | Arriva plc Annual Report & Accounts 2009 About Arriva

Buses 6,300

Train sets 217

Employees 23,150

Entered bus market 1980 Bus operating area Entered rail market 2000 Rail

LondonLond

UK bus market UK rail market

Market description Market description • Liberalisation stage: mature • Liberalisation stage: mature • The UK bus market has 2 different operating environments • Competitively tendered - Deregulated market outside London • Almost fully franchised - Regulated market in the capital, which is Market features competitively tendered • Rail in the UK is split into 3 types Market features - Long distance Regions (outside London) - Regional • Privatised in the 1980s - London/ south east commuter • Operates on a commercial basis • The tendering authority sets service provision and - Relationship is directly with the passenger schedules - Revenue principally comes directly from fares and • Rolling stock and employees transfer to the franchisee compensation for non fare paying passengers • Franchises tend to be much larger than their equivalents - We bear revenue risk and cost risk in mainland Europe • We also run contracts for local authorities where there is Contracts deemed to be a social need for services (which would not otherwise be commercially viable), and airport transport • Net cost services • Variable length London • The tendering authority may provide a contribution in the • Operate services under contract to Transport for London form of additional contracted financial support (TfL), the city’s transport authority - In some franchises support payments decline over the life • TfL specifies the required routes, timetables and vehicles of the contract (as passenger revenue increases) • Revenue comes from TfL, who pay us for running services - In others where there isn’t as much opportunity for the on their behalf operator to grow revenue, it remains steady • Sightseeing tour operators - Some routes in the UK are premium paying (the operator pays the tendering authority) Contracts • Revenue support/ risk sharing mechanisms are in place in • Gross cost London contracts most contracts - Typically 5 years in length - TfL bears revenue risk - TfL operate a bonus/ penalty regime linked to service quality • Other contracts - Airport contracts - Local tendered service contracts

15 About Arriva • • • • Future • • • Market changesin2009 • • Arriva isoneofthelargestbusoperatorsinUK Arriva’s roleinmarket UK busmarket 16 Our markets(continued) United Kingdom Rail biddingopportunitiesacceleratein2010.We willmonitorthesituation andbidfornewfranchisesasappropriate We willfocusonmaintainingandimprovingourexcellentoperationalperformance inourbusoperationsandbothrailfranchises The springgeneralelectionresultmayshapetransportpolicies The CompetitionCommissionmayreportpreliminaryfindingsin2010 book by27% renewal andwonadditionalwork,growingtheUKBusorder In London,weretained99%ofcontractedmileageupfor local transportauthorities and 2008 encouragespartnershipworkingbetweenoperators The LocalTransport ActwhichcameintoforceinDecember throughout itsinvestigations will continuetoworkwiththeCompetitionCommission initsstudy,Commission. ArrivacooperatedwiththeOFT and the regionalbusmarketwasreferredtoCompetition An OfficeofFair Trading marketstudyofcompetition in (OFT) Runapproximately1,600buses - - Joint largestbusoperatorinLondon Joint - share:approximately20% Market - Around 30%ofourUKBusbusiness - London Runapproximately4,700buses - Thirdlargestbusoperator - share:approximately15% Market - Approximatelytwo-thirdsofourUKBusbusiness - Regions (outsideLondon) | ArrivaplcA nnual Report&Accounts 2009 (continued) (continued) • • Market changesin2009 UK railmarket • • • • • (ATW) • • • • • • CrossCountry • • Arriva’s roleinmarket a managementcontractuntilitisretendered competitor. Thegovernmentisrunningthefranchiseunder The EastCoastMainLinefranchisewassurrenderedbya CP4 of thefranchise Support paymentsdeclineslightlyeachyearoverthelife commuter passengerrailservices Regional railfranchise,operatesinter-urban, ruraland More than1,000routemiles Wales andtheEnglishbordercounties Began operatingthe15-yearfranchisein2003 Revenue supportavailablefromNovember2011 the franchise Support paymentssteadilydeclineoverthelifeof journeys alongtheroute Long distancerailfranchise,alsoprovidesinter-urban 100 stations More than1,500routemiles,callingatmore to Cardiff stretching fromAberdeentoPenzance andfromStansted Geographically themostextensivefranchiseinUK, 9-year franchise,beganin2007 2 franchises passenger trainmiles Arriva runsapproximately11%oftheUKrailnetworkby (continued) page 42for explanation CP4: see About Arriva

