Report on rail market operations in 2017

Warsaw 2018

Mission: To provide safe and competitive conditions for services

Vision: A modern and open office safeguarding the high standard of services provided on the rail transport market.

Office of Rail Transport This document uses icons downloaded from www.flaticon.com created by Al. Jerozolimskie 134 Freepik 02-305 www.utk.gov.pl NIP: 526-26-95-081

Ignacy Góra President of the Office of Rail Transport

Dear Madams and Sirs, 2017 could well be named a record-breaking year for the rail sector. Positive trends were observed both in passenger and . This is confirmed by detailed market analyses carried out by the Office of Rail Transport. Over the previous year, more than 303 m passengers decided to use rail services. The last time when such high passenger volumes were recorded was 15 years before. 2017 was the year of continued investments and improvements to the quality of passenger service. Importantly, railway undertakings and ordering entities pay greater attention to interoperability requirements. From the passengers’ perspective, this involves, for instance, making the rolling stock more accessible for those with disabilities. The results of freight transport indicate that the downward trend has been overcome. In addition to an increase in the weight of transported goods, for the first time since 2013 railway undertakings recorded a rise in operating revenues. A clear upward trend resulted in an almost 2.5-fold increase in income of the entire sector from PLN 180 m in 2016 to PLN 440 m in 2017. Last year was yet another year in a row with a dynamic growth of intermodal transport. In terms of weight, the growth exceeded 14%. In 2013-2017, transport in the international exchange with China grew consistently. It should be expected that , due to its beneficial geographic location, will take the opportunity to further develop freight transport, in particular intermodal transport through our country. In the second half of 2017 infrastructural investments were launched along many railway sections. They require an efficient coordination of both managers’ and railway undertakings’ efforts. The work in this area is aimed at reducing travel times, improving rail transport safety and comfort of travel, and removing barriers to freight transport. I would like to take this opportunity to invite you to read this “Report on Rail Transport Market Operations in 2017” by UTK. I am confident that the Report will serve as a valuable source of information and assist you in making business decisions.

Best regards,

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Table of contents

Table of contents ...... 4 1. Terms and abbreviations ...... 5 2. Passenger transport ...... 10 2.1. Operation of the passenger transport market in Poland ...... 10 2.2. Basic parameters of the passenger transport market ...... 15 2.3. Stations with the highest number of passengers in Poland ...... 18 2.4. Licensing passenger railway transport ...... 20 2.5. The passenger transport market ...... 21 2.6. The employment and financial performance of passenger railway undertakings ...... 25 2.7. The services offered by railway undertakings ...... 29 2.8. The evaluation of the quality of rail transport services – punctuality ...... 34 2.9. The evolution of passenger transport services in Poland as compared to other European countries ...... 38 3. Freight transport ...... 42 3.1. The basic parameters of the freight transport market in 2017 ...... 42 3.2. The main groups of goods ...... 43 3.3. Average speed of freight ...... 52 3.4. Freight transport licensing ...... 55 3.5. The freight railway undertaking market ...... 56 3.6. The employment and business performance of freight railway undertakings ...... 59 3.7. Freight transport in international transport ...... 61 3.8. The importance of the selected border crossings and maritime for international transport ...... 67 3.9. Intermodal transport ...... 71 3.10. The transport of dangerous goods ...... 81 3.11. The evolution of freight transport services in Poland as compared to other European countries ...... 85 4. The railway ...... 88 4.1. The functioning of infrastructure managers...... 88 4.2. The employment and financial performance of infrastructure managers ...... 90 4.3. Railway line parameters ...... 91 4.4. Service infrastructure facilities ...... 95 4.5. Infrastructure investments and railway system interoperability ...... 97 4.6. The capacity of nodal freight infrastructure ...... 98 4.7. PKP PLK investments in 2017 ...... 101 4.8. The implementation of the National Railway Programme ...... 102 4.9. Fees for access to infrastructure ...... 106 4.10. RFC5 and RFC8 corridors ...... 107 4.11. The railway infrastructure in Europe ...... 108 5. Rolling stock ...... 113 5.1. The structure of the rolling stock of standard-gauge passenger railway undertakings ...... 113 5.2. Meeting the interoperability requirements in terms of passenger rolling stock in 2017 ...... 116 5.3. The structure of the rolling stock of freight railway undertakings ...... 120 5.4. The compliance with the rolling stock interoperability requirements in 2017 ...... 123 5.5. Noise TSI – requirements to be met by rolling stock ...... 124 5.6. The market of owners and keepers according to the data from the National Vehicle Register (NVR) ...... 126 LIST OF TABLES ...... 130 LIST OF FIGURES ...... 131

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Abbreviations and terms

1. Terms and abbreviations

Railway undertakings and companies 1. RP - ARRIVA RP sp. z o.o. 2. Barter - Barter S.A. 3. Bartex - Bartex sp. z o.o. 4. BCT - Bałtycki Terminal Kontenerowy Sp. z o.o. 5. BLS - BLS AG 6. Captrain Polska - Captrain Polska sp. z o.o. 7. Przewozy Tow. - Cargo Przewozy Towarowe, Transport sp. z o.o. sp.k. 8. CARGOTOR - CARGOTOR sp. z o.o. 9. Ciech Cargo - CIECH Cargo sp. z o.o. 10. CD Cargo Poland - CD Cargo Poland sp. z o.o. 11. CL Łosośna - Centrum Logistyczne w Łosośnej sp. z o.o. 12. Colas Rail - Colas Rail Polska sp. z o.o. 13. CTL Express - CTL Express Sp. z o.o. 14. CTL Logistics - CTL Logistics sp. z o.o. 15. CTL Maczki – Bór - CTL Maczki – Bór S.A. 16. CTL Rail - CTL Rail Sp. z o.o. 17. CTL - CTL Train sp. z o.o. 18. DB Cargo Polska - DB Cargo Polska S. A. 19. DB Cargo Spedkol - DB Cargo Spedkol sp. z o.o. 20. DB Kolchem - DB Schenker Rail Kolchem sp. z o.o. 21. DCT - DCT Gdańsk S.A. Przedsiębiorstwo Obrotu Surowcami Wtórnymi 22. Depol - “Depol” sp. z o.o. 23. DSDiK - Dolnośląska Służba Dróg i Kolei we Wrocławiu 24. Ecco Rail - ECCO Rail sp. z o.o. 25. Euronaft - Euronaft Trzebinia sp. z o.o. 26. Euroterminal Sławków - “Euroterminal Sławków” sp. z o.o. 27. Eurotrans - EUROTRANS sp. z o.o. 28. F.H.U. Orion Kolej - F.H.U. “ORION Kolej” Krzysztof Warchoł 29. Freightliner PL - Freightliner PL sp. z o .o. 30. Grupa Azoty „KOLTAR” - Grupa Azoty „KOLTAR” sp. z o.o. 31. HSL Polska - HSL Polska sp. z o.o. 32. Infra SILESIA - Infra SILESIA S.A.

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33. Inter Cargo - Inter Cargo sp. z o.o. 34. JSK - Jastrzębska Spółka Kolejowa sp. z o.o. 35. Karpiel - „Karpiel” sp. z o.o. 36. Kolej Bałtycka - „Kolej Bałtycka” S.A. 37. Koleje Dolnośląskie - Koleje Dolnośląskie S.A. 38. Koleje Małopolskie - “Koleje Małopolskie” sp. z o.o. 39. - “Koleje Mazowieckie – KM” sp. z o.o. 40. Koleje Śląskie - Koleje Śląskie sp. z o.o. 41. - Koleje Wielkopolskie sp. z o.o. 42. KP Kotlarnia - Kopalnia Piasku “Kotlarnia” S.A. 43. KP Kotlarnia Linie Kolejowe - “Kopalnia Piasku Kotlarnia - Linie Kolejowe” sp. z o.o. Logistics&Transport 44. - Logistics&Transport Company sp. z o.o. Company 45. - “Lotos Kolej” sp. z o.o. 46. LTE Polska LTE Polska sp. z o.o. 47. LW Bogdanka - Lubelski Węgiel “Bogdanka” S.A. ŁKA or Łódzka Kolej 48. - “Łódzka Kolej Aglomeracyjna” sp. z o.o. Aglomeracyjna 49. Majkoltrans - “MAJKOLTRANS” sp. z o.o. 50. Moris - MORIS sp. z o.o. 51. NKN Usługi Kolejowe - NKN Usługi Kolejowe sp. z o.o. 52. Omniloko - OMNILOKO sp. z o.o. 53. Orlen Koltrans - ORLEN KolTrans sp. z o.o. 55. OT Rail - OT RAIL sp. z o.o. 56 PCC Intermodal - PCC Intermodal S.A. 57. PKM - Pomorska Kolej Metropolitalna S.A. 58. PKP Cargo - PKP CARGO S.A. 59. PKP Cargo Service - PKP CARGO SERVICE sp. z o.o. 60. PKP Energetyka - PKP Energetyka S.A. 61. PKP Intercity or PKP IC - “PKP INTERCITY” S.A. 62. PKP LHS - PKP Linia Hutnicza Szerokotorowa sp. z o.o. 63. PKP PLK - PKP Polskie Linie Kolejowe S.A. PKP SKM or PKP SKM in 64. - PKP Szybka Kolej Miejska w Trójmieście sp. z o.o. Tricity 65. PMT Linie Kolejowe - “PMT Linie Kolejowe” sp. z o.o. Przedsiębiorstwo Napraw Infrastruktury sp. z o.o. under 66. PNI Warszawa - liquidation 67. Pol-Miedź Trans - Pol–Miedź Trans sp. z o.o. 68. Polzug - Polzug Intermodal Polska sp. z o.o.

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Abbreviations and terms

69. POZ BRUK - POZ BRUK sp. z o.o. sp.j. Pomorskie Przedsiębiorstwo Mechaniczno – 70. PPMT - Torowe sp. z o.o. Przewozy Regionalne or 71. - “Przewozy Regionalne” sp. z o.o. 72. PUK Kolprem - Przedsiębiorstwo Usług Kolejowych KOLPREM sp. z o.o. 73. Rail Polska - Rail Polska sp. z o.o. SKM Warszawa or SKM in 74. - Szybka Kolej Miejska sp. z o.o. Warsaw 75. SKPL Cargo - SKPL Cargo sp. z o.o. 76. STK - STK S.A. 77. Torpol - Torpol S.A. 78. Tec Logistics - TRACK TEC Logistics sp. z o.o. 79. Track Tec Rail - Track Tec Rail sp. z o.o. 80. Trakcja PRKiI - Trakcja PRKiI S.A. 81. Transchem - Transchem sp. z o.o. 82. UBB - Usedomer Bäderbahn GmbH 83. UBB Polska - UBB Polska sp. z o.o. 84. WAM - WAM sp. z o.o. 85. Wiskol - Wiskol sp. z o.o. sp. k. 86. WKD - Warszawska Kolej Dojazdowa sp. z o.o. 87. ZIK Sandomierz - Zakład Inżynierii Kolejowej sp. z o.o. 88. ZPiS „SPEDKOKS” - Zakład Przewozów i Spedycji “SPEDKOKS” sp. z o.o. Zakłady Produkcyjno-Naprawcze Taboru Maszyn 89. ZPNTMiU “TABOR” - i Urządzeń “TABOR” M. Dybowski s.j. Companies CTL Logistics sp. z o.o., CTL Północ sp. z o.o. 90. CTL Group - and CTL Train sp. z o.o. Companies DB Cargo Polska S.A. and DB Cargo Spedkol 91. DB Group - sp. z o.o. Companies PKP Cargo S.A., PKP Cargo Service sp. z o.o., 92. PKP Group - PKP Linia Hutnicza Szerokotorowa sp. z o.o. 93. DB - Institutions and organisations 1. CUPT - Centre for EU Transport Projects 2. EUAR - Agency for Railways 3. Eurostat - Statistical Office of the European Communities 4. GUS - Statistics Poland 5. IRG-Rail - Independent Regulators’ Group – Rail 6. MI - Ministry of Infrastructure 7. MIR - Ministry of Investment and Development

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Union Internationale des Chemins de Fer (the 8. UIC - International Union of Railways)

9. UTK - Office of Rail Transport

10. President of UTK - President of the Office of Rail Transport

Legal regulations

Directive 2012/34/EU of the and of 1. Directive 2012/34/EU the Council of 21 November 2012 establishing a single European railway area

2. TSI Technical Specification for Interoperability

TSI NOI 2011 (OJ L 99, 13.4.2011); TSI NOI 2014 ( OJ L 3. TSI Noise - 356, 12.12.2014)

TSI CCS 2006 (OJ L 342, 7.12.2006, as amended); TSI TSI Control-Command and 4. - CCS 2012 ( OJ L 51, 23.02.2012, as amended); TSI CCS Signalling 2016 ( OJ L 158, 15.06.2016)

TSI WAG 2006 (OJ EU L 344, 8.12.2006); TSI WAG 2013 5. TSI Freight wagon ( L 104, 12.04.2013)

Commission Decision 2011/291/EU of 26 April 2011 concerning a technical specification for interoperability TSI Loc&Pass of 2011 or TSI relating to the rolling stock subsystem — ‘ 6. Locomotives and passenger - and passenger rolling stock’ of the trans-European rolling stock conventional rail system ( OJ L 139, 26.5.2011, p. 1, as amended)

Commission Regulation (EU) No 1300/2014 of 18 November 2014 on the technical specifications for 7. TSI PRM 2014 - interoperability relating to accessibility of the Union's rail system for persons with disabilities and persons with reduced mobility ( L 356, 12.12.2014)

the Act of 16 December 2010 on public collective 8. Public Transport Act - transport ( Journal of Laws of 2017, item 2136, as amended).

The Rail Transport Act of 28 March 2003 ( Journal of 9. Rail Transport Act - Laws of 2017, item 2117, as amended).

Train paths in accordance with the Network Regulations of the Manager of PKP PLK

1. L (M, W, P, T, Z, S) - light engines

T (A, B, C, G, R, B, D, P, N, M, freight trains 2. - L, K, T, S, H) 3. TC, TD - intermodal trains (international TC, domestic TD)

for bulk transport in full or empty wagons in block trains, 4. TM - in domestic transport

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Abbreviations and terms

Other terms 1. CEF - Connecting Europe Facility 2. ECM - entities in charge of maintenance 3. ERTMS - European Rail Traffic Management System Electronic System for Recording Operational 4. e-SEPE - Performance 5. ETCS - European Train Control System 6. Eurobalise - an element of the track-side equipment ERTMS/ETCS 7. EMU - electrical multiple unit 8. GSM-R - GSM for Railways 9. KPK - National Rail Programme an entity's authorisation to perform the function of a railway undertaking in the Republic of Poland and other 10. Licence - EU Member States or member states of the European Free Trade Association (EFTA) - parties to the agreement on the European Economic Area 11. main line - railway lines No. 131 and 201 12. NVR - National Vehicle Register 13. “Nadodrzanka” - railway line No. 273 14. pass-km - passenger-kilometre 15. train-km - train-kilometre

16. IEOP - Infrastructure and Environment Operational Programme

Regulations concerning the International Carriage of 17. RID - Dangerous Goods by Rail 19. SBB - Schweizerische Bundesbahnen 20. SMGS - Agreement on International Goods Transport by Rail 21. DMU - diesel multiple unit an equivalent to a 20-foot unit 1 20-foot container equals 22. TEU - 1 TEU 23. tonne-km - tonne-kilometre

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2. Passenger transport

2.1. Operation of the passenger transport market in Poland

Passenger is performed by licensed railway undertakings. Transport can be provided under:

• public services; • commercial transport; • occasional transport. Passenger rail transport services are currently performed for 18 organisers who conclude public service contracts: the minister in charge of transport, province marshals and the Mayor of Warsaw. The scope and period of contracts is individually determined by the respective organisers. For example, the Mazowieckie Province has concluded one multi-year contract with the operator Koleje Mazowieckie and with WKD. Both contracts are binding until 2024. The Wielkopolskie Province, on the other hand, has three contracts with Przewozy Regionalne binding until 2020 and with Koleje Wielkopolskie until 2025. Another example is the Małopolskie Province, which had annual contracts concluded with three operators: Przewozy Regionalne, Koleje Małopolskie and Koleje Śląskie. This demonstrates that the scope varies by organiser. Overall, in 2017 operators received PLN 566 m of co-financing from the State budget (by PLN 16 m more than in 2016) and PLN 1 536 m (by PLN 94 m more as compared to 2016) of local government co-financing for public services.

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Passenger transport

List of organisers and operators with concluded contracts

organiser operator

Ministry of Infrastructure and Construction PKP Intercity

Koleje Dolnośląskie Marshal’s Office of the Dolnośląskie Province Przewozy Regionalne

Arriva RP Marshal’s Office of the Kujawsko-Pomorskie Province in Toruń Przewozy Regionalne

Marshal’s Office of the Lubelskie Province in Przewozy Regionalne

Marshal’s Office of the Lubuskie Province Przewozy Regionalne

Przewozy Regionalne Marshal’s Office of the Łódzkie Province Łódzka Kolej Aglomeracyjna

Przewozy Regionalne Marshal’s Office of the Małopolskie Province Koleje Małopolskie Koleje Śląskie

Koleje Mazowieckie Marshal’s Office of the Mazowieckie Province Warszawska Kolej Dojazdowa

Marshal’s Office of the Opolskie Province Przewozy Regionalne

Marshal’s Office of the Podkarpackie Province Przewozy Regionalne

Marshal’s Office of the Podlaskie Province Przewozy Regionalne

Przewozy Regionalne Marshal’s Office of the Pomorskie Province PKP SKM in Tricity

Przewozy Regionalne Marshal’s Office of the Śląskie Province in Koleje Śląskie

Marshal’s Office of the Świętokrzyskie Province Przewozy Regionalne

Marshal’s Office of the Warmińsko-Mazurskie Province in Przewozy Regionalne

Przewozy Regionalne Marshal’s Office of the Wielkopolskie Province in Poznań Koleje Wielkopolskie

Marshal’s Office of the Zachodniopomorskie Province Przewozy Regionalne

The City of Warsaw SKM in Warsaw

In addition to public service transport, railway undertakings may perform commercial transport services under the open access policy. This involves transport services which are not co-financed if the receipts from tickets are insufficient. The provision of commercial transport services on domestic and international paths requires the President of UTK’s decision on granting open access. The railway undertaking receiving such a decision may apply for access to railway infrastructure to the infrastructure manager of the indicated path. These regulations do not apply to connections for which a contract has been signed with the organiser of public collective transport.

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In the case of applications for granting open access submitted in 2017, the President of UTK investigated whether a new commercial transport service would not adversely impact on the economic balance of the services provided under public service contracts, but only at the request of authorised entities. For applications submitted before 30 December 2016, such an analysis was necessary for each application. During the analysis, the President of UTK took into account both the potential benefits for passengers arising from the growth of competition on the Polish rail market, including an increase in the number of available connections, the attractiveness of the package for people who had not previously used rail transport, providing connections to attractive tourist destinations or areas with previously insufficient transport options, as well as the risks connected with the needs of passengers using the already available trains and the traffic intensity on the railway line. In some cases it was determined on the basis of the conducted analysis that the proposed package was aimed at taking over passengers from public service trains and would not bring any added value to rail transport services, leading to lower revenues for the operator. This would result in the need to restrict the uniform and consistent package of public transport services. In such cases a decision denying open access was issued.

For applications in which the analysis demonstrated that the package would complement public service transport and bring benefits to the development of the passenger rail transport market, railway undertakings received decisions granting open access on a domestic path. In 2017 open access was granted to:

• PKP Intercity – 20 paths; • Arriva RP – 8 paths; • Koleje Dolnośląskie – 1 path; • PKP Cargo – 1 path. In addition, in 2017 the President of UTK issued the first-ever decision granting open access for an international path to a railway undertaking from another EU Member State. This was an open access decision for the Czech railway undertaking LEO Express a.s. for the Kraków-Praga route. In 2017 the

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Passenger transport

President of UTK issued 31 decisions granting open access to railway undertakings (30 for national paths and 1 international path). In 2017, railway undertakings could also perform commercial rail transport services which did not require them to obtain the President of UTK’s decision granting open access. Such a possibility was introduced by the transitional provisions of the Act on public collective transport, which had remained in force until 31 December 2017. The opportunity was taken, i.a., by PKP Intercity, Koleje Dolnośląskie and Arriva RP. The last method to provide transport services is by way of ‘occasional transport’, i.e. one-time passenger transport aimed at meeting the transport needs not taken into account in the transport services carried out on a given line as part of the public service contract or on the basis of a decision granting open access. Such transport services should be performed in response to a need to transport people to an event (festival, sports event, concert, convention or other mass event) or to perform commissioned dedicated transport services, e.g. for a business trip, corporate team-building trip, summer camp, etc. Occasional transport differs from regular passenger transport services in that it has a specific, predefined and one- time objective. Occasional transport services may involve, e.g. the transport of fans to a yacht racing event, but not launching additional trains in the summer season to facilitate holiday travels. It should be noted, however, that the “one-time” nature of occasional passenger transport services should not be understood only as involving a one-time return ride. The nature of an event might require the transport of many people using a larger number of trains, also from locations in various areas of the country, along various paths. In such a case, even though the transport services are performed along various paths and using a variety of trains, we can still refer to them as occasional transport, as it is aimed at transporting passengers to a single event. In 2017 this category accounted for around 0.05% of the total number of passengers.

The share of public and commercial transport services in the number of passengers transported, transport performance and operational performance in 2017

100% 3% 8% 11%

75%

50% 97% commercial transport services 92% 89% public transport services

25%

0% the number of transport operational passengers performance performance

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Having a decision granting open access or a signed public service contract, a licensed railway undertaking submits a request for a train path (infrastructure capacity) within the period specified in the network statement. Then the railway infrastructure manager, on the basis of the list of priorities in the Rail Transport Act, grants capacities according to appropriate rules (until 30 December 2016 these were defined by the Regulation of the Minister of Infrastructure and Development of 5 June 2014 on the conditions of access to and use of railway infrastructure (Journal of Laws of 2014, item 788, as amended) and from 11 April 2017 by the Regulation of the Minister of Infrastructure and Construction of 7 April 2017 on providing access to railway infrastructure (Journal of Laws of 2017, item 755).

In 2017, trains ran on the basis of:

• the Annual Timetable – paths are allocated on dates determined by the manager before the timetable comes into force or during its update;

• the Individual Timetable – paths are allocated as part of spare capacity after the paths of trains are allocated in the Annual Timetable, after the lapse of the time limit for submitting infrastructure capacity requests within the Annual Timetable of trains;

• the Substitute Timetable – introduced by PKP PLK in the context of changes to the Annual Timetable resulting from network investments, renovations or railway line maintenance. Although the timetable is set once a year, it still can be subject to change resulting from investment, renovation and maintenance works in the PKP PLK network. In the 2016/2017 timetable, PKP PLK introduced 5 Substitute Timetables valid from 11 December 2016, and 12 March, 11 June, 3 September and 15 October 2017. In 2017 passenger transport volume exceeded 300 m passengers. An upward trend was already visible in 2015 and 2016. An increase in the number of passengers was recorded both for long-distance transport and for regional transport, and also in large cities.

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Passenger transport

2.2. Basic parameters of the passenger transport market In 2017 a rise was recorded on the passenger transport market both in terms of the number of passengers and transport performance. Nearly 303.6 m passengers used the services of railway undertakings, i.e. almost 3.8% more than in the previous year. A similar number of passengers using rail services was last observed in 2002 (304.1 m), i.e. 15 years before.

The number of passengers in passenger rail transport in the years 2008-2017 (standard-gauge transport)

310 303,6

300 292,2 292,5 290 283,3 280,3

280 273,9 270,4 269,1 mpassengers 270 264,1 261,8 260

250 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

In 2017 transport performance was by almost 6% higher than in the previous year. It amounted to 20.3 bn pass-km.

Transport performance in passenger rail transport in the years 2008-2017 (standard-gauge transport)

21 000 20 321 20 255 20 000 km

- 19 181

19 000 18 679 pass

m 18 164 17 860 17 907 18 000 17 443

16 797 17 000 16 071 16 000

15 000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Passenger railway undertakings covered a total of 162.3 m train-km. As compared to 2016, this value increased by 1.4%, which means that the trains of passenger railway undertakings covered a distance greater by approx. 2.3 m km.

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Operational performance in passenger rail transport in the years 2008-2015 (standard-gauge transport)

170

162,3 160,0 160 km -

150 145,7

m train m 143,3 144,1 143,4 142,6 139,4

137,1 140 135,4

130

120 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

The number (in m) and share (in%) of checked-in passengers in respective provinces in 2017

120 102.3 33.7%

80 55.5 18.3%

40 27.1 24.9 8.9% 20.4 16.6 8.2% 12.9 6.7% 5.5% 9.1 8.1 m 5.2 4.7 4.9 3.7 4.3% 3.0% 2.7% 3.4 2.7 2.1 1.7% 1.6% 1.6% 1.2% 1.1% 0.9% 0.7% 0

In 2017, in the Mazowieckie Province 102.3 m passengers checked in. Compared to 2016, their number grew by 1.2 m. Despite this growth, the market share of that region dropped almost by 1 percentage point. The high result of the Mazowieckie Province in comparison to other provinces was due to the complementary connections network. In the Pomorskie Province, ranking second in terms of the number of checked-in passengers, an increase in absolute values was also observed. In 2016, 53.7 m passengers were checked in, as compared to 55.5 m in 2017. As far as the Province’s share is concerned, it remained unchanged. The Łódzkie Province recorded the largest increase in the number of passengers – from 9.7 m in 2016 to 12.9 m in 2017 (a growth of more than 33%). The share of this Province in the total number of checked-in passengers grew by 1 percentage point.

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Passenger transport

The number of checked-in passengers increased significantly also in the Dolnośląskie Province (by 2.5 m, an 11% rise) and the Małopolskie Province (by 1 m, a 7% growth).

The number of trips per resident of the Province in 2012-2017

Pomorskie 24.0 23.3 21.9

21.4 Warmińsko- 20.1 19.9 mazurskie Zachodnio- 3.2 3.1 3.4 3.7 3.3 pomorskie 3.1 5.4 5.3 5.4 5.8 5.3 5.5 Kujawsko- pomorskie Podlaskie 2.2 3.7 1.8 3.7 1.8 3.9 1.5 1.2 1.6 3.8 3.7 3.9 Mazowieckie L u 19.1 19.2 18.9 18.8 18.5 3.3 b 17.1 Wielkopolskie 3.0 u 3.0

s 8.2 7.2 7.7 7.3 7.2 3.0 7.8 k 3.1 3.3 i Łódzkie e 5.2 4.1 4.3 3.5 3.6 3.9 Lubelskie Dolnośląskie 2.7 2.6 2.8 3.0 2.3 2.2 8.6 7.7 5.8 6.6 5.1 4.9 Opolskie Śląskie Świętokrzyskie 2.8 2.4 2.2 1.8 1.9 2.0 4.5 4.3 4.5 4.4 4.2 4.3 7.1 6.6 5.1 5.4 5.3 5.3

2017 Podkarpackie 2016 Małopolskie

2015 1.9 1.7 1.7 1.6 1.5 1.5 4.9 4.6 3.0 3.9 3.1 2014 2.7 2013 2012

The popularity of rail transport is demonstrated by the rail usage rate, i.e. the number of trips (checked-in passengers) per 1 province resident. In comparison to the previous year, it grew in the whole of Poland by 0.3 from 7.6 to 7.9 trips per country resident. Only the Pomorskie, Mazowieckie and Dolnośląskie Provinces recorded a rail usage frequency higher than the overall indicator for Poland. For calculating the indicator, GUS data were used on the number of residents of provinces in the respective years. Similarly to 2016, the highest rail usage rate was recorded in the Pomorskie Province, where it amounted to 24 (an increase of 0.7 trip per resident). The next Province in the listing is the Mazowieckie Province, where a growth of 19.1 was observed (of 0.2 trip per resident). The third position in the listing was occupied by the Dolnośląskie Province with 8.6 trips. In comparison to 2016 the number of trips in the region was higher by 0.9 trip per resident. As compared to the previous year, in 2017 the indicator dropped in the Wielkopolskie and Lubelskie Provinces. Decreases in these regions can be attributed to large-scale modernisation works. However, it should be considered that as soon as inconveniences on specific lines cease to exist, passengers gladly return to rail services. It can therefore be expected that the usage rate in these provinces will grow in the future. In the remaining provinces growths were recorded from of 0.1 to 0.4 trip per resident. Better results were achieved both due to a higher number of passengers using PKP Intercity’s services and due to expanding the connections network in order to manage agglomeration traffic.

