Turning the tracks around

The challenges are plain for Danish rail infrastructure manager, Rail Net Denmark. A somewhat outdated rail and signal infrastructure are ripe for thorough renewals. The task is put in the hands of an organisation in the process of change, moving from being household of the state to a more independent role. To complete the picture, the Danish Government is reconsidering the entire future structure for Rail Net Denmark. The man in charge of both processes is CEO Jesper Rasmussen. In this article he explains how Rail Net Denmark will develop in the coming years and which strategic measures are taken into use to support the development.

In a couple of years Rail Net Denmark has moved from being part of the central administration in Denmark to a state-owned enterprise with an independent Board of Directors. As liberalisation of the markets is a fact, I suspect this will go even further. Markets are opening up and we need to be able to compete with the other players on the track market in Europe more than ever before. This means major changes in the way we do our business, and to do that we have to define the desired qualities of our core business in a way that is unmistakable for customers, employees and government alike.

Inside the core business – providing a safe and efficient rail infrastructure to operators – we have settled for three main objectives; safety, efficiency and punctuality. These are fundamental and it is along the line of these three parameters that we will benchmark ourselves with the rest of Europe. To sum up the issue, the Danish state are demanding that all major construction projects are offered to the market in free competition. Here we need to be competitive – that is going to take some adjustment.

We are in the process of turning what is in Denmark considered an organisational super tanker with more than 2,500 employees, most of which are facing fundamental changes in their work conditions. To succeed in this we need to induce a common feeling of purpose among employees, politicians and customers. This is done by dialogue with all parts – and especially so with the organisations that are representing our employees.

Common goals

All over Europe massive lay-offs and outsourcing would immediately spell trouble with the unions. But since I started at the end of 2003, the workers organisations has been positively interested in dialogue. It became clear quite quickly that we basically have the same objectives; we want a good healthy company that maintains good healthy jobs for a long period of time. But in the process of changing a company to new objectives there is some hard work and cutting down to do. The rail workers organisations are just as aware of this as we are.

Safety, efficiency and punctuality

As I stated before, Rail Net Denmark wants to be the leading rail infrastructure manager in measurable terms of safety, efficiency and punctuality. Everything that does not lead us in this direction is an obstacle and should be dealt with – even if this means outsourcing activities. This is the point of departure for our future activities. We are putting a lot of effort into spreading this gospel both inside our organisation and to the surrounding world. The message is that our choices are governed by our focus and that this is where we have our ambitions.

Safety at all times

Safety is first on the list as I guess it is for any rail infrastructure manager. The safety issue is present in all our activities, but, in terms of future constructions, the continuing replacement of old rails and the signals are the biggest upcoming investments. Even though the Danish rail infrastructure is among the oldest in Europe in terms of basic rail age, it’s not an issue that’s affecting the general safety. It is simply a fact we are aware of – and responding to. It means however, that we have to draw out plans for renewal to maintain safety. With regards to signals and related safety systems, the key point is to move in the direction of European standards. Here there is a lot of work to be done all over Europe. 2005 is destined to bring an end to the discussion on whether Rail Net Denmark will update all signals in Denmark to meet European standards at once or do so gradually. The first means initiating a project of approximately ?1.2 billion. Already in 2005, politicians and rail infrastructure professionals alike agree that the signals should be changed at once, but financing the operation possesses some problems – at least if Rail Net Denmark continues being fully financed under the state budget. Instead both workers’ organisations and some politicians are proposing that Rail Net Denmark should have a looser relation to the state, giving us the option to seek loan financing.

Efficiency

The issue of financing touches another fundamental issue in our development. Rail Net Denmark needs to be competitive. The change from direct state control to being led by a Board, and the rule that major projects are to be proposed in free competition, both point in the same direction; we need to conduct all parts of our business with as much efficiency as the companies in the private sector do. As in the private sector we need to keep a strong focus on costs and focus on core business. In this process we have had to part with divisions or areas that were too far from the centre. This is a consideration that every company has to take continuously and at present we have six areas, including our IT department, being prepared for sale. Also in this process, it is important to look at the consequences for all involved and remember that an organisational divorce may be productive. This has indeed been the case for our department of engineering advisors that was bought by Atkins in 2001. Atkins is a world leading provider of professional, technologically-based consultancy and support services.

Punctuality

In 2004, Rail Net Denmark maintained a punctuality percentage of 94.5% on long distance travel and 97.4% on the urban trains in Copenhagen. This is quite impressive, taking into consideration the age of tracks, signals and security systems. Behind that number, which places Rail Net Denmark as third in the European punctuality benchmark, is a story of an enormous effort from our people out on the tracks. The people handling our tracks on a daily basis are second to none in the sometimes un-gratifying job of dealing with a number of different systems that need to work together.

Even if our punctuality percentage is comparably high, it’s still not enough. To be competitive we need to be able to get trains through on time, almost every time. Again, the standardisation of signal and safety systems will have a great effect, while the work on the tracks will be something that has a negative impact on punctuality for years to come.

The future – more traffic on rails

The future belongs to the rails. No other mode of transport offers the combination of competitive prices, short transit times and a safe environmentally sound transport. But the rail infrastructure all over Europe needs to develop the product according to the needs of the customers, both in regard to freight and passengers. Rail Net Denmark and other European infrastructure administrators have jointly established international freight channels to enable seamless freight transport across national borders. This work is central in bringing rail based transportation up to its potential. In Rail Net Denmark we aim to ensure that the Danish railway gains greater importance than it has today. This can only be achieved by ensuring that the Danish railway is up to the same standards and can function in correlation with the rest of the European railway network.