The status of Rail Polska so far…

Rail Polska was established in November 1999 by Mr. Edward Burkhardt, the founder and the only owner of Rail World Inc., registered in Chicago. Mr. Burkhardt successfully privatised railways in the United States, Australia, New Zealand, Great Britain and Estonia. The original aim of the company was to take part in the privatisation of PKP Cargo which had just started to be considered. However, it soon turned out that the privatisation would not take place quickly. And then, our owner decided to use Rail Polska as the basis for creating his own freight transport operator.

On 1 March 2003, having analysed existing market opportunities, Rail Polska purchased 100% of shares in ‘Kolex’ – a company providing Firma Chemiczna ‘Dwory’ / the Chemical Company ‘Dwory’ in Oświęcim with railway transport services, and Zec Trans – a company offering motor transport services and providing five railway sidings belonging to Kogeneracja Wrocław (Zespół Elektrowni Wrocławskich) with railway services.

It was very important to us that Kolex owned a big railway siding with more than 20km of tracks, 700 wagons (mainly tank cars of various types) and seven shunting locomotives. Zec Trans possessed passenger motor cars and lorries which were transferred to other companies or sold after its restructuring. We purchased this company from Kogenerajca with 26 self unloading wagons to carry coal and six shunting locomotives. In the case of Zec Trans, the most important for us was a license to operate freight movements. Immediately after the liberalisation of the railway market, both our companies received licenses to operate freight movements and make rail vehicles available. In 2005, Kolex, Zec Trans and Rail Polska were merged into one company – Rail Polska.

Starting movement operations

The first coal train to Kogeneracja was operated in October 2003. We started coal movements to Energetyka Dwory the same year. In spring of the following year, salt movements from Kłodawa to Dwory started. Subsequent rolling stock purchases allowed a gradual development of our movements. Each year our volumes increased by 15 to 25%. The biggest increase has taken place in 2011. We estimate that at the end of 2011, the growth could reach 70% in comparison to 2010. The expected execution of 2011 amounts is approximately 3,200 k tonnes of freight (650,000 k net tonne kilometers). The movement structure amounts to 55% for coal, 30% for aggregate and chemical products make up the remainder. An average distance of a movement relation is satisfactory too. It amounts at approximately 210km. This result gives us the 8th-10th position among railway operators and a 1.2% share in the market. And it is clear that we have not become a big company yet. Nevertheless, if one remembers that our company has been built from the start, in my opinion, it is not a bad achievement at all. Especially since we had to compete with PKP Cargo and a few private operators present in the market for many years. Also, I do hope that we are going to achieve much more.

Rolling stock acquisition

In order to start railway movements on a bigger scale, in 2003 we started intensive rolling stock purchases. Unfortunately, rolling stock was not available in Poland because PKP Cargo, a company with a substantial surplus of rolling stock, refused to sell it. Locomotives and wagons which could have been repaired were sent for scrap. This is why we purchased and repaired wagons abroad – in Romania, the Czech Republic, Slovakia, former Yugoslavia States and Belgium. Irrespective from the purchases, we rebuilt 160 unused tank cars into coal cars. At the moment we have 650 wagons to carry coal and aggregate. It was slightly more difficult to purchase locomotives because all that were available was Romanian ST43 locomotives and Russian ST44 locomotives built in the 70s. Since we needed something to start our operations with, we purchased more than 10 such locomotives in Germany. The locomotives were prone to breakdowns and they were not very strong. They had power to haul 1,800 tonnes without taking a risk. Effectiveness of such movements was not very good and this is why our owner decided to modernise them.

The modernisation started in 2004 in our Rolling Stock Division. It consists of a replacement of a diesel engine with a new engine (produced by General Electric, with a horsepower of 3,000), a generator, exhaust and cooling systems and a whole system of control. For the ‘old’ locomotives, all that remain are the bogies, a frame and a body. The locomotive is able to haul 2,800 tonnes easily, and as many as 40 wagons in a flat territory. It consumes 40% less fuel per 1,000 gross tonne kilometers. At the moment, we possess 18 such locomotives. The only disadvantage of the rebuilt locomotive, marked as M62M, is a poor resistance of traction motors in comparison to a new, much stronger, diesel engine. In 2011, we are going to continue modernisation based on a more modern diesel engine as the previous one does not meet new environmental standards. We are also going to replace traction motors in order to adjust their resistance to an increased power of the diesel engine.

Current organisational structure

After merging the companies, a major part of our business was situated at our own siding, in the earlier ‘Kolex’ area, because administration buildings, the wagon repair depot, the separate engine shed, the fuel station and the tank cleaning station were located there. We established two regions: the South Region provides Firma Chemiczna ‘Dwory’ with services – it rents tank cars out. The Region maintains our own railway infrastructure and infrastructure belonging to Firma Chemiczna and Kogeneracja. It provides Firma Chemiczna ‘Dwory’, Energetyka ‘Dwory’ with shunting and forwarding services. The divisions of Operations and Rolling Stock use shunting services performed by the Region too. The Railway Infrastructure Maintenance Unit is equipped with Plasser’s tamping machine. The Unit often performs work for other entities. The Lower Silesia Region performs shunting services for Kogeneracja sidings in Wrocław, Siechnica and Długołęka.