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In 2017 a number of factors encouraged passengers to choose rail transport. This was the period of successive rolling stock investments and improvements to the quality of passenger service. New rolling stock was purchased by several railway undertakings and used rolling stock was modernised on an ongoing basis (including the EN57 train sets). Quite importantly, railway undertakings and ordering entities pay greater attention to interoperability requirements. It is worth emphasising that a substantial part of the new rolling stock in operation in Poland was produced domestically. All railway undertakings plan rolling-stock investments also for the following years, and these cover rolling-stock plans with investments worth several billion PLN.

In 2017, in addition to the new rolling stock, railway undertakings provided passengers with solutions inspire by the concept of ‘integrated ticket’, such as the Traveller's Package from the Ministry of Infrastructure and Construction and PKP and the Integrated Local Government Ticket. Services where railways are used as an important part of urban transport were also developed. Many railway undertakings developed initiatives to encourage passengers to use rail services. These included special offers or the launching of special trains. In the second half of 2017 infrastructural investments were launched on many rail sections, requiring the proper coordination between the work of managers and railway undertakings. Only by keeping passenger inconvenience during renovation to the minimum is it possible to avoid the trend of passengers abandoning rail services. 2.3. Stations with the highest number of passengers in Poland As UTK's analysis shows, in 2017 25% of all passengers got on and off trains at the following 10 major stations: Warszawa Śródmieście, Poznań Główny, Wrocław Główny, Warszawa Wschodnia, Kraków Główny, Warszawa Centralna, Warszawa Zachodnia, Katowice, Główna and Gdańsk Główny. On each of them the passenger turnover exceeded 10 m passengers per year and 25,000 daily. In the last three years railways regained and attracted new passengers with an improved timing scheme and new rolling stock on selected paths. The number of passengers increased in this period on all major stations except for Warszawa Śródmieście. The number of passengers in the whole country increased in the last three years by approx. 12%, and for major stations by approx. 30%. Major stations also gained in significance, increasing their market share from approx. 22% to approx. 25%.

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Passenger transport

The largest station in Poland with regard to the number of passengers is Warszawa Śródmieście. The second largest station is Poznań Główny, and the third Wrocław Główny. Among the top ten stations in the listing there are as many as four Warsaw stations, which indicates that railways play a crucial role in the provision of transport services for Warsaw's area. The substantial role of agglomeration railways is also visible in the high passenger volumes at two Tricity stations.

The largest increase in the analysed period of 2014-2017 was recorded for the Kraków Główny station and resulted from the development of agglomeration services and the redevelopment of long-distance services with modernised paths. The situation for the Wrocław Główny station is similar. The second largest growth was observed in the Warszawa Centralna station. This is confirmed by passengers’ returning to rail services after the completion of modernised lines and introducing new long-distance rolling stock. The highest number of trains arrived at the Warszawa Zachodnia station – 962 train sets on average per day. The key issue regarding stations is meeting the needs of passengers with limited mobility. These include the disabled and the elderly, persons travelling with children, bikes, large luggage, etc. In 2017, only 3 out of 10 major stations were adjusted to the needs of passengers with limited mobility; these were the recently modernised Warszawa Centralna, Kraków Główny and Katowice. The main stations in Wrocław and Gdynia were also modernised, but not all of their platforms were equipped with lifts. The Poznań Główny station's modernisation is under way, and so is the renovation of platforms in Gdańsk. None of Warszawa Wschodnia station's platforms is accessible for people with limited mobility. The Warszawa Zachodnia station is only furnished with lift platforms. At the largest station Warszawa Śródmieście only one platform has a lift.

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Data on major passenger stations in Poland in 2017

2.4. Licensing passenger railway transport

The amendment of the Rail Transport Act passed on 30 December 2016 features a changed definition of railway undertaking. It now defines railway undertaking as an entrepreneur licensed to perform rail transport services or traction services or providing transport services on narrow-gauge rail infrastructure. Providing transport services on narrow-gauge lines does not require a railway undertaking licence. The amendment of the Act in this respect authorised entrepreneurs providing transport services on narrow- gauge infrastructure holding a railway undertaking licence issued on the basis of the previous regulations to apply to the President of UTK with an application to cancel their licence. The President of UTK in 2017 issued three decisions on the expiry of such licences. On 30 May 2017 the amendment of the Rail Transport Act entered into force containing provisions on rail transport licensing, changing the conditions confirming the meeting of requirements referring to good repute, financial credibility, professional qualifications and cover for civil liability for entities applying for a railway undertaking licence. The main change regards the condition confirming the meeting of requirements referring to cover for civil liability, which is considered to be met when an entrepreneur applying for the licence demonstrates that it has concluded a civil liability insurance agreement or an insurance guarantee agreement including the requirements specified in Article 12 of Regulation 1371/2007/EC of the European Parliament and Council of 23 October 2007 on rail passengers' rights and obligations on rail passengers’ rights and obligations and meets the requirements as to the insurance effective date and the minimum guaranteed amount in line with the Regulation of the Minister of Development and Finance of 30 May 2017 on insurance for railway undertakings (Journal of Laws of 2017, item 1033). In accordance with the Regulation on insurance for railway undertakings, the insurance obligation of a railway undertaking arises at the latest on the day preceding the day of launching operations covered by

20

Passenger transport

the licence, and the minimum guaranteed amount of the civil liability insurance of a railway undertaking, in an insurance period not longer than 12 months, is equivalent to (in PLN):

• EUR 100 000 – for railway undertakings with a licence to provide rail services, providing rail services only on narrow-gauge railway lines; • EUR 250 000 – for railway undertakings providing rail services only on the infrastructure which they manage; • EUR 2 500 000 – for other railway undertakings. with the minimum guaranteed amount calculated on the basis of the average EUR exchange rate published by the National Bank of Poland for the first time in the year in which the insurance agreement was concluded. The amendment of the Rail Transport Act in terms of the requirements to be met by an entity applying for a railway undertaking licence (especially in terms of cover for civil liability) stopped entrepreneurs for some time from filing application for a railway undertaking licence. In 2017 the President of UTK did not grant a railway undertaking licence to provide passenger rail transport. Due to formal deficiencies, the President of UTK dismissed one application for a licence to provide passenger rail transport. In 2017 the President of UTK suspended one railway undertaking's licence for the provision of passenger rail transport, freight transport and traction services. Three entities had their licences for the provision of passenger transport expired, and in the case of one railway undertaking the licence to provide traction services was revoked. At the end of 2017, 35 railway undertakings had active licences for the provision of passenger rail transport (except for suspended ones) entitling them to engage in activities, 15 of which reported regular passenger transport services on normal-gauge infrastructure.

The number of licensed railway undertakings authorised to provide transport services and actually operating on the rail market in the years 2008-2017

50 the number of licensed railway undertakings 40

30

20 39 38 36 35 35 35 35 34 30 29 10 15 18 16 15 15 13 13 12 12 11 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

2.5. The passenger transport market

The record-breaking number of passengers as compared to the previous years in the case of most railway undertakings did not have any impact on significant changes in the market share of companies by the number of passengers and on transport performance. It is worth noticing that almost 75% of all passengers used the trains of Przewozy Regionalne, Koleje Mazowieckie, PKP Intercity and PKP SKM in Tricity. The largest market share in terms of the number of passengers transported was recorded by the company Przewozy Regionalne operating under the consumer brand POLREGIO. The services of this railway

21

undertaking were used by 400 000 people more than in 2016, but the market share of this company in terms of the number of passengers decreased by 0.85 percentage point and equalled 26.31%. In comparison to other regional and agglomeration-based railway undertakings Przewozy Regionalne provided the largest number of connections to regions where railways are used to a lesser extent and guarantees access to smaller towns and localities.

The market share of passenger transport undertakings by the number of passengers in 2017

Łódzka PKP SKM Kolej in Tricity SKM w Warszawie Aglomeracyjna 13.94% Koleje 1.27% 7.60% Koleje Małopolskie PKP Intercity Śląskie WKD 1,89% 14.11% 5.18% 2.55%

Arriva RP 0,77% UBB Koleje 0,17% Koleje Mazowieckie Wielkopolskie 20.44% 2.67% Koleje Dolnośląskie Other 3.09% 0.016% Przewozy Regionalne 26.31%

The railway undertaking whose market share increased the most in comparison to the previous year was PKP Intercity (0.94 percentage point). The undertaking transported over 4.3 m passengers more than a year before, which means a rise in the number of passengers of more than 11.2%. Other companies whose market share by the number of passengers increased in comparison to the previous year include Koleje Dolnośląskie (0.59 percentage point) Łódzka Kolej Aglomeracyjna (0.41 percentage point), Koleje Małopolskie (0.25 percentage point) and WKD (0.21 percentage point). In total, the companies transported over 9.5 m passengers more than in 2016. For other companies the share was lower than in the previous year: SKM in Warsaw (-0.54 percentage point), Koleje Mazowieckie (-0.37 percentage point) and PKP SKM in Tricity (-0.37 percentage point), Koleje Wielkopolskie (-0.16 percentage point), Koleje Śląskie (-0.06 percentage point) and Arriva RP (-0.03 percentage point).

22

Passenger transport

The share of railway undertakings in the passenger transport market in 2013-2017 by the number of passengers

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0%

26,3% 27,2% Przewozy Regionalne 27,4% 29,5% 31,4% 20,4% 20,8% Koleje Mazowieckie 22,6% 23,3% 23,1% 14,1% 13,2% PKP Intercity 11,1% 9,5% 11,4% 13,9% 14,3% PKP SKM 14,0% 13,3% 13,0% 7,6% 8,1% SKM w Warszawie 9,0% 9,5% 8,4% 5,2% 5,2% Koleje Śląskie 5,7% 6,0% 6,0% 3,1% 2,5% Koleje Dolnośląskie 1,9% 1,3% 0,9% 2,7% 2,8% Koleje Wielkopolskie 2,6% 2,7% 2017 2,0% 2,6% 2,4% WKD 2,7% 3,0% 2,7% 2016 1,9% 1,6% Koleje Małopolskie 0,6% 0,01%

1,3% Łódzka Kolej 0,9% 2015 0,6% Aglomeracyjna 0,2% 0,0% 0,8% 0,8% Arriva RP 1,5% 1,7% 2014 0,9% 0,2% 0,2% UBB 0,2% 0,1% 0,2% 0,02% 2013 0,03% Other 0,02% 0,01% 0,01%

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The market share of passenger railway undertakings by transport performance in 2017

Koleje Mazowieckie Koleje Małopolskie 10,77% 0,83% Przewozy Regionalne SKM w 20,74% Warszawie Łódzka PKP SKM Kolej Koleje 1,70% 5,42% Aglomeracyjna Wielkopolskie 0,70% 1.76% WKD 0,58% Koleje Dolnośląskie Arriva RP 2.50% 0,47%

Koleje Śląskie UBB PKP Intercity 3,38% 0,004% 51,13% Other 0.009%

The share of the largest railway undertaking by transport performance – PKP Intercity – increased to 51.1% from 49.4% in 2016. The company ranking second – Przewozy Regionalne – lost on its market share approx. 1.5 percentage point, with the share amounting to 20.7%. The share of three major railway undertakings PKP Intercity, Przewozy Regionalne and Koleje Mazowieckie accounted for nearly 83% of the whole market. As far as other companies are concerned, in recent years a growth was recorded in the share of Koleje Małopolskie, Koleje Dolnośląskie and Koleje Śląskie, respectively of 0.34 percentage point, 0.29 percentage point and 0.28 percentage point. In the case of some railway undertakings the increase in the share of transport performance was considerably lower than the overall number of passengers. This was the case for, i.a. Koleje Dolnośląskie and Łódzka Kolej Aglomeracyjna. The results of these railway undertakings reflect the changes associated with the number of passengers using services for relatively short distances, often in the vicinity of one main city, with an unchanging or lower interest of passengers in these undertakings’ services for long- distance trips. The average trip distance for all railway undertakings is almost 67 km. In Przewozy Regionalne the average trip distance amounted to 52.8 km (a decrease of almost 1 km) and in PKP Intercity – 242.6 km (a drop of 3 km).

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Passenger transport

The passenger transport market structure by transport performance in Poland in 2013-2017

0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00%

51,1% 49,4% PKP Intercity 44,5% 38,9% 42,2%

20,7% 22,2% Przewozy Regionalne 25,2% 30,0% 30,6% 10,8% 11,3% Koleje Mazowieckie 12,8% 13,8% 13,2% 5,4% 5,7% PKP SKM 5,6% 5,4% 4,8% 3,4% 3,1% Koleje Śląskie 3,6% 4,0% 3,9% 2,5% 2,2% Koleje Dolnośląskie 1,8% 1,3% 0,7% 1,8% 2,0% Koleje Wielkopolskie 2,0% 2,2% 1,5% 2017 1,7% 1,9% 2016 SKM w Warszawie 2,2% 2,4% 2,0% 2015 0,8% 2014 0,5% Koleje Małopolskie 0,2% 2013 0,0% 0,0% 0,7% Łódzka Kolej 0,6% 0,4% Aglomeracyjna 0,1% 0,0% 0,6% 0,6% WKD 0,7% 0,8% 0,7% 0,5% 0,5% Arriva RP 1,0% 1,210% 0,5% 0,004% 0,004% UBB 0,004% 0,004% 0,004% 0,01% 0,01% other 0,01% 0,002% 0,01%

2.6. The employment and financial performance of passenger railway undertakings

In 2017, the passenger transport sector had 22 602 employees. On the basis of the analysis of the employment rate since 2014, it has remained relatively unchanged.

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Employment in the passenger transport sector in the years 2010-2017

30 000

27 500

25 000 persons 681 915 965 22 500 26 25 24 154 766 662 555 602 23 22 22 22 20 000 22 2010 2011 2012 2013 2014 2015 2016 2017 The highest rise in employment in another year in a row was recorded by Koleje Małopolskie, where employment grew nearly twofold (70 persons in 2015, 150 persons in 2016 and 289 persons in 2017). An almost 20% increase in employment was recorded by Koleje Dolnośląskie. In 2017 only three companies reduced their employment: Przewozy Regionalne (by 5.5%), SKM in Warsaw (by 3.5%) and Arriva RP (by 1.5%).

Employment structure at passenger railway undertakings in 2017

Koleje Śląskie PKP Koleje 4,6% SKM w Trójmieście Mazowieckie 3.6% 12.5% Koleje Dolnośląskie 3,0% Koleje Wielkopolskie WKD UBB 2.9% 1,2% 0,9%

Przewozy Regionalne ŁKA 31,1% 1,2% Other Arriva RP 7.1% 0,9%

SKM Warszawa Koleje 1,7% Małopolskie 1.3% PKP Intercity 35,2%

Among companies providing regular (timetable) passenger transport, the highest number of employees was observed in PKP Intercity (35.2%), Przewozy Regionalne (31.1%) and Koleje Mazowieckie (12.2%). The three companies employ in total more than 75% of all the staff of passenger railway undertakings.

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Passenger transport

The business performance of passenger railway undertakings (in PLN bn) in the years 2009-2017

6,5

operating costs operating revenues

6,0 5,80

5,48 5,5 5,63 5,53 5,23

PLNbn 5,14 4,98 5,20 5,0 4,79 4,81 4,94 4,58 4,77 4,81 4,80 4,46 4,5 4,43

4,21 4,0 2009 2010 2011 2012 2013 2014 2015 2016 2017

2017 was another year in a row which saw a growth in the revenue of passenger railway undertakings. Costs grew as well, but at a lower rate. Passenger railway undertakings closed the year 2017 with revenue at PLN 5.8 bn. In this period costs grew to PLN 5.63 bn, which means that railway undertakings achieved an operating profit of approx. PLN 170 m. The main source of revenue for railway undertakings was ticket sales. The revenues also included subsidies, i.a. government and local-government subsidies, for the provision of public services and covering the deficit related to statutory reliefs. An important component of costs incurred by railway undertakings is the cost of access to railway infrastructure (including the fee for minimum access to the infrastructure), along with expenditures on electricity and fuel. In 2017 the average fee for minimum access to infrastructure per 1 train-km was PLN 6.44, which is almost identical to the previous year. In addition, railway undertakings paid over PLN 86.8 m of other charges for railway infrastructure managers. The costs of access to infrastructure were PLN 1.13 bn in total, accounting for 20% of the operating costs of passenger railway undertakings.

The percentage share of selected costs of the activities of passenger railway undertakings in the total operating costs in 2017

Total operating costs of railway fuel and electricity costs 14,7%20,0% 65,3% undertakings infrastructure access costs 0% 20% 40% 60% 80% 100%

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Electricity charges accounted for 88.1%, and the remaining part was fuel charges. Total electricity costs almost reached PLN 728 m, and railway undertakings used a total of nearly 1 346 m MW. In 2017 they used 28 400 m3 (28.4 m litres) of liquid fuel for over PLN 98 m. The total amount spent on energy and fuel supplies was over PLN 826 m.

The share of liquid fuels and traction energy by the purchase costs of passenger railway undertakings in 2017

Total fuel and 11,9% Liquid fuels electricity 88,1% Electricity costs

0% 20% 40% 60% 80% 100%

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Passenger transport

2.7. The services offered by railway undertakings

In 2017 an increase was recorded in each category of transport services. Inter-province rail transport was used by 258.5 m passengers (6.8 m more than in 2016). Inter-province trains (stopping, fast and express trains) transported almost 42 m passengers (a rise of 3.9 m). An increase was also observed in occasional transport – from 114 000 to 143 000.

The number of passengers (in thous.) in particular categories of services in the years 2015-2017

2017/2016 category 2015 2016 2017 change province 244 336 251 611 258 453 2.72% inter-province 33 367 38 099 41 962 10.14% international and cross-border 2 455 2 724 2 997 10.02% occasional 151 114 143 25.44% in total 280 309 292 549 303 555 3.76%

In the category of province transport five railway undertakings: Przewozy Regionalne, Koleje Mazowieckie, PKP SKM in Tricity, SKM in Warsaw and Koleje Śląskie transported a total of 222 m – nearly 86% of passengers using inter-province transport. In comparison to 2016, almost all railway undertakings recorded a rise in the number of passengers transported: Przewozy Regionalne of 0.7 m, Koleje Mazowieckie of 1.2 m, PKP SKM 0.4 m and Koleje Śląskie – an increase of 0.4 m. The number of passengers in province transport dropped only for SKM in Warsaw (by 700 000 passengers), which is due to numerous renovations of access lines to Warsaw, in particular the line from Pruszków to Warsaw. Among the remaining railway undertakings, the highest growth was recorded by Koleje Dolnośląskie from 7 m in 2016 to 9 m in 2017, ŁKA – a rise from 2.4 m to 3.5 m passengers and WKD from 6.9 m to 7.7 m passengers.

The share of companies by the number of passengers in province trains in 2017 and 2016 in PLN m

2016 78,4 60,7 41,8 23,8 15,3 31,6

2017 79,1 61,9 42,2 23,1 15,7 36,4

- 50,0 100,0 150,0 200,0 250,0 300,0 Przewozy Regionalne Koleje Mazowieckie PKP SKM w Trójmieście SKM w Warszawie Koleje Śląskie Other

In 2017 seven railway undertakings provided inter-province train transport services. In addition to PKP IC, these were Przewozy Regionalne, Koleje Mazowieckie, Koleje Dolnośląskie, ŁKA, Arriva RP and Koleje Śląskie. The inter-province transport market was dominated by PKP Intercity, whose share reached 97% by the number of passengers transported.

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PKP IC provided transport services in the category of inter-province express trains mainly on a commercial basis under the business name Express InterCity (EIC) and the business name Express InterCity Premium (EIP) provided with trains ED250 (). In comparison to 2016, the connections network for these train sets changed – EIP trains reached final stations in: Bielsko-Biała, Gdynia, , Jelenia Góra, Katowice, Kołobrzeg, Rzeszów, Warszawa and Wrocław. Fast inter-province train services were provided by PKP IC under the TLK and Intercity brands. Fast inter- province trains were also operated on paths from Łódź to Warsaw by Przewozy Regionalne (the “Interregio” train from Łódź to Warsaw on weekdays) and the ŁKA “Sprinter” train running along the same path on weekends and holidays, as well as Koleje Śląskie's connection from Żywiec to Zakopane. Inter-province trains also include stopping trains. In this category connections were provided by Koleje Mazowieckie from Warsaw to the Tricity and Ustka (the “Słoneczny” train). Until 10 July 2017 there was also the “Dragon” train from Warsaw to Kraków. Koleje Dolnośląskie provided trains running on weekdays to Żary (the Lubuskie Province), whose path on weekends was extended to Forst-Lausitz in . Arriva RP in the summer season offered stopping inter-province trains from through Gdańsk and Władysławowo to Hel.

In the category of international trains the following can be identified:

• cross-border transport, which takes place in the zone defined in the Act on public collective transport as an area of at least one commune, district or province where a public collective transport operator offers public collective transport services, located in the direct vicinity of the state border of the Republic of Poland, and the area of the respective administration unit located outside the border of the Republic of Poland on the territory of a neighbouring state. In 2017 cross-border transport was provided by three undertakings:

30

Passenger transport

1) Przewozy Regionalne to Germany along the paths to Lübeck, Lichtenberg, Forst and Görlitz, to to Medzilaborce, to Belarus along the paths from Terespol to Brest and to through Trakiszki to ; 2) Koleje Dolnośląskie to the : from Szklarska Poręba to Liberec, from Sędzisław to Trutnov and from Wrocław to Lichkov; 3) Koleje Śląskie to Bohumin in the Czech Republic;

• stopping trains provided by UBB along the path from the Świnoujście Centrum station to Stralsund in Germany. The 1.4 km section between Świnoujście Centrum and Ahlbeck State Border is managed by UBB Polska, a railway infrastructure manager, owned by the German UBB company, part of the DB corporation. This railway undertaking is not a public collective transport operator, so passenger transport provided by it is not included under cross-border transport but international passenger transport;

• long-distance fast trains, IC, EIC, EN. Under this category in 2017 transport services were provided by PKP Intercity and Koleje Dolnośląskie. These include PKP IC trains to: Berlin (Germany), Prague and Ostrava (the Czech Republic), Vienna (), Bratislava (Slovakia), Budapest (), Lviv, Kiev, Zdolbuniv and Rivne (), Brzesko, Grodno and Minsk (Belarus) and (). Koleje Dolnośląskie offer “Pociąg do kultury” trains from Wrocław Główny to Berlin Lichtenberg and from Wrocław Główny to Dresden (Dresden Hbf). In 2017 international and cross-border trains transported a total of 2 997 000 passengers, i.e. by 273 000 more than in 2016 (a growth of 10%). The performance of transport services reached 591 m pass-km, i.e. by 12 m pass-km more than in the previous year. The average travel distance of a passenger in cross- border and international trains dropped to 197 km (15 km less than in 2016).

The number of passengers transported in international trains, including cross-border trains in 2017 and 2016 (in thous. passengers)

36 2016 2 018 505 160 5

2017 2 185 508 171128 5

- 500 1 000 1 500 2 000 2 500 3 000 3 500 PKP IC UBB Koleje Dolnośląskie Przewozy Regionalne

Przewozy Regionalne recorded a rise in the number of passengers in international and cross-border transport. The number of passengers crossing the border in Przewozy Regionalne trains grew from 36,000 in 2016 to 128,000 in 2017. At the same time in 2016 PKP Intercity recorded an increase in the number of passengers from 2 018 000 to 2 185 000 (167 000 passengers more). It is worth noticing an increase in the number of passengers in the international transport of Koleje Dolnośląskie – from 160 000 in 2016 to 171 000 in 2017. UBB recorded a slight increase, but in this case the cross-border transport volume remained at a similar level as in the preceding years.

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The services of railway undertakings by categories and types of transport in 2017

Railway undertakings

Types of category transport

PKP Intercity Przewozy Regionalne Koleje Mazowieckie Koleje Dolnośląskie Śląskie Koleje Kolej Łódzka Aglomeracyjna Arriva RP UBB Other: PKP SKM, WKD, SKM Warszawa, Koleje Wielkopolskie, Koleje Małopolskie ✓ province stopping ✓ ✓ ✓ ✓ ✓ ✓ REGIO ✓ stopping ✓ ✓ ✓ “Słoneczny” ✓ ✓ inter- express ✓ province Inter- TLK, IC “Sprinter" REGIO

✓ express EIC, EIP

cross-border ✓ ✓ ✓ ✓ and stopping

international ✓

long-distance ✓ express, EC, EN Season tickets represented a vast majority of tickets in the two companies operating in the area of the Warsaw agglomeration: SKM in Warsaw (91.5%, a decrease of 0.6 percentage point) and Koleje Mazowieckie (78.0%, a drop of 0.2 percentage point). The railway undertaking with the lowest share of season and other tickets, i.e. 13.7%, is PKP Intercity. This company also recorded another year-on-year decrease of 0.7 percentage point in this category in relation to 2016.

The share of the number of passengers by ticket types (single, season and other) in 2017

100% 13,7% 34,4% 42,2% 43,7% 50,1% 50,3% 50,7% 53,8% 56,6% 58,2% 91,5%

50% 78,0% 86,3% 65,6% 57,8% 56,3% 49,9% 49,7% 49,3% 46,2% 43,4% 41,8% 8,5% 0% 22,0% WKD Koleje Koleje Arriva RP Arriva PKPSKM Koleje Koleje Przewozy Regionalne Małopolskie Dolnośląskie Mazowieckie PKPIntercity Koleje Śląskie Koleje Łódzka Kolej Wielkopolskie Aglomeracyjna SKMWarszawa

single season and other

The most significant changes in the ticket structure were observed for four companies: the percentage of trips with season and other tickets grew in Koleje Śląskie (by 7.5 percentage points), in Koleje Małopolskie (by 3.9 percentage points) and WKD (by 3.0 percentage points), while ŁKA recorded a decrease of 3.7 percentage points. Other railway undertakings did not observe any major changes in their ticket structure.

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Passenger transport

The share of the number of passengers by ticket types (normal, discounted and other) in 2017

100% 37,0% 38,2% 44,5% 46,7% 46,7% 48,2% 50,4% 54,4% 56,8% 64,9% 84,6% 50% 94,2% 63,0% 61,8% 55,5% 53,3% 53,3% 51,8% 49,6% 45,6% 43,2% 5,8% 35,1% 0% 15,4% WKD Arriva Koleje Koleje PKPSKM Koleje Koleje Przewozy Regionalne Małopolskie Dolnośląskie Mazowieckie PKPIntercity Koleje Śląskie Koleje Łódzka Kolej Wielkopolskie Aglomeracyjna SKMWarszawa

normal discounted and other

When comparing 2016 and 2017 in the case of most railway undertakings a low rate of change was observed in the division of tickets into full-fare and discounted/other. Changes in the shares of particular railway undertakings were from 0.04 percentage point to 2.2 percentage points. Comparing the number of trips taken with tickets purchased in various distribution channels, in 2017 an evident change was observed in comparison to the previous year. The change comprised the increased share of mobile apps and online sales (from 5.4% to 7.7%) and stationary ticket machines (from 6.0% to 7.0%) and mobile ticket machines in trains (from 0.4% to 1%). The total share of these distribution channels is 3.9 percentage points.

The share of the number of passengers in ticket distribution channels in 2017 and 2016

difference in percentage distribution channel 2016 2017 points ticket offices 56.0% 50.9% -5.1

train crews 16.1% 14.5% -1.6

the Internet and mobile apps 5.4% 7.7% +2.4 stationary ticket machines 6.0% 7.0% +0.9

mobile ticket machines (in trains) 0.4% 1.0% +0.6

other 16.1% 18.9% +2.9

total number of passengers 292 548 916 303 555 520

A decrease was recorded in the share of trips taken on the basis of tickets purchased in ticket offices (from 56.0% to 50.9%) and sold by train crews (from 16.1% to 14.5%). The total drop amounted to 6.8 percentage points. Despite the decrease in the share of ticket offices among other distribution channels, they still played a dominant role in ticket distribution. It is worth emphasising that the calculation included the ticket offices of railway undertakings, agency ticket offices and ticket offices of other railway undertakings. The second main ticket distribution channel was train crews, enabling the purchase of tickets where there are no ticket offices, i.e. many minor stations/stops, particularly at those serviced by regional railways. In such cases tickets can be purchased from the train crew without additional fees. The observed changes show that passengers tend to abandon traditional ticket distribution channels, which often necessitate standing in a queue to the ticket office, in favour of online sales. Among self- service channels, online sales and mobile apps recorded the highest increase (of 2.5 percentage points). One of the factors which might be contributing to the growing share of these channels is the number of mobile Internet users. It has increased in recent years, reaching in 2016-2017 a stable value of 7.4 m,

33

which ranks Poland second among European countries in terms of market saturation with their type of services and places it among leaders at the European scale1. 23.5 m trips were taken with tickets purchased online and through mobile apps, of which 67% in long- distance PKP Intercity trains, and 13% with Przewozy Regionalne trains. PKP Intercity sold 37% of tickets online. 18.9% of tickets were sold via “other” distribution channels (a rise of 2.9 percentage points). The “other” category includes tickets sold by WKD train drivers, distribution of traditional paper tickets of PKP SKM, and also travelling on the basis of tickets enabling both rail and bus transport in certain cities (e.g. the consolidated package of ZTM in Warsaw).

