. Cooperation of railway construction companies in Europe within EFRTC

Joseph H.M. UrlingsEFRTC Vice-President

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What is EFRTC ?

• Federation of national associations and national coordinators representing the majority of specialists trackworks contractors in the countries of EU and EFTA• at present national associations of 12 EU/EFTA members states are EFRTC full members, namely Belgium, Bulgaria Estonia, France, Germany, Italy, Luxembourg, the Netherlands, Portugal, Spain, Switserland and UK• they represent 130 contractor companies with total turnover of some billion Euros and significant workforces using most advanced technology for the construction, track renewal and maintenance mainly performed under the contracts with all major European Infrastructure Managers

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Some examples of EFRTC contractors

• Germany – 14 contractors e.g. Leonhard Weiss, Schwerbau, Heitkamp, Spitzke etc. delivering most of the DB contracts) • France – about 30 contractors with ColasRail, Eurovia and TSO as leading contractors performing for SNCF and RATP • Italy – about 30 medium sized contractors dedicated for track renewal and maintenance of RFI network• Spain – medium size contractors grouped in consolidated large size companies such as e.g. COMSA group • UK – 6 major contractor, leading Balfour Beatty (30 000 staff worldwide, £ 5,9 bi turnover), Carillion, Jarvis and others • NL - VolkerRail, StruktonRail, BAM Rail – all works for ProRail • full list on www.efrtc.org

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EFRTC focus on business needs of railways• Infrastructure accounts up to 50 to 70 % of total costs of operation of railways• In EC about 30 billion is spent on existing infrastructure annually of what about € 20 billion for renewal and maintenance of track• It can be estimated that about the same level of investment will be needed for the new EC members for upgrading the existing network so in total about € 40 billion annually• Any potential savings will have a tremendous impact on the efficiency of investments into railway network and its operation• EFRTC supports business approach through overall supply chain with all partners aiming at increasing performance, efficiency and quality through innovative solution driving cost reduction of rail system operation

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EFRTC companies principles

• EFRTC members are private companies working in competitive market and living from awarded contracts

• The technical and entrepreneurial competence of contractors is based on high value expertise gained on relatively long terms and as such it shall be maintained and further developed in close cooperation with customers

–Infrastructure Managers

• European market shall be fully opened and supported by EC directives, standards and further harmonisation - any distortion of competition may have a serious impact not only on contractors but also on their clients

–Infrastructure Managers

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EFRTC major objectives

• Promote liberalization and harmonization of European market for track construction, renewal and maintenance to be carried out by effective and competitive private sector contractors to the satisfaction of their customers• Represent the interests of the Federation and its members with regard to European institutions, governments and public bodies, railway infrastructure managers and operators, and their representative associations such as EIM, UIC and CER• Contribute to drafting European standards applicable to contractors while complying with Interoperability• Support technical innovations and improvements in safety, quality, competency and thus contributing to increase of overall efficiency of the rail sector

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EFRTC structure

• Statutory bodies – General Assembly and Board (elected representatives at at level of Companies Directors), at present Chairman Jorge Miarnau-Monserrat from Spain

• Professional Committees chaired by Board members- Policy and Research Committee, Chairman: Jeremy Candfield (UK), Vice Chairman: prof Lothar Fendrich (D),- Safety and Security Committee, Chairman Jo Urlings (NL),- Technology and Logistics Committee, Chairman: Fernando Santos (P), Vice Chairman: Alessandro Rossi (I),

• Joint EIM/CER/EFRTC working group A - Market Strategy, chaired by EIM/Network Rail B – Long Term Funding and Planning, chaired by CER E – Contracting Strategy, chaired by EFRTC, Spitzke (D)F – Harmonization of procurement, co-chaired by EIM/EFRTC, ProRail/VolkerRail (NL)

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EFRTC work performed

The EFRTC activities were focused into series of important areas which included:

• The optimization of management, construction, renewal and maintenance of track infrastructure• The harmonization of procurement procedures• Participation in drafting European standards applicable to contractors• Safety procedures for work on track• Participation in EC research projects and in the future in EC tenders for TEN network and structural funds

