Railway Newsletter

Cross-Channel operator Eurotunnel has reported a €1.4 million net profit at the end of 2009, despite an unfavourable economic context. Although traffic through the Channel Tunnel was limited for several weeks following a fire in September 2008 and then suspended in December 2009 due to technical problems, the number of Eurostar passengers grew by 1.2 per cent to more than 9.2 million in 2009. Annual turnover dropped to €640 million (11.2 per cent less than in 2008), mainly because of a steep decline in lorry traffic. Eurotunnel shuttle generated €311 million revenues, down from €411 million in 2008, while earnings from rail business (Eurostar and rail freight) remained at €250 million.

(Source: Eurotunnel)

Seven European rail freight operators - DB Schenker Rail (Germany, Netherlands, Denmark), CD Cargo (Czech Republic), CFL Cargo (Luxembourg), Green Cargo (Sweden and Norway), Rail Cargo Austria, CFF Cargo (Switzerland) and SNCB Logistics (Belgium) - have signed an agreement to found XRail, a single-wagon alliance. It has been created to offer efficient international wagonload traffic, which accounts for half of European rail freight traffic, and to win volumes from road transport operators. XRail is planning to use the existing Trans-European Transport Corridors (TEN-T) before expanding into other rail networks. "Close cooperation on production and information processes can help us unlock significant potential in efficiency and quality", Xrail Project Leader Günther J. Ferk explained.

(Source: DB Schenker)

Russian Railways (RZD) has announced its investment budget for 2010-2011: 555 billion rubles (more than US$18.5 billion), an increase compared to 2008 levels. Some 435 billion rubles (US$14.5 billion) will be earmarked for the company's own investment programmes: major infrastructure maintenance works on 20,000 km of track, including 3,200 km of new lines and five new bridges; and new rolling stock estimated at 72 billion rubles (US$2.4 billion). The remaining 120 billion rubles (US$4 billion) will be used to build a combined road/rail link between Adler and the Alpika-Service mountain resort. However, the pre-crisis levels of rail freight are expected to be reached sometime between 2013 and 2015, RZD President Vladimir Yakunin said during a meeting that took place in Sochi.

(Source: RZD)

Agência Nacional de Transportes Terrestres (ANTT) in Brazil has announced a tender for the construction of 511 km of high-speed railway between the cities of Sao Paulo, Rio de Janeiro and Campinas. The $US17.4 billion project is required to become operational for the Olympic Games in 2016. Specifications for the bid had been originally planned to be released in June 2009, but a feasibility study carried out by British-based Halcrow showed that the total cost was likely to exceed the preliminary estimates. Business Week reported that several major European and Asian companies have expressed interest in the project, which will be carried out on a public private partnership basis under a 40-year concession agreement.

(Sources: ANTT; Business Week)

Pakistan Railways (PR) is to be split into four companies (Passenger, Freight, Manufacturing and Asset Management) according to a restructuring plan approved by the Cabinet Committee on Restructuring (CCoR) of Public Sector Enterprises (PSEs). PR has cumulated a PKR50 billion (US$600 million) debt. The process will start with administrative changes in the management of the debt-stricken company, followed by implementation plans, according to Daily Times. A ministerial committee is in charge of supervising the restructuring and privatisation strategies, with technical assistance provided by the World Bank and the Asian Development Bank. Railways are a sensitive matter in Pakistan as it remains the only affordable means of transportation for many.

(Source: Daily Times)

Britain's rail network will be modernised to allow trains running at speeds up to 250 miles per hour, according to News Distribution Service. The country's Transport Secretary Lord Adonis has revealed a national project for a 335 mile high-speed 'Y'-shaped network, connecting London with Leeds, Sheffield and Manchester. High Speed Two Ltd's (HS2 Ltd), a company established by the Government in January 2009 to advise on the development of high-speed rail services between London and Scotland, has published the recommended route between London and Birmingham, as the first phase of the £30 billion project.

(Sources: News Distribution Service; HS2 Ltd)

Citadel Capital has become the owner of a 17.5 per cent stake in Rift Valley Railways (RVR) of Kenya and Uganda, after acquiring a 49 per cent stake in Sheltam Railways Company, the largest single shareholder in RVR. "Citadel Capital will look to inject more than US$150 million in Kenya Uganda Railways over the coming five years," said Citadel Capital Managing Director Karim Sadek. RVR is backed by Citadel Capital in its negotiations with América Latina Logística (ALL) for a technical agreement.

Citadel Capital is a private equity firm in Africa and the Middle East with US$8.3 billion investments in 15 industries spanning 14 countries. RVR operates an old rail network connecting Kenya and Uganda with the port of Mombasa, under a 25-year concession agreement.

(Source: Citadel Capital)

Bulgarian transport minister Alexander Tsvetkov has said that the country's first high-speed railway between the capital Sofia and Plovdiv would be operational in three years, according to EU Infrastructure. Eight companies have submitted their bids for the 290 km infrastructure project that could be launched before summer. Sofia-Burgas and Plovdiv-Burgas will be other sections of the future Bulgarian high-speed network with an estimated cost of €3 billion.

(Source: EU Infrastructure)

Major railway infrastructure projects and purchase of rolling stock are to be funded by a US$4.7 billion investment approved by the Israeli government, as part of the US$7.2 billion first phase of the "Israel Ways" transport investment package, according to Railway Gazette International. State-owned Israel Railways, founded in 2003, is responsible for construction and maintenance of rail infrastructure as well as for passenger and freight operations.

It has been reported that the Government has been looking at the controversial British model to privatise railways. Israeli business daily "Globes" reported that a draft bill, called the Railway Transport Law, sets out separation of infrastructure, retained in state ownership, from train operations, which could be open for competition.

(Sources: Railway Gazette International; "Globes" online)

The Association of American Railroads (AAR) has revealed that total carload traffic on US railroads in 2009 was at its lowest levels since 1988. It declined by 16.1 per cent compared with the previous year, and down 18.2 per cent when compared with 2007. US rail intermodal traffic, which covers the movement of truck trailers and shipping containers by rail, was down 14.1 per cent compared with 2008, and 17.7 per cent lower than a year before.

However, 2009 was the safest year in freight railroad history after more than US$9 billion invested in capital improvement programs. The number of rail-related fatalities on freight railroads was 497 last year, whilst the total number of train accidents involving freight railroads was down 26 per cent. "This record of accomplishment shows the depth of the freight railroad industry's commitment to the safety of our employees, the communities we serve and the country's rail network infrastructure," said AAR President and CEO Edward R. Hamberger.

(Source: Association of American Railroads; AAR)