Global Railway Business Overview for Q1 2020
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IEC INTERNATIONAL GLOBAL RAILWAY BUSINESS OVERVIEW OF MAJOR RAIL EVENTS I QUARTER 2020 EXECUTIVE SUMMARY Business health In Q1 rail business activity was close to normally observed in Q1 of other years. 01 Most active sectors: rolling stock production and procurement (mainly passenger) and urban transport development projects. Investments and financing Huge railway investments for a period up to 10 years totaling approx. €281 bn were announced, including international and national financing. 02 COVID-19 impact By the end of Q1 the spread of COVID-19 resulted in new international 03 benchmarks and calls for support. A comprehensive support programme proposed only by the USA. Limited international strategic cooperation in Q1. Q1 = I QUARTER 2020 2 CONTENTS SCOPE OF OVERVIEW GEOGRAPHY OF GLOBAL RAILWAY BUSINESS IN Q1 2020 RAIL INVESTMENTS AND FINANCING INTERNATIONAL INITIATIVES AND PARTNERSHIPS RAIL PERSONS RAILWAY SECTORS COVID-19 RESPONSE 3 SCOPE OF OVERVIEW Investments Strategies Major international and national investments. International and national initiatives. Financing from development banks Corporate strategies of railway companies. supranational organizations. Private Business development via M&A or new investments of rail companies. subsidiaries. Technologies Passenger New technologies and digital solutions for High speed, long-haul and suburban railway railways. Cooperation with non-rail passenger transportation. Services, routes technological companies. Innovations. and contracts. Station management. Construction Urban Construction, modernization and upgrade of Development of urban transportation: rail, rail infrastructure classified by cycles of metro, tram. project. Rolling stock Freight Rolling stock production and procurement. Railway freight transportation development. Passenger, freight and urban transportation News from logistics hubs. needs. SOURCES: 1. RAIL SECTOR MEDIA. 2. OFFICIAL INTERNET SITES OF RAILWAY COMPANIES AND ORGANIZATIONS. FOR Q1 MORE THAN 120 KEY EVENTS ARE CONSIDERED. THIS IS YET A NON-EXHAUSTIVE LIST. FOR ADDITIONAL INFORMATION AND ANALYSIS YOU MAY CONTACT IEC TEAM. 4 GEOGRAPHY OF GLOBAL RAILWAY BUSINESS 2020 Q1. TYPES OF PROJECTS EU COUNTRIES NORTHERN EUROPE EASTERN EUROPE* CENTRAL ASIA EASTERN ASIA OUTHERN SIA NORTHERN AMERICA S A WESTERN ASIA SOUTHEASTERN ASIA WESTERN AFRICA SOUTHERN EUROPE SOUTH AMERICA NORTHERN AFRICA EASTERN AFRICA AUSTRALIA AND NEW ZEALAND INVESTMENTS NEW URBAN FREIGHT Q1 NEW SERVICES PLANS AND FINANCING TECHNOLOGIES TRANSPORT TRANSPORT ALREADY SUSPENDED DUE TO COVID-19 *including Russia, all countries considered as by UN Geoscheme, except for EU BUSINESS CONSTRUCTION, PASSENGER ROLLING / TEMPORARY SERVICES first symbol represents dominant types of activities, others in random order DEVELOPMENT UPGRADE TRANSPORT STOCK FOR COVID-19 PANDEMIC 5 GEOGRAPHY OF GLOBAL RAILWAY BUSINESS 2020 Q1. NUMBER OF PROJECTS 42 9 EU COUNTRIES 9 CENTRAL ASIA 9 EASTERN ASIA 9 EASTERN EUROPE 5 NORTHERN AMERICA 4 GLOBAL / INTERNATIONAL 4 EASTERN AFRICA 20 SOUTHERN ASIA OTHER NUMBER OF PROJECT INCLUDES INITIATIVES, NEW STRATEGIC DOCUMENTS AND INVESTMENT DECISIONS. 6 RAIL INVESTMENTS AND FINANCING INVESTMENT MIX (BY NUMBER OF PROJECTS) ORGANIZATIONS EUR 1.4 billion investment package which will EU countries support 14 large infrastructure projects in seven Member States; World Bank credits in Croatia 20 11 (upgrade) Central Asia Development banks Supranational financing* 4 CAREC Transport Strategy 2030: 8 projects 3 3 7 3 Northern America National programmes in the USA National investments 4 Eastern Asia CAREC Transport Strategy 2030: 3 projects 8 *Mainly EU. Also considered development banks providing EIB and EBRD investments in Tunisia and Cairo, financing following supranational decisions Northern Africa including rolling stock procurement 13 TYPES OF FINANCING Southern Europe EU investments in non-EU countries EIB investments in India (urban) ; ADB investments 2 Interstate loans Other in Bangladesh (upgrade); National programme in New Zealand (upgrade) 3 Subsidies 14 Grants Calculated by the number of announced project in Q1 2020 19 Bank credits RAIL INVESTMENTS AND FINANCING MAJOR PROVIDERS OF INVESTMENTS AND FINANCING IN Q1 2020 (BY VOLUMES OF FINANCING) EU USA CAREC (ADB) TOTAL VALUE OF ANNOUNCED PROJECTS* 53% 38% 5% € 281 bn *non-exhaustive, as officially announced in Q1 2020; Includes investments of financing institutions and national investments. KEY FACTS In the EU supranational programme of the European Commission is combined with large-scale national investments. The EU investments are likely to be stable and unchangeable despite unfavorable economic context. The important share of the U.S. financing refers to national projects and especially support (COVID Rensponse Bill). Without these support measures the share of U.S. would reach 2% and the share of EU would raise up to 78%. CAREC Transport strategy is in Q1 2020 the only macroregional investment tool, but the parameters of some projects are not defined, so they are more likely to be review under macroeconomic pressure. 