Hellenic Railways: moving forward

The Greek railway network constitutes part of the trans-European transport network and OSE, therefore, implements an investment programme in compliance with the Common European Policy on railway/combined transports.

The current activities of OSE that are financed by both European Union’s structural funds and OSE’s financial resources include such large investment projects as the construction of high speed railway lines (over 200km/h), the creation of railway network connections with ports and industrial areas, the creation of freight centres and the development of a suburban railway network.

Generally, the implemented and planned investments concern:

• Infrastructure
• Rolling stock
• Corporate function and Information Technology
• Staff training and development

The completion of the scheduled investments and projects will lead to the development of the railways as a significant transport means for the carriage of passengers and goods. This will be achieved by minimising travel time between the big cities and metropolitan centres where the economic activity and the population are concentrated. Considering that the country has enjoyed the highest GDP growth rate among the countries of Euro-zone over the last few years and that the political environment in South-Eastern Europe is becoming progressively stable, prospects for an increase of the railway’s share seem to be favourable – especially after 2007, thanks to the ongoing investment projects.

International activities

The position of Greece constitutes a transporting and transit hub that connects the South-Eastern part of Europe with Asia. The importance of its position is significant in commercial and economic terms. It is therefore necessary for Greece to develop its rail network and infrastructure in order to be prepared to face today’s increased competition and become a leader in transport of people and goods among the countries of South-Eastern Europe.

During the last few months Thessaloniki has officially become a terminal for international routes. Specifically, from June 17 2005 two new pairs of trains with high quality services are being routed between Thessaloniki and Sofia. These trains are providing passengers a comfortable international trip at especially good prices. The total duration of the journey with the new trains is five hours and forty-five minutes, instead of seven hours and thirty-six minutes, that it was previously. Departures occur daily, from both Thessaloniki and Sofia.

Furthermore, since July 8 2005 the train FILIA (which means ‘friendship’) – TOSTLUK EXPRESS, composed of high-comfort, air-conditioned coaches for the direct daily connection between Thessaloniki and Instanbul, has been put into operation. The total traveling time of the trip is 11 hours and 30 minutes. Until now, the route Thessaloniki – Instanbul, carried out with transshipment at the border railway station of Pithio, lasted for approximately 14 hours and 30 minutes. Along the Thessaloniki – Instanbul route, there are intermediate stops in the capitals of the prefectures from where the train passes.

The trains routed for the itineraries Thessaloniki – Instanbul and Thessaloniki – Sofia are on the basis of the implementation of the recent agreements between the Minister of Transports and Communications of Greece Mr. Michalis Liapis and his Turkish and Bulgarian counterparts. The new itineraries symbolise the continuing upgrading of the collaboration and the constant friendship between Greeks and Turks, as well as between Greeks and Bulgarians and is expected to contribute considerably to the economic development of the countries involved.

Finally, a Joint Decleration on the establishment of a High Performance Railway network in South Eastern Europe has recently been signed by the Ministers of Transport of the SEECP. This agreement aims to implement in South East Europe of a High Performance Network of railways for passenger, freight and inter-modal transport offering faster, higher-quality and more competitive rail connections with significantly reduced travel times between the main urban and commercial centres.

OSE renewal projects and future plans

From January 1 2006, OSE consists of a group of four companies, with the mother company having the dominant role in the holding company. Its split into two entities (infrastructure and operation) is an outcome of the harmonisation of the Greek legislation with that of EU Directions. The new group structure will provide a major benefit. It will ensure that infrastructure expenditure will be transparent. Additionally, it will ensure that no indirect subsidisation of the rail operations takes place, as it happens with all the other public means of transportation. Finally, each subsidiary will focus on a specific area of OSE’s current operations and their main task will be the maximisation of returns of investment.

OSE’s management is promoting the signing of public service obligations contracts between the Greek State and OSE, through which the state will subsidise itineraries that are unprofitable for the organisation but, at the same time, are considered vital from a social point of view. This will ensure a level playing field for all providers of transport services. Moreover, it will benefit passengers as well as increase OSE’s transport work.

Another main management priority is the improvement of the company’s finances and the decrease of its dependence on state subsidies for its operation. This will be beneficial to both OSE’s customers and to the taxpayer who pays the deficits.

OSE’s extensive real estate property has been managed by GAIA OSE, one of OSE’s subsidiaries which will focus on obtaining maximum financial returns from this under-exploited property.

The gradual implementation of OSE’s major investment projects will soon change its network image and will transform it into a network comparable to those of the advanced countries of the European Union. These are partly financed by the EU. ERGOSE (one of OSE’s subsidiaries), which has undertaken the construction of a series of projects, including the construction of a double track in the axis Patras – Athens – Thessalonica to provide top-quality railway connection with big cities and ‘Eleftherios Venizelos’ airport. These investment projects aim at increasing the trains’ speed up to 200km/hour and will significantly decrease the itineraries’ total duration. In this context, OSE has recently achieved a reduction in the duration of the Athens – Thessalonica route, to 4 hours and 15 minutes. Moreover, OSE is currently carrying out a large number of track – maintenance projects, as well as projects of infrastructure renovation, improvement of linings, train-stations’ refurbishments etc. that aim to minimise the duration of the itineraries; improve the level of transportation safety; decrease the cost of maintenance and to increase the passengers’ comfort.