The share of distribution channels in the total number of tickets sold by the number of passengers in 2017

mobile ticket machines (in trains) 1%

stationary ticket machines 7% Internet and mobile apps other 8% 19%

train crews 15%

ticket offices 51%

2.8. The evaluation of the quality of rail transport services – punctuality

One of the most important determinants of the quality of transport services is the level of punctuality. Trains that reach the final station on time or with a 5-minute delay are considered punctual. The ratio of punctuality on arrival is the quotient of the number of trains that reach the final station on time (including those with a 5-minute delay) and the number of all trains launched by railway undertakings. In 2017, the punctuality of trains on final stations reached 90.2%, which means a decrease in comparison to the previous year by 1.0 percentage point from 91.2%. In 2017 licensed railway undertakings dispatched a total of over 1.7 m trains, which is approx. 1.4% more than in the previous year (a rise of 24 000). The percentage of all trains that were late on arrival (including those that were up to 5 minutes late) was 20.3%

1Report on the state of the telecommunications market in 2017, p. 8 and 13 https://uke.gov.pl/akt/raport-o- stanie-rynku-telekomunikacyjnego-w-2017-roku,93.html, accessed on 5 July 2018

34

Passenger transport

(in 2016 – 19.3%). In 2017 total train delays equalled 57 184 hours, i.e. 2383 days (a rise of 7090 hours in comparison to the previous year).

The average delay time, except for delays of up to 5 min, increased by 13 sec. and amounted to 17 min and 47 sec. Including trains delayed up to 5 min, the average delay time was 9 min and 33 sec. (22 sec. more than in 2016). Trains delayed up to 5 min accounted for the largest, 53.1%, share, although it lower than in the previous year (in 2016 – 54.7%). However, the number of trains delayed from 5 to 60 min grew, in 2017 accounting for 44.8% (43.3% in 2016). Trains delayed by 1-2 hours represented 1.6% (1.5% in 2016) and those delayed by more than 2 hours – 0.6% (0.5% in 2016).

The punctuality of passenger railway undertakings in 2017 (indicating the change in relation to 2016)

total 90.2% (-1.0 p.p.)

PKP Intercity 73.0% (-3.0 p.p.)

Koleje Małopolskie 85.7% (-9.0 p.p.)

Koleje Śląskie 86.3% (-1.6 p.p.)

Koleje Dolnośląskie 86.5% (-2.6 p.p.)

Przewozy Regionalne 90.0% (-0.9 p.p.)

Koleje Wielkopolskie 91.2% (+2.0 p.p.)

Koleje Mazowieckie 91.9% (+1.1 p.p.)

Arriva RP 93.0% (+0.7 p.p.)

SKM Warszawa 94.2% (-0.6 p.p.)

ŁKA 95.8% (-0.3 p.p.)

PKP SKM w Trójmieście 98.1% (-0.6 p.p.)

UBB 98.5% (-0.4 p.p.)

WKD 99.6% (+0.4 p.p.) 60% 70% 80% 90% 100%

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The punctuality of passenger railway undertakings in 2016-2017 and in the respective quarters of 2017 (delays above 5 minutes on arrival)

Quarter 1 Quarter 2 Quarter 3 Quarter 4 2017 2016 in total 92.10% 92.29% 89.43% 86.90% 90.17% 91.22%

PKP Intercity 75.85% 76.64% 70.77% 69.04% 72.97% 75.94%

Koleje Śląskie 90.13% 91.09% 83.11% 81.00% 86.28% 87.86%

Koleje Dolnośląskie 89.91% 89.97% 86.77% 79.88% 86.55% 89.11%

Koleje Wielkopolskie 93.38% 92.72% 93.21% 86.12% 91.24% 89.24%

Koleje Mazowieckie 92.38% 92.88% 91.53% 90.64% 91.85% 90.76%

Przewozy Regionalne 92.53% 92.40% 89.20% 85.91% 90.01% 90.86%

Arriva RP 94.54% 94.60% 91.53% 91.37% 92.97% 92.30%

Koleje Małopolskie 89.47% 95.16% 87.24% 68.19% 85.67% 94.68%

SKM in Warsaw 94.23% 94.68% 94.49% 93.42% 94.21% 94.78%

ŁKA 95.48% 96.38% 95.48% 95.67% 95.76% 96.07%

PKP SKM in Tricity 98.56% 98.16% 97.60% 97.90% 98.05% 98.64%

UBB 99.35% 98.89% 98.13% 97.83% 98.51% 98.96%

WKD 99.61% 99.52% 99.41% 99.77% 99.58% 99.20% Similarly to the previous year, the trains of Warszawska Kolej Dojazdowa were characterised by the highest punctuality indicator. These trains move on its own separate infrastructure. In 2017 the railway undertaking recorded a rise in punctuality of approx. 0.4 percentage point (from 99.2% to 99.6%). A high punctuality indicator was also observed for UBB and PKP SKM in Tricity, amounting to 98.5% and 98.1%, respectively. However, starting from early 2017, a decrease in punctuality could be noticed in the respective quarters of the year for PKP Intercity. The railway undertaking provides long-distance services covering the entire country, and in the case of such connections the effects of large-scale investment works on the rail network are the most visible. At PKP Intercity punctuality dropped by nearly 3 percentage points in comparison to 2016. The highest decrease in punctuality level in 2017 was recorded in Koleje Małopolskie – approx. 9 percentage points (from 94.7% to 85.7%). The railway undertaking's result was influenced by modernisation works which started in 2017 in several points in Kraków. Track modernisation and construction in agglomerations also caused numerous traffic hindrances, because two- way traffic was arranged on a single track. Modernisation works on railway infrastructure in Poland undoubtedly increase travel times and limit the packages of railway undertakings. In the nearest future disruptions may continue due to planned investments financed from national and EU funds. However, once the works are completed, passengers can be expected to return to using railway services.

36

Passenger transport

Summary of data on the Polish passenger transport market in 2017

37

2.9. The evolution of passenger transport services in Poland as compared to other European countries

There are no official data from the or Eurostat2 on passenger transport in Europe in 2017. Therefore, the Office of Rail Transport collected information from 16 regulatory bodies associated in IRG-Rail. The data are subject to minor changes.

The evolution of passenger transport in 2017 in European countries

Number of passengers Transport performance Operational performance

-30% -20% -10% 0% 10%

0,6% 0,6% 1,8% Austria

-1,1% -1,4% 0,6% Bulgaria

-4,9% -12,6% -1,8% Croatia 4,4% 10,4% 0,8% Finland

3,5% 3,0% 0,8% Spain

-0,2% 3,4% 3,5% Lithuania

1,5% 2,1% 0,4% Latvia

-24,5% -28,7% -17,0% Macedonia

1,4% 1,7% 1,6% Germany

3,8% 5,9% 1,4% Poland

1,3% Slovakia

-4,2% -4,4% -0,1% Slovenia

0,3% 0,0% -0,7%

0,5% 3,1% Sweden

0,1% 0,2% -1,2% Hungary

-1,0% 1,3% 0,3% the United Kingdom

The highest percentage rise in terms of the number of passengers took place in Finland. The number of rail passengers increased in 2017 by 4%, and transport performance increased by 10%. In the last 5 years in

2The recent report of the European Commission for the European Parliament and Council on monitoring the development of the rail transport market was published in 2016 and contains data until 2014. The publication of a new report with data until 2016 is planned for December 2018. The most recent Eurobarometer survey regarding the satisfaction of EU residents with rail transport was carried out in 2013. The new survey is also going to be published in 2018. Eurostat has not published statistical data for 2017.

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Passenger transport

Finland the number of passengers grew by 24%. In 2017 the number of passengers increased both for short and long distances. In long-distance trips along popular paths travel times were reduced and average ticket prices dropped. At the same time, some long-distance trains were withdrawn, which resulted in lower operational performance but, consequently, higher transport efficiency. Similarly to the previous year, in 2017 the second largest rise in the number of passengers among the analysed countries took place in Poland. However, in 2016 transport and operational performance increases were considerably higher, which indicates a change and a higher transport efficiency. A relatively high growth on the passenger market also occurred in Spain, where passenger volumes have been on the rise for a few years. In 2017 an increase was observed in all segments: high-speed rail, conventional long- and medium-distance transport and suburban railways. In Germany, which is the largest European passenger market, a slight rise was observed. However, the passenger market in Germany is growing gradually, and in 2017 it reached the best results in history. A continuous increase in passenger transport has been observed in Switzerland for years, although it was only slight in 2017. Currently all long-distance transport services are provided by the state-owned railway undertaking SBB, but a new railway undertaking BLS appeared on the market, and it intends to launch transport services on selected paths. Passenger transport services in Sweden are also growing gradually. From 2012 the number of passengers grew by 15%, and transport performance – by 12%. In 2017 the average travel distance was longer. This may be due to the developing network of regional connections within the Stockholm-Mälaren Region (Mälardalen). In October 2017 a new ticket system was introduced in the region.

The highest decrease in the number of passengers was observed in Macedonia. This may be explained by the low competitiveness of railways as compared to road transport, because on most paths trains move at a speed of approx. 50 km/h. The second largest drop occurred in Croatia, where transport performance decreased by as much as 13%, and the number of passengers by 5%, with a lower decrease in operational performance. From 2012 the

39

decreases amounted to 29% and 34%, respectively. The reason for this is modernisation works on the network, which cause delays and contribute to passengers' choosing other modes of transport. A substantial decrease was also recorded on the Slovenian market. From 2012 the number of passengers dropped by approx. 13%. This also applies to its neighbour Croatia. Factors dissuading passengers from choosing railway transport are low punctuality and the frequent replacement of trains with buses, both resulting from ongoing infrastructure renovations. In Hungary, where agglomeration transport in the Budapest metropolitan area is of significance, the drops in the number of passengers were much lower. In combination with the decrease of the number of passengers and transport performance in Bulgaria exceeding 20% from 2012 onwards, it can be noticed that the results for Central and Eastern European countries are influenced by the implemented infrastructure modernisation programme financed from EU funds. A similar process was observed in Poland 2007-2014, when track repairs caused decreases in the number of passengers. After completing the modernised lines their number grew.

Rail usage rate in 2017 in European countries3

70 69,6 60 50 47,7

40 34,2 33,1 26,1 30 22,2 20,1 17,4 15,6 15,0 20 14,3 12,9 12,7 12,7 10,7 9,0 7,9 6,5 5,2 10 4,8 3,3 3,0 1,7 1,6 0,2 0,1 0 Spain Latvia France Poland Greece Austria Finland Estonia Croatia Kosovo Sweden average Norway Bulgaria Slovakia Slovenia Portugal Hungary Romania Germany Lithuania Macedonia Switzerland the

the United Kingdom United the

In order to compare the rail usage rate in particular countries, the data on passenger volumes obtained from regulatory bodies were divided by the number of residents of each country as at 31 January 2017 according to Eurostat data. As compared to other European countries, the average number of trips per capita in Poland is below average, equalling 7.9 trips (a growth from 7.6 in 2016). Taking into consideration 25 analysed countries, the average resident of Europe uses rail services 20 times a year, and disproportions between particular countries are enormous. It can be observed that rail usage is higher in Western European countries and lower in the countries which joined the European Union after 2003. In this context it should be mentioned that rail usage in Hungary is almost twice as high as in Poland. Slovakia also ranks high; since 2014 it has provided free rail transport for children up to the age of 15, full-time students and retirees above 62 years of age.

3Data for Denmark, Estonia, France, the Netherlands, Kosovo, Norway, Portugal, Romania, Slovakia and Switzerland are provided for the year 2016.

40

Passenger transport

Switzerland is the country with the highest rail usage rate, with approx. 70 trips per year per capita, which demonstrated that an average Swiss uses rail transport regularly. Rail transport in this country is characterised by:

• a high availability of rail transport (a large number of trains per day), • reliability and punctuality, • comfort of travel (comfortable and well soundproofed wagons available also in regional connections),

• a large number of connections within rail transport and in combination with other transport modes,

• an extensive selection of integrated tickets for all transport modes. Another factor encouraging the use of railway undertakings’ services are the relatively high costs of using a car in the city. In Denmark an average resident will use rail transport almost 50 times a year. Due to high car ownership taxes, some residents of Denmark use railways on a regular basis. The rail system is well integrated with bus services. Rates for access to infrastructure for passenger trains in Denmark are very low.

A very high rail usage rate of almost 30 trips per year is observed in Germany and Austria. The German market is the largest in Europe, with as many as 139 railway undertakings; in 2017 the number of passengers exceeded 2.8 bn. Rail usage is the highest in Balkan countries such as Kosovo and Macedonia, where railways cannot compete with road transport. The situation is Greece is similar. Railways are used to a limited extent also in Lithuania, Bulgaria, Romania, Estonia, Croatia and Slovenia.

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3. Freight transport

The results for freight transport indicate that the downward tendency has been overcome. In 2011, the most recent record-breaking year on the freight transport market, the increase was achieved due to investments implemented under 2012. A rise in the weight of transported goods in 2017 was associated with the general revival of many sectors of the economy and a number of new investments. In 2017, 72 railway undertakings functioned on the market, including one wide-gauge railway undertaking PKP LHS. Considering only standard-gauge transport, in the previous year 75% of the market, both in terms of the weight of transported goods and transport performance, belonged to PKP Cargo, DB Cargo Polska, CTL Logistics and Lotos Kolej.

3.1. The basic parameters of the freight transport market in 2017

Freight railway undertakings transported 239.9 m tonnes of cargo, which accounted for more than 7.9% in comparison to 2016.

Cargo weight in freight rail transport in the years 2010-2017 (standard-gauge transport)

260 249,2 250

240 239,9 235,3 230 231,3 233,2 224,8

bn tonnes bn 228,9 220 222,2 210

200 2010 2011 2012 2013 2014 2015 2016 2017

Transport performance amounted to 54.8 bn tonne-km and was higher than in 2016 by 4.2 bn tonne-km – 8.3%. The average distance covered in the transport grew slightly from 227.8 km in 2016 to 228.5 km in 2017.

42

Freight transport

Transport performance in freight rail transport in the years 2010-2015 (standard-gauge transport)

60,0

km 55,0 54,0 - 54,8 50,1 50,6 50,6 50,0 49,1 bn tonne bn 50,9 48,8 45,0

40,0 2010 2011 2012 2013 2014 2015 2016 2017

Freight railway undertakings had an operational performance of 80.1 m train-km – by 6.1 m train-km (8.2%) more than a year before.

Operational performance in freight rail transport in the years 2010-2017 (standard-gauge transport)

80,0 80,1 km 79,3 m train - 74,9 74,4 74,8 75,0 74,3 74,0

71,5

70,0 2010 2011 2012 2013 2014 2015 2016 2017

3.2. The main groups of goods

The goods transport results differed significantly in comparison to the previous years in terms of the volume of transported goods and the significance of specific groups of goods. Rail transport was used both for trains with bulk loads, but scattered transport of cargo as well as transport in containers and trains containing various types of wagons were gradually gaining in significance. The rise in 2017 shows that rail may not only serve as a transport mode for bulk goods, but also for goods which are currently carried by road vehicles. In 2017 the downward trend in the transport of bulk goods decelerated. In comparison to 2016, absolute numbers show a substantial increase in, inter alia, the transport of coal and lignite; crude petroleum and natural gas (nearly 5.4 m tonnes more) and goods in the group of ores and other and quarrying products (over 8.4 m tonnes more). Despite significant changes in absolute numbers, percentages by weight remained at a similar level. The two groups in 2017 constituted more than 66.4% of the weight of all transported goods, which means an increase in their share of almost 1 percentage point.

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At 37.7%, hard-coal transport had the largest share in weight transported (95.3 m tonnes). Due to the situation related to energy resources, its transport was significantly higher. The last time when the transport of this group of goods was at a similar level was 2013. A growing demand for aggregate, sand and gravel was noticeable. The reasons include the launching of EU-funded projects within the 2014-2020 perspective and a favourable situation on the construction market (confirmed by data from statistical offices).

The evolution of raw material transport by transported weight in 2017/2008 (in comparison to 2007)

60% hard coal metal ores and other mining and quarrying products refined petroleum products other products 40%

19,7% 20%

5,5% 2,4% 0,4% -1,0% -1,1% -3,6% -2,2% -6,1%-4,5% 0% -6,5% -3,2% -12,7% 0,4% -9,0% -9,1% -13,1% -12,5% -13,4% -13,2% -6,8% -8,4% -12,7% -13,2% -20% -16,9% -16,7% -14,3% -14,6% -22,9% -16,4% -20,4% -30,3% -33,1% -32,4% -34,1% -37,1% -27,3% -35,9% -37,3%

-40% -34,7%

-60% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

In 2017 the transport of refined petroleum products increased by 6.62% as compared to 2016. In comparison with 2016, an upward trend in terms of weight transported was also recorded for most of other groups, i.a. in the transport of basic and fabricated metal products (6.1%), food products (13.6%), non-metallic raw materials, including construction materials (20%) and unidentifiable goods (11.3%). In line with the Standard Goods Classification for Transport Statistics, unidentifiable goods include goods which for any reason cannot be identified and therefore cannot be assigned to groups 01- 16 and unidentifiable goods in containers or swap bodies. The shares of particular groups measured with the transport performance indicator remained at a similar level to the previous years. However, a change was observed in the group with the largest share. In 2017 the group which previously ranked first fell to the second position, i.e. coal and lignite, crude petroleum and natural gas. The share of this group in terms of transport performance was 27.5% (nearly 15.1 bn tonne-km). In 2017 the group with the highest share was metal ores and other mining and quarrying products – 27.6% (more than 15.1 m tonne-km). In 2017 in most groups an upward trend was observed in transport performance in comparison to 2016. For the group metal ores and other mining and quarrying products it amounted to 20.6%, and for other non metallic mineral products – 21.6%. Considerable changes also occurred in the following groups: unidentifiable goods – a rise of 23.2%, and basic metals and fabricated metal products – a growth of 4.4%.

44

Freight transport

The table below includes the main groups of goods transported by rail undertakings and a detailed analysis of particular groups of goods transported by rail, by weight and transport performance, excluding narrow- gauge transport.

Main groups of goods transported by freight railway undertakings in 2017

Company Metal ores and other Coke and refined Chemicals, chemical Basic metals, fabricated Coal and lignite mining and quarrying petroleum products products metal products products AWT ✔ ✔ Barter ✔ ✔ ✔ ✔ Bartex ✔ Captrain Polska ✔ ✔ ✔ ✔ ✔ Cargo Przewozy Tow. ✔ ✔ ✔ ✔ ✔ Ciech Cargo ✔ ✔ ✔ CL Łosośna ✔

Colas Rail ✔

CTL Logistics ✔ ✔ ✔ ✔ ✔ CTL Północ ✔ ✔ ✔ ✔ CTL Train ✔ ✔ DB Cargo Polska ✔ ✔ ✔ ✔ ✔ DB Cargo Spedkol ✔ Depol ✔ Ecco Rail ✔ ✔ ✔ ✔ ✔ EP Cargo A.S. ✔ Euronaft Trzebinia ✔ ✔ ✔ ✔ ✔ Eurotrans ✔ ✔ ✔ ✔ ✔ F.H.U Orion Kolej ✔ Freightliner PL ✔ ✔ ✔ Grupa Azoty ,,KOLTAR" ✔ ✔ ✔ ✔ HSL Polska ✔ ✔ ✔ ✔ ✔ Inter Cargo ✔ ✔ ✔ ✔ Kolej Bałtycka ✔ ✔ ✔ ✔ ✔ CD Cargo Poland ✔ ✔ ✔ ✔ KP Kotlarnia ✔ ✔ Logistics&Transport Company ✔ Lotos Kolej ✔ ✔ ✔ ✔ ✔ LW Bogdanka ✔ Majkoltrans ✔ ✔ Moris ✔ Orlen KolTrans ✔ ✔ ✔ ✔ Omniloko ✔ OT Rail ✔ ✔ ✔ ✔ PKP Cargo ✔ ✔ ✔ ✔ ✔ PKP Cargo Service ✔ ✔ PKP LHS ✔ ✔ ✔ ✔ ✔ PNI Warszawa ✔ Pol-Miedź Trans ✔ ✔ ✔ ✔ ✔ POZ BRUK ✔ PPMT-Gdańsk ✔ PUK KOLPREM ✔ ✔ ✔ ✔ Rail Polska ✔ ✔ ✔ ✔ ✔ SKPL Cargo ✔ STK Wrocław ✔ ✔ ✔ ✔ ✔ Torpol ✔ ✔ Trakcja PRKiI ✔ ✔

45

Transchem ✔ ✔ Wiskol ✔ ✔ ZPNTMiU ,,TABOR” ✔ ZPiS „SPEDKOKS” ✔ ✔ ZIK Sandomierz ✔ ✔

The volume of transported weight of goods by groups of goods (in thousand tonnes) and market shares in 2017

Weight of goods

Groups of goods In total (in thousand tonnes) Market share [%]

Total 239 885.415 100.00%

Products of agriculture, hunting, and forestry; fish and other 3 976.539 1.66% fishing products of which cereals 760.635 0.32%

Coal and lignite; crude petroleum and natural gas 97 069.354 40.46% of which hard coal 95 289.133 39.72%

Ores and other mining and quarrying products 62 242.923 25.95%

iron ores 10 991.573 4.58% of which aggregates, sand, gravel, clay 43 667.154 18.20%

Food products, beverages and tobacco products 1 464.998 0.61%

Textiles and textile products, leather and leather products 16.211 0.0068%

Wood and products of wood, cork, articles of straw, paper and 1 925.689 0.80% paper products, printed matter and recorded media

Coke and refined petroleum products, manufactured gas 27 576.119 11.50% of which refined petroleum products 17 122.009 7.14%

Chemicals, chemical products, and man-made fibres; rubber 9 823.198 4.09% and plastic products; nuclear fuel

Other non-metallic mineral products 3 183.414 1.33%

cement, lime, gypsum 2 669.376 1.11% of which other building materials 478.204 0.20% Basic metals, fabricated metal products, except machinery 9 517.422 3.97% and equipment Machines, appliances, electrical and electronic equipment 240.638 0.10%

Transport equipment 903.516 0.38%

Furniture, other manufactured goods n.e.c. 75.433 0.03%

Secondary raw materials, municipal waste 3 689.175 1.54%

Letters, packages and courier's parcels and shipments 0.048 0.000%

Empty packaging 1 063.870 0.44%

Goods moved in the course of household and office removals, 0.000 0.00% other non-market goods n.e.c.

46

Freight transport

Mixed goods excluding food products 1 903.610 0.79%

Unidentifiable goods 9 796.830 4.08%

Other goods 5 416.429 2.26%

47

The share of transported groups of goods by weight in 2015-2017

0% 10% 20% 30% 40% 50%

1,66% products of agriculture 1,70% 1,74% 0,32% of which cereals 0,30% 0,19% 40,46% hard coal, lignite, petroleum, gas 41,27% 40,77% 39,72% of which hard coal 40,78% 40,41% ores and other mining and quarrying 25,95% 24,21% products 26,33% 4,58% of which iron ores 4,38% 5,62% 18,20% of which aggregates, sand, gravel, clay 16,90% 19,41% 0,61% food products 0,58% 0,86% textiles and textile products, leather and 0,01% 0,00% leather products 0,00% 0,80% wood, products of wood and cork 0,99% 0,93% 11,50% coke, briquettes 12,19% 11,40% 7,14% of which refined petroleum products 7,23% 6,78% 4,09% chemicals, chemical products 4,38% 4,29% 1,33% non-metallic raw materials 1,19% 1,26% 1,11% of which cement, lime and gypsum 1,03% 1,09% 0,20% of which other building materials 0,14% 0,13% 3,97% metals, metal products 4,04% 3,93% machines, appliances, electrical and 0,10% 0,09% electronic equipment 0,07% 0,38% transport equipment 0,31% 0,33% furniture, other manufactured goods 0,03% 0,04% n.e.c. 0,03% 1,54% secondary raw materials, municipal waste 1,51% 1,63% letters, parcels and courier's shipments 0,00% 0,00% and parcels 0,00% 0,44% empty packaging 0,44% 0,36% 0,00% non-market goods 0,00% 0,00% 0,79% mixed goods excluding foodstuffs 0,23% 0,16% 4,08% unidentifiable goods 3,96% 3,14% 2,26% other goods 2,87% 2,75%

2017 2016 2015

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Freight transport

Transport performance by groups (in thousand tonnes) and market shares in 2017

Transport performance

total Groups of goods Market share [%] (in thousand tonne-km)

Total 54 829 028.990 100.00% Products of agriculture, hunting, and forestry; fish and other 1 404 183.951 2.56% fishing products of which cereals 296 574.796 0.54% coal and lignite crude petroleum and natural gas 15 079 000.399 27.50% of which hard coal 14 474 308.730 26.40%

Ores and other mining and quarrying products 15 126 438.885 27.59%

iron ores 4 056 629.731 7.40% of which aggregates, sand, gravel, clay 8 915 271.357 16.26%

Food products, beverages and tobacco products 324 692.424 0.59%

Textiles and textile products; leather and leather products 877.484 0.0016% Wood and products of wood and cork (except furniture); articles of straw and plaiting materials; pulp, paper and paper products; 526 502.209 0.96% printed matter and recorded media Coke and refined petroleum products, manufactured gas 8 790 780.293 16.03% of which refined petroleum products 5 961 253.969 10.87% Chemicals, chemical products, and man-made fibres; rubber and 3 149 388.114 5.74% plastic products; nuclear fuel Other non-metallic mineral products 958 636.252 1.75%

cement, lime, gypsum 782 102.857 1.43% of which other building materials 166 413.251 0.30% Basic metals, fabricated metal products, except machinery and 2 454 225.525 4.48% equipment Machines, appliances, electrical and electronic equipment 57 483.104 0.10%

Transport equipment 266 499.623 0.49%

Furniture, other manufactured goods n.e.c. 27 800.256 0.05%

Secondary raw materials, municipal waste 923 474.385 1.68%

Letters, packages and courier's parcels and shipments 0.768 0.0000014%

Empty packaging 395 453.106 0.72% Goods moved in the course of household and office removals, 0.000 0.00% other non-market goods n.e.c. Mixed goods excluding foodstuffs 236 852.289 0.43%

Unidentifiable goods 3 846 849.519 7.02%

Other goods 1 259 890.404 2.30%

49

The share of transported freight groups by transport performance in the years 2015-2017

0% 5% 10% 15% 20% 25% 30% 35%

2,56% products of agriculture 2,70% 2,80% 0,54% of which cereals 0,54% 0,26% 27,50% hard coal, lignite, petroleum, gas 29,65% 30,68% 26,40% of which hard coal 28,87% 30,25% ores and other mining and quarrying 27,59% 24,78% products 26,75% 7,40% of which iron ores 7,16% 7,80% 16,26% of which aggregates, sand, gravel, clay 14,43% 14,94% 0,59% food products 0,54% 2017 1,07% 2016 textiles and textile products, leather 0,002% 0,001% and leather products 0,001% 2015 0,96% wood, products of wood and cork 1,02% 1,03% 16,03% coke, briquettes 17,28% 15,78% 10,87% of which refined petroleum products 11,35% 8,31% 5,74% chemicals, chemical products 6,23% 5,95% 1,75% non-metallic raw materials 1,56% 1,60% 1,43% of which cement, lime and gypsum 1,30% 1,43% 0,30% of which other building materials 0,24% 0,14% 4,48% metals, metal products 4,65% 4,29% machines, appliances, electrical and 0,10% 0,09% electronic equipment 0,10% 0,49% transport equipment 0,39% 0,45% furniture, other manufactured goods 0,05% 0,07% n.e.c. 0,06% secondary raw materials, municipal 1,68% 1,69% waste 1,75% letters, parcels and courier's shipments 0,00% 0,00% and parcels 0,00% 0,72% empty packaging 0,69% 0,61% 0,00% non-market goods 0,00% 0,00% 0,43% mixed goods excluding foodstuffs 0,39% 0,15% 7,02% unidentifiable goods 6,17% 5,08% 2,30% other goods 2,11% 1,85%

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Transport volume changes involving particular groups of goods in 2017

-40% -20% 0% 20% 40% 60% 80% 100%120%140%160%180%200%220%240%260%280%300%

8,31% TOTAL 7,95%

2,93% products of agriculture 5,33%

7,77% of which cereals 12,25%

0,45% hard coal, lignite, petroleum, gas 5,85%

-0,97% of which hard coal 5,15%

20,58% ores and other mining and quarrying products 15,70% 11,92% of which iron ores 13,02%

22,03% of which aggregates, sand, gravel, clay 16,27%

18,68% food products 13,64%

wood, products of wood and cork 1,95% -12,48%

0,49% coke, briquettes 1,80%

3,78% of which refined petroleum products 6,62%

-0,18% chemicals, chemical products 0,84%

non-metallic raw materials 21,62% 20,02% transport performance 18,45% of which cement, lime and gypsum 16,90% weight 35,86% of which other building materials 58,41%

4,37% metals, metal products 6,13%

34,44% transport equipment 30,45%

8,14% secondary raw materials, municipal waste 10,21% 13,71% empty packaging 7,74%

20,93% mixed goods excluding foodstuffs 270,55%

23,16% unidentifiable goods 11,35%

17,96% other goods-15,16%

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3.3. Average speed of freight trains

In order to calculate the average commercial speed of freight trains a method was used according to which commercial speed is a quotient of the path length (in km) and time spent on covering this distance (in hours). The average annual commercial speed, as indicated by individual railway undertakings, was adjusted with their market share measured with their transport performance. Commercial speed in intermodal transport was adjusted with the number of trains launched in a given path.