17 y. 2022

Bus Rail

Cross border services to the Czech Republic 2021

2020 Bus operating area Rail Rail yet to start

% 2019

83 64%

2018

Non-passenger 2017

2016 2015

Berlin 2014

Bus/ rail split

2013 2012 Cross border service from

% 2011 17 2010 Bus Rail 36% Passenger 0 50 £m 100 150 200 250 300 400 350 Cross border service from the Netherlands Cross border service to the Netherlands 900 216 2004 2005 2,900 2008 2009 2008 2009 0 2009 up 15% to £1.8 billion 2009 up 15% 2009 up 14% to £416.7 million 2009 up 14% to £416.7 2 1 0 £bn £m 100 200 500 300 400 Order book Passenger and Passenger non-passenger revenue Revenue Employees Entered rail market Entered bus market Buses sets Train Germany After in state or local government ownership. European public transport market but is predominantly Germany is the largest the countr network of rail and bus operations across country in 2004, we have built up a significant starting operations in the Our markets (continued)

About Arriva Germany (continued)

Germany bus market Germany rail market

Market description Market description • Liberalisation stage: emerging, now stalled • Liberalisation stage: mid-liberalisation • Less than 10% of the market has been competitively • Around 35% of the regional market has now been tendered, approximately half of which was awarded competitively tendered, with approximately 20% of the to the private sector market currently operated by the private sector • Close to 100% of the long distance market is operated by Market features state-owned operator DB, who is also dominant in the • Highly subsidised regional market • Cities, districts or public transport associations are responsible for bus tenders Market features • Conditions differ widely between the regions • Regional authorities are responsible for tendering regional rail routes Contracts • The 25 client bodies take their own approach to tendering • Net cost or gross cost contracts • Infrastructure: mostly owned by the subsidised national • Length ranging from 5 to 8 years operator

Arriva’s role in market Contracts • Arriva’s market share is around 1% • Range in market: everything from gross cost limited Competition incentive/ penalty regimes to net cost super bonus/ Dominated by public transport companies owned by cities, fine regimes districts and state subsidiary • New rolling stock is usually required DB Stadtverkehr, part of (DB), and small Arriva’s role in market local companies • 2009 has been the most successful year yet for Arriva in International operators German rail tenders, winning 3 contracts • Veolia • Second largest private rail operator in Germany • Transdev • Market share: approximately 5% • FirstGroup Competition • NS PSR: see page 37 for International operators Market changes in 2009 explanation • DB • Bus tendering declined significantly in 2009 prior to the start of • Veolia the PSR transitional period on 3 December as direct award to • Transdev state and city-owned companies was a dominant feature • Keolis • M&A activity in Germany has slowed significantly since • DSB (Danish State Railways) 2006, with very little activity in 2009 • NS Rail (acquired Abellio) Other • Publicly-owned regional groups • Small number of regional or local operators

Market changes in 2009 • Tender volume in rail at an all time high • Trend towards bigger contracts being offered (the biggest contract ever awarded to the private sector was won by Arriva)

Future

• Economic pressures are increasingly driving the need for market testing in Germany. With high state capital subsidies due to end, private companies are becoming an increasingly attractive option for the regional authorities • 2010: significantly more rail contracts being tendered, already ahead of full year 2009 • New rail contracts are due to start in December 2010, 2011 and 2012 • Medium to long term: expect to see more bus tendering as public service contracts come to an end during the PSR transition period, and are not eligible for automatic direct award PSR: see page 37 for explanation

18 | Arriva plc Annual Report & Accounts 2009 About Arriva

Netherlands

Revenue 2009 up 12% to £249.0 million Bus Rail

£m 300

150 78% 22%

0 2008 2009

Passenger and Passenger Non-passenger non-passenger revenue

32% 68%

Order book 2009 up 21% to £1.7 billion Bus/ rail split £bn £m 250 2 Bus 200 Rail 150 1 100 50 0 0 2008 2009 2011 2018 2010 2012 2021 2016 2015 2017 2020 2019 2013 2014

Buses 570

Trains 54

Cross border service Other 10 waterbuses to Germany

Employees 1,600 AmsterdamAmsterdam

Entered bus market 1998 Cross border service from Germany Entered rail market 1999

Bus operating area

Rail

19 Our markets (continued)

About Arriva Netherlands (continued)