8 RAIL INVESTMENTS AND FINANCING. NATIONAL PROGRAMMES EU AND NORTHERN EUROPE NORTH AMERICA AUSTRALIA AND NEW ZEALAND GERMANY: LuFV III railway operating and financing agreement USA: COVID Response Bill aimed at support of different NEW ZEALAND: governmental subsidies for running – the largest investment programme for infrastructure transport, also mass transit and Amtrak. infrastructure modernization and upgrade. maintenance and upgrade (Deutsche Bahn AG). Cost: $114 bn for rail and mass transit. Period: from 2020 Cost: 1,1 bn NZ dollars (approx. €611 m). Cost: €86 bn. Period: 2020-2030. Period: 2020-2025. CRISI Program to improve the safety, efficiency, and DENMARK: The European Commission has concluded that reliability of intercity passenger and freight rail systems. Denmark’s public financing model for the Fehmarn Belt rail and Rural projects, which have a minimum of 25 per cent funding road tunnel to Germany is compatible with EU state aid rules. requirement under the CRISI Program, received nearly 50 Cost: €9,3 bn (max approved). Opening: 2028. per cent of the funds. Cost: $248,5 m. UK: HS2 construction – continuation approved by Prime Minister. Federal Transit Administration (FTA) provided a $790 m Cost: £62-69 million (not included in estimations of rail grant, while $ 629.5 m was approved by the U.S. investments) Department of Transport through the Build America Bureau construct an LRT extension in Washington till 2024. 9 INTERNATIONAL INITIATIVES AND PARTNERSHIPS Rail passenger transport initiatives Main focus on COVID-19 pandemic + digital PASSENGER 1) UIC COVID-19 Task Force. Rail freight transport intiatives 2) UITP Guidelines for public transport operators. 3) Calypso Networks Association and OSPT FREIGHT EU legislative intiiatives. Alliance joint programme on open ticketing. 1) European Green Deal (call rfom 15 organizations). 2) Amendment proposal of the Combined Transport Directive (withdrawal). Vairous transport initiatives and programmes 1) CAREC Transport Strategy 2030 (Central and Eastern Asian countries). Rail industry transport intiatives 2) UIC Working programme 2020-2022. 3) Netherlands’ proposal to develop a Pan-European EU Industrial strategy. RAIL network of passenger corridors. INDUSTRY 4) ALLRAIL, CER, ERFA, UIC and UIRR joint letter o VARIOUS the European Commission calling for concrete PARTNERSHIPS measures to face the COVID‐19 pandemic and its 1. MOU OF THE UKRANIAN MINISTRY OF TRANSPORT WITH DEUTSCHE BAHN AG COVERING economic consequences CO-OPERATION IN THE TRANSPORT SECTOR AND THE DEVELOPMENT OF NATIONAL RAILWAY UKRZALIZNYTSIA. 2. UIC AND IATA AGREEMENT TO FACILITATE TICKETING, RESERVATIONS AND OTHER ISSUES 3. AGREEMENT BETWEEN TANZANIA-ZAMBIA RAILWAY AUTHORITY AND COPPERBELT UNIVERSITY TO ESTABLISH A JOINT EDUCATIONAL CAMPUS 10 RAIL PERSONS SWEDEN Monica Lingegård appointed as CEO of SJ AB POLAND Krzysztof Zdziarski appointed as CEO of PESA BELGIUM ÖBB’s CEO Andreas Matthä appointed as CER President FRANCE New management structure in SNCF Rail passenger transportation Organization Urban transportation Various (railway holding) 11 RAIL SECTORS. RAIL INFRASTRUCTURE CONSTRUCTION AND UPGRADE RAIL COMPANIES LEVEL POLAND: Polish-Chinese consortium to modernise the 71 km line between LITHUANIA: JV of Eurovia CS, Eurovia Czyżew and Białystok Lietuva and UAB Geležinkelio Tiesimo Centras to modernise and double track Livintai – Gaižiūnai section ALBANIA: HSH has awarded a consortium of Spanish companies Ardanuy Ingeniería and Metrotenerife and their At the level of rail companies, as usually in Q1, rail local partner SIM a four-year infrastructure construction and upgrade sector was contract to support the tendering and management to not active in Q1 2020. upgrade Tiranë Public Transport Terminal and Durrës In Europe infrastructure construction process are line and the construction of a branch to the international linked to TEN-T development, mainly Rail Balltic airport at Rinas in Q1 2020. UAE: JV of L&T Construction and TANZANIA, ZAMBIA: Standard Power China International get a Despite the pandemic, Chinese construction Gauge Railway project continues and contract to design, build and soon will launch international tender commission seven freight handling companies got new contracts signed outside China. procedure for the construction of facilities on Stage 2 of the national Isaka – Mwanza line rail network. 12 RAIL SECTORS. PASSENGER TRANSPORTATION UK: cross-Channel high speed