The average commercial speed of all freight trains and of intermodal trains in Poland in km/h in the years 2012-2017

40

total freight transport intermodal transport

34,6 35 33,6 32,0 31,8 31,3 29,9 30

25,6 24,9 25,1 25 23,9 23,0 23,1

20 2012 2013 2014 2015 2016 2017

The calculation results indicate that the average commercial speed in Poland is low and has a negative impact on the competitiveness of rail transport. In the years 2013-2015 the average commercial speed of freight trains decreased due to the accumulation of modernisation works on the network towards the end of the previous EU budget perspective. In 2017 speed improved slightly due to the infrastructural situation: on the one hand, modernisation works were launched under the 2014-2020 perspective and, on the other, railway undertakings were able to use paths renovated between 2007 and 2015. 2017 saw another substantial increase in intermodal transport, whose speed also increased. However, the data for intermodal transport alone point to a decrease in average speed in the last three years. This may be primarily due to the fact that starting from 2012 the scale of intermodal transport was growing gradually, the number of railway undertakings and paths was increasing, so disruptions and delays on the network were observed in intermodal transport to a greater extent. The average speed of 30 km/h is one of the factors making it difficult for railways to compete with road transport on the container transport market. The President of UTK obtained from selected regulatory bodies associated in IRG-Rail data on the average commercial speed of freight trains in 2016. The data confirm that the average commercial speed of freight transport in Poland is low.

52

Freight transport

The average commercial speed of freight trains in selected IRG-Rail countries in 2016 (km/h)

70 64 60 54 53 50 39 40

30 25 21 20

10

0 the Portugal Spain Lithuania Poland Romania Netherlands

In the Netherlands international traffic accounts for 80% of freight transport, with the key role played by connections from the in Rotterdam. This translates into an approx. 35% share of container transport in the rail market. Speed of delivery is crucial in intermodal transport. Furthermore, a higher speed means higher capacity, which is important in the crowded rail network in the Netherlands. Notably, a 160-km- long double-track railway line called “Beturweroute” was opened in 2007. Connecting Germany with the , it is dedicated to freight transport. By 2022, due to the increasing traffic along 70 kilometres of the line, a third track is to be added. A large portion of freight trains in the Netherlands run along regular routes. Over the last decade or so, Portugal has managed to modernise the transport infrastructure providing connections to its rapidly-developing ports. Owing to these investments and an increase in trade at ports, intermodal rail transport grew several times in comparison to 2004. In 2016 transport performance in container transport increased by 40% and, as a result, the share of intermodal transport in the rail market exceeded 40%. In the coming years, Portugal is planning to continue its rail network modernisation programme, which includes projects to build a 92-km line dedicated to freight transport connecting the port of Lisbon with Spain, improve connections to the ports of Sines and Setubal and electrify two railway lines, as well as a project involving the adaptation of several lines for 750-m-long freight trains. The importance of intermodal transport is even greater in Spain, where it accounts for about 45% of the overall transport performance, which is reflected in the average commercial speed. However, is responsible for only several percent of the freight transport market and has been criticised for the insufficient maximum train length and a shortage of convenient rail connections to ports. Also in Lithuania freight transport is characterised by higher speeds than in Poland. Lithuania is making efforts to utilise its location to form part of the New Silk Road initiative. The amount of freight transported through its border with Belarus is growing, as a 15% increase in transport was observed here. The common features of the said rail markets are their transit location and the role of maritime ports. In Poland ports play a very important role in the rail network and the significance of transit as part of the New Silk Road is increasing. In this context, it is extremely important to improve the speeds of trains between ports and the south of the country, as well as between its eastern and western borders. Rail lines Nos. 131 and 201 (“the coal main line”), line No. 273 (“Nadodrzanka”) and the C-E 20 corridor, at least in part, could be dedicated to freight transport.

53

The average timetable speed of freight trains in selected EU countries in 2016 (km/h)

domestic trains international trains

90 80 80 7374 72 70 70 64 60 60 60 45 47 50 45 39 41 3236 32 40 29 31 3129 30 30 24 20 10 0

The European Commission approached Member States to collect data on the average timetable speed of freight trains in 2016. As the submission of such data was not mandatory, the information is incomplete. In Poland the average timetable speed was calculated on the basis of data obtained from infrastructure managers, adjusting for their share in the infrastructure provision market and after including PKP LHS in the analysis. In 2017 timetable speed in Poland was 31 km/h. The value for 2016 was similar. This means that average timetable speed in Poland is about 6 km/h higher than the average commercial speed, which demonstrates that the actual connection times are considerably longer than assumed in the timetable. In the Netherlands and Lithuania average commercial speed is not lower than average timetable speed. The “Strategy for Responsible Development (SRD) by 2020 (with a perspective to 2030)” (p. 311) declares an objective to reach the average speed of freight trains in the PKP PLK network of 40 km/h by 2020. The reference value in the Strategy was 27 km/h in 2015 (the value for all infrastructure managers in 2015 was 28 km/h).

In comparison to the rather low results observed in other Visegrad countries, the Czech Republic has performed well. As in the case of average commercial speed, high speeds are achieved by infrastructure managers in countries where a significant role is played by transport to and from maritime ports, including especially intermodal transport. In the small Irish market intermodal transport accounted for 57% of transport performance in 2016, 50% in Denmark, 23% in France, 29% in Slovenia and about 9% in Poland.

54

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3.4. Freight transport licensing

In 2017 seven undertakings applied for a railway undertaking licence for the provision of freight rail transport or a railway undertaking licence for the provision of freight rail transport and traction services, including one undertaking which applied for a temporary licence. The President of UTK granted the licence to 5 entrepreneurs: 4 licences concerned activities involving the provision of freight rail transport and traction services and 1 licence was a temporary licence for the provision of freight rail transport. Two railway undertakings holding licences for the provision of freight rail transport extended their licensed activities to include the provision of traction services. One undertaking was subject to proceedings on the re-approval of the licence in connection with the planned extension of the freight railway undertaking's activities to include the provision of traction services, but the proceedings were suspended. The President of UTK suspended the licences of four railway undertakings: in the case of two railway undertakings for the provision of freight rail transport services, in the case of one undertaking for the provision of freight rail transport and traction services and in the case of another undertaking for the provision of passenger rail transport, freight rail transport and traction services.

Licences for the provision of freight rail transport services were cancelled for two undertakings and licences for the provision of freight rail transport and traction services were cancelled for two other undertakings. The President of UTK withdrew the railway undertaking licences held by two undertakings providing freight rail transport and traction services. Due to formal deficiencies, the President of UTK did not process 2 applications for granting a licence for the provision of freight rail transport. Following the substantive assessment of the application, the President of UTK refused to grant a licence to one undertaking due to its failure to meet all the requirements necessary to obtain the railway undertaking licence. At the end of the previous year, valid licences (suspended licenses excluded) were held by 91 railway undertakings, including 1 temporary licence. In 2017, of 91 railway undertakings holding licences, 69 undertakings engaged in the transport business.

55

The number of licensed railway undertakings authorised to provide transport services and operating on the rail market in the years 2008-2017

100 the number of licensed railway undertakings the number of operating standard-gauge railway undertakings 80

60 94 91 89 86

40 83 74 71 69 69 69 68 67 67 66 61 53 53

20 42 40 40

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

3.5. The freight railway undertaking market

PKP Cargo remains the clear leader of the freight transport market. In 2017 the Company transported over 106.1 m tonnes, which meant an increase of 8.6 m tonnes in terms of weight transported (8.9%). For other undertakings, the largest increases in weight transported were recorded for: DB Cargo Polska (2.9 m tonnes), CD Cargo Poland (1.1 m tonnes), PUK Kolprem (0.8 m tonnes), Orlen KolTrans (0.8 m tonnes), Lotos Kolej (0.7 m tonnes) and PKP Cargo Service (0.6 m tonnes).

The market share of the largest railway undertakings by weight of transported goods as at the end of 2017

CD Cargo Poland 1.33% PKP LHS 4,20% CTL Logistics 3,84% Ciech Cargo 1,26%

Lotos Other KP Kotlarnia 1,12% Kolej 5.35% 5.56% Rail Polska 1,68% STK 1,03% DB Cargo Polska Inter Cargo 0,78% 17.88% Captrain Orlen Polska 0.77% Kol-Trans 1.81% Ecco Rail 0,65%

Pol- Miedź PKP Cargo 44,24% Trans 2,20% PUK ZPiS Spedkoks 0,63% Freightliner Kolprem PL PKP Cargo 2,87% 2.27% Service 0.54%

As at the end of 2017 the market share by weight of transported goods exceeded 0.5% in 19 companies. As for transport performance, a market share above 0.5% was observed in 17 companies. The share of PKP Cargo increased in relation to the previous year in terms of weight transported by 0.37 percentage

56

Freight transport

point with the simultaneous increase in transport performance of 0.06 percentage point. The company's transport performance was 28.2 bn tonne-km and was 8.4% higher than in 2016. In the case of other companies with a share of transport performance higher than 0.5%, the highest increases were recorded by those undertakings which had operated on the Polish freight transport market for a relatively short time. The highest increase in transport performance was recorded at Inter Cargo (nearly 1 percentage point). In addition, increased shares were observed in the case of CD Cargo Poland (0.9 percentage point), Orlen KolTrans (0.6 percentage point) and STK (0.5 percentage point).

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The market share of the largest railway undertakings by transport performance as at the end of 2017

DB Cargo Polska 5.32% CTL CD Cargo Poland 1,55% Logistics PKP 4.47% LHS PUK Kolprem 1,30% 5.68% Other 4.33% Lotos Kolej Inter Captrain 9,76% Cargo Polska 1.50% 1.11% STK 1,60% Ciech Cargo 1.05% Rail Polska 1,74%

Pol-Miedź Trans Ecco 1,89% Rail 1.00%

PKP Cargo 51,43% Euronaft Orlen Kol-Trans Freightliner PL Trzebinia 0.51% 2,84% 2,91%

The structure of the freight transport market according to the weight transported in Poland in 2013-2017 – data for railway undertakings above 0.5% as at the end of 2017.

2013 2014 2015 2016 2017 PKP Cargo 48.64% 47.94% 47.48% 43.87% 44.24% DB Cargo Polska 19.20% 18.55% 17.71% 17.99% 17.88% Lotos Kolej 4.04% 4.65% 5.61% 5.70% 5.56% PKP LHS 4.32% 4.66% 4.30% 4.48% 4.20% CTL Logistics 3.19% 3.11% 3.58% 4.31% 3.84% PUK Kolprem 2.30% 2.44% 2.23% 2.73% 2.87% Freightliner PL 2.09% 2.92% 2.52% 2.27% 2.27% Pol-Miedż 2.36% 2.34% 2.33% 2.26% 2.20% Orlen KolTrans 1.16% 1.24% 1.45% 1.61% 1.81% Rail Polska 1.72% 1.28% 1.39% 1.61% 1.68% CD Cargo Poland - - 0.15% 0.95% 1.33% Ciech Cargo 0.57% 0.65% 1.02% 1.23% 1.26% KP Kotlarnia 1.32% 1.21% 1.36% 1.13% 1.12% STK 1.31% 0.94% 0.75% 0.90% 1.03% Inter Cargo - - 0.23% 0.63% 0.78% Captrain Polska 0.28% 0.34% 0.42% 0.64% 0.77% Ecco Rail 0.17% 0.37% 0.36% 0.60% 0.65% ZPiS „SPEDKOKS” 0.17% 0.25% 0.41% 0.66% 0.63% PKP Cargo Service 0.44% 0.43% 0.20% 0.30% 0.54% other 6.72% 6.68% 6.50% 6.13% 5.35%

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The structure of the freight transport market according to transport performance in Poland in 2013-2017 – data for railway undertakings above 0.5% as at the end of 2017.

2013 2014 2015 2016 2017 PKP Cargo 58.82% 56.69% 55.66% 51.37% 51.43% Lotos Kolej 7.76% 8.87% 9.91% 10.20% 9.76% PKP LHS 6.62% 7.06% 6.24% 6.58% 5.68% DB Cargo Polska 5.58% 5.10% 5.17% 5.21% 5.32% CTL Logistics 5.22% 4.90% 5.75% 5.94% 4.47% Freightliner PL 2.18% 2.87% 2.74% 2.83% 2.91% ORLEN KolTrans 2.08% 2.31% 2.23% 2.27% 2.84% Pol-Miedź Trans 2.08% 2.09% 1.96% 1.87% 1.89% Rail Polska 2.06% 1.74% 1.63% 1.72% 1.74% STK 1.82% 1.25% 1.09% 1.10% 1.60% CD Cargo Poland 0.0003% 0.0001% 0.08% 0.66% 1.55% Inter Cargo - - 0.07% 0.53% 1.50% PUK Kolprem 0.88% 0.93% 0.94% 1.29% 1.30% Captrain Polska 0.14% 0.28% 0.36% 1.05% 1.11% Ciech Cargo 0.31% 0.39% 0.87% 1.05% 1.05% Ecco Rail 0.22% 0.54% 0.61% 0.94% 1.00% Euronaft Trzebinia 0.17% 0.27% 0.43% 1.04% 0.51% other 4.06% 4.71% 4.26% 4.35% 4.33%

3.6. The employment and business performance of freight railway undertakings

Employment at freight railway undertakings decreased in 2017 from 27,590 to 27,258 persons (by 1.1%).

Employment in freight transport in the years 2010-2017

40 000

30 000 065 persons 210 094 263 36 978 33 33 908 32 590 258 30 27 27 27 20 000 2010 2011 2012 2013 2014 2015 2016 2017

59

Employment structure at freight railway undertakings in 2017

Rail Polska Orlen Kol-Trans 0,8% 1,4%

Pol-Miedź Trans 2,6% Other 14.2% PKP LHS 3,2%

PUK Kolprem 3,6% PKP CARGO 62,5% CTL Group 3.6%

Lotos Kolej 3,7% DB Group 4.3%

PKP Cargo remains the largest employer on the market (62.5% share). DB Cargo Polska and DB Cargo Spedkol had a 4.3% combined share in total employment. In total, over 95% of all employees of freight railway undertakings worked at 13 companies.

The business performance of freight railway undertakings (in PLN bn) in the years 2008-2017

operating costs operating revenues 9,0

8,45 8,5 8,24 8,07 8,04 8,0 7,84 8,00 8,05 7,78 7,58 7,85 7,54

PLNbn 7,83 7,78 7,39 7,74 7,5 7,26 7,40 7,0 7,23 7,08 7,10 6,5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

In 2017 for the first time since 2013 an increase in operating revenue and costs of freight railway undertakings was observed. A clear upward trend observed in the transport services resulted in an almost 2.5-fold increase in income of the whole sector from PLN 180 m in 2016 to PLN 440 m in 2017. In the case of freight railway undertakings the level of costs of purchasing paths from infrastructure managers was almost PLN 1.2 bn, which accounted for 16.4% of total costs. The average fee for minimum access to infrastructure per 1 train-km of provided path was PLN 13.86, which amounted to PLN 1.1 bn. Other fees amounted to over PLN 90 m. The higher cost of fees in the case of freight railway undertakings is mainly due to the significantly higher weight of freight trains. This is an over 2.8 times higher gross value of tonne-km in comparison to passenger transport.

60

Freight transport

The percentage share of selected costs of the activities of railway undertakings in the total operating costs

Total operating costs of Fuels and electricity costs 12,2%16,4% 71,4% freight railway undertakings Access to infrastructure costs Other costs

0% 20% 40% 60% 80% 100%

The percentage share of electrical energy and fuel costs in energy consumption costs in 2017

Total fuels and 34,4% 65,6% Liquid fuels electricity costs Electricity

0% 20% 40% 60% 80% 100%

The share of electrical energy and fuel costs in the total operating costs of railway undertakings remained at a similar level. The much higher consumption of liquid fuels for freight transport in comparison to passenger transport is connected, i.a. with freight transport along a number of non-electrified lines. The highest fuel consumption (nearly 50% of fuels consumed by freight railway undertakings operating transport services according to timetables) is still recorded by PKP companies (PKP Cargo, PKP Cargo Service and PKP LHS). Their share is even higher in electricity consumption. Energy accounts for 12.4% of the operating costs of railway undertakings. The cost of 1 MWh depends on a number of factors. In 2017 the cost of energy was still influenced by a number of additional fees on top of the basic fee. This structure of the system results in the fact that the differences between companies in the price of 1 MWh were as high as PLN several hundred. In 2017 freight railway undertakings used almost 85,600 m3 (85.6 m litres) of liquid fuels and over 1 m MWh. The cost of liquid fuels was over PLN 303 m and of electrical energy – over PLN 574 m.

3.7. Freight transport in international transport

In 2017 freight transport in international transportation was provided by 31 licensed railway undertakings, which transported nearly 74.4 m tonnes of goods, and their transport performance amounted to 23.3 bn tonne-km. Transported weight in comparison to the previous year increased by 10.9%, with a simultaneous increase in transport performance of 7.2%.

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The weight of transported goods in domestic and international transport in the years 2012- 2017 (thous. of tonnes)

2017 165 500 41 422 26 729 6 234

2016 155 155 34 734 27 874 4 462 domestic transport 2015 157 678 35 331 27 620 4 148 imports

2014 160 569 36 929 27 048 4 320 exports

2013 164 210 34 896 28 845 5 215 transit

2012 166 114 35 419 24 883 4 930 0 50 000 100 000 150 000 200 000 250 000

Transport performance in freight transport in domestic and international transport in the years 2012-2017 (thous.of tonne-km)

2017 31 544 770 11 609 311 7 859 514 3 815 434

2016 28 906 058 9 994 751 9 194 220 2 525 140 domestic transport 2015 28 784 925 10 197 915 9 065 432 2 557 261 imports

2014 28 376 804 10 432 787 8 627 191 2 660 849 exports

2013 28 313 584 9 449 693 9 833 328 3 303 315 transit

2012 28 708 932 9 194 265 8 029 463 3 106 010

0 10 000 000 20 000 000 30 000 000 40 000 000 50 000 000 In 2017 imports recorded a 19.3% year-on-year increase in the transported weight of goods 3% and in transport performance an increase of 16.2%. In comparison to exports and transit, the highest transported weight and transport performance were observed for imports – 41.4 m tonnes and 11.6 bn tonne-km, respectively. The volume of transported weight and transport performance decreased for exports by 4.1% and 14.5%, respectively. The transported weight was 26.7 m tonnes and transport performance – 7.9 bn tonne-km. In transit, when compared to 2016, there was a 39.7% increase in transported weight with a simultaneous 51.1% increase in transport performance. Transit in Poland accounted for 6.2 m tonnes of transported weight of goods, with transport performance of 3.8 bn tonne-kilometres. Domestic transport recorded a volume increase in comparison to 2016. Nearly 10.3 m tonnes of goods more than in the previous year were transported (a 6.7% increase). Transport performance in the analysed period, however, increased by more than 2.6 bn tonne-kilometres (a 9.1% increase). The share of transport in international transport measured by transported weight of freight is still relatively low. In 2012-2015 it was less than 30% in 2016 – 30.2% and in 2017 – 31%. Due to the distances to cover in this type of transport (in 2017, 313 km on average), its market share concerning transport performance is higher, accordingly). Until 2006 it fluctuated at 50%, and in the following years there was a gradual decrease in this share. As at the end of 2017, the market share of international transport in transport performance was 42.5%.

62

Freight transport

The companies of PKP Group still held the largest share in international transport. At the end of 2017, their combined share amounted to 66.7% by weight and 68.5% by transport performance Among the companies whose share exceeded 2%, DB Cargo Polska recorded a 6.4% share by weight and 7.5% by transport performance, CTL Logistics 5.1% and 5.3%, Lotos Kolej 4.7% and 5.4%, CD Cargo 3.4% and 2.7% and Inter Cargo, 2.2% and 3.3%.

Railway undertakings' share in international transport in 2017 by weight (over 1.0%)

CTL Logistics Lotos Kolej 5,09% 4,67% DB Cargo Polska CD Cargo Inter Cargo 6,40% 3,42% 2,20%

other PKP LHS 7.81% Freightliner PL 13,43% 1,27%

PKP Cargo Rail Polska 54,30% 1,40%

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The railway undertakings' share in international transport in 2017 by transport performance (over 1.0%)

DB Cargo Polska Lotos Kolej… 7.51% CTL Logistics… Inter Cargo 3,30% PKP LHS other Captrain 13,33% 5.18% 1,09%

Ecco Rail 1,05%

PKP Cargo CD Cargo 55,19% 2,67%

In analysing the structure of transported goods in international transport, similarly to the previous years, a significant share of hard coal transport can be noticed. In 2017 it was 18.9 m tonnes and in 2016 it was almost 15.8 m tonnes. The share of imports in the transport of hard coal at the end of 2017 was at 58%, while in the previous year it was 43%. The increase in coal imports resulted from the higher transport volume of this material from eastern locations, especially Russia. At the same time in 2017 the share of exports decreased from 55% in 2016 to 36% in 2017.

In 2017 Poland’s main international trading partners in exports were Germany, the Czech Republic, Ukraine, Austria, Slovakia, China and . In imports, the main trading partners were Ukraine, Russia, Belarus, Germany, Australia, China, the Czech Republic and Slovakia. In this market segment, the transport of raw materials such as hard coal, coke, briquettes and refined petroleum products was still predominant. The largest amount of transported freight involved coal (hard coal and lignite), with a share of 26% by weight and 14.6% by transport performance and freight such as coke, briquettes and refined petroleum products – 22.4% and 26.3%. Compared to the previous year, there was an increase in the transport of chemicals and metal ores. A high market share was held by freight

64

Freight transport

categorised in the group “Other”, which mainly included “Unidentifiable goods” and all goods with a market share below 0.5% (e.g. textiles and textile products; machines, appliances, electrical and electronic equipment; furniture, other manufactured goods n.e.c.). In comparison to 2016, a decrease in the transport of food products was recorded.

The structure of goods transported internationally in 2017

50% weight performance 40% 26,33% 30% 26,03% 22,36% 20% 14,72% 14,30% 13,58% 14,59% 13,43% 11,36% 8,67% 7,76% 10% 6,86% 1,61% 2,37% 0,81% 2,24% 2,08% 1,60% 1,51% 1,21% 1,19% 2,02% 0,80% 0,74% 1,24% 0,59% 0% other chemicals metal ores food products metal products empty packaging products and cork products hard coal and lignite and coal hard transport equipment products of agriculture secondary raw materials raw secondary other non-metallic mineral coke and refined petroleum wood and products of wood Poland’s largest trading partners, similarly as in 2016, were: Russia, Germany, Ukraine and the Czech Republic. For this reason, the share of rail transport in these directions was also the highest, accounting for over 59.9% of total transported weight. The share of transport performance between Poland and these countries in 2017 reached 52.1%. As regards the place of dispatch and destination of goods (according to waybills), transportation between Poland and Russia – 17.6% of the total volume of goods (12 m tonnes) and between Poland and Germany – 17.1% (11.7 m tonnes) constituted the largest shares. An important partner in trade is also Ukraine. In 2017 the share of transport between Poland and Ukraine by weight amounted to 14.4% (9.8 m tonnes) and between Poland and the Czech Republic – 10.7% (7.3 m tonnes). The data for 2013-2017 also indicate a consistent growth in transport between Poland and China.

65

Transported weight (in thousand tonnes) in China-Poland international transport in 2013- 2017

1 800 1 600 1 400 1 200 1 000 weight imports 800 671,5 weight exports 1 421,4

600 323,7 1 224,5 1 075,3 1 021,6 016,1

400 1 1 1 724,1

200 631,6 471,2 0 2013 2014 2015 2016 2017

Transport performance (in thousand tonne-km) in China-Poland international transport in 2013-2017

700000 transport performance imports

600000 transport performance exports

500000

400000 692

300000 329 531 665 036 572 980 319 542 541 200000 134 445 424 621 410 391 299

100000 286 262 187 0 2013 2014 2015 2016 2017

For freight transported from China, Poland is an important transit country for cargo transported to Germany, France, Italy, etc. Due to its geographical location (the most convenient connection by land from Asia to ), Poland is expected to take advantage of the global trend and especially the volume of intermodal transport through our country will continue to grow.

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3.8. The importance of the selected border crossings and maritime ports for international transport The rail areas of border crossings and port stations, as well as railway traffic organisation are of key importance for international transport. Using data from the e-SEPE system and information from railway undertakings providing international transport services, the Office of Rail Transport has analysed the paths from/to the former border crossing Zebrzydowice-Petrovice u Karviné, the Brest border crossing, the Małaszewicze area, and the Gdańsk Port Północny station. The said stations affect not only rail transport, but also the whole transport chain from and to major intermodal terminals, such as those located in Gądki, Stara Wieś and Radomsko and work organisation at the Gdańsk port.

Basic information on the importance of selected locations for rail transport

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Border crossings are some of the most important points on the rail map of Poland. These include the Zebrzydowice-Petrovice border station, the Brest-Terespol border crossing and its neighbouring Małaszewicze area. Good traffic organisation at these border crossings involves setting the timetables of thousands of freight trains in a year, which operate both intermodal transport and the transport of bulk goods, products and raw materials of importance to various sectors of industry and energy. This situation requires the coordination of timetables across a number of infrastructure managers and owners of service infrastructure facilities, but also the cooperation of customs services, employee coordination and rolling stock availability management. Gdańsk Port Północny Station One of Tricity’s most important stations is Gdańsk Port Północny. Railway undertakings operating international transport launched over 7.5 thousand domestic and international paths, and paths for light engines (without wagons) from this station. It has also been the terminus for over 7.8 thousand paths. If we exclude light engines from calculations, there were 5.7 thousand freight trains with cargo or with empty wagons running from Gdańsk and 5.8 thousand such trains for which it was the terminus. The railway undertakings operating international transport launched an average of 42 trains per day from or to the Gdańsk Port Północny station.