Netherlands bus market Netherlands rail market

Market description Market description • Liberalisation stage: mature • Liberalisation stage: emerging • Around half of the bus market is competitively tendered, • Very little of the rail network has been competitively tendered outside major cities • Approximately 6% of the market is operated by the • , Rotterdam, the Hague and Utrecht are yet to private sector put concessions out to tender Market features Market features • Responsibility for regional rail is transferred to regional • The 19 regional authorities in the Netherlands have had authorities responsibility for public transport since January 2001 when • Conditions differ widely between the regions, and by contract the Passenger Transport Act 2000 came into force Contracts • The regional authorities are obliged to organise public transport into concessions, which are periodically put out to • Typically net cost contracts tender by open procedure • Average length: 15 years

Contracts Arriva’s role in market • Typically net cost contracts • Arriva is the largest private operator • Average length: 8 years • Best performing rail operator in the Netherlands

Arriva’s role in market Competition • Arriva is one of the 3 largest bus operators Dominated by state-owned NS Rail (Nederlandse Spoorwegen), • Operates approximately 12% of the regional bus market with 100% of long distance market under direct award contracts International operators Competition • Veolia The regional market is dominated by Connexxion, which was • Syntus (joint venture Keolis/ NS) part-privatised in 2007, with the Dutch state retaining a 33.33% stake International operators • Veolia • Syntus (joint venture Keolis/ NS)

Other • QBuzz: a new company founded by former Connexxion management (supported and 49% owned by NS)

Market changes in 2009 • Tenders focusing on quality and the environment in addition to price

Future

• 2012: Amsterdam, Rotterdam and the Hague currently operate bus services by direct award. Bus tendering may take place in these areas after 2012 when existing contracts expire • The state rail operator’s contracts are currently due to expire in 2014. National debate is ongoing with regard to the staged opening of the market • PSR transition period PSR: see page 37 for explanation

20 | Arriva plc Annual Report & Accounts 2009 About Arriva

Italy

Revenue* 2009 up 13% to £215.1 million Bus only

£m 300

200 100% 100

0 2008 2009

Passenger and Passenger Non-passenger non-passenger revenue

26% 74%

Order book 2009 down 43% to £201 million Longevity £m £m 400 140 120 100 200 80 60 40 20 0 0 2008 2009 2011 2010 2012

Buses 1,950

Employees 2,500 RomeRome

Entered bus market 2002

Bus operating area

* Including share of associates

21 Our markets (continued)

About Arriva Italy (continued)

Italy bus market Italy rail market

Market description Market description • Liberalisation stage: emerging • Liberalisation stage: yet to liberalise • Market opening is slow, and competitive tendering is not yet • Early attempts at competitive tendering failed commonplace Market features Market features • Yet to emerge • Highly subsidised, with low fares Market changes in 2009 • Capital subsidies available for investment in fleet • Trenitalia (owned by FS) signed 6 year service contracts • Public transport funding is provided nationally by the state for regional services in many areas (with 6 year extension • Provincial or municipal local authorities are responsible for options) bus provision and setting fares (inside a general framework • Some regions are considering market opening, including provided by the region) Piemonte where we operate buses • In some regions, public private partnerships have been set up

Contracts • Where contracts are in place, they are typically net cost

Arriva’s role in market • Largest wholly privately owned operator • Market share: approximately 5% • Operate urban and inter-urban services in the north • Airport connection services to Turin and Milan airports

Competition • Large number of local operators, mostly owned by regions and municipalities Other private operators • SITA (51% owned by FS, state-owned rail operator) • Transdev

Future

• Successive changes in government have delayed the liberalisation process in Italy. Regional elections in 2010 may bring change • We expect to see rail tendering in selected regions, and will respond to any invitations to tender we see as a good business fit for Arriva

Picture from Sergio Spadari (bus driver), SAB, Italy

22 | Arriva plc Annual Report & Accounts 2009 About Arriva

Scandinavia

Revenue 2009 up 13% to £455.8 million Bus Rail

£m 500 400 300 83% 17% 200 100 0 2008 2009

Passenger and Passenger Non-passenger non-passenger revenue

6% 94%

Order book 2009 up 2% to £1.7 billion Bus/ rail split £bn £m Bus 2.0 450 400 Rail 1.5 350 300 250 1.0 200 150 0.5 100 50 0 0 2008 2009 2011 2018 2010 2012 2016 2015 2017 2013 2014