The Rolling Stock Division performs all wagon repairs, inclusive of revisions, overhauls and current locomotive repairs not only on the company’s territory but also en route. ‘En route repairs’ are made by our mobile service. It is much cheaper to use our mobile service than to have to return to our workshops every time. In 2009, we extended the engine shed in order to increase the modernisation potential and improve labour conditions. As a result, the Division also repairs rolling stock for external customers too.

The Dispatching Centre of the Division of Operations is located at our siding. We established two traction crew nests: one in Oświęcim and another in Wrocław, and a dispatching centre of traction crews in Wrocław. To begin with, the Marketing Division functioned as a separate unit located in Wrocław but we changed the structure and, for a year, it has become a part of the Division of Operations. We decided that due to substantial intensification of movements, such structure would reduce the time needed to take decisions concerning the ability to start movements and would improve a flow of information to a customer. We consider the last element as especially important, since a customer has to be informed on time of an arrival of a shipment and any deviations from a plan of deliveries. Usually, such deviations occur at loading sites but sometimes rolling stock breakdowns occur and some delays are caused by the Infrastructure Manager. The Board of Rail Polska cares about good relations with customers and companies we cooperate with. I have to say that we are very good in this area and we do not receive any justified criticism.

Management and safety

Directors of Divisions are very independent in their actions. The Board handles strategy of action, sets directions of the development and Board Members supervise work of specific Divisions. The Board Meetings take place when necessary, not on fixed dates, which allows work flexibility.

Safety is what we believe to be the most important. Let me prove it by saying that disregarding urgency of issues to be discussed, issues regarding labour safety are always the first to be discussed at the Board Meetings. Fortunately, in our company we have not had a fatal accident. From time-to-time we happen to have some minor injuries, resulting from a temporary distraction of employees. We have not had any accidents through employer’s fault, which would result from lack of protective clothing or defects of machines and equipment.

Safety related to railway movement operation is a separate issue.

We possess all legally required Certificates issued by Urząd Transportu Kolejowego / the Railway Transport Office. The subject of safety is always raised at all trainings for loco drivers and thanks to such an approach, we have had just one accident (without consequences) caused by our employee, so far. Our Company possesses the ISO 9001 Certificate.

Cooperation with Urząd Transportu Kolejowego (UTK) / the Railway Transport Office, Infrastructure Managers and other Operators

We have a very good cooperation with UTK. We can always count on their assistance or guidelines concerning problems which we encounter. The same concerns Infrastructure Managers and, especially, PKP PLK (Polish Railway Lines). We have signed relevant agreements concerning use of railway lines. We order and receive required movement timetables without any obstacles.

As far as cooperation with other operators is concerned, we can say it is going well, except for PKP Cargo, which is hermetically closed to any form of cooperation in movement operations. It is obvious that there is a permanent competition in the market of operations, but nevertheless, it does not disturb the current cooperation between carriers. According to requirements of one party and the potential of another, we rent wagons and locomotives to each other (sometimes for very short periods of time), we operate movements as subcontractors or we sublet movements to be realised in varied rolling stock configurations. Most often, movements are realised in a compound set belonging to a given operator but, quite often, our wagons, or their groups, are hauled by a locomotive belonging to another carrier or the other way round. There are no problems with our mutual payments. Such cooperation proves to be very advantageous for both parties. It allows the most effective utilisation of possessed rolling stock and human resources and thus, it allows substantial reduction of costs of this activity but, first of all, it allows execution of signed contracts and thus provides a guarantee of proper customer service.

On top of such forms of cooperation, private operators – us included – often create consortia in order to take part in big transport tenders, in which for many reasons, mainly related to rolling stock potential, they would not be able to participate on their own.

To sum this up, I can say that there is a strong competition at the stage of submitting tenders, but when the tenders are sorted out, the cooperation starts – depending on the contractor’s demands.

About the Author

Janusz Wellman is Vice President of the Board at Rail Polska and joined in January 2000. His responsibilities as the Vice President of the Board include business development and supervision over the current functioning of the company. Janusz graduated from the Law Faculty at Warsaw University and completed post-graduate studies at Lodz University and started work at PKP (Polish State Railways) in 1970. Since 1973, Janusz has held managerial positions include Department Supervisor in Central Railway Research and Construction Office, Department Manager in Communi – cation Association and Main Specialist in Labour Division at the Main College of Commerce. Janusz has many years of experience in human resources management at PKP. In 1991 he was appointed as the Deputy Director of the Central Management of PKP Region in Warsaw. In 1996 he was appointed the Main Director of Railway Healthcare. In 1998-1999 he held the post of General Director of Main Inspectorate of Railways.