Intermodal trains constituted a large part of the trains running from and to Gdańsk, 2.5 thousand and 2.7 thousand, respectively. Intermodal trains from Gdańsk usually ended their paths at the following stations: Stara Wieś k/Kutna, Radomsko GT, Łódź Olechów ŁOA and Sławków Euroterminal. 1.2 thousand intermodal paths were launched to these terminals. The difference between the actual and planned time of reaching the terminus was over 3 hours on average for each of the paths. Stara Wieś k/Kutna, Radomsko GT, Łódź Olechów ŁOA and Sławków Euroterminal are also the major departure stations for trains running towards Gdańsk. For paths for which the Gdańsk Port Północny

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station was the terminus, the average difference between the actual and planned time exceeded 3 hours. However, for the connection from Stara Wieś k/Kutna, on average, the trains arrived about 13 minutes earlier than planned. The timetables of some intermodal trains are set by infrastructure managers in different categories than TC/TD, which makes it difficult to include them in the statistics. However, as declared by the railway undertakings, a monthly average of about 220 intermodal trains departed from the station in Gdańsk. A similar average number of trains arrived monthly at the Gdańsk station. This means that the Gdańsk Port Północny station could be the departure station for about 150 more intermodal trains than would follow from the manager’s system statistics. More than 2.4 thousand trains for bulk cargo were launched from the Gdańsk Port Północny station, and nearly 2.7 thousand such paths were opened to Gdańsk. For bulk trains, the average delay was over 8.5 hours per train. The Brest – Małaszewicze border crossing In 2017 railway undertakings launched nearly 7.8 thousand paths from the Małaszewicze Centralne, Małaszewicze MSE, Małaszewicze Południowe and Małaszewicze Rozrządowa, of which 4.2 thousand were launched from the Małaszewicze Centralne station and over 2.9 thousand from Małaszewicze Południowe. Over 900 paths were created for light engines. TG trains accounted for over 2.4 thousand, of which for over 2.3 thousand paths Brest was the terminus. For the paths of international and domestic intermodal trains, in addition to transit paths running through Rzepin (810 paths) and Zebrzydowice (nearly 170 paths), many train paths were planned to the stations located near Małaszewicze. One such station is Chotyłów, which is the destination for trains running towards Germany or the Czech Republic. Often such division of paths is due to problems with directly setting the paths for trains over the whole length of the route. Trains from the Rzepin station included paths forming part of the “New Silk Road”, including the Rotterdam, Tilburg – Chengdu path. For such trains from Rzepin, the delays originating in Małaszewicze create difficulties in other countries of Europe and Asia. According to the e-SEPE system, intermodal trains (TC, TD), had an average length of nearly 590 metres and gross weight of over 1.1 thousand tonnes. As for bulk trains (TM) the average weight was 2.2 thousand tonnes. Intermodal trains have a much lower weight than those carrying bulk goods, but are also considerably longer than bulk trains. In many places, Polish nodal infrastructure is not adapted to handle long trains. This means that along many paths, running long intermodal trains may be difficult. One of the most important issues connected with the station in Małaszewicze in 2017 involved difficulties with its capacity. The station was unable to receive and dispatch all trains on time. Before they could enter, these trains had to wait at the nearby stations as e.g. in Chotyłów. This is one of the reasons for which, on average, freight trains running from the station in Małaszewicze reached their terminal stations 7 hours later than planned. In 27 cases the terminus was reached 4-7 days later than planned. That is why in the case of rail transport for connections going through the station in Małaszewicze it is also important to ensure an appropriate number of service and railway infrastructure facilities, as well as good work organisation at intermediate stops. As for the Brest station, a total of over 2.9 thousand paths were launched, 2.7 thousand of which were paths being part of international bulk and border transport services (TG paths) and over 90% to the Małaszewicze station. The stations located in the area of Brest – Terespol are important nodes for connections to cities both in the Czech Republic and Germany, e.g. to major smelting industry centres and one of the most important intermodal transport centres, Duisburg. According to their declarations, railway undertakings operating trains from and to the Małaszewicze, Brest or Terespol stations launched about 400 intermodal connections on average every month.

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Former border crossing Zebrzydowice – Petrovice u Karviné The border crossing in Zebrzydowice is one of the most important locations for paths along the lines forming part of the Baltic-Adriatic Corridor. The paths using this infrastructure include connections involving the transport of:

• cars from the largest terminal in the town of Koper by the Mediterranean Sea or car parts from the factory in Žilina to assembly plants, including those located in the and from/to the plant in Mladá Boleslav; • coal from major Polish mines (including Katowice, Mysłowice and Brzeszcze); • from/to intermodal terminals in Koper, Ostrava; • products of mining, smelting, and other industries involving metal ores (i.a. From/to Třinec and Velké Opatovice).

In 2017 the Zebrzydowice station was the departure station for 13.9 thousand train paths (including all categories and light engines). At the Petrovice station, selected railway undertakings launched over 6.2 thousand paths. A large number of paths, 10.3 thousand, are those running between Zebrzydowice and Petrovic in both directions. This number includes light engine paths. These are border traffic paths connected with the joint programming of train routes in the infrastructure of two countries. Further analysis did not include the border traffic between the Zebrzydowice-Petrovice and Český Těšín stations. Among trains with domestic paths from the Zebrzydowice station, nearly 3.6 thousand were bulk trains and the number of intermodal paths was over 630. Domestic paths for freight trains were launched both to the nearby stations: Zabrzeg Czarnolesie, Czechowice-Dziedzice and to more distant ones – Korsze (located near the Skandawa border crossing – over 400 paths), stations in Kraków (almost 290 paths – mainly as part of connections with the smelting industry in Nowa Huta), Małaszewicze (over 200 paths), Dąbrowa Górnicza and Gdańsk. The trains that began their paths in Zebrzydowice reached their terminal stations with an average delay of 6 hours. The statistical length of intermodal trains launched from the Zebrzydowice station was almost 600 metres, and their gross weight was nearly 950 tonnes.

The largest number of trains from the Petrovice station in international traffic along paths longer than 100 km ran to the Małaszewicze station, Kraków and Gdańsk.

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According to data obtained from railway undertakings there were about 150 trains defined as intermodal running to and from the Petrovice / Zebrzydowice station. This means that 5 intermodal trains per day ran through these stations. The differences between trains declared by railway undertakings as intermodal and the paths indicated in the e-SEPE system result from the fact that some trains in other categories, such as TA, TB (priority trains) or TG (for international bulk and border transport) are considered intermodal by railway undertakings. The major destination was Małaszewicze/Terespol and the border crossing in Skandawa.

Intermodal connections are an important part of the paths operated by international railway undertakings. The paths in this segment mainly involve connections from maritime ports to terminals and those launched as part of the “New Silk Road”. A major proportion of paths require the coordination of connections not only through the territory of Poland, but also in other European and Asian countries. The data presented above demonstrate the importance of the described nodes for railway undertakings operating international transport connections.

3.9. Intermodal transport

The statistical data collected by the UTK indicate a rising interest in intermodal transport services. When compared to the previous year, all transport parameters increased in 2017. Intermodal transport in 2017 was provided by 18 railway undertakings. When compared to the overall figures for railway undertakings providing freight rail transport, this value is still low, but e.g. only 6 railway undertakings provided such transport services in 2007 and 9 in 2012.

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A list of undertakings engaging in intermodal rail transport in the years 2008-2017

Company 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

PKP Cargo ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ PKP LHS ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ DB Cargo Polska ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ DB Kolchem ✔ ✔ CTL Rail ✔ ✔ ✔ ✔ CTL Logistics ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ CTL Express ✔ ✔ ✔ ✔ ✔ Captrain Polska ✔ ✔ ✔ ✔ CD Cargo Poland ✔ ✔ Ecco Rail ✔ ✔ ✔ ✔ ✔ Eurotrans ✔ ✔ ✔ ✔ Freightliner PL ✔ ✔ ✔ ✔ Karpiel ✔ ✔ Kolej Bałtycka ✔ Lotos Kolej ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ LTE Polska ✔ Majkoltrans ✔ ✔ PCC Intermodal ✔

Pol-Miedź ✔ Polzug ✔ ✔ ✔ ✔ Rail Polska ✔ ✔ ✔ ✔ ✔ ✔ STK ✔ ✔ ✔ ✔

In 2017 railway undertakings focused on the transport of bulk goods, e.g. hard coal and aggregates. However, there is a noticeable increase in the proportion of intermodal transport. Investments on rail lines should contribute to an increase in commercial speed, which will improve the competitiveness of intermodal transport. Global statistics show an improvement in the number of transported containers. The use of containers is increasing in intercontinental traffic. Due to its geographical location, Poland is expected to take advantage of the global trend and the volume of intermodal transport through our country will continue to grow. In 2017 nearly 14.7 m tonnes of goods were transported. This is an increase of 1.9 m tonnes (about 14.5%) in relation to 2016. The share of intermodal transport in the rail transport market measured by transported cargo weight reached a level of over 6.1% and was slightly higher than in 2016. The freight transport performance was 5.4 bn tonne-km. Comparing this with 2016, we observed an increase of nearly 1.0 bn tonne-km (21.8%). In 2017 the share of intermodal transport on the rail transport market measured by transport performance reached 9.9% and was 1.1 percentage point higher than in the previous year. This is the best result recorded in the history of intermodal .

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In 2017, railway undertakings also transported a record number of cargo units – nearly 1,081 m pieces in total, including nearly 1,053 m containers. Compared to 2016, the number of transported units increased by 13.6%. If we analyse intermodal transport services in terms of TEU (twenty-foot equivalent unit = 1 TEU), 1,667.3 m TEU were transported in 2017, which constituted a 16.1% increase in relation to the 2016 results.

Intermodal rail transport in Poland (in thousand tonnes)

15 000 14 688 PKP Group Other Total 14 000

13 000 12 830 12 000

11 000 10 386 9 601 10 000

9 000 8 633 8 056 8 000

7 000 5 906 6 000 thous. tonnes

5 000 4 772 4 404 4 000 3 315 3 000

2 000

1 000

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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Intermodal rail transport in Poland (in thousand tonnes)

5 500 000 5 410 198

PKP Group Other Total 5 000 000

4 441 180 4 500 000

4 000 000 3 718 045 3 401 655 3 500 000 3 066 986

km 3 044 869 - 3 000 000

2 447 102 2 500 000

thous. tonne 2 214 136

2 000 000 1 888 027 1 449 200 1 500 000

1 000 000

500 000

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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Intermodal rail transport in Poland (in thousand pieces)

1 100 000 1 080 517

PKP Group Other Total 990 000 950 953

880 000

745 341 770 000 689 275 699 594 644 569 660 000

550 000 488 909 423 763 the number of units 440 000

344 575 330 000 266 995

220 000

110 000

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Intermodal rail transport in Poland (in thousand TEU)

1 800 000 1 667 305 PKP Group Other Total 1 600 000 1 436 324 1 400 000 1 123 361 1 151 754 1 200 000 1 114 174 1 054 174 1 000 000 798 906 800 000 TEU 692 947 600 000 569 640 429 765 400 000

200 000

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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Similarly to 2016, the main players in this market segment were the companies in the PKP Group. The share of PKP Cargo and PKP LHS as at the end of 2017 was 48.1% in the weight of transported units and 51.4% in transport performance.

In 2017 the companies DB Cargo Polska and Lotos Kolej had a significant position on the intermodal transport market. Their market share in terms of transported weight was 17.7% and 14.2%, respectively. In terms of transport performance this share was 21.1% and 12.4%, respectively. The increasing market share of other companies is also apparent. The Captrain Polska railway undertaking reached 8.7% share in transported weight and 7.3% share in transport performance as at the end of 2017. Further two companies, Ecco Rail and LTE Polska, reached 3.7% and 2.4% in terms of cargo weight and 3.8% and 2.2%, respectively, in terms of transport performance.

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The share of railway undertakings in the intermodal transport market by weight in 2017.

DB Cargo Polska 17,66%

Lotos Kolej Ecco Rail 14,21% 3,72%

LTE Polska 2,43% PKP CARGO Captrain Polska PKP LHS 46,44% 8,72% 1,64%

Eurotrans 1,59%

Rail Polska 1,50% Freightliner PL Majkoltrans 0.82% 0,002% PCC Intermodal 0,69% Polzug Pol-Miedź 0.01% CTL CD Cargo Trans Karpiel Logistics Poland Kolej Bałtycka 0.04% 0,10% 0,17% 0.11% 0.15%

The share of railway undertakings in the intermodal transport market by transport performance in 2017

DB Cargo Polska 21,09%

Ecco Rail 3,83% Lotos Kolej 12,39%

LTE Polska 2,18% PKP CARGO Captrain Polska 50,21% 7,26% PKP LHS 1,21%

Rail Polska 0,56%

Freightliner PL 0.40%

Majkoltrans CD Cargo Poland 0.002% 0,21%

Polzug PCC Intermodal 0.01% 0,18% Eurotrans Pol-Miedź 0,03% CTL Kolej Bałtycka Trans Karpiel Logistics 0,16% 0.04% 0,10% 0.13%

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The share of domestic intermodal transport services was low and, in relation to 2016, it decreased by nearly 3.6 percentage points. As measured by transport performance, domestic transport only accounted for 27.6%.

Transport share of international transport in intermodal transport in 2017

100%

30,7% 31,2% 27,6% 27,9% 80% domestic transport international transport

60%

40% 69,3% 68,8% 72,4% 72,1%

20%

0% the number of weight transport TEU units performance

Due to the high cost of rail transport services and low commercial speed, competing with road transport is difficult. The average distances covered by intermodal transport are between 350 and 370 km. The profitability of intermodal transport by rail increases with transport distance. For an effective transport system it is important to ensure appropriate parameters of both linear and nodal infrastructure. It is important to facilitate access to terminals, not only for road transport, but also for rail.

The average distances covered by intermodal transport in the years 2013-2017

2017 368

2016 346 km

2015 358

2014 354

2013 355

320 330 340 350 360 370 380

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International connections dominated intermodal transport. By number of transported units, imports accounted for 29.5%, exports 24.9% and transit 15% (over 69% in total). The proportion of domestic transport was 30.7%. Intermodal transport uses mainly containers, whose share in the total number of units amounted to 97.4% at the end of 2017. 20- and 40-foot unit transport dominated in this segment, accounting for 43.8% and 47.7%, respectively. The share of other containers amounted to 25-foot – 0.6%, 30-foot – 2.8%, 35-foot – 0.7% and 45-foot – 1.9%. Trailers and semi-trailers accounted for 1.4% of the units used and interchangeable car bodies – 0.8%. In Poland intermodal transport services mainly involve , which amounted to 75% by transport performance. In 2017 only 25% involved transport by sea.

The share of specific types of transport units in 2017

40-foot containers trucks 514970,9534 1282 47,7% 0,12%

other 2925 20-foot 0,3% containers 473786,3973 25-foot containers 43,8% 6174,227371 0,6% 35-foot containers 7936 interchangeable 0,7% car bodies 8294 0,8% 30-foot containers trailers and semi- 45-foot 29763,85662 trailers containers 2,8% 15265 20119,59464 1,4% 1,9%

The data on intermodal transport collected by the UTK for 2017 reveal the potential of this market segment and its development opportunities. The intermodal transport segment has been consistently growing in recent years. The prospects are good. The Polish ports have a huge potential, but the connections through the eastern border crossings should be investigated in more detail, especially those forming part of the Silk Road. In the context of the trends in global economy, the creation of the New Silk Road from China and the expected decrease in the share of coal in energy generation, imports from China are a huge opportunity to further Poland’s economic development. “The New Silk Road” is an initiative by China and European countries which is aimed at developing the connections between Asia and Europe. It is the main factor in the growth of container transport. Currently, rail connections along the China-Europe direction pass through three major border crossings.

1. China – Kazakhstan (Dostyk – Alataw Shankou) 2. China – Mongolia (Erenhot) – single-track line, low capacity

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3. China – Russia (Manzhouli – Zabaykalsk)

Selected China-Europe rail connections

Source: Theo Deutinger and Kit Chow It is estimated that transport services along the Europe-China path will continue to develop at a fast pace. is expected to remain the main transport route due to its best cost-effectiveness and higher capacity. Currently, the largest container ships can carry 21 thousand TEU at a time. An increase in trade with China is also an opportunity to develop rail transport connections. Rising trade increases the volume of container transport from China, regardless of the mode used. Transport services along the “New Silk Road” will be rising in absolute figures. Rail transport is the second most important mode of transport used in connections between China and Europe. It is up to 30% cheaper than air transport and considerably faster than maritime transport. Trains are two-three times faster than ocean container ships calling at European ports (it takes about 35 days to cover the distance by water and two weeks by rail). In analysing transport from China, Poland’s role in the trade chain should be discussed. Not only can Poland be a partner in international trade with China, but its location can also make it a gateway to Europe along the “New Silk Road”. Poland is located at the intersection of major trans-European transport corridors – East-West and North-South. This makes the further development of intermodal port terminals in this country essential. In Poland’s main ports, Gdańsk’s DCT and Gdynia’s BCT there has been a consistent growth in the volume of processed containers. 1.05 m TEU went through Polish ports in 2010 and more than 2 m TEU in 2017. The development of intermodal rail transport as part of the New Silk Road also involves transport services using the border crossings in this country's eastern areas. To ensure the continued development of intermodal transport, it is important to introduce strategic projects, but also to enhance the effectiveness of processes connected with operating the current connections, and to adjust the infrastructure to the increasing demands. Providing the necessary capacity at border crossing points (especially in the area of Małaszewicze) and adjusting linear infrastructure by, i.a. building new sections and modernising the existing lines to match appropriate standards, also in terms of axle load. Ensuring the smooth flow of goods, i.a. by reducing the freight turnaround time, enhancing information exchange between European customs offices, including those in Poland, and Chinese customs. Reducing the time needed to perform inspections and improving cooperation efficiency between the relevant services at border crossing points clearly contributes to increased volumes in international trade. The share of transport using standard transport units (containers) across a variety of modes of transport should be increased. Trains should naturally be used for the transport of goods along the central,

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longest section of a path running from point A to point B. At the initial and final stages (i.e. the first and last mile), goods may be supplied and received by road transport. Those two modes of transport should be complementary, not competing. These activities fit in well with the pro-environmental policy of the European Commission, which in 2011 set a goal to move 30% of road freight transport along distances longer than 300 km to other modes of transport. Until 2050 this should exceed 50%.

3.10. The transport of dangerous goods

In 2017 28 licensed railway undertakings conducted economic activity involving the transport of dangerous goods (in 2016 – 25 railway undertakings). The increase was observed not only in the number of railway undertakings, but also in the volume of goods transported. A total of 25.9 m tonnes of dangerous goods were transported (23.6 m tonnes in the previous year) and the transport performance reached 8.5 bn tonne-km (7.9 tonne-km in 2016). The share of the transport of dangerous goods in the rail market remained at a similar level and was 10.8% by weight and 15.5% by transport performance (10.6% and 15.6% respectively in the previous year). Compared to 2016, the average distance in transport of dangerous goods dropped slightly from 335 km to 329 km. The transport of dangerous goods mainly involves domestic transport. In 2017 domestic transport accounted for 67.6% by weight and 74.8% by transport performance (in 2016, 65.4% and 69.2%, respectively). When measured by transport performance, the share of imports was 14.6%, exports 7.4% and transit 3.2% (in 2016, these were 15.4%, 11.9% and 3.4%, respectively). In 2017, flammable liquid materials (crude petroleum and petroleum products, e.g. fuels, diesel oil) continued to be the most important group of goods in transport, with a market share of 66.5% by weight and 66.2% by transport performance (in 2016, 66.9% and 68.7%, respectively). According to the classification of dangerous goods (provided for in the RID regulations for international rail transport of dangerous goods), apart from flammable liquids, the largest share in dangerous goods transport was held by goods in class 2 – gases, 12.5% and 10.2% (13.5% and 10.6% in 2016), class 8 – corrosives, 5.8% and 4.7% (6.2% and 5.2%, in 2016), class 4.1 – flammable solids, 2.0% and 2.3% (2.3% and 2.6% in 2016) and class 4.2 – substances liable to spontaneous combustion, 2.0% and 0.7% (1.8% and 1.0% in 2016).

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The share of transport of particular groups of dangerous goods in 2017 (by weight)

organic peroxides radioactive 0,0002% materials 0,001%

explosive materials and items 0.1% substances which, in contact with water, emit flammable gases 0,04% flammable liquids toxic materials… 66.5% oxidising materials 1,0% corrosives substances liable to 5.8% spontaneous combustion 2,0% miscellaneous dangerous materials flammable and items, other solids 2,0% 9.4%

gases 12.5%

The share of transport of particular groups of dangerous goods in 2017 (by transport performance)

radioactive materials 0.002% organic peroxides 0,0002% explosive materials and items 0,03%

substances which, in contact with water, emit flammable gases 0,05% substances liable to spontaneous flammable liquids combustion 66.2% 0.7% toxic materials 0,9% corrosives oxidising 4.7% materials 1,1%

flammable gases solids 2,3% 10.2% miscellaneous dangerous materials and items, other 13.8%

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Looking at the market for the transport of dangerous goods, it is worth comparing the two modes of transport involved – road and rail transport. The latest data in this respect for road transport are from 2016 4. A comparison of transport performance (expressed in tonne-km) in the domestic transport of dangerous goods in 2013-2016 leads to the conclusion that road transport is gaining market share. The share of rail transport over the said years dropped by 7 percentage points. This trend is a matter of concern, as in the transport of dangerous goods, road transport should play a supplementary role to rail transport. Large load capacity and increased safety in relation to road transport should make rail transport the preferred mode for this type of goods.

The volume and share of rail and road transport in transport performance in the transport of dangerous goods

100%

90% - km - km - km 80% 37% 39% 41% 44% 4.8 mld tkm

70% 4.6 bn tonne 4.7 bn tonne 4.7 bn tonne 60%

50% Rail transport Road transport

40% - km - km - km - km 30% 63% 61% 59% 56%

20% 7.9 bn tonne 7.3 bn tonne 6.8 bn tonne 6.0 bn tonne 10%

0% 2013 2014 2015 2016

4 Eurostat database: http://ec.europa.eu/eurostat/en/web/transport/data/database, table Annual road freight transport of dangerous goods, by type of dangerous goods and broken down by activity (Mio Tkm, Mio Veh-km, 1 000 BTO) (road_go_ta_dg), accessed on 5 July 2018.

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Summary of data on the Polish freight transport market in 2017

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3.11. The evolution of freight transport services in Poland as compared to other European countries

As in the section on passenger transport, the data presented below have been provided by IRG-Rail affiliated regulatory bodies. In 2017 most analysed countries observed an increase in freight transport. Using transport performance as the most important indicator, as it covers both the weight of transported goods and the distance, the highest growth was recorded in Macedonia – 25 percent. It should be remembered, however, that the market in Macedonia is relatively small (1.5 m tonnes and 280 m tonne-km) and that it had seen a downward trend since 2007. This is connected with a crisis in freight transport in Greece, as 90% of the traffic in Macedonia is transit between Greece and other EU Member States. The 2017 increase, therefore, represents a bounce back from the record low level in 2016 and results from increased transport in Greece, i.a. due to the rise in transshipment in Greek ports. The second largest growth was observed in Croatia. According to the Croatian regulator, the market developed after liberalisation policies had been introduced. This led to the emergence of new railway undertakings, who develop their transport services every year, and so the market has seen a stable growth trend over the last three years. A 14-percent increase in transport performance was observed in Bulgaria, which also saw increased competition on the rail market, as the 14th railway undertaking started operating in 2017. Another increase in transport services was recorded in Slovenia, which involved over 30% higher transport performance than in 2012. The primary reason is the consistent growth in transshipment in the port of Koper, which is the vital node for freight transport in Slovenia. A little over 13 m tonnes were transshipped in the port in 2009 and in 2017 it was more than 23 m tonnes. The highest rise was observed in container handling, which rose from 3 to 9 m tonnes by weight and from 343 thousand to 912 thousand by TEU between 2009 and 2017 . This makes Koper the largest container port on the Adriatic. The port of Koper is competing against Polish ports in relations with such countries as Austria, Hungary, Slovakia, and the Czech Republic.

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In early 2017 the Lithuanian national freight railway undertaking, AB “Lietuvos geležinkeliai” implemented a restructuring programme to reduce costs and increase the flexibility of its services. Transit through Lithania to the port in Klaipėda grew by 12.6% and to Kaliningrad by 29%. The transport of, i.a., crude oil and chemicals increased. It should be taken into account that, by weight, at least three times more cargo goes from Belarus to Lithuania and to the Kaliningrad Oblast, than to Małaszewicze. Some of this cargo is then exported by Lithuanian and Russian ports. Transport performance in Finland grew by 10%, which resulted from both domestic and international transport, and transit reached a record level. The transport of main groups of goods, raw materials, wood, metals, chemicals and construction materials grew. Like in Poland, transport performance in Hungary grew by 8%. This increase was mainly connected with the rising demand on the domestic market, which resulted from a recovery on the construction market. Transport performance grew by 20% in relation to 2012.

Also in Austria, economic recovery led to increases in transported weight and transport performance. Exports, imports and transit all grew on the Austrian market, which was dominated by international transport. Rail transport increases in Sweden were connected with higher metal ore transport in the north of the country. The German regulator is currently unable to present data for 2017 due to the construction disaster in Rastatt at the freight corridor connecting the ports of the North Sea with north Italy. The corridor section near Rastatt was considered a bottleneck, which is why the decision was made to construct a tunnel to reduce the load on the path. In August 2017 there was a landslide in the tunnel which was then under construction and the tracks on the surface collapsed. Traffic was only reintroduced in October and until that time about 200 freight trains per day were directed to detours (of which some were under renovation) or cancelled, which caused multi-million losses and switching to road and river transport by some clients. Other problems included the lack of availability of train drivers and language issues with detours through France. Some factories were forced to temporarily stop production and logistics operators demanded compensation. The situation took a toll on container rail transport, which plays a huge role in this route, time being of the essence to clients. This is likely to be reflected in Germany’s transport performance figures for 2017. The incident in Rastatt also affected transalpine transport in Switzerland, which dropped by 1.6 m tonnes (5.3%).

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Freight transport

In Latvia, in relation to 2012, transported weight decreased by 28%, transport performance fell by 31% and operational performance dropped by 37%. This largely results from decreased trade with Russia in connection with the sanctions between that country and the European Union. Furthermore, Russia is attempting to make more use of its ports in imports and exports to avoid using the ports in Latvia and Estonia.

The evolution of freight transport in 2017 in European countries

Weight Transport performance Operational performance

-10% -5% 0% 5% 10% 15% 20% 25% 30%

3,4% 3,0% Austria -2,4% 11,3% 14,1% Bulgaria 22,2% 21,8% 18,4% Croatia 9,1% 6,4% 9,6% Finland 6,8% 4,3% -3,2% Spain -4,0% 9,9% 11,8% Lithuania 8,7% -8,4% -5,4% Latvia -7,9% 14,7% 24,6% Macedonia 20,6% 7,9% 8,3% Poland 8,3%

Slovakia 3,0% 10,4% 12,5% Slovenia 6,7% 1,5% -4,4% Switzerland 2,6% 2,8% 2,0% Sweden 2,0% 5,5% 8,4% Hungary

-2,7% 0,7% United Kingdom -1,3%

87

4. The railway infrastructure

4.1. The functioning of infrastructure managers

Railway infrastructure managers are entities responsible for managing railway infrastructure or, in the case of constructing new infrastructure, entities launching the construction work as investors. In connection with the amendment to the Rail Transport Act (Act of 16 November 2016 amending the Rail Transport Act and certain other Acts, Journal of Laws item 1923), a side-track user has become a special case of an infrastructure manager. As defined in the Act, a side-track user is an infrastructure manager who does manages exclusively side-tracks and no other rail infrastructure.

Managers making available rail infrastructure, excluding managers who exclusively make available rail infrastructure being part of a service infrastructure facility, are not authorised to perform rail transport services other than technological transport for their own purposes. Nonetheless, there is a group of managers conducting both types of activities, namely entrepreneurs who combine the functions of infrastructure managers and railway undertakings by managing railway infrastructure and performing rail transport activities along the lines intended exclusively for urban or suburban transport, and along wide-gauge lines.

• PKP SKM – a manager obliged to provide licensed railway undertakings with access to infrastructure;

• WKD – a manager not providing railway undertakings with access to infrastructure; • PKP LHS – a manager not providing railway undertakings with access to infrastructure; Narrow-gauge railways may also combine the manager and railway undertaking functions.