Picture from Paul Peschke (operational planner), Arriva Deutschland. Arriva trains in Varde, Denmark

23 Our markets (continued)

About Arriva Scandinavia (continued) Denmark

Buses 1,500

Trains 47

Employees 4,500

Entered bus market 1997

Entered rail market 2003

Bus operating area Cross border service to Germany Rail

Denmark bus market Denmark rail market

Market description Market description • Liberalisation stage: mature • Liberalisation stage: mid-liberalisation • Tendering is well established • Opened to public tendering in 2000 • Of the 90% tendered, approximately 95% is operated Market features by the private sector • Danish parliament is responsible for the regulatory Market features framework for transport provision and also sets fares • 6 Passenger Transport Authorities have responsibility for Contracts public transport services • Net cost Contracts • Bonus/ penalty regimes for punctuality and customer • Typically gross cost satisfaction • Average length: 6 years Arriva’s role in market • Quality and service incentives/ penalties apply • Arriva was the first private company to be awarded a rail Arriva’s role in market franchise, which was re-won in 2009 • Arriva is the largest private sector public transport operator • We operate approximately 15% of the regional network • Acquired Veolia’s operation in Denmark in 2007 • Our operations are focused in the Jutland area • Bus market share in Copenhagen is approximately 60% Competition • Operate approximately 50% of overall market • Danish State Railways (DSB) operates approximately 75% of Competition train kilometres in Denmark, under direct award from the Ministry for Transport • Keolis, Tidebuss, (formerly Concordia) • DSB/ FirstGroup joint venture

Future

• Having established scale in the bus market we are now focusing on improving the quality of our contract portfolio. We expect our bus market share to decline as we look for improved prices for the loss-making former Veolia contracts as they come up for tender

24 | Arriva plc Annual Report & Accounts 2009 About Arriva

Sweden

Stockholm

Buses 580

Trains 38

Employees 1,800

Entered bus market 1999

Bus operating Entered rail market 2007 area New bus operating area yet to start Rail

Sweden bus market Sweden rail market

Market description Market description • Liberalisation stage: mature • Liberalisation stage: mid-liberalisation • Deregulation commenced in the 1980s • There is widespread tendering of regional contracts • Competitive tendering is well established Market features Market features • Rolling stock often provided by contracting authority • 22 Passenger Transport Authorities have responsibility for Contracts public transport services, including determining ticket prices, timetables and contract duration in the regions Regional rail contracts are typically • Gross cost Contracts • Between 3 and 5 years • Typically gross cost • Quality and service incentives/ penalties apply • Average length: 8 years Inter-regional services tend to be • Quality and service incentive/ penalty regimes are in place • Net cost Arriva’s role in market • Between 10 and 15 years • Arriva has established a market share of around 5%, mainly Arriva’s role in market in the south of the country • With contracts in the Skäne region and between Göteborg • In 2009 we became the first new entrant in in and Örebro, we now operate approximately 6% of the short 10 years distance rail network, by kilometres operated

Competition Competition • Nobina (formerly Concordia) • Dominated by state-owned Swedish Railways (SJ) • Busslink (80% Keolis) • DSB • Veolia • Veolia

Future

• In June 2010, we will start operating an 8-year bus contract, with a 2-year extension option, which we won in June 2009 • A new law is preparing a partial deregulation of the rail sector bringing opportunities for potential open access in the rail market

25 Our markets (continued) About Arriva Iberia

Revenue* 2009 up 19% to £207.9 million Bus Rail £m 300

200

100 95% 5%

0 2008 2009 * Including share of associates

Passenger and Passenger Non-passenger non-passenger revenue

49% 51%

Order book 2009 up 285% to £718 million Longevity (Madrid) £m £m 800 50 40 600 30 400 20 200 10 0 0 2011 2018 2010 2012 2021 2016 2015 2017 2020 2019 2022 2013 2014 2023 2008 2009 2024

Picture from Stuart Lowerson (bus driver), Arriva North East, UK. An Autocares Mallorca bus, Spain