A future project of major significance is the construction of the Western Axis, a project that will be instrumental in the development of Western Greece – a region that is one of the poorest in the EU. Moreover, it will contribute to transport connection with Western Europe. The assignment of studies for this project took place on September 2005.
The completion of the scheduled projects of the Hellenic Railways Organization and its newly adopted customer-oriented philosophy will lead to improvement of competitiveness, which is particularly important not only for the organisation but for the passengers themselves, who enjoy (especially in the future) quality services that better fulfill their needs.

OSE technology and safety

The structural changes that are scheduled to take place in Hellenic Railways aim at its modernisation and will enable it to keep up with the increased challenges of the 21st century, focussing on the Greek as well as the broader European transport market.

In this context, OSE has already started the improvement and expansion of its network as well as the upgrading of its fleet of rolling stock through the implementation of an investment programme of approximately 11 billion euros that will last over the next ten years.

With regard to its rolling stock, OSE has been gradually introducing technologically advanced trains that will provide a higher level of transport services to the passengers and will reduce the itineraries’ total duration. In the near future, OSE is planning to implement highly comfortable ‘tilting trains’ which will run in high speed on the existing rail network without the need for new expensive infrastructure investments.

With regard to safety standards, they will be assured by safety certificates to be issued by national authorities as a stepwise evolution towards a common European system.

Development of freight transports

The completion of the scheduled infrastructure investments will result in decreased journey times while the operation of the freight centres and new rail connections to industrial areas and harbours will substantially increase OSE’s transport work and revenues. The existing railway network connects, or is scheduled to connect, until 2008 the five most important ports of Greece; namely Piraeus/ N. Ikonio, Thessaloniki, Patras, Volos and Alexandroupolis. In particular, the connection of the railway network of the Hellenic Railways with the commercial port of Piraeus (Ikonio) is considered to be one of the most fundamental factors that will contribute to the development of rail freight transports. Additionally, the operation of freight centres such as the Thriasio Freight Centre which is under construction and the Thessaloniki Freight Centre, whose construction has recently been announced by the Prime Minister, as well as the railway connection with industrial areas will certainly boost freight transports, decongest the capital city from significant traffic and assert it as the ‘core’ of the combined transports system in Greece and South-Eastern Europe.

Finally, in 2005, OSE’s revenues from freight services were approximately 25 per cent higher than the previous year’s.

Suburban railway

PROASTIAKOS’ existing line connects the centre of Athens with the airport as well as other nodular places of the greater area of Athens in a fast, safe and comfortable way for the passengers. From September 2005, frequent daily itineraries have started to take place between the capital of Greece and Corinth. The further development of PROASTIAKOS’ rail lines and routes constitutes a major infrastructure project that will radically upgrade the rail network of Athens. With the network completion by 2010, PROASTIAKOS will be connecting Athens to Thiva, Kiato, Lavrio, Rafina and Chalkida. It is estimated that approximately 420,000 passengers will be served daily.

Social character

For many years the Hellenic Railways (OSE) has consistently offered its services to the Greek citizens. Greek trains and the Suburban Railway, in particular, are the future of transport in large urban centres. They constitute a ‘guided’ means of mass transport for commuting purposes, within the influence limits of large conurbations, i.e. between the centre and the suburbs or satellite communities within a range of 20 and 100km.

Special prices are offered for children, young, elderly and disabled people, regular passengers and train lovers. Social criteria are used for the passengers of remote areas. In general, the fares for the passengers are cheaper compared to those of the other EU member states.

Environmental care

According to various measurements, transport of people and goods by rail has a significantly lower impact on the atmosphere, compared to the other terrestrial means of transport. Environmental responsibility is an important facet of OSE’s philosophy and culture. OSE aims to expand its activities, while reducing the emission of pollution in the air and lowering noise as well as the use of hazardous substances. In the future, the objective of environmental care and sustainability will still be pursued by OSE, along with the company’s economic and financial performance.

Importance of Foreign Investment

OSE is interested in joint ventures and in strategic partnerships. In the framework of the restructuring of the Greek railway transport system and the reorganisation of OSE, an appropriate legal framework is being established which will facilitate joint ventures and strategic partnerships with OSE.

Participation of the private sector in the development of the Greek railways network is of particular importance. Some ideas have already been considered for the participation of the private sector in the construction of railway projects through public-private partnerships (PPP), in the construction of the Western Railway Axis and the railway stations of Athens and Piraeus.