Enhancing investments for a quality network

The Railway Infrastructure Administration, state organisation (SŽDC) is the infrastructure manager in the Czech Republic and, in addition to other duties is responsible for the modernisation and development of the railway network. It launched its operations on 1 January 2003 as one of two successors of the former Czech Railways state organisation (the other successor is the Czech Railways, joint-stock company). The separation of the infrastructure manager from the biggest railway carrier (Czech Railways) launched the transformation of the railway system in the Czech Republic, a process which went on to implement another change on 1 September 2011.

The transformation of the railway system in the Czech Republic continues

SŽDC’s primary task is to carry out the function of the owner and the operator of the national and regional rail. The principal operations include operating the railway infrastructure, en – suring its operability and, last but not least, ensuring the modernisation and development of the railway network in the Czech Republic. SŽDC manages state assets represented by the railway infrastructure in the Czech Republic. The railway network of the Czech Republic is one of the densest in Europe; we have 0.12km of lines per square kilometre.

SŽDC’s mission applies to operations related to the role of rail owner and operator. So far, the tasks related to rail operation have been contractually fulfilled by the Czech Railways, joint-stock company. On 1 September 2011, in compliance with the Government Resolution, these functions were transferred to us. As a result of this, SŽDC ensures rail operation and the so-called ‘live infrastructure’. In short, we take over responsibility for railway men, train dispatchers, traffic control operators and other personnel who are involved in the organisation of train transport. This transfer involves approximately 10,000 employees. This step will complete the process which started in 2003 and has aimed to ensure a liberalised environment with equal access for all carriers. By imple – menting this modification of the railway system, in compliance with the European legislation, the infrastructure manager is completely separate from the carrier in the Czech Republic.

It is understandable that all the related processes have to be correctly regulated to prevent this transfer from jeopardising the continuity and safety of the rail operation. Operations related to operation control will be provided continuously with no operation breakdown.

The integration of new staff into the current organisational structure can, however, have long-term benefits. After the transfer of operating personnel from CD a.s. to SŽDC has been implemented, our current organisational structure will be reviewed and re-evaluated, both at the level of the Headquarters and in organisation units, with a view to optimising the organisational structure. We plan to reduce administrative costs and to avoid the doubling of functions. This optimisation is to be finalised within six months from the date of the transfer of these rail operating personnel from CD, a.s. to SŽDC.

The establishment of live infrastructure represents one of many significant short-term goals. As mentioned before, meeting this goal will complete the transformation process as well as creating conditions to fulfil SŽDC’s own mission – operating the railway infrastructure, as laid down by law.

Interoperability

SŽDC’s strategic goal within the development of the railway infrastructure is to ensure competitive infrastructure through the implementation of interoperability features, in particular on the backbone railway network. We intend to offer reliable lines to carriers from e.g. northern-German ports operating eastward, and thus to compete with the route Brandenburg–Austria–East. The strategic geographical setting of the Czech Republic provides us with huge potential. In this respect, we have already taken important steps – during the modernisation of transit corridors we met European requirements for interoperability, and the implementation of ERTMS/ETCS is at an advanced stage. We can proudly say that both of our main corridors (1 and 2) have been fully equipped with the GSM-R system. The installation of GSM-R continues on other lines, so we anticipate that 1,540km lines will be covered by 2015. The ETCS Level 2 system is being progressively deployed on relevant national railway transit corridors as well as on the line Decin–Nymburk–Kolin. The implementation of these modernisation projects is to be completed by 2015.

Modernisation and development

Backbone corridors

Our most important tasks include the completion of modernisation of four national railway transit corridors. Two of them – the first and the second national corridor – are part of the IV and VI Pan- European Corridor. The construction currently proceeds in the sections of the III and IV National Corridor, i.e. on lines Prague–Pilsen–Cheb and Ceske Budejovice–Prague.

The modernisation of the railway junctions was not part of the modernisation of corridor lines and proceeds separately. The most significant projects include the construction of the so-called New Link within the railway junction Prague, the reconstruction of the railway junction Breclav, situated in proximity of Slovakian and Austrian borders, the reconstruction of the railway station Prerov and others. Another important project prepared for future implementation is an ambitious project focusing on the reconstruction of the railway junction Brno, Moravian metropolis, which also deals with the relocation of the passenger station. It is this project that has currently become the topic of heated all-society debates held by supporters and opponents, which means that the launch of the project is a rather long-run concept.

Other lines

In addition to the modernisation of corridors, SŽDC implements a progressive modernisation and reconstruction system of other selected national and regional lines with a view to creating conditions to ensure high-quality transport services in regions and conurbations. Such plans are represented by e.g. the modernisation of the line Prague–Kladno with a branch line for the international airport Prague- Ruzyne. Other constructions include the electrification of the line Brno–Train stop near Brno, double-tracking of the section Steblova–Opatovice nad Labem and others.

Infrastructure optimisation

Compared to other European states, railway builders in the Czech Republic bequeathed one of the densest railway networks to us. For that reason, one of the priority goals of our company is to optimise, i.e. to lessen the scope of the infrastructure. After detailed analyses of relevant lines, we propose the final extent of the railway network – in consideration of allocated funds and the state budget.