The managers of rail infrastructure with a gauge of 1 435 mm are obliged to provide railway undertakings with access to infrastructure on an equal treatment basis. This obligation does not apply in the case of:

• railway infrastructure intended exclusively for passenger transport performed by railway undertakings which simultaneously act as the managers not providing other undertakings with access to their infrastructure;

• private railway infrastructure, i.e. infrastructure used exclusively for its owner or manager's purposes other than passenger transport. Infrastructure managers may also choose not to abide by the provisions of Chapter 6 of the Rail Transport Act concerning the provision of access and payments for the use of railway infrastructure in the following cases:

• the railway network is intended exclusively for provincial or local transport; • the rail infrastructure forms part of a service infrastructure facility; • the rail infrastructure was classified as local railway infrastructure which has no strategic significance for the operation of the rail market by way the European Commission's decision. The manager is obliged to notify the President of UTK of its decision. On 6 July 2016, the European Commission issued an implementing decision on the strategic significance of railway infrastructure, in accordance with Article 2 Par. 4 of Directive 2012/34/EU on creating a uniform European railway area. In its decision, the European Commission determined the managers and infrastructure which can be treated as local railway infrastructure without a strategic significance for the operation of the rail market: JSK, Infra SILESIA, KP Kotlarnia Linie Kolejowe, UBB Polska, CTL Maczki - Bór, PKM, PMT Linie Kolejowe and DSDiK for line No. 326. These managers may be exempted from the obligation to provide access to their infrastructure, under the principles determined in Chapter 6 of the Rail Transport Act, and from the obligation to develop business plans comprising investment and financial programmes. Line No. 311 managed by DSDiK, which runs to the State border with the Czech Republic, and line No. 250 managed by PKP SKM in Tricity, were recognised as regional railway infrastructure which could be viewed as having no strategic objective and thus falling outside the scope of Article 8, Par. 3 of Directive 2012/34/EU. In consequence, the managers of these lines might be exempted from the obligation to develop business plans comprising investment and financial programmes. The Commission further decided that the infrastructure managed by Cargotor and Euroterminal Sławków cannot be viewed as having no strategic significance for the operation of the rail market, as a result of which the exemptions specified above cannot be applied to these managers. Following the amendment of the Act, for the 2017/2018 timetable, four entities – side-track users: PGE Górnictwo and Energetyka Konwencjonalna S.A. Lublin Wrotków, Przedsiębiorstwo Transportowo- Sprzętowe Betrans sp. z o.o., Track Tec S.A. and Wagon sp. z o.o. – obtained decisions from the President of UTK approving the unit shunting fee rates. Thereby, these entities were included under rail infrastructure managers – users of publicly available side-tracks. The obligation of the side-track manager/user is to prepare the statutes of a rail network. The statutes should indicate rail lines, side-tracks and other rail routes managed by the entity and define whether they are made available or considered out of order or private infrastructure.

4.2. The employment and financial performance of infrastructure managers

As at the end of 2017 the number of person employed by infrastructure managers reached 40,648, which was 0.7% less than in 2016. This primarily resulted from a decrease in employment by the main infrastructure manager PKP PLK. In this case, employment was similar to that from 2015. Employment once again decreased at such managers as KP Kotlarnia, CTL Maczki-Bór and PKM. The share of the main infrastructure manager in the general workforce amounted to 96.4%. WKD and UBB Polska and side- track users were not included in the list.

Employment in infrastructure managers in the years 2008-2017

45 000

40 000 152 396 persons 934 863 809 648 596 42 870 534 41 836 40 40 40 40 40 39 39 38 35 000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

In 2017 operating costs once again increased in relation to the previous year. It was a 2.1% increase and the subsidies for the main infrastructure manager grew by PLN 34 m (about 1%) and was much lower than in 2016. PKP PLK received PLN 3.2 bn worth of subsidies in 2017. In 2017 the operating costs of infrastructure managers increased by 9% from the level of PLN 6.18 bn to PLN 6.75 bn, reaching a new record high. PKP PLK’s costs rose by 7.5% and PKP SKM’s by 12%. The difference between operating revenues and costs was over PLN 1.09 bn as compared to PLN 0.64 bn in the previous year.

The operating performance of infrastructure managers (in PLN bn) in the years 2008-2017

7,0 operating costs operating revenues 6,5 6,75 6,18 6,0 5,73 5,66 5,5 5,21 5,25 5,10 5,54 5,0 4,82 4,34 4,5 4,69 4,68 3,77

PLN bn PLN 4,0 3,77 4,01 4,15 3,5 3,63 3,86 3,0 3,21 2,5 2,76 2,0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

4.3. Railway line parameters

The length of the railway lines used by all infrastructure managers in 2017, including standard- and wide- gauge railways, was 19 291.3 km, which means an increase of 77.3 km in comparison to 2016. The largest infrastructure manager (PKP PLK) has 18 513 km active lines. This is 84 km more than in 2016. PKP PLK was the manager of 2 129 km of out of service lines. In total, the company managed 20 642 km of lines (51 km less than in 2016).

In addition to PKP PLK, also the Infra SILESIA infrastructure manager slightly increased the length of operated lines (by 2.1 km). In the case of such managers as KP Kotlarnia, CTL, Maczki-Bór and JSK, 3.6 km, 2.8 km and 2.5 km were put out of service in 2017, respectively. The longest network of wide-gauge railway lines (395 km) was managed by PKP LHS. The length of the network did not change in this case.

The structure of railway lines operated in Poland in 2017 by gauge

541 3% standard-gauge wide-gauge 18 750 97%

The length of the operated wide-gauge lines included railway lines of three managers: PKP LHS (394.65 km), PKP PLK (142.1 km) and Euroterminal Sławków (4.14 km).

The structure of railway lines operated in Poland in 2017 by electrification level

7 427 38% electrified non-electrified 11 864 62%

The length of the electrified railway lines used by all infrastructure managers in Poland was 11 864.3 km, as compared to 11 883.5 km in 2016, which means a decrease of 19.2 km. Only 14 km of wide-gauge lines were electrified.

The structure of railway lines operated in Poland in 2017 by importance

6 716 35% of State importance other 12 575 65%

In compliance with the Regulation of the Council of Ministers binding in 2017, all lines of State importance were managed by a single manager – PKP PLK. They accounted for nearly 68% of lines operated by the company and 64% of all railway lines in Poland. The length of lines of State importance increased by 198.5 km in relation to 2016.

The structure of railway lines operated in Poland in 2017 by number of tracks

8 740 double-track 45% 10 551 single-track 55%

At the end of 2017, the total length of double-track lines was 8 740 km, i.e. by 11 km less than the year before. Single-track lines still form the majority of railway lines in Poland, which often causes capacity problems. The vast majority of double-track lines (90%) are electrified lines, whereas non-electrified lines prevail among single-track lines (62%). All wide-gauge lines are single-track lines.

The average density of railway lines for the whole country was 6.17 km/100 square km, as compared to 6.14 km/100 square km in 2016. The density of the railway network in individual provinces measured in kilometres of lines/100 square km of area did not change significantly in 2017. The largest increase in line length was observed in the Podlaskie Province, reaching 80 km. A significant increase was also observed in the Zachodniopomorskie and Małopolskie Provinces – 19 km and 18 km, respectively. The sharpest drop was recorded in the Śląskie Province, where the length of railway lines decreased by 21 km. The highest density remains in the Śląskie Province (15.8 km/100 square km) and the lowest in the Podlaskie

Province (3.6 km/100 square km). The largest proportion of the railway network is held by the Śląskie Province (10.1%) and the lowest by the Świętokrzyskie Province (3.7%).

The structure of railway lines operated in Poland in the years 2015-2017 by maximum speed

29,5% Vmax ≤ 60 26,5% 25,5%

16,9% 60< Vmax ≤80 16,6% 15,7% 39,9% 80< Vmax ≤120 41,4% 43,0%

120

0,6% Vmax >160 0,6% 1,0%

0,0% 10,0% 20,0% 30,0% 40,0% 50,0%

2015 2016 2017 The maximum speed in the rail network has been consistently increasing in recent years. In 2017 the length of lines with speeds above 160 km/h for passenger trains was 138 km. According to KPK’s assumptions, by the end of 2023 passenger trains will run at speeds above 160 km/h along 350 km of lines. In 2017 the percentage of tracks with maximum speeds between 80 and 120 km/h increased. However, for inter-provincial passenger transport this is often insufficient. There is demand for increasing the length of lines with maximum speeds between 120 and 160 km/h. A large percentage of tracks in Poland still have the lowest speed parameters. In 2017 tracks with maximum speeds up to 60 km/h and between 60 and 80 km/h accounted for 25.5% and 15.7 of all tracks, respectively.

The structure of railway lines operated in Poland in the years 2015-2017 by permissible axle load (in kN)

25,4% P < 200 24,7% 24,1%

16,0% 210 > P ≥ 200 14,2% 12,8%

6,3% 221 > P ≥ 210 5,8% 5,2%

52,3% P ≥ 221 55,3% 57,8%

0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 70,0%

2015 2016 2017

Due to the modernisation work conducted, the share of tracks with a permissible axle load of 221 kN has increased in recent years. In 2016, this share exceeded 55%, and in 2017 it nearly reached 58%. However, nearly one-fourth of the railway network is adjusted to an axle load of less than 200 kN, which is particularly problematic for freight transport. In the rail market, opinions are also expressed concerning the need to raise the permissible axle loads to more than 221 kN. It is important to allow the traffic of trains with maximum allowed length and more effective use of load capacity. A long and heavy train reduces costs on the part of the railway undertaking and facilitates more reasonable use of rolling stock.

4.4. Service infrastructure facilities

With the entry into force on 30 December 2016 of the amended Rail Transport Act, a new type of infrastructure was distinguished – service infrastructure facilities. The operator of a service facility is the entity managing the facility or providing services to railway undertakings in the facility.

On 10 December 2017 the Act imposed on operators the obligation to make available facilities on equal and non-discriminatory terms to all railway undertakings applying for it. The competences of the President of UTK were extended to cover supervision over the fair and non-discriminatory treatment by operators of all railway undertakings in providing access to a service infrastructure facility. The powers of the President of UTK include inspecting the correctness of the development and application of the facility’s regulations, supervising the conclusion of contracts with the facility’s operators and overseeing the correctness of determination and collection of fees for using a service infrastructure facility by the operator. Providing access to a service infrastructure facility should be understood as allowing railway undertakings, at their request, to use the services for the provision of which the facility has been specifically adapted. When the specification of the provided services so requires, providing access to a facility also involves the use of the facility. Only out-of-service facilities are excluded from the obligation of providing access to them. This information should be defined in the statutes prepared by the facility’s manager.

All submitted requests must be considered by the operator. However, the operator has no obligation to incur any costs necessary to achieve this objective. The operator may deny access to a facility if it demonstrates that:

1) the railway undertaking may perform planned transport services on economically comparable terms, using another provided facility, excluding the situation in which the railway undertaking informs the operator that the operator of the indicated facility had denied access to it, or 2) accepting the request would involve the need to incur costs on the operator’s part, as mentioned in par. 3, or 3) due to insufficient capacity, accepting the request would prevent the operator from serving its own reasonable needs or fulfilling its commitments resulting from contracts previously concluded with other railway undertakings. A separate type of service infrastructure facilities are passenger stations, which include railway stations and platforms, along with infrastructure allowing passengers to access platforms on foot or by vehicle from a public road or railway station. As in the case of other facilities, also in this case the operator of a passenger station has the obligation to provide access to it both to railway undertakings and to passengers using the services of a railway undertaking stopping at a given station. The operator of a passenger station may choose not to provide access to the railway station or platform to passengers. In such a case, the railway station or platform is referred to as inactive. Providing access to a passenger station involves:

1) allowing passengers to use the passenger station; 2) providing railway undertakings, on equal and non-discriminatory terms, with access to: a) the area designated for passenger handling or placing additional commercial communications or b) a ticket sales system operated by the passenger station operator.

4.5. Infrastructure investments and railway system interoperability

For several years the railway network in Poland has been modernised in accordance with the National Rail Programme. The investment works have not only enabled the improvement in the operational parameters of railway lines, such as the maximum speed or the permissible axle load, but also ensured, to a large extent, the compliance with the applicable European interoperability requirements defined in TSI for a given subsystem. The objective of the investments announced in 2017 included a significant improvement in rail traffic in agglomerations, raising the standard of travel on regional paths and improving freight transport conditions. In 2017 numerous tender procedures were concluded, contracts were signed and contractors selected. A number of key tender procedures for the implementation of multi-million investment projects were also announced. The value of contracts signed by PKP PLK until 2017 was about PLN 18.6 bn. As at 2017 the implementation of the National Rail Programme (KPK) 5 was at the level of about PLN 30 bn, which is nearly half its value. The contracts signed in 2017 included the following investment projects:

- The Warszawa Zachodnia/Gołąbki – Warszawa Gdańska ring rail line; - E30 Kraków Główny Towarowy – Rudzice; - Kędzierzyn-Koźle – Opole; - Działdowo – Olsztyn; - The E75 line : Sadowne – Czyżew; 6 - C-E 65 at the section Zduńska Karsznice – Bydgoszcz – Tczew. In 2017 development work centred around Warsaw, Poznań and Kraków. A particular increase in investments was also recorded in the Śląskie and Małopolskie provinces. In 2017 modernisation work was underway at railway line No. 447 – Warsaw – Grodzisk Mazowiecki, E20 – Warsaw – Poznań, No.7 along the section Warsaw – Lublin, No. 4 (CMK) along railway lines Nos. 140, 148, 157, 159, 173, 689, 691 along the section Chybie – Żory – Rybnik – Nędza/Turze, along the E 75 line on the section Sadowne – Czyżew along with the remaining works on the section Warszawa – Sadowne.

5 Over 220 rail investment projects were launched under KPK with a total value of over PLN 66 bn. 6 Analysis on the basis of PKP Polskie Linie Kolejowe S.A.’s press releases.

2017 can be considered a year of increased awareness among participants in the rail market in terms of rail system interoperability. TSI conditions were included in tender specifications, investment projects and their implementation took into account the application of TSI and the participation of independent verification entities (notified bodies). This is shown by a significant number of EC verification requests for the subsystem in 2017 (188 requests for subsystems; compared to about 100 requests in 2016). In 2017 a key increase was observed in the implementation of processes connected with the placing into service of structural subsystems making up railway lines. In terms of the infrastructure, energy and trackside control-command and signalling subsystems, 33 requests for authorisations of placing in service were submitted last year to the President of UTK. However, these processes are lengthy. Often it is not until this stage that the crucial issues and requirements, which the contractors previously failed to identify, appear. In 2017 the President of UTK made an attempt to address the key issues by preparing a number of statements. The subject matter of the President of UTK’s statements, which involved ongoing cooperation with the infrastructure manager, modernisation contractors and producers of goods, is meant to facilitate improved and more efficient functioning of the market. Improving the organisation of the national system for placing in service railway buildings and equipment. In January 2017 a list of national technical specifications and normative documents was published. Compliance with these documents allows the fulfilment of the basic requirements regarding the interoperability of the rail system. A series of statements was issued regarding the procedures of confirming the type conformity of goods, type certificates and interoperability constituents. Following the President of UTK’s suggestions directly translates into higher effectiveness in implementing infrastructure investments. For example, an analysis of the conditions in the field of interoperability constituents (such as tracks and fastening systems) leaves the producers/modernisation contractors freedom to implement investment projects using either new devices or warehouse stocks. The key decision in the context of the whole rail market's operation was the President of UTK’s move to open a discussion on the rules and dates for the implementation of the GSM-R system. The selection of the contractor for implementing the investment task involving the network-wide implementation of the GSM-R system was at an advanced stage (the project covers about 13.6 thousand km of lines). To implement GSM-R, the analog radiotelephones using the frequency of 150 MHz, which are currently in operation, will have to be disabled. This would necessitate equipping all rail vehicles with GSM-R radiotelephones. Taking into account the scale of the project of migrating over to GSM-R and also its importance for the Polish rail system, it is essential to ensure appropriate coordination and cooperation among all involved parties – government institutions, infrastructure managers and railway undertakings. According to the President of UTK, the effective use of the GSM-R network being implemented in Poland depends on granting railway undertakings financial support to equip vehicles with ETCS and GSM-R on- board equipment. The UTK, MIR, MIB and CUPT began cooperation in looking for sources of financial support for equipping rail vehicles with the ERTMS system.

4.6. The capacity of nodal freight infrastructure

Problems with the capacity of nodal infrastructure are an obstacle to the performance of freight transport services. It is particularly important in areas which are sources of high traffic: near borders, ports and in the Upper Silesia region. The following is a list of capacity problems connected with nodal infrastructure which are not caused by any modernisation work in progress. Border crossing points and border stations:

• Braniewo: a low number of standard- and wide-gauge tracks causes bottlenecks at the Braniewo station and delays of cross-border trains;

• Chałupki: numerous railway undertakings report the common problem of occupied tracks, which delays arrival at the station;

• Małaszewicze Centralne: railway undertaking reported permanent problems with entering the station and placing trains from the container terminal on the CARGOTOR infrastructure;

• Małaszewicze Południowe: out-of-service tracks and a low number of storage tracks reduce the station’s capacity;

• Zebrzydowice: frequent lack of free tracks. Freight stations at ports:

• Gdańsk Port Północny: hindered access to the station caused by the insufficient number of tracks, paired with very intensive traffic, especially to the DCT container terminal;

• Gdańsk Zaspa Towarowa: no holding tracks for locomotives; • Gdynia Port: railway undertakings report the insufficient number of auxiliary tracks. Freight stations in the Silesia region:

• Dąbrowa Górnicza Towarowa: hindered access to the station due to the insufficient number of tracks, with a large number of auxiliary tracks closed because of their poor condition. In connection with the rising volume of transport services, trains await entrance to the station at nearby stations and routes. This issue is reported by numerous railway undertakings and its importance is made stronger by the fact that the so-called Huta Katowice and nearby plants, taken together, are one of the main sources of rail traffic in Poland;

• Gliwice Łabędy: railway undertakings report the need to extend the length of steeply graded tracks;

• Katowice Muchowiec: railway undertakings suggest the reconstruction of station tracks (two principal and four auxiliary) to serve the Staszic Mine and trains in the direction of Zebrzydowice, Kraków, Dąbrowa Górnicza Towarowa and Gliwice;

• Kędzierzyn-Koźle: it is necessary to extend the direction tracks to 750 m; • Rudziniec Gliwicki: the reconstruction of tracks No. 8 and 10 would increase the capacity of the Toszek Północ - Rudziniec Gliwicki section which is currently under refurbishment. In 2017 railway undertakings usually pointed to the issue of limited capacity in the area of Małaszewicze near the Terespol – Brest border crossing point on the “New Silk Road” between China and Europe. The “New Silk Road” is an opportunity to boost Poland’s significance in terms of transit and transshipment; however, limited capacity can lead to the avoidance of the terminals in Małaszewicze, or even Poland. Alternatives to Poland include routing freight:

• from Belarus to ports in the Baltic States and Russia; • to Slovakia or Austria if the length of the wide-gauge track from Košice to Vienna is extended; • through Turkey and the Balkan countries; • by ship to the port in Piraeus and then to Central and Western Europe. Currently, the two most attractive transcontinental rail transport corridors from China lead through Małaszewicze, which makes this border crossing crucial for the relations between China and the EU. Both the Baltic corridor and the trans-Caspian corridors need a larger number of transshipments and border checks. Due to the political circumstances, transit from Russia to the EU through Ukraine is currently highly limited. This might change, however, especially if the wide-gauge track from Košice to Vienna is extended. This investment project is currently suspended due to the conflict in the Donbass region of Ukraine, but concept work and feasibility study preparation are currently underway. Turkey’s ambition would be to develop the trans-Caspian route and then direct freight to Western and

through Bulgaria, Romania and Hungary. The development of the trans-Caspian route would be in the interests of the Polish railway undertaking PKP LHS, provided that it would run through the Black Sea and Ukraine, passing over Turkey. Although the sample container from Sławków reached Iran in 9 days, the problems of this corridor involve the lack of modernised infrastructure and a large number of border checks. It is assumed that in this variant trains would cross the Black Sea on board train ferries. , whose tracks are used to transport most goods along the “New Silk Road” have expressed their concern about the capacity in Poland and Belarus in the context of the current and planned modernisations. The Russians are seeking an alternative route to transport goods to their ports in Petersburg and Kaliningrad. The issue of ferry connections between Kaliningrad and German ports is still to be discussed. The Russian RŻD Logistics and the German DB Cargo have signed a cooperation agreement in Moscow, under which DB Cargo undertakes to organise container transport from ports in the Kaliningrad Oblast to the Rostock port in Germany and further. The predicted deliveries will be 100 thousand TEU per year. It seems that the primary threat to the transit role of Poland (not only for transshipment in Małaszewicze, but also for the plans of Polish ports to serve Slovakia, the Czech Republic and Hungary) is the Balkan corridor leading from the port of Piraeus in Greece, through Bulgaria or Macedonia, Serbia and Hungary. The port in Piraeus is owned by the Chinese shipowner COSCO and Hungary plans to finance the modernisation of the line from Belgrade to Budapest in its territory using a loan from a Chinese bank. On the Serbian side the line is already being renovated with the participation of Chinese companies, which shows the level of this country’s involvement in the creation of the Balkan corridor. In 2017 Piraeus saw the transshipment of 6.4% more containers than in 2016, which allowed reaching the record high of 3.7 m TEU. In 2010, shortly after takeover by COSCO, 880 thousand TEU were transshipped in Piraeus, which is indicative of the scale of growth. The port is being extended by the Chinese managing company, which aims at the transshipment of 5 m TEU after a new wharf is placed into operation in 2019. The target value is over 7 m TEU, which would place the port as one of the 30 biggest in the world. In 2016 Piraeus was 44th, Polish ports did not make it to the top 100 and DCT Gdańsk recorded transshipment figures lower than 145 thousand TEU than Buenos Aires, which was last in the ranking. In general, at ports owned by COSCO, the total transshipment in 2017 was 87.3 m TEU, almost 10 m TEU more than in 2016. Due to the bottlenecks in the area of Małaszewicze in 2017, the average time of transport between China and the EU changed from 14 days to 15-18 days, and periodically even 20-25 days. The structural reasons for the capacity problem are as follows:

• Małaszewicze has 18 terminals managed by various entities, of which some have only minimum track infrastructure, are unable to group trains, thus reducing capacity, and often transship only several wagons per day;

• the ring line for terminals lacks modern rail traffic control devices and the ability to serve two trains at the same time;

• the unavailability of free tracks in Małaszewicze forces railway undertakings to park trains in Chotyłów and at other stations in the area. Paths to Małaszewicze are purchased only when free capacity is available;

• the Kobylany station is a bottleneck, as it lacks tracks for intermodal trains. Holding tracks at terminals are 300 m long, so longer trains block the station;

• the longest tracks in CARGOTOR’s infrastructure are 700 m long, while trains from China are longer;

• there is only one PKP PLK wide-gauge track between Terespol and Kobylany, so it is not possible to serve two trains from the east at the same time;

• the capacity of the bridge on the Bug River is an infrastructural limitation (currently it features gauntlet tracks, which effectively limits the number of trains on the bridge at the same time to one). The expected increase in passenger transport following the modernisation of Line No. 2 will reduce freight transport capacity even more. To increase it, it seems necessary to carry out infrastructure investments and ensure better organisation at terminals. The necessary investments include:

• constructing an additional group of tracks for intermodal trains in Kobylany (CARGOTOR is considering this solution and the decision should be made soon, as construction will take 3-4 years);

• adjusting the infrastructure from the border crossing point to Małaszewicze for the axle loads and lengths of trains from China;

• adding a wide-gauge track between the border crossing point and the station in Kobylany; • potentially adding a border track; • developing new rail traffic control devices. To achieve better organisation in the transshipment region, it is necessary for terminals to cooperate with each other by appointing an area coordinator. The objectives should include increasing the efficiency of customs checks. Raising the fees for occupying station tracks in Kobylany should also be considered. In addition to improving the situation in Małaszewicze, complementary border crossing points should be prepared to take over some of the traffic and diversify transport routes:

• a container terminal was launched in Siemianówka, but its transshipment capacity is low (six trains per day);

• Kuźnica and Braniewo lack intermodal terminals; • both on the Polish and Belarussian side, the border crossing point in Czeremcha can only be reached by standard-gauge railway, which necessitates the transshipment of goods in Belarus. If a combined standard- and wide-gauge track was available to Czeremcha, a terminal could be established there. If the Czeremcha border crossing is considered as a potential detour for the time of the modernisation of Małaszewicze, then some of the traffic after modernisation can remain there, including transshipment in Belarus, which would be a violation of the SMGS agreement.

4.7. PKP PLK investments in 2017

2017 was another year of the Financial Framework 2014-2020 in which PKP PLK implemented investment projects covered by the National Rail Programme until 2023 (KPK). The programme was adopted in 2015 and last updated in 2018. The main objective of implementing KPK is to boost the importance of rail transport in the country’s integrated transport system. KPK defines the investment tasks and assumes the maximum use of EU funds for financing projects under:

• the Infrastructure and Environment Operational Programme (IEOP) 2014-2020; • CEF Instrument (the Connecting Europe Facility); • the Operational Programme Eastern Poland (OPEP) 2014-2020; • Regional Operational Programmes (ROP) 2014-2020. The investment implementation and settlement period under KPK overlaps with the EU Financial Framework 2014-2020 and takes into account the N+3 rule, which means that the eligibility period for expenditure will finish on 31 December 2023 (in accordance with KPK of 12 July 2017). The value of

expenditure from KPK’s primary list, adjusted for the refunds connected with projects funded from the Financial Framework 2007-2013, is over PLN 66 bn.

Planned KPK expenditure over the years by target financing sources (PLN bn)

No. Programme Expenditure

1 Cohesion Fund 49.3 1.1 CEF 17.9 1.2 IEOP 2014 - 2020 28.3 1.3 IEOP 2007 - 2013 3.2 2 OP EP 2.2 3 ROP 4.8 3.1 ROP 2014 - 2020 4.7 3.2 ROP 2007 - 2013 0.1 4 State 10.1 5 Non-military defence preparations 0.1 total 66.4

The implementation of the European Rail Traffic Management System (ERTMS), consisting of the European Train Control System (ETCS) and the Global System for Mobile Communications – Railway (GSM-R) will contribute to the increased safety of rail transport and improved train speed to over 160 km/h. The implementation of the ERTMS system in the Polish rail network is planned to continue under the investment projects co-financed from the EU’s 2014-2020 budget. Other solutions that could potentially increase safety include eliminating level crossings and constructing passageways for animals or adapting current structures, as well as installing animal deterrents using sound and light (reflection) signals.

4.8. The implementation of the National Railway Programme

In 2017, the key activities related to projects included in the NRP involved:

• conducting tendering procedures to select contractors for the implementation of projects; • signing agreements with contractors. At the end of 2017, out of more than PLN 66.4 bn allocated for the implementation of projects included in the NRP, more than PLN 26 bn were being carried out; completed projects were worth PLN 5.5 bn and tendering procedures were pending for PLN 9 bn. In 2017 more than 200 investment projects were accepted for implementation, of which 66 were tasks for which the first major investment outlays were planned for 2017. The largest project in terms of outlays was the project involving the modernisation of the E75 Sadowne-Czyżew line, implemented under the CEF 2014-2020 programme, for which the total outlays for 2017 amounted to ca. PLN 370 million.

The value of the 10 largest projects made up 53% of the investment plan for 2017, with each costing more than PLN 100 million.

The largest investments of PKP PLK by outlays planned for 2017

outlays No. project programme planned for 2017 Work on E75 line, section Sadowne - Czyżew, including other works in the PLN 372.3 1 CEF 2014-2020 Warszawa Rembertów – Sadowne section million Work on railway line No. 7 Warszawa Wschodnia Osobowa – Dorohusk, PLN 347.6 2 IEOP 2014-2020 section Warszawa – – Dęblin – Lublin, stage I million PLN 345.3 3 Work on E75 line, section Czyżew - Białystok CEF 2014-2020 million Modernisation of E 30 railway line, section Zabrze – Katowice – Kraków, PLN 285.0 4 CEF 2014-2020 stage Iib million Modernisation of railway line No. 8, section Warszawa Okęcie - Radom PLN 236.3 5 IEOP 2014-2020 (LOT A, B, F) 2nd phase million Work on E 20 railway line, section Warszawa - Poznań - other works, section PLN 225.8 6 CEF 2014-2020 Sochaczew – Swarzędz million Modernisation of E30 C-E30 railway line, section Kraków-Rzeszów stage III, PLN 225.6 7 IEOP 2014-2020 2nd phase million PLN 171.7 8 Modernisation of railway line No. 4 Centralna Magistrala Kolejowa stage II Budget million Work on E59 railway line, section Wrocław-Poznań, stage IV, section from PLN 156.2 9 CEF 2014-2020 the border of Dolnośląskie Province to Czempiń million PLN 120.4 10 Work on E59 railway line, section Poznań Główny - Dąbie CEF 2014-2020 million The investment works conducted on the railway network managed by PKP PLK included in particular the modernisation, regeneration or construction of 1,037 km of tracks. As part of the modernisation and regeneration work, covering superstructure, 534 crossovers were replaced.

The plan and performance of PKP PLK work in 2017 (in material terms)

performance No. indicator unit of measure plan for 2017 2017

1 Railway modersniation km of track 687.95 1037.45

2 Track underpasses pcs. 15 20

3 Overpasses pcs. 3 4

4 Platforms pcs. 87 91

5 Crossovers pcs. 525 534

Passenger information system 6 pcs. 5 8 (including displays, sound systems, etc.)

