Tuesday 5 October 2010

Workshop on “Economic Evaluation of ERTMS” : The study “ERTMS Benchmark on Costs” presented at UIC headquarters in Paris on 28 September 2010

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The results of the UIC study were presented by the Project Manager, Paolo de Cicco. The first task was to establish a uniform cost methodology. 15 European countries actively contributed to the project on a regular basis and had enabled the achievement of a critical mass of information with 20 ERTMS implementations in three different benchmark pools: ERTMS/ETCS L1 trackside subsystem; ERTMS/ETCS L2 trackside subsystem; and ERTMS/ETCS On-board subsystem.

Average LCC costs paid by implementers per on-board unit (OBU) was 430 K€, 135 K€ per km of double track for level 1 and 575 K€ per km of double track for level 2.

Shares varied from 15-19% for Research and Development (R&D), 62-66% for Investment, and 15-23% for Operations and Maintenance regarding Rolling stock, level 1and level 2 respectively.

This meant that 60% of the total cost was to be invested within the first year. This unbalanced situation explained the reluctance of investors.

The European ERTMS Coordinator represented by Christian Faure, from the European Commission, was asked a number of questions by participants. He saw the success of ERTMS as being dependent on good cooperation between suppliers and infrastructure managers. Mr Faure confirmed that the Commission believed that ERTMS financing should not rely on subsidies but instead on good business cases, which represented the best incentive for new implementers. The railway industry was of the same opinion but customers complained that the price should be decreased to allow for bigger tenders, whereas the industry was asking its customers to increase tenders first.

Jean-Marc Dupas, General Manager of Belgorail, representing NB RAIL – the group of Notified Bodies (NoBos) which deliver EC conformity assessments – confirmed that free competition among NoBos could help to reduce the cost of certification.

The European Railway Agency represented by Martin Schroeder, Project Officer, declared that it was also interested in acquiring data and results from UIC for its own database, DREAM.

Mr Hase from Deutsche Bahn AG highlighted the importance of supporting an “open source software” approach, as this was one important way of reducing the costs and improving the safety of the ERTMS system, which was to be understood as a pure software system.

A number of participating infrastructure managers noted that the objectives shared by many stakeholders, such as reducing specific national developments and other local adaptations of ERTMS, were not easy to achieve due to the complex reality of ERTMS implementation.

A proposal was made by a German participant to work on a modular frame contract to allow suppliers’ offers to be compared. Such a frame contract was currently being designed by DB AG.

Some participants, mainly from the railway industry, were of the opinion that there was no real competition in ERTMSbusiness.

David Gillan, General Manager UNISIG and Emmanuel Brutin, Senior Public Affairs Manager from UNIFE (the railway industry association) stated they were doing a lot to reduce prices but that business cases outside Europe demonstrated – according to them – that only big orders involving many units would enable a real price reduction.

In spite of all these constraints and limits, Emilio Maestrini, Director of the new Railway System Department at UIC highlighted the importance of ERTMS deployment throughout Europe in order to reap the benefits of a single, standardised European Traffic Management System with 37,000 km of equipped lines worldwide (50% outside Europe) by the year 2015.

UIC would of course continue working on the “Benchmark on ERTMS Costs” study as the project matured. The next phase had already begun in October 2010, focusing in particular on Operations and Maintenance.

UIC Members Railways who would like to participate in the activities of the UIC ERTMS Benchmark Working Group please contact: Snejana Markovic-Chenais: markovic@uic.org

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From left to right: Mr Christian Faure, from the European Commission and Paolo de Cicco, Project Manager
Panel of the “Economic Evaluation of ERTMS” Workshop