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Construction, renewal and maintenance

Optimization of overall supply chain in management, construction, renewal and maintenance of track infrastructure in accordance with the business needs of our customers and in cooperation with infrastructure managers mainly through• Identification of best practices• Benchmarking of key performance indicators• Procurement and contracting, etc. based on • Profound knowledge of infrastructure managers business objectives in terms of RAMS and LCC, safety targets, investment strategies and resources, etc• Technical and entrepreneurial competence of contractors for the execution of work and delivering the results as contracted – on time and at costs

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Harmonization of procurement procedures

Work performed by joint EIM-EFRTC Study group with focus to the following major issues

• Contracting process starting with Qualification, Selection criteria and Contract Award

• Harmonisation of certification of working methods and personnel

• Investing in equipment in relation to contract characteristics (type of contract, value, duration, etc.)

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European standards applicable to contractors

EFRTC is represented in CEN/TC 256/SC1 “Railway applications-Track and plays active role in drafting all standards applicable to contractorsThe major interest are standards dealing with• Specification for construction and maintenance machine because the capital costs of trackworks machinery and their depreciation are key cost drivers• Qualification system for railway track work contractors • Safety Protection on track during work • Measuring and recording systems for track geometry and quality assessment• Rail grinding, milling, welding and planning work• and some others in total 45 standards published by TC 256/SC1

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Participation in EC bodies/projectsRIMARERailway Infrastructure Maintenance and Renewals Efficiency StudyIdentification of best practices working jointly with infrastructure managersProposal of business models for cost-effective track renewal and maintenance

INNOTRACKInnovative track conceptsEFRTC major contribution to logistic and services for new innovative concepts for track renewal and maintenance Final report on benchmarking of the interface between infrastructure managers and contractors identify success critical areas for the future potential improvements

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Outlook for the future

• Continues effort for provision the best services to our customers – infrastructure managers in terms of costs and quality of performed work responding to terms of contracts• More competition in particular with regard to technology market/offer (machinery) but also more cooperation with infrastructure managers and railway operators• Harmonisation of procurement procedures to assure fair competition and best performance for awarded contracts• More visibility at EC for supporting contractors and suppliers to assure cost-effective investments into European infrastructure projects in particular for priority projects of TEN •Further harmonisation and standardisation taking into account the innovation driving the cost reduction of railway system

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• There is a strong consensus of views between EFRTC members and Infrastructure Managers (IMs) established by benchmarking research

• The key issues related to contractors business are often about process, people and culture even if technology and safety harmonisation are also important in particular for cross border operation and opening of the markets

• The over-arching key to success: a closer and more open relationship between IMs and contractors

• Seven key areas identified as critical to success, to be taken forward in joint contractor/IM working groups:

Key issues

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Seven Success-Critical Areas

AA BB CC

Market StrategiesMarket Strategies Long Term Funding Long Term Funding and Strategic and Strategic

PlanningPlanning

Work programmingWork programming

DD EE FF

Project Management Project Management and Logisticsand Logistics

Contracting Contracting StrategiesStrategies

Rules and Rules and RegulationsRegulations

GG

PlantPlant

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• Differing rules and regulations are a key barrier to entry into national markets

• A more open market would produce more efficient prices, more efficient sizing of capacity and better utilisation

• Moreover requirements can be very rigid and onerous in proportion to benefits

• So need harmonisation based on good practice• And a certification process that encourages

innovation rather than obstructing it

F – Rules and Regulations

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Remits related Rules and Regulations In the area of technology and safety harmonization the

EFRTC drafted the remits and agreed with EIM and CER to continue with

• review of current rules and regulations for cross acceptance of machinery, staff and works, proposal for harmonisation including qualification of contractors and harmonization of procurement procedures

• review of safety issues hindering harmonisation of rules and regulations for cross-acceptance of machinery, staff and working processes

Joint EIM/EFRTC/CER work on both remits can serve to the future standardization work and as input to the work on interoperability

Praha, 12.03.09

Thank you very much for your attention!!!

Questions/Comments

For further information, please consult www.efrtc.org

or send an email to

SG-EFRTC@fntp.fr