7 Traction network tonne-km 613 855

In addition, the railway line modernisation and regeneration works carried out by PKP PLK will include the redevelopment of level crossings and pedestrian level crossings, including their retrofitting with safety and/or warning devices. Also, the level crossings and pedestrian level crossings will be dismantled and replaced by viaducts, footbridges or track underpasses. In 2017 a total of 182 level crossings were modernised within the company’s network with automatic signalling systems (ASS devices), retrofitted with CCTV. Also 69 rail and road viaducts were upgraded. Agreements were signed for the projects included in the NRP, with a total value of PLN 18.6 bn. The most important group of agreements were investment agreements for the implementation of EU projects.

Major agreements signed in 2017 (PLN million)

agreement project name programme contract name net value

Restoring traffic fluidity in the TEN-T Łódź IEOP Preparation of design documents and execution rail hub, section Łódź Fabryczna – Łódź 1,293.0 14-20 of construction works Kaliska_Łódź Żabieniec

E 30 Kraków Główny Towarowy – Rudzice CEF Execution of construction works including including the addition of agglomeration line 966.3 14-20 preparation of detailed designs tracks

E 20 Warszawa - Poznań - other works, CEF Execution of construction works in the LCS Konin 837.8 section Sochaczew – Swarzędz 14-20 area – section Barłogi – Swarzędz Work on railway line No. 7 Warszawa Wschodnia Railway line No. 7 Warszawa Wschodnia IEOP Osobowa – Dorohusk, section Warszawa – Osobowa – Dorohusk, section Warszawa – 756.5 14-20 Otwock – Dęblin – Lublin, section Otwock – Otwock – Dęblin – Lublin, stage I Lublin at km 26.050-175.850” LOT C Work on railway line No. 7 Warszawa Wschodnia Railway line No. 7 Warszawa Wschodnia IEOP Osobowa – Dorohusk, section Warszawa – Osobowa – Dorohusk, section Warszawa – 597.4 14-20 Otwock – Dęblin – Lublin, section Otwock – Otwock – Dęblin – Lublin, stage I Lublin at km 26,050-175,850” LOT B Execution of construction works under Contract CEF E 30 Zabrze – Katowice – Kraków, stage Iib No. 2 Modernisation of section Trzebinia - 596.7 14-20 Krzeszowice (km 29.110 - 46.700 line No. 133). E 20 Warszawa - Poznań - other works, CEF Execution of construction works in the LCS 560.0 section Sochaczew – Swarzędz 14-20 Kutno area – section Żychlin - Barłogi

E75 Sadowne - Czyżew, including other Execution of construction works in the Sadowne - CEF works in the Warszawa Rembertów – Czyżew section, from km 71.800 to km 107.260 521.6 14-20 Sadowne section (including rail traffic control devices)

Work on railway line No. 7 Warszawa Wschodnia Railway line No. 7 Warszawa Wschodnia IEOP Osobowa – Dorohusk, section Warszawa – Osobowa – Dorohusk, section Warszawa – 494.2 14-20 Otwock – Dęblin – Lublin, section Otwock – Otwock – Dęblin – Lublin, stage I Lublin at km 26.050-175.850” LOT D 354 Poznań Główny POD-Chodzież-Piła ROP Modersniation of railway line No. 354 Poznań 485.0 Główna 14-20 Główny POD - Chodzież - Piła Główna Among the agreements signed in 2017, the vast majority were construction work contracts – 97%.

Agreements signed in 2017 by programme and type (PLN bn)

supplies construction works services total

budget - 2.2 0.1 2.3

CEF 2014-2020 0.1 6.6 0.2 6.8

OP EP 2014-2020 - 1.5 0.03 1.6

IEOP 2014-2020 - 6.6 0.2 6.8

IEOP 2007-2013 - 0.002 0.0002 0.002

ROP 2014-2020 - 1.0 0.04 1.1

ROP 2007-2013 - 0.001 - 0.001

total 0.1 17.9 0.5 18.6 The scale of the signed construction agreements made it possible to open new construction sites in 2017 and start works on many key railway lines, such as No. 7 (section Warszawa – Otwock – Dęblin- Lublin), E59 (section Poznań Główny – Szczecin Dąbie and the section from the border of Dolnośląskie Province to Czempiń) and E20 (section Sochaczew – Swarzędz).

The largest projects which started construction works in 2017 (PLN million)

estimated project value No. project name as per the NRP (07.2017)

Work on railway line No. 7 Warszawa Wschodnia Osobowa – Dorohusk, section 1 2,954.7 Warszawa – Otwock – Dęblin – Lublin, stage I Work on E59 railway line, section Poznań Główny - Szczecin Dąbie (preliminary work) 2 2,236.0

Work on E 20 railway line, section Warszawa - Poznań - other works, section Sochaczew 3 2,017.1 – Swarzędz 4 Modernisation of E 30 railway line, section Zabrze – Katowice – Kraków, stage IIb 1,825.7 5 Work on E75 line, section Czyżew - Białystok 1,610.0 Work on E59 railway line, section Wrocław-Poznań, stage IV, section from the border of 6 1,287.7 Dolnośląskie Province to Czempiń Work on E 30 railway line, section Kraków Główny Towarowy – Rudzice including the 7 1,043.3 addition of agglomeration line tracks Work on E75 line, section Sadowne - Czyżew, including other works on the Warszawa 8 1,025.2 Rembertów – Sadowne section Work on railway lines Nos. 97, 98, 99, section Skawina – Sucha Beskidzka – Chabówka – 9 910.0 Zakopane 10 Modernisation of railway line No. 4 Centralna Magistrala Kolejowa stage II 843.9

Major construction work tender procedures announced in 2017 (PLN million)

estimated project name programme contract name contract value (net)

Preparation of design documents and execution of C-E 65 Chorzów Batory - construction works in the design–build formula for the task Tarnowskie Góry - Karsznice - IEOP entitled LOT C - Work on railway lines Nos. 131, 686, 687, Inowrocław - Bydgoszcz -– 14-20 756.3 704 section Kalina (km 66.800) – Rusiec Łódzki (km Maksymilianowo 137.500).

C-E 65 Chorzów Batory - Preparation of design documents and execution of Tarnowskie Góry - Karsznice - IEOP construction works in the design–build formula for the task Inowrocław - Bydgoszcz - 14-20 entitled LOT A - Work on railway line No. 131, section 644.3 Maksymilianowo Chorzów Batory (km 5.900) – Nakło Śląskie (km 29.000),

Railway line No. 93 Trzebinia – IEOP Preparation of design documents and execution of Oświęcim – Czechowice- 14-20 construction and assembly works 414.0 Dziedzice

C-E 65 Chorzów Batory - Preparation of design documents and execution of Tarnowskie Góry - Karsznice - IEOP construction works in the design–build formula for the task Inowrocław - Bydgoszcz - 14-20 entitled LOT B - Work on railway line No. 131, section Nakło 342.1 Maksymilianowo Śląskie (km 29.000) – Kalina (km 66.800)

Railway lines Nos. 97, 98, 99 Tender 2 - Modernisation of railway line No. 99 Chabówka - Skawina – Sucha Beskidzka – Budget Zakopane 335.5 Chabówka – Zakopane Railway line No. 93 Trzebinia – IEOP Preparation of design documents and execution of Oświęcim – Czechowice- 14-20 construction and assembly works 324.8 Dziedzice Preparation of design documents and execution of C-E 65 Chorzów Batory - construction works in the design–build formula for the task Tarnowskie Góry - Karsznice - IEOP entitled LOT D - Work on railway lines Nos. 131, 542, 739, Inowrocław - Bydgoszcz - 14-20 324.2 section Rusiec Łódzki (km 137.500) – Zduńska Wola Maksymilianowo Karsznice (km 170.212)

estimated project name programme contract name contract value (net)

Construction of the Szczecin IEOP Task A: Modernisation of railway line No. 406, section Metropolitan Railway 14-20 Szczecin Główny - Police 300.9

Railway line 289 Legnica – IEOP Preparation of design documents and execution of Rudna Gwizdanów 14-20 construction works 242.3

The vast majority of tender procedures announced in 2017 involved construction works – 83%. More than 56% were financed under IEOP 2014-2020. 4.9. Fees for access to infrastructure PKP PLK rates are the most important for market development, as they cover the whole country and concern both freight and passenger transport. Given the need to balance its business, PKP PLK concluded an agreement with the Ministry of Infrastructure and Development, under which the railway infrastructure management and protection costs would be partly covered by the State budget.

The average cost of train-km for the minimum access to PKP PLK infrastructure from the 2008/2009 timetable to the 2017/2018 timetable

Passenger trains * Freight trains * Network average

30 - km 19,55 20 17,42 17,38 17,70 17,90 13,70 13,71 13,81 13,47 13,47 10,56 10,93 10,56 10,70 11,21 8,92 8,99 9,11 8,68 8,68 10 infrastructure in PLN/train kmaverage unitoffeerate the for to kmaverage access - 7,28 6,45 7,02 6,83 6,91 6,33 6,51 6,64 6,43 6,43

0 PLN/train Average unitAverage ofrate the for tofee access infrastructure in

* network average for passenger and freight trains based on information from the manager’s application

The average network rate for the minimum access to infrastructure managed by PKP PLK was reduced from PLN 9.11/train-km in the 2015/2016 timetable to PLN 8.68/train-km in the 2016/2017 timetable, and remained unchanged in the 2017/18 timetable. More substantial drops occurred in the 2013/2014 timetable as a result of the manager’s adopting only some costs of maintenance, management of rail traffic and amortisation, which are directly connected with train transport, for the calculation of the unit rates of the basic fee. The average network rate for the minimum access to PKP PLK infrastructure was reduced for all trains. Starting with the 2013/2014 timetable, the average network rates were reduced and stabilised. On 30 December 2016 the regulations concerning the manager’s determining the fees for access to infrastructure and approval of draft price lists were amended. The President of UTK did not approve the PKP PLK price list for the 2017/18 timetable; therefore, the manager informed about the price list in force

for the previous timetable also applying to the 2017/18 timetable. It is being applied to extent that it is in keeping with the regulations in force.

4.10. RFC5 and RFC8 corridors

In November 2015, under Regulation (EU) No 913/2010 of the European Parliament and of the Council concerning a European rail network for competitive freight, the following two freight transport corridors were opened in Poland:

• Corridor 5 (Baltic-Adriatic) – along the North-South Axis, • Corridor 8 (North Sea-Baltic) – along the East-West Axis. The freight transport corridors offer the Corridor one stop-shop (C-OSS) service to railway undertakings providing international transport services. The C-OSS offers preliminarily determined paths and the capacity-booking option. Applicants may submit applications and receive responses in one facility, and as part of a single procedure, for freight trains crossing at least one state border along the freight transport corridor. Corridor 5 (Baltic-Adriatic) connects Polish seaports with Adriatic seaports. The following countries are engaged in its implementation: Poland, the Czech Republic, Slovakia, Austria, Slovenia and Italy. Corridor 8 (North Sea-Baltic) is implemented by Poland, , the Netherlands, Germany, the Czech Republic and Lithuania.

The RFC5 and RFC8 transport corridors (prepared by Rail Net Europe)

Bałtyk – Adriatyk – Baltic Sea – Adriatic Sea Morze Północne – Bałtyk – North Sea – Baltic Sea Na podstawie – based on opublikowanej na – published on The paths situated along both corridors have been open for operation since December 2016. The Single European Railway Area Committee (SERAC), pursuant to Article 21 of Regulation 913/2010, approved, in December 2016, the initiative of creating a new Amber Rail Freight Corridor, so-called RFC11. The European Commission, after conducting the necessary analysis, on 31 January 2017 issued a decision on the establishment of the corridor. RFC 11 is to be launched in 2018 or 2019 and will connect the seaport of Koper, Hungary and Slovakia to Poland and the border crossing in Terespol. Satisfaction surveys of the users of corridors Nos. 5 and 8 were conducted in 2017. In the case of corridor No. 5, the survey involved 13 entities – as regards the Polish part of the corridor, respondents reported the poor quality of railway infrastructure in Poland, which results in uncompetitive transit, prolonged travel time and high access costs. In the case of corridor No. 8, respondents had reservations about the conditions for cancelling routes in Poland, which constitute a barrier to capacity booking.

4.11. The railway infrastructure in Europe

The indicator of average infrastructure use intensity is calculated by dividing operational performance in passenger and freight transport by network length and number of calendar days. This is not a congestion indicator, as sometimes a significant part of the traffic takes place on a small part of the network, as it is the case in France. The railway network is most intensively used in the Netherlands, where passenger trains account for 90% of operational performance. The high level of use of railway lines in the

Netherlands is due to the high demand for rail transport which results, among other things, from a high population density. This demand is satisfied by high network capacity, reached owing to a significant share of double-track lines, and four-track lines around major cities.

In Switzerland, high capacity is facilitated, among other things, by regular maintenance work and a cyclical timetable. It is worth noting that in the Netherlands and Switzerland the network use intensity for freight transport is also relatively high – higher than in Poland and the average in the analysed countries. The United Kingdom, Denmark and Luxembourg, in which passenger transport predominates, are also characterised by a very high network use intensity. According to EUAR, the presence of modern traffic control devices supports increased transport intensity and improved punctuality.

Rail traffic intensity in IRG-Rail countries in 2016 (number of passenger and freight trains on average per 1 km of network per day)

0 20 40 60 80 100 120 140

The Netherlands 13 120

Switzerland 15 102

United Kingdom 6 90

Denmark 4 84

Luxembourg 5 75 Freight trains Austria 24 55

Germany 19 58 Passenger Belgium 10 63 trains Italy 6 43

Slovenia 25 23

France 7 39

Sweden 9 31

Portugal 6 33

Hungary 7 31

Slovakia 11 26

Spain 5 30

Norway 5 28

Poland 11 22

Croatia 6 16

Finland 6 16

Romania 6 15

Lithuania 12 9

Bulgaria 5 15

Latvia 12 7

Estonia 3 11 1 Greece 12

Macedonia 26

Kosovo02

Average 10 43

Freight transport predominates in Lithuania, Latvia and Slovenia, in which the key role is to serve the Koer seaport. In Poland, freight trains account for 32% of operational performance, down from 37% in 2015. In terms of network use intensity, Poland ranks poorly, almost twice below the average for passenger transport. The ratio of network use in the discussed countries is 82:18 in favour of passenger transport. The construction of high-speed lines is a steady trend in the development of railway infrastructure in Europe. This context appears significant for the plans to build such lines in Poland. Currently, trains may travel at speeds exceeding 160 km/h on the Central Railway Main Line only. In December 2017, the section of the Central Railway Main Line with the maximum speed of 200 km/h was extended to 138 kilometres. However, according to the UIC’s research method, the whole Main Line is considered a high- speed line, which is why the graph below comparing the length of high-speed lines in European countries presents Poland’s high-speed lines with a length of 224 km. This value was not adjusted to keep the UIC classification (in other countries the UIC could treat some lines similarly to the Central Railway Main Line).

The length of high-speed lines in Europe enabling travel at ≥ 200 km/h in sections or entire lines – as at the end of 2017 (in km)

3000 2852 2814

2500 634 Handed over in 2017 Total 2000 1658 1500 183

896 1000

500 268 224 209 144 120 113 0

According to UIC data, in 2017 in Europe there were 9,298 km of operational lines all or sections of which allowed trains to run at speeds equal to or higher than 200 km/h. The year 2017 saw the opening of as many as 634 km of high-speed lines in France:

• a 214-kilometre section from Le Mans to Rennes with the maximum speed of 320 km/h, • a 340-kilometre section from Tours to Bordeaux with the maximum speed of 320 km/h, • an 80-kilometre section from Nimes to Montpellier for freight trains. The first section consists of the completion of the high-speed line from to Rennes, the capital of Brittany. The second section consists of the extension of so-called Atlantic high-speed line from Paris

towards the Pyrenees. The third section is in the southern part of the country, and is the first high-speed line in France intended for mixed passenger and freight traffic. The line was opened in December 2017 for freight trains, while passengers trains with a speed of 220 km/h (300 km/h as a target) should start running in summer 2018. After the completion of the next missing section, the line will constitute a link between the French and Spanish high-speed rail systems. A 183-kilometre section between Nuremberg and Erfurt (with a speed limit of 230 km/h for 83 kilometers and 300 km/h for 100 kilometers) was opened in 2017, which facilitated a high-speed connection from Berlin to Munich. In 2017 high-speed lines were being constructed in Austria (281 km up to 200-250 km/h), Denmark (56 km up to 250 km/h), Germany (185 km up to 250 km/h), Spain (904 km up to 250-300 km/h), Italy (53 km up to 250 km/h), the United Kingdom (230 km up to 360 km/h) and short sections in Sweden and Switzerland.

The average charges for the railway infrastructure minimum access package for passenger trains in 2016 in IRG-Rail countries (in euro per train-kilometre)

10 9,0 9 8,0 8 7 6,4 6 5,1 4,9 5 4,2 4,1 4 3,1 2,9 3 2,4 2,4 2,4 2,0 1,9 1,9 1,7 1,6 2 1,5 1,5 1,3 1,0 0,7 0,7 1 0,5 0,4 0,0 0

Data concerning average charges for the minimum access package to railway infrastructure in the individual IRG-Rail countries, which can be considered the average rate for access, are presented above. The average revenue was calculated in the following way: revenue from access charges were divided by the number of train-kilometres clocked by railway undertakings in 2016. The average charge for access is higher for passenger trains than for freight trains. In most Western- European countries, as well as in other states, the rate is higher than in Poland. In Slovenia PSO trains are exempted from access charges, and in Norway rates for passenger trains apply only on the line from Oslo to Oslo airport.

The average charges for the railway infrastructure minimum access for freight trains in 2016 in IRG-Rail countries (in euro per train-kilometre)

20 17,9 18 15,4 16 14 12 9,6 10 8 5,7 6 4,2 3,1 3,0 4 2,9 2,6 2,5 2,3 2,3 2,8 2,1 2,1 2,1 1,9 1,9 1,8 1,7 1,3 1,2 1,0 1,0 2 0,8 0,2 0

The highest rates for freight trains are in force in the Baltic states, which is attributable to the specific nature of the local infrastructure: the majority of lines are broad-gauge and the permissible axle load is higher than in other countries. In Poland, rates for freight trains are high when compared with most other countries; however, the average load (tonne-km per 1 train-km) is, next to the Baltic states and Finland, the highest in Europe. Higher rates are in force in Switzerland. These are, however, balanced by the high fees paid by road carriers for access to road infrastructure. In Norway, in 2016, the rates applied only to the heaviest trains, and in Spain the rates are below the direct cost.

5. Rolling stock

5.1. The structure of the rolling stock of standard-gauge passenger railway undertakings

In 2017 the number of traction vehicles at the disposal of passenger railway undertakings dropped in comparison to 2016. However, the number of wagons increased. The data on wagons also include wagons in diesel and electric multiple units which have more than one component.

The structure of traction and wagon rolling stock managed by standard-gauge passenger railway undertakings in the years 2012-2017

year type of rolling stock 2012 2013 2014 2015 2016 2017

locomotives in total 557 538 513 474 441 429

412 398 368 331 322 320 electric locomotives

diesel locomotives 145 140 145 143 119 109

electric multiple units 1216 1261 1317 1343 1262 1279

diesel (multiple units and single unit railcars) 227 239 238 255 249 240

total passenger wagons 7516 7477 7421 7437 7147 7290

of which only in electric 3814 4068 4220 4414 4239 4418 multiple units

The number of locomotives dropped by 12 (10 diesel and 2 electric locomotives). The number of diesel railcars decreased, when compared to 2016, by 9 and amounted to 240, of which 73 were single-unit railcars. In 2017, the number of classic wagons was 2438.

The use of locomotives and EMU by standard-gauge railway undertakings in 2012-2017

90% EMU 80% locomotives 70%

60%

50%

40%

30% 65,94% 65,79% 64,50% 61,20% 61,16% 58,66% 55,94%

20% 54,02% 52,15% 51,40% 50,16% 49,02% 10%

0% 2012 2013 2014 2015 2016 2017

Changes in the number of rolling stock at the disposal of railway undertakings largely affected the increase in the utilisation ratio7. In 2017 the utilisation ratio of electric multiple units increased significantly, by more than 7 percentage points. The availability of such type of rolling stock decreased by slightly more than 1 percentage point, to 64.5%. The utilisation of locomotives was at 55.94% in 2017, which means that the upward trend from the year before continued. When compared to 2016, this ratio increased by 1.9 percentage points.

7 The utilisation ratio of rolling stock for a given year is determined using the following formula:

𝑠𝑠𝑠𝑠𝑠𝑠 𝑜𝑜𝑜𝑜 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 − 𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 𝑖𝑖𝑖𝑖 𝑎𝑎 𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦 Operated locomotives/EMU/DMU/wagons include rolling stock which was operated on a given day irrespective of the time of operation. Permanently decommissioned rolling stock and not operated for other reasons on a given day (e.g. due to periodic maintenance or repairs) is excluded.

The average age of wagons (including components of diesel and electric multiple units) in 2017 was 25.9 years (24.8 in 2016). The average age of wagons, without taking into account multiple units, was 29.3. The average age of multiple units was 25.5: with 27.5 for EMU and 10 for DMU. As regards passenger locomotives, their average age was 35.3, with 33.6 for electric and 40.5 for diesel ones. An important element connected with the development of passenger transport services is to have rolling stock which meets current expectations of passengers (air-conditioning, vacuum toilets, Internet access and space for bicycles).

A list of additional equipment in passenger rolling stock in 2017

with dedicated seats for persons with compliance vacuum air- space for disabilities (for Internet with toilet conditioning bicycles vehicles non- PRM TSI compliant with PRM TSI)

electric multiple units 50% 46% 29% 66% 22% 56%

wagons (including with and without 41% 32% 15% 13% 1% 5% compartments)

diesel multiple units 99% 84% 10% 71% 7% 95%

A large part of the passenger rolling stock is still not adapted to client requirements; however, in recent years we have observed an improvement in travel comfort when using rail transport. In electric multiple units – the rolling stock group which has the largest numbers of passengers – more than half of these vehicles are equipped with vacuum toilets (44% in 2016). A similar share of EMU, 46%, was equipped with air-conditioning (43% in 2016). In 2017 Internet access was provided in 29% of electric multiple units (24% in the preceding year). The many upgrades and extensive investments in the purchase of EMUs made over the years have resulted in increased numbers of well-equipped units of this type. Railway undertakings are announcing more investments in passenger rolling stock, which should bring about further improvement in travel comfort. As a rule, all new vehicles should be fully compliant with the requirements of the relevant TSI. Currently, EMUs comprise the group with the largest proportion compliant with PRM TSI (22%). This is, among other things, due to EMUs being easier to adapt, compared to classic wagons, to the needs of persons with disabilities and persons with reduced mobility in the case of upgrades. A significant advantage of EMUs and DMUs is in the greater share of rolling stock with spaces for bicycles (66% and 71%, respectively). Classic wagon sets are inferior in this regard. At the end of 2017, 41% of these had vacuum toilets (37% in 2016). In the case of air-conditioning, this percentage amounted to 32% (31% in 2016). At the end of 2017, 15% of classic wagons provided Internet access (14% in 2016). Spaces for bicycles were found in 13% of wagons, while in 2016, this percentage was 7%. Diesel multiple units (DMU) make up the smallest and best-equipped group among the three largest rolling stock groups. Also, it is the youngest group. 99% of vehicles are equipped with vacuum toilets, 84% with air-conditioning and 71% with spaces for bicycles. The DMUs, however, comply with PRM TSI only to a limited extent (7%), and are characterised by a relatively small percentage of vehicles providing Internet access (10% of this kind of rolling stock).

Travel time is important for travellers, which is often compared to road and air travel, competing with rail travel. As at the end of 2017, rail transport offered the possibility of travelling at a maximum speed not exceeding 160 km/h, except for a section of CMK with a speed of 200 km/h. The situation is similar for rolling stock: only a small percentage of it is adapted to speeds exceeding 160 km/h. Currently, this type of rolling stock consists of 10 locomotives, 186 wagons and 20 EMUs only.

In 2017 railway undertakings invested PLN 373.3 million in the purchase of rolling stock (the investments of Marshal’s Offices were not included in this amount). Railway undertakings procured 19 new EMUs and 8 new DMUs. Przewozy Regionalne, Koleje Dolnośląskie and Koleje Śląskie all invested in new rolling stock. An additional amount of new rolling stock was composed of 33 EMUs purchased by Marshal’s Offices, operated in 2017 by Przewozy Regionalne and Koleje Małopolskie. Railway undertakings also upgraded their rolling stock for PLN 389.3 million. 60% of this amount was allocated for the upgrade of EMUs (PLN 234.8 million), of which PLN 230.9 million was spent on the most popular EN57 sets. An increasing part of rolling stock used by railway undertakings is owned by local-government units. Local governments usually buy new electric multiple units, which are co-funded by EU funds. Local-government units own rolling stock and lend it under agreements concluded with the selected railway undertakings which provide passenger transport services within a given province. Marshal’s Offices, utilising European Funds, have greatly improved the quality of present rolling stock by purchasing modern EMU and DMU.

5.2. Meeting the interoperability requirements in terms of passenger rolling stock in 2017

Modern railway vehicles, in the perspective of a single European railway area, must meet technical and operational requirements specified in TSI. In recent years, electric multiple units have constituted the vast

majority of new and upgraded passenger vehicles. This stems from the rolling stock policies of most companies, which focus on increasing the share of fixed sets of rolling stock. Only 24 new and upgraded passenger wagons were placed in service in 2017. The total of EMUs placed in service (including new and upgraded vehicles) increased by 50% year on year.

The number of passenger wagons placed in service in 2014-2017 in terms of their compliance/non-compliance with TSI

2017 18 6

TSI compliant 2016 3

non-TSI compliant (placed in service on 2015 47 3 the basis of an authorisation of a type of vehicle not compliant with TSI)

non-TSI compliant (placed in service on 2014 150 14 the basis of an acceptance certificate)

0 50 100 150 200

Only 3 passenger wagons were placed in service in 2016 (Talgo F063 sets compliant with TSI). In 2017 only TSI non-compliant wagons were placed in service. This was largely associated with the upgrade of the existing rolling stock and the transitional period ending on 31 May 2017, which allowed their placing in service at the national level, i.e. by means of authorisations for placing in service. By 2016, most traction vehicles had been placed in service on the basis of an acceptance certificate for a rail vehicle not compliant with TSI or an authorisation of a type of vehicle. Such vehicles were designed and manufactured pursuant to national technical regulations. The trend of not applying the harmonised European requirements covered by TSI was reversed in 2017. After the transitional period, starting from 1 June 2017, all passenger rolling stock placed in service must be fully compliant with at least Loc&Pas TSI 2011. The obligation of obtaining the acceptance certificate for all rail vehicles intended for operation on the main rail network in Poland is an important step forward on the road to aligning the technical and procedural standards. As a result, every type of vehicle will be subject to verification by independent assessment bodies, which will verify the applicable essential requirements.

Issued acceptance certificates for passenger rolling stock in 2017

non-compliant with vehicles compliant with TSI TSI passenger locomotives 5 0 electric multiple units 45 39 passenger wagons 0 24

So far, vehicles non-compliant with TSI have constituted a majority in the total number of vehicles placed in service. In 2017 the numbers of vehicles compliant with TSI and those non-compliant with TSI became almost equal. All new vehicles were placed in service as fully compliant with all applicable TSI. The group of vehicles non-compliant with TSI is composed of upgraded railway vehicles, to which the interoperability

requirements apply only in respect of the upgraded part of the vehicle. The inability to adapt the vehicle during its upgrade to be fully compliant with TSI often results from design limitations. In practice, this rule results in an increase in the number of vehicles at least partially compliant with TSI requirements. In the case of passenger rolling stock, it is important for vehicles to meet the TSI requirements in respect of persons with limited mobility. Among 108 railway vehicles intended for passenger transport which were placed in service in 2017, 84 electric multiple units met the requirements of the latest TSI PRM for interoperability relating to accessibility of the Union’s rail system for persons with disabilities and persons with reduced mobility of 2014. New vehicles (45 units) were fully compliant with this TSI, while alterations were made to upgraded vehicles (39 units) resulting in their meeting the requirements in the upgraded part (Appendix F). In the case of upgraded passenger wagons, becoming compliant with TSI PRM in the upgraded respect is impossible due to design reasons associated, among other things, with the width of wagon entrance doorways.

Compliance of vehicles allowed to operate in 2014-2017 with the “Persons with reduced mobility” TSI subsystem

2017 84

2016 11 TSI PRM 2014 11 2015 70 TSI PRM 2008 2014 36

0 20 40 60 80 100

The key element of ensuring the interoperability of rolling stock is the implementation of the ERTMS/ETCS system. ETCS is part of the ERTMS (European Rail Traffic Management System) being implemented in the European Union, which is expected to ensure interoperability, i.e. the ability of trains to move freely along the rail networks of various countries (infrastructure managers) without the need to stop at borders and switch locomotives or train drivers. As a rule, every new rail vehicle allowed to operate for the first time must be equipped with the ETCS. Exceptions to this rule are described in detail in Control- Command Signalling TSI.