Railway crossings

A socially important topic is the enhancement of railway transport safety, especially at level crossings. There are approximately 8,200 level crossings in the Czech Republic. SŽDC, in an effort to enhance safety, has installed new safety and signalling equipment at level crossings. In 2011, we have already doubled investments in level crossings compared to 2010. We also stress the importance of prevention in cooperation with the Ministry of Transport and the Police of the Czech Republic. There is a unique system of uniform registering of level crossings in the Czech Republic. Every level crossing is allocated a number (usually attached on the back of the warning cross) and the list of these numbers is also provided to the traffic controllers of the Integrated Rescue System. In case of emergency (accident, obstacle at the level crossing, etc.), road traffic participants have to dial 112 and report the crossing number; after which the line is immediately blocked.

The objective is to enhance not only the safety at level crossings but to also accelerate the cancelling of level crossings. There are many of them on our territory; on average nine level crossings on 10km of lines. By cancelling the level crossings, we eliminate the risks of potential collisions and at the same time we enhance the safety and speed on our lines.

SŽDC engaged in an international initiative focusing on enhancing safety at level crossings – International Level Crossing Awareness Day (ILCAD).

Transport services

In the area of modernisation and development of infrastructure, we thoroughly apply a conceptual approach; development intents and the concept of the transport services of the regions play a significant role. The scope of planned transport services and the related requests for transport outputs largely determine the future demands for suburban and regional transport, which is why it is an important aspect for planning investments in the railway infrastructure. The concept of development of the railway infrastructure was elaborated in SŽDC’s document Strategic Business Plan. The update of this document is currently prepared, with a view to taking the current economic situation into account, i.e. in the first place, the allocated sum of funds earmarked for railway infrastructure from the state budget. Simultaneously, planned investments are continuously re-evaluated and updated in terms of their efficiency with the objective of finding cost-saving measures which allow their implementation to the necessary extent while maintaining the required parameters.

Investment sources

For implementation of the planned constructions to modernise and develop railway infrastructure, SŽDC mainly draws on the funds from the State Fund for Transport Infrastructure, the European Operational Programme Transport and other EU funds as well as from the European Investment Bank. At present, we do not apply the system of Public and Private Partnership (PPP) for investments in railway infrastructure in the Czech Republic.

Capacity allocation and timetable

SŽDC, within the scope of rail operation, also attends to timetable elaboration and path capacity allocation/sale. In compliance with European legislation, we provide all entitled (certified) carriers with equal and non-discriminatory access to the railway infrastructure.

The goal of our organisation has always been the harmonisation of conditions for carriers’ access to railway and road infrastructure, i.e. harmonisation of economic rules. In our opinion, the current charge system gives road carriers an advantage over railway carriers. We are in favour of the internalisation of external costs and we keep track of the European directive Eurovignette and its finalisation.

Efficiency enhancement

A crucial task of our organisation is to substantially enhance the efficiency of funds utilisation in the railway, both in terms of investments, maintenance and safety. The second key task is to radically cut our expenses, and the third to invest in those areas which might economically benefit from it. Given the fact that it has been less than a year since the changes in SŽDC management (the former Director General resigned from his post towards the end of 2010), I consider the results most satisfying. Together with the suppliers of construction work selected on the basis of newly-drafted tenders, we manage to achieve immense savings compared to expenses which were incurred by similar projects in the past. On top of this, by negotiating with construction firms and modifying ongoing projects as well as other investment actions, we succeeded in achieving savings totalling CZK 6.1 billion (€244 million). We have also introduced electronic auction sales, where possible. In 2010, we saved nearly 10% of investment costs and for 2011 we plan to achieve savings of 15% as against the original plan.

In order to make human resources processes more efficient, the staff number was reduced by 10%, which accounts for nearly 1,000 employees, naturally resulting in a decrease of wage costs.

As for the direction our investments are focused on, we further investment projects which present the opportunity to substantially increase future profits. We want to offer high-quality service to carriers, thus motivating them towards greater utilisation of railway, which will naturally result in bigger income from track access charges. In other words – the funds are invested in those areas where e.g. it is necessary to enhance the path capacity. Also, by implementing stateof- the-art technologies, we can enhance the practical use of the current infrastructure. The process of making investments efficient has been launched and SŽDC wants to follow this trend.

Conclusion

There is no need to stress the importance and complexity of the tasks which every infrastructure manager has to face, as understood in the context of the European railway market. SŽDC attempts to create fully competitive conditions to ensure the development of railway transport in the Czech Republic. We strive to fulfil our own vision – to become a modern, flexible and customer-oriented organisation, ensuring the development of an operable, modern, capacityproviding and safe railway network as an inseparable part of the European railway system.

About the Author

Pavel Habarta has been man aging the Railway Infrastructure Administration since October 2010 when the Management Board entrusted him with the power to run the company after the former Director General had resigned from his post. The Management Board made this decision given the need to stabilise the financial trend in the organisation, and as a crisis manager Pavel Habarta was put into this leading position with the key task of radically rationalising the spending of public funds. As a renowned economist he has focused on railway project appraisal, namely on financial analyses and return of invested funds as well as in favour of national interests in terms of the Czech transport policy.