26 | Arriva plc Annual Report & Accounts 2009 About Arriva

Spain

Buses 460

Employees 950 Madrid

Entered bus market 1999

Bus operating area

Spain bus market Spain rail market

Market description Market description • Liberalisation stage: emerging • Liberalisation stage: yet to liberalise • Market is mostly concession-based • No competitive tendering has taken place to date • The urban bus market is operated by private and city-owned Market features companies, whilst the inter-urban and long distance concessions are typically operated by private companies • State-funding provides for loss-making regional and urban services Market features • 19 autonomous regions • 19 autonomous regions, with law making capabilities Competition • Long concessions have typically been granted, with exclusive rights The state railway companies RENFE and FEVE operate all trains in Spain • The regions set maximum fares and monitor the delivery of concession requirements

Contracts • Concession based market, with revenue risk and exclusive rights - Concessions ranging from 8 to 25 years • Where contracts are in place, in Madrid for example, they are typically gross cost with increasing incentives (and penalties)

Arriva’s role in market • One of the larger private operators although our market share is still less than 1% • Operations in Madrid, Galicia and Mallorca • We now run approximately 14% of the privately operated Madrid market • Concessions extended in Galicia and Mallorca • Reshaped and extended contract in Madrid until 2024

Competition • The bus market is diverse and fragmented: 4,000+ small operators, often family owned, account for c.70% of the market • Larger bus groups are emerging - - Avanza

Future

• Until long concession agreements come to an end there will be little change in concession operators • National long distance coach lines could be subject to competition in 2010 and beyond

27 Our markets (continued) About Arriva Portugal*

Buses 1,550

Bus operating Trains 6 area Associate LisbonLisbon Barraqueiro Employees 3,100 operating area Rail Entered bus market 2000

Entered rail market 2006

Portugal bus market Portugal rail market

Market description Market description • Liberalisation stage: mid-liberalisation • Liberalisation stage: yet to liberalise • No competitive tendering, operates as a commercial market • There has only been one instance of a concession under licence awarded to a private operating company to date

Market features Market features • Major cities are still municipally owned • Urban and regional services are operated under • Municipalities are responsible for allocating routes by concessions allocated by the state awarding licences to independent operators, or by • State funding provides for loss-making regional and delivering services directly urban services • Fare increases set by government Arriva’s role in market Contracts • Barraqueiro (31.5% owned by Arriva) is the first and only • Concession based market with exclusive rights private company to hold a rail concession in Portugal, • Concessions range from 10 to 30 years operating the Fertagus services around Lisbon

Arriva’s role in market • Through Barraqueiro we also have an interest in the Metro Sul do Tejo tram operation to the south of Lisbon • Third largest bus operator in Portugal • Market share: approximately 8% Competition • 31.5% stake in Barraqueiro, Portugal’s largest public • Dominated by state-owned Comboios de Portugal (CP) transport operator • Barraqueiro is the only private operator

Competition Market changes in 2009 The bus market is fragmented outside the main cities with many • There are no signs of a further early move towards small local operators competitive tendering • Large operators - Barraqueiro (31.5% owned by Arriva) - Grupo Joalto Transdev

Market changes in 2009 • No fare increases in 2009

Future

• authorities have now been established in Lisbon and Porto, with a view to introducing competitive tendering for bus contracts • We will continue to monitor the rail situation, and when changes do occur we are well placed to benefit through the good reputation of Fertagus rail operations through Barraqueiro • In April 2010 we are due to start operating Metro do Porto, the city of Porto’s tram network

* Including share of associates

28 | Arriva plc Annual Report & Accounts 2009 About Arriva

Eastern Europe

Revenue 2009 up 58% to £59.8 million Bus Rail £m 60 50 40 30 89% 11% 20 10 0 2008 2009

Passenger and Passenger Non-passenger non-passenger revenue

27% 73%

Order book 2009 up 133% to £36 million Bus/ rail split

£m £m Bus 40 18 Rail 16 14 30 12 10 20 8 6 10 4 2 0 0 2008 2009 2011 2010 2012 2013

Picture from Vojta Vlcek (internal audit), Czech Republic. Passengers boarding one of our buses at Nové Zámky bus terminal in Slovakia

29 Our markets (continued)

About Arriva Eastern Europe (continued) Czech Republic Poland

Buses 260 Trains 9 Employees 450 Employees 80 Entered bus market 2006 Entered rail market 2007