The rolling stock of passenger railway undertakings equipped with ETCS – as at 31 December 2016

of which purchased of which with ETCS of which with level 2 vehicles with ETCS added ETCS locomotives 0 6 6 multiple units 138 1 139

The first vehicles equipped with ETCS did not receive acceptance certificates in the area of the Republic of Poland until 2016. At the end of 2017, passenger railway undertakings had at their disposal 145 vehicles with the ETCS system. Almost all vehicles allow driving with level 2 ETCS, which enables traffic control based on continuous two-way radio transmission.

The implementation of ETCS/ERTMS brings significant economic benefits for railway undertakings, particularly those which operate vehicles reaching speeds above 130 km/h. The fitted ETCS devices allow transport at over 160 km/h and make it possible to avoid using the two-person train driver crew above 130 km/h. In the first case, this translates into a higher attractiveness of rail transport services and in the second one, it paves the way for actual savings for companies, and allows more effective planning of train drivers’ work. It should be highlighted that irrespective of the above, the ETCS system means first and foremost the development of the railway system concurrent with improvement in safety. A drawback of this system is the high cost of equipping a vehicle with appropriate devices. Railway undertakings estimate the cost of retrofitting the operated vehicles with ETCS at PLN 1.1 to 2.6 million. Also the still limited area of operation of a vehicle with the ERTMS/ETCS system enabled is another serious inconvenience. This is influenced by the rate at which the system is adopted by the infrastructure manager. Despite these inconveniences, railway undertakings plan further investments in new vehicles equipped with ETCS and retrofitting the already operational rolling stock with class A rail traffic control devices. As declared by railway undertakings, by 2023 they will have purchased or retrofitted with ETCS a total of 251 vehicles, of which 33 in 2018 already.

The implementation of the ETCS is inextricably linked to the implementation of a GSM-R radio communications system. The GSM-R digital radio channel is, next to eurobalis, one of the two track-to- train communication channels used at ETCS level 2. The implementation of a standardised radio communications system constitutes an important step on the road to the interoperability of railway lines. Currently, passenger railway undertakings have 183 vehicles equipped with GSM-R radiotelephone apparatuses. In 2018 the rolling stock of railway undertakings should include 36 more vehicles equipped with GSM-R radio. This will result from the purchase of 26 new and retrofitting 10 used vehicles with GSM-R radiotelephone apparatuses. The rate at which rolling stock is equipped with radiotelephone apparatuses supporting GSM-R should increase in 2018, which was set as the last year of operation of the 150 MHz band the radio system.

5.3. The structure of the rolling stock of freight railway undertakings

According to the date of freight railway undertakings on rolling stock at their disposal at the end of 2017, when compared to the end of 2016, a drop in the number of locomotives (by 284 units) and wagons (by 868 units) was observed.

The number of traction and wagon rolling stock managed by freight railway undertakings in the years 2012-2017

year type of rolling stock 2012 2013 2014 2015 2016 2017

locomotives in total 3,657 3,686 3,643 3,638 3,733 3,449 electric locomotives 1,445 1,501 1,478 1,484 1,517 1,419

diesel locomotives 2,212 2,185 2,165 2,154 2,216 2,030

freight wagons in total 99,879 98,106 98,643 90,754 91,717 90,849

covered freight wagons 4,563 4,397 4,141 4,053 3,995 3,831

open freight wagons 58,500 57,745 57,827 58,058 58,916 58,657

platforms 11,225 11,202 11,712 11,683 11,830 13,158

tank wagons 15,746 15,357 16,018 8,677 8,591 7,142

lidded wagons 1,238 1,220 1,220 1,256 1,388 1,253

special wagons 8,128 7,747 7,304 6,608 6,594 6,314

other freight wagons 479 438 421 419 403 494

The average age of locomotives of freight railway undertakings at the end of 2017 was 36.9 years. This value increased in relation to the preceding year by 0.8 years. The average age of wagons was 30.3 years (an increase by 0.1 years). Railway undertakings declared that they had 90,849 wagons. This also included wagons which could not be operated on tracks for various reasons, as well as wagons unregistered in Poland. Data from NVR were used to present the number and age of rolling stock registered in Poland, whose condition allows their operation on a railway line. As at 17 April 2018, the database included 88,464 wagons meeting this criterion.

Freight wagons broken down by age category

a other up to 9 years 50-59 years 189 pcs. 4 143 pcs. 1 435 pcs. 0.2% 5% 2%

10-19 years 7 806 pcs. 40-49 years 9% 17 325 pcs. 20% 20-29 years 14 400 pcs. 16%

30-39 years 43 166 pcs. 49%

Freight wagons by production date – in ascending order by share

production years number share age

2008-2017 4143 5% max. 9 years

1998-2007 7806 9% 10-19 years

1988-1997 14,400 16% 20-29 years 1978-1987 43,166 49% 30-39 years

1968-1977 17,325 20% 40-49 years

1958-1967 1435 2% 50-59 years

older 189 0.2% other- older

The presented data indicate a small share of new rolling stock in freight railway undertakings. 86% of freight rolling stock comprises vehicles which are more than 20 years old. In 2017 the utilisation ratio increased to 48.4% (44.2% in 2016). This means that despite such vehicles becoming older and older, the effectiveness of their use and work organisation is improving. As declared by railway undertakings as at 31 December 2017, 1,269 were permanently or temporarily out of operation (36.8% of the total – a decrease by 1.4 percentage point). In 2017, the utilisation of freight wagons remained decreased by 3.1 percentage points to 71.9%.

The use of locomotives and wagons in the years 2011-2017 by daily stock

90%

80%

70%

60%

50% freight wagons 40% locomotives 77,02% 76,72% 75,94% 75,76% 74,98% 73,98%

30% 71,91%

20% 51,18% 48,36% 48,03% 45,52% 44,56% 44,16% 44,14%

10%

0% 2011 2012 2013 2014 2015 2016 2017

5.4. The compliance with the rolling stock interoperability requirements in 2017

Freight vehicles constitute a significant part of the entire rolling stock operated in Poland. Freight wagons make up approximately 85% of all vehicles registered in the National Vehicle Register (NVR). Freight wagons which meet the requirements of the TSI Freight Wagons can move within the entire EU’s network, including TSI non-compliant infrastructure. Therefore, the vast majority of new freight wagons are manufactured as compliant with TSI.

The number of freight wagons authorised for operation in the years 2013-2017

TSI-compliant ("Freight wagons" 2017 2001 and "Noise")

2016 77 1 TSI non-compliant (placed in service 2015 47 15 on the basis of an authorisation of a type of vehicle not compliant with 2014 254 16 TSI) TSI non-compliant (placed in service 2013 290 on the basis of an acceptance certificate) 0 100 200 300 400

The average age of the freight wagons entered in the National Vehicle Register is considertable: in 2017 it was 30.3 years. Investment processes in this rolling stock group see no dynamic progress. Only 21 wagons were authorised for operation last year. Except for one historic vehicle, all vehicles met the requirements set in TSI. The considerable age of freight wagons is an important risk for the competitiveness of in view of the plans to revise the Noise TSI, which will result in all existing wagons being covered by the requirements of this TSI. This aspect is discussed more extensively in Chapter 5.5. 44 new and upgraded locomotives were placed in service in 2017. The vast majority (39 vehicles) were locomotives intended only for freight traffic. 33 locomotives were fully compliant will the requirements of all the applicable European technical specifications. Railway undertakings in 2017 were in possession of 25 locomotives equipped with ETCS, over 50% of which had been purchased by PKP Cargo. The degree of the ERTMS/ETCS implementation in vehicles held by freight railway undertakings is low. This results from the fact that these vehicles are not operated at speeds of 130 km/h and higher (the prevailing speed ranges from 80 to 100 km/h) – above this limit, it is possible to avoid using the two-person train driver crew, which constitutes a marked economic benefit. However, equipping locomotives with ERTMS/ETCS is beneficial also for freight railway undertakings. Such investments improve rail traffic safety, guarantee the interoperability of these vehicles and enable their use across the networks managed by entities from other EU Member States. The numbers of locomotives used for freight traffic with GSM-R radio apparatuses increased. GSM-R radio systems are crucial for the high quality of radio communications, which substantially impacts on the safety level. At the end of 2017, freight railway undertakings had at their disposal 155 locomotives equipped with GSM-R radio apparatuses. In 2018 this number should grow by 60 vehicles equipped with GSM-R radio, of which 59 are existing vehicles.

5.5. Noise TSI – requirements to be met by rolling stock

Work associated with the revision of Noise TSI was one of the relevant aspects influencing the functioning of the rail market in 2017. Reducing rail noise, generated mainly by freight transport, is one of the priorities in the most densely populated countries of the European Union (Germany, the Netherlands) and Switzerland. Recognising this problem, at the end of 2015 the European Commission published a working document analysing the possible scenarios for further action at the EU level. An option to revise Noise TSI was selected for implementation, taking advantage of the new legal possibilities offered by Directive 2016/797. Pursuant to Article 4 (3) (h) Technical Specifications for Interoperability indicate the laws applicable to the existing subsystems and vehicles, which paves the way for the introduction of an obligation to adapt all vehicles to TSI to a certain extent within a set term, and not only those subject to upgrading and renewal, as it has been the case thus far. Work on amending Noise TSI to adapt the existing freight wagons to its requirement started in 2016 under the European Union Agency for Railways (EUAR). This work was particularly intensive in 2017. The aim of the revision of Noise TSI was to reduce the level of noise generated by passing trains in the most densely populated areas and with the busiest train traffic. Accordingly, a concept of so-called quiet sections emerged. These are the sections of railway lines on which only freight wagons meeting the TSI pass-by noise requirements can move. The present draft TSI submitted to the European Commission expects that the quiet sections will be set on line sections with a minimum length of 20 km, which are passed at night time (between 10 pm and 6 am) by more than 12 freight trains.

Railway lines passed by more than 12 trains at night time (data from PKP PLK)

In the case of Poland, such-formulated criteria translate into the determination of quiet sections of freight routes in the country, including the coal main line along the Wrocław – Katowice route, or in a series of railway lines in Silesia, including the cross-border connections in the Czech Republic. As a result, the owners of the vast majority of freight wagons will be forced to adapt them to the new requirements, as it will be extremely difficult or even impossible to route trains, excluding the above-mentioned lines. The necessity of adapting the vast majority of freight wagons to the requirements of Noise TSI would be a heavy burden for railway undertakings and wagon owners. In economic terms, the most viable solution to reduce the noise generated by the existing wagons is to replace cast iron brake blocks with composite ones. During braking, composite brake blocks polish the running surface of the wheels, reducing its roughness, which translates into a reduction in noise generated during movement. This solution is relatively cheap, since it only requires the replacement of brake blocks. For some types of freight wagons, however, the application of this solution requires replacing the wheels or reconstructing the braking system, which drastically increases the cost of the whole operation – by up to seven times per wagon. As estimated by the Ministry of Infrastructure and Construction and the Office of Rail Transport in 2017, the problem of increased costs of adapting the wagons to the new requirements may apply to as many as 62,500 freight wagons of the following types:

• with wheels with tyres; • with brake blocks located on only one side of the wheel (1Bg or 1Bgu configuration); • intended for movement at 100 km/h, equipped with “ss” brake (so-called S2 brake according to TSI and UIC leaflets);

• intended for movement at 120 km/h. The overall market costs associated with adapting the entire rolling stock of freight wagons in Poland may reach PLN 2 bn.

In order to reduce these costs, Poland’s representatives strongly promoted among EU’s institutions solutions which would be favourable for our country. These efforts culminated with Poland being awarded the so-called special case status, allowing the operation of the aforementioned types of wagons in Poland, also in the line sections specified as quiet sections, until the end of 2036. It was also possible to negotiate an extended deadline for the entry into force of the new regulations – by 8 December 2024 (the entry into force of the 2024/2025 timetable). From that day onwards, only freight wagons compliant with Noise TSI will be able to move on lines designated as quiet sections (excluding wagons to which the special case status applies – these will be able to run on all lines in Poland). Work on revising Noise TSI will be continued in 2018 at the European Commission level. The final version of TSI should be announced in November 2018 after the vote of the Railway Interoperability and Safety Committee. According to the present timetable, the revised Noise TSI should be published in the Official Journal of the European Union in the 1st half of 2019. The Polish rail transport market should start preparing to these changes already. It is likely that almost all freight wagons to which the specific case for Poland does not apply will have to be fitted with composite brake blocks before 8 December 2024. This obligation can only be avoided if the wagons are operated outside the railway lines designated as quiet sections. Their list will be made available in the second half of 2019, which will make it possible for railway undertakings to perform pertinent analyses of their transport services and locate quiet sections. As a rule, however, the quiet sections will be located on the lines with the highest volume of freight traffic, which is why it will not be easy, and sometimes even impossible, to route a train excluding them. As a result, only a limited pool of freight wagons permanently operated outside the largest industrial centres and the key freight lines will be allowed for operation on the existing rules. When making decisions in this respect, it is worth taking into account that wagons which do not meet the Noise TSI requirements will not be allowed for flexible operation throughout the EU rail network when needed, which can generate additional costs and operation-related problems in the future.

5.6. The market of owners and keepers according to the data from the National Vehicle Register (NVR)

Passenger and freight railway undertakings are not always the owners or keepers of the rolling stock they use. Pursuant to the Rail Transport Act, a keeper is an entity which is the owner of the railway vehicle or has the right to use it as a means of transport, entered into the NVR. One should keep in mind that the status of the keeper is not synonymous with the entity which operates the rolling stock. It means the entity entered into the NVR which is responsible for the railway vehicle and decides on how it is used and what entities can use it. The keeper is responsible, among other things, for maintaining the keeper’s register8. This situation makes it possible for some railway undertakings to conduct transport operations despite the lack of rolling stock for which they would be responsible. In the case of rolling stock being maintained in a good technical condition, any competent entity that holds an ECM certificate, i.e. an entity in charge of maintenance, may be regarded as responsible. The certificate is ascribed to the rolling stock in NVR. Therefore, other railway undertakings may be actually using the vehicle; however, the keeper should be aware of this. Analysing data from the NVR is one of the possible ways of examining the market of owners and keepers of vehicles operated in Poland. The register specifies basic data on the operated vehicles, such as

8Pursuant to the Regulation of the Minister of Transport, Construction and Maritime Economy of 3 January 2013 on the manner of maintaining a register of and marking railway vehicles.

information about the owners, keepers and entities in charge of maintenance (ECM). National vehicle registers are established to provide national safety authorities and rail market players with access to key information on railway vehicles operated in EU Member States. Based on these data, it is possible to determine the many forms of rolling stock ownership as well as the substantial number of keepers whose vehicles have been entered into the register.

The ownership structure of vehicles registered in the NVR indicates the existence of several groups of vehicle owners. As declared by the keepers, the owners of the largest number of vehicles that have valid registrations are freight railway undertakings, followed by passenger railway undertakings, other entities and public transport organisers. The other category of entities includes entities belonging to the Europe’s largest rolling stock leasing companies, logistics operators, as well as capital groups incorporating companies of railway undertakings which use rolling stock owned, for example, by the main company. This category also includes companies which provide rolling stock leasing services, manufacturing plants and small entrepreneurs providing rental services. In addition, as a result of the changes on the passenger railway undertaking market and the establishment of local-government railway undertakings, the volumes of rolling stock owned by public transport organisers is increasing. According to data from the NVR, they own more than 1,100 vehicles (this value applies also to multiple units, for which every component means a separate vehicle in the NVR database). As regards railway undertakings providing freight and passenger transport services, the data were included in the group of freight railway undertakings.

The structure of rolling stock owners according to data from NVR – number of units and percentage share

Public transport Other organisers 1083 18601 1% 17%

Passenger railway undertakings Freight railway 6848 undertakings 80786 7% 75%

While rolling stock owners are often entities which are not associated with the rail sector, the rolling stock keepers are usually railway undertakings or entities which provide rolling stock rental services.

The structure of rolling stock keepers – number of vehicles and share

Passenger railway undertakings 8539 8% Other 14429 13%

Freight railway undertakings 84350 79%

Passenger railway undertakings have at their disposal more vehicles than the ownership structure would suggest. This is because Przewozy Regionalne and individual railway undertakings in provinces are the keepers of vehicles owned by Marshal’s Offices.

The other group also includes infrastructure managers whose vehicles have been entered into the NVR. These are usually special vehicles, including semi-trailers, draisines and other track machines.

The number of rolling stock keepers based on the NVR including vehicle numbers

rail market entities number of entities number of keeper’s vehicles

freight railway undertakings 62 8,539

passenger railway undertakings 11 84,350 other 159 14,429

Number of units of a given rolling stock type

type of vehicle number passenger vehicle 3,342

special vehicle 3,891

freight vehicle 91,090

traction vehicle 8,995 total 107,318 Data from the register also reflect the number of units of a given rolling stock type. In the case of passenger vehicles, these include passenger wagons as well as special wagons such as restaurant wagons and sleepers. There were 3,342 such vehicles in the register. In the case of freight vehicles, this means all types of wagons, i.e. 91,090 units. The number of traction vehicles, including diesel and electric locomotives and elements of multiple units, was 8,995.

LIST OF TABLES

List of organisers and operators with concluded contracts ...... 11 The number of passengers (in thous.) in particular categories of services in the years 2015-2017 ...... 29 The services of railway undertakings by categories and types of transport in 2017 ... 32 The share of the number of passengers in ticket distribution channels in 2017 and 2016 ...... 33 The punctuality of passenger railway undertakings in 2016-2017 and in the respective quarters of 2017 (delays above 5 minutes on arrival) ...... 36 Main groups of goods transported by freight railway undertakings in 2017 ...... 45 The volume of transported weight of goods by groups of goods (in thousand tonnes) and market shares in 2017 ...... 46 Transport performance by groups (in thousand tonnes) and market shares in 2017 .. 49 The structure of the freight transport market according to the weight transported in Poland in 2013-2017 – data for railway undertakings above 0.5% as at the end of 2017...... 58 The structure of the freight transport market according to transport performance in Poland in 2013-2017 – data for railway undertakings above 0.5% as at the end of 2017...... 59 A list of undertakings engaging in intermodal rail transport in the years 2008-2017 . 72 Planned KPK expenditure over the years by target financing sources (PLN bn) ...... 102 The largest investments of PKP PLK by outlays planned for 2017 ...... 103 The plan and performance of PKP PLK work in 2017 (in material terms) ...... 103 Major agreements signed in 2017 (PLN million) ...... 104 Agreements signed in 2017 by programme and type (PLN bn) ...... 104 The largest projects which started construction works in 2017 (PLN million) ...... 105 Major construction work tender procedures announced in 2017 (PLN million) ...... 105 The structure of traction and wagon rolling stock managed by standard-gauge passenger railway undertakings in the years 2012-2017 ...... 113 A list of additional equipment in passenger rolling stock in 2017 ...... 115 Issued acceptance certificates for passenger rolling stock in 2017 ...... 117 The rolling stock of passenger railway undertakings equipped with ETCS – as at 31 December 2016 ...... 118 The number of traction and wagon rolling stock managed by freight railway undertakings in the years 2012-2017 ...... 120 Freight wagons by production date – in ascending order by share ...... 121 The number of rolling stock keepers based on the NVR including vehicle numbers . 129 Number of units of a given rolling stock type ...... 129

LIST OF FIGURES

Fig. 1. The share of public and commercial transport services in the number of passengers transported, transport performance and operational performance in 2017 ...... 13 Fig. 2. The number of passengers in passenger rail transport in the years 2008-2017 (standard- gauge transport) ...... 15 Fig. 3. Transport performance in passenger rail transport in the years 2008-2017 (standard- gauge transport) ...... 15 Fig. 4. Operational performance in passenger rail transport in the years 2008-2015 (standard- gauge transport) ...... 16 Fig. 5. The number (in m) and share (in%) of checked-in passengers in respective provinces in 2017 ...... 16 Fig. 6. The number of trips per 1 resident of the Province in 2012-2017 ...... 17 Fig. 7. Data on major passenger stations in Poland in 2017 ...... 20 Fig. 8. The number of licensed railway undertakings authorised to provide transport services and actually operating on the rail market in the years 2008-2017 ...... 21 Fig. 9. The market share of passenger transport undertakings by the number of passengers in 2017 ...... 22 Fig. 10. The share of railway undertakings in the passenger transport market in 2013-2017 by the number of passengers ...... 23 Fig. 11. The market share of passenger railway undertakings by transport performance in 2017 ...... 24 Fig. 12. The passenger transport market structure by transport performance in Poland in 2013-2017 ...... 25 Fig. 13. Employment in the passenger transport sector in the years 2010-2017 ...... 26 Fig. 14. Employment structure at passenger railway undertakings in 2017 ...... 26 Fig. 15. The business performance of passenger railway undertakings (in PLN bn) in the years 2009-2017 ...... 27 Fig. 16. The percentage share of selected costs of the activities of passenger railway undertakings in the total operating costs in 2017 ...... 27 Fig. 17. The share of liquid fuels and traction energy by the purchase costs of passenger railway undertakings in 2017 ...... 28 Fig. 18. The share of companies by the number of passengers in province trains in 2017 and 2016 in PLN m ...... 29 Fig. 19. The number of passengers transported in international trains, including cross-border trains in 2017 and 2016 (in thous. passengers) ...... 31 Fig. 20. The share of the number of passengers by ticket types (single, season and other) in 2017 ...... 32 Fig. 21. The share of the number of passengers by ticket types (normal, discounted and other) in 2017 ...... 33

Fig. 22. The share of distribution channels in the total number of tickets sold by the number of passengers in 2017 ...... 34 Fig. 23. The punctuality of passenger railway undertakings in 2017 (indicating the change in relation to 2016) ...... 35 Fig. 24. Summary of data on the Polish passenger transport market in 2017 ...... 37 Fig. 25. The evolution of passenger transport in 2017 in European countries ...... 38 Fig. 26. Rail usage rate in 2017 in European countries ...... 40 Fig. 27. Cargo weight in freight rail transport in the years 2010-2017 (standard-gauge transport) ...... 42 Fig. 28. Transport performance in freight rail transport in the years 2010-2015 (standard- gauge transport) ...... 43 Fig. 29. Operational performance in freight rail transport in the years 2010-2017 (standard- gauge transport) ...... 43 Fig. 30. The evolution of raw material transport by transported weight in 2017/2008 (in comparison to 2007) ...... 44 Fig. 31. The share of transported groups of goods by weight in 2015-2017 ...... 48 Fig. 32. The share of transported freight groups by transport performance in the years 2015- 2017 ...... 50 Fig. 33. Transport volume changes involving particular groups of goods in 2017 ...... 51 Fig. 34. The average commercial speed of all freight trains and of intermodal trains in Poland in km/h in the years 2012-2017 ...... 52 Fig. 35. The average commercial speed of freight trains in selected IRG-Rail countries in 2016 (km/h) ...... 53 Fig. 36. The average timetable speed of freight trains in selected EU countries in 2016 (km/h) ...... 54 Fig. 37. The number of licensed railway undertakings authorised to provide transport services and operating on the rail market in the years 2008-2017 ...... 56 Fig. 38. The market share of the largest railway undertakings by weight of transported goods as at the end of 2017 ...... 56 Fig. 39. The market share of the largest railway undertakings by transport performance as at the end of 2017 ...... 58 Fig. 40. Employment in freight transport in the years 2010-2017 ...... 59 Fig. 41. Employment structure at freight railway undertakings in 2017 ...... 60 Fig. 42. The business performance of freight railway undertakings (in PLN bn) in the years 2008-2017 ...... 60 Fig. 43. The percentage share of selected costs of the activities of railway undertakings in the total operating costs ...... 61 Fig. 44. The percentage share of electrical energy and fuel costs in energy consumption costs in 2017 ...... 61 Fig. 45. The weight of transported goods in domestic and international transport in the years 2012-2017 ...... 62

Fig. 46. Transport performance in freight transport in domestic and international transport in the years 2012-2017 ...... 62 Fig. 47. Railway undertakings' share in international transport in 2017 by weight (over 1.0%) 63 Fig. 48. The railway undertakings' share in international transport in 2017 by transport performance (over 1.0%)...... 64 Fig. 49. The structure of goods transported internationally in 2017 ...... 65 Fig. 50. Transported weight (in thousand tonnes) in China-Poland international transport in 2013-2017 ...... 66 Fig. 51. Transport performance (in thousand tonne-km) in China-Poland international transport in 2013-2017 ...... 66 Fig. 52. Basic information on the importance of selected locations for rail transport ...... 67 Fig. 53. Intermodal rail transport in Poland (in thousand tonnes) ...... 73 Fig. 54. Intermodal rail transport in Poland (in thousand tonnes) ...... 74 Fig. 55. Intermodal rail transport in Poland (in thousand pieces) ...... 75 Fig. 56. Intermodal rail transport in Poland (in thousand TEU) ...... 75 Fig. 57. The share of railway undertakings in the intermodal transport market by weight in 2017...... 77 Fig. 58. The share of railway undertakings in the intermodal transport market by transport performance in 2017 ...... 77 Fig. 59. Transport share of international transport in intermodal transport in 2017 ...... 78 Fig. 60. The average distances covered by intermodal transport in the years 2013-2017 ...... 78 Fig. 61. The share of specific types of transport units in 2017 ...... 79 Fig. 62. Selected China-Europe rail connections ...... 80 Fig. 63. The share of transport of particular groups of dangerous goods in 2017 (by weight) .... 82 Fig. 64. The share of transport of particular groups of dangerous goods in 2017 (by transport performance) ...... 82 Fig. 65. The volume and share of rail and road transport in transport performance in the transport of dangerous goods ...... 83 Fig. 66. Summary of data on the Polish freight transport market in 2017 ...... 84 Fig. 67. The evolution of freight transport in 2017 in European countries ...... 87 Fig. 68. Employment in infrastructure managers in the years 2008-2017 ...... 90 Fig. 69. The operating performance of infrastructure managers (in PLN bn) in the years 2008- 2017 ...... 90 Fig. 70. The structure of railway lines operated in Poland in 2017 by gauge ...... 91 Fig. 71. The structure of railway lines operated in Poland in 2017 by electrification level ...... 92 Fig. 72. The structure of railway lines operated in Poland in 2017 by importance ...... 92 Fig. 73. The structure of railway lines operated in Poland in 2017 by number of tracks ...... 93 Fig. 74. The structure of railway lines operated in Poland in the years 2015-2017 by maximum speed ...... 94

Fig. 75. The structure of railway lines operated in Poland in the years 2015-2017 by permissible axle load (in kN) ...... 94 Fig. 76. The average cost of train-km for the minimum access to PKP PLK infrastructure from the 2008/2009 timetable to the 2017/2018 timetable ...... 106 Fig. 77. The RFC5 and RFC8 transport corridors (prepared by Rail Net Europe) ...... 107 Fig. 78. Rail traffic intensity in IRG-Rail countries in 2016 (number of passenger and freight trains on average per 1 km of network per day) ...... 109 Fig. 79. The length of high-speed lines in Europe enabling travel at ≥ 200 km/h in sections or entire lines – as at the end of 2017 (in km) ...... 110 Fig. 80. The average charges for the railway infrastructure minimum access package for passenger trains in 2016 in IRG-Rail countries (in euro per train-kilometre) ...... 111 Fig. 81. The average charges for the railway infrastructure minimum access for freight trains in 2016 in IRG-Rail countries (in euro per train-kilometre) ...... 112 Fig. 82. The use of locomotives and EMU by standard-gauge railway undertakings in 2012- 2017 ...... 114 Fig. 83. The number of passenger wagons placed in service in 2014-2017 in terms of their compliance/non-compliance with TSI ...... 117 Fig. 84. Compliance of vehicles allowed to operate in 2014-2017 with the “Persons with reduced mobility” TSI subsystem ...... 118 Fig. 85. Freight wagons broken down by age category ...... 121 Fig. 86. The use of locomotives and wagons in the years 2011-2017 by daily stock ...... 122 Fig. 87. The number of freight wagons authorised for operation in the years 2013-2017 ...... 123 Fig. 88. Railway lines passed by more than 12 trains at night time (data from PKP PLK) ...... 124 Fig. 89. The structure of rolling stock owners according to data from NVR – number of units and percentage share ...... 128 Fig. 90. The structure of rolling stock keepers – number of vehicles and share ...... 128