Cross border service from Germany yet to start

Warsaw Prague Cross border services from Germany

Bus operating area Rail

Czech Republic bus market Poland bus market

Market description Market description • Liberalisation stage: emerging • Liberalisation stage: emerging • Competitive tendering limited, direct award common Market features Market features • Regional authorities have the option of awarding • Market very fragmented after privatisation contracts by competitive tendering or direct award • 167 former state owned companies (known as PKS), • Regional governments control licensing and maximum fares operate rural, inter-urban and long distance transport • Individual cities are responsible for urban public transport • 140 municipal bus operators in towns and cities Arriva’s role in market Contracts • We have a position around Prague, operating 260 buses • Gross cost in city operations, ranging from 2 to 6 years Contracts • Regional services operate on a commercial basis • Cost-plus subsidy contracts, awarded annually Market changes in 2009 Competition • Some cities are moving towards the creation of tendering authorities • Around 250 bus companies, many formed in the 1990s as part of privatisation Poland rail market

Czech Republic rail market Market description

Market description • Liberalisation stage: emerging • Liberalisation stage: emerging Market features • Regional rail provision has been devolved to the regions Market features Contracts • The state is responsible for rail provision and funding • Short, net cost contracts, 1 to 3 years Competition Arriva’s role in market • Dominated by state-owned CD with a 99% market share • Joint venture (with DB Schenker) Market changes in 2009 • Only private company operating passenger rail services • The state has extended the majority of CD’s contracts for a Competition further 10 years, limiting medium-term opportunities • State and region-owned operators Future Market changes in 2009 • Growth slower than anticipated. 3 contracts tendered, • In December 2010 we will start a cross border rail service retained by state operator from Germany into the Czech Republic Future

• We will monitor privatisation of PKS bus companies • We intend to build upon existing experience in rail

30 | Arriva plc Annual Report & Accounts 2009 About Arriva

Slovakia Hungary

Buses 600 Buses 120 Employees 1,050 Employees 200 Entered bus market 2008 Entered bus market 2008

Budapest Bratislava

Bus operating Bus operating area area

Slovakia bus market Hungary bus market

Market description Market description • Liberalisation stage: emerging • Liberalisation stage: emerging • Less than 5% of the market has been competitively • Contracts with exclusive rights may only be awarded to tendered an operator selected by a tendering procedure

Market features Market features • Regions responsible for public transport provision • National government is responsible for regional public and funding transport, mainly provided by state-owned Volan companies • Municipalities are responsible for local public transport Contracts Contracts • Between 1 and 9 years in length, with exclusive rights • Generally entered into once a year, longer in some areas Arriva’s role in market • Mixture of gross cost or cost-plus • Arriva is the largest privately owned bus operator Arriva’s role in market • 60% interest in 2 SADs (former Slovak Bus Service operators) • Largest privately owned bus operator Competition • Joint venture with Hungarian company, Videoton • Dominated by the SADs: 17 regional bus companies either • Market share: less than 1% owned completely by the state or partially privatised (60%), • Operate tenders and sub-contracts for the Volan companies with public stakes (40%) Competition • 5 municipal/ city-owned companies • The Volan companies: 24 state-owned regional operators Slovakia rail market • 6 municipal operators Market changes in 2009 Market description • In recent months, outsourcing by the Volan companies • Liberalisation stage: yet to emerge has become more common Market features Hungary rail market • The central government is responsible for rail provision and funding Market description • Liberalisation stage: yet to emerge Future • No competitive tendering as yet

Market description Market features • Privatisation in the bus market will remain a theme in coming • Responsibility of national government years, with public stakes in SADs expected to be sold • Funded by state Future

• As bus contracts expire in the run up to 2012, PSR: see we expect to see competitive tendering page 37 for explanation gradually introduced in line with PSR

31 Our markets (continued) About Arriva Larger mainland Europe contracts won in 2009 Approximate anticipated lifetime Country Area Mode Start date revenue €m Denmark Jutland Rail Dec 2010 475 Our share Sweden Halland Bus June 2010 138 of 50/50 joint venture Germany North East Rail Dec 2012 500 Dec 2010/ Netherlands Gelderland Bus/ rail Dec 2012 600

Picture from Sebastian Schneider (train conductor), Metronom, Germany

So far in 2010, we have also won the following Approximate anticipated lifetime Country Area Mode Start date revenue €m Germany Hamburg Rail Dec 2010 700 our economic Denmark Fyn Bus Summer 2010 300 interest in this is 37% Portugal Porto Metro April 2010 200 we have an effective economic stake of 35%

32 | Arriva plc Annual Report & Accounts 2009