Rail Infrastructure Challenges in Poland

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Rail Infrastructure Challenges in Poland Rail
Freight Operator Perspective
Freightliner Group Presentation

• 4 March 2009, Brussels

2
Freightliner Group Background

• In operation since 1965
• Entered UK bulk market in 2000

• MBO from British Rail in 1996
• Established subsidiary in Poland in 2005

• Freightliner in 1996
• UK Intermodal business only
• Annual turnover of 95m
• Operating loss of c. 8m
• 1,095 staff
• 80 old diesel electric locomotives, 1100 flat
  wagons
• 1,850 intermodal containers per day

• Freightliner today
• UK Intermodal, bulk international
• Annual turnover in excess of 260m
• Operating profit of 25m
• 1,750 staff
• 170 locomotives, including 137 new Class 66s and
  3,300 wagons, incl. 1,800 newly build since 2000
• Up to 2,800 intermodal containers per day and
  1,000 heavy haul trains per week

3
Freightliner Poland
Freightliner International Developments

• Licensed freight and passenger operator in
  Poland, operations commenced in September 2007
• 7 Class 66 locomotives and 432 new EA
  coal/aggregate wagons in service ? largest single
  investment in new assets in Poland in last 10
  years
• 3 million tonnes of coal and aggregates moved
  since operations start
• Nationwide service offering and cross border
  capability with Germany (Cl. 66 locos)
• Keen to develop new cross-border opportunities

4
Infrastructure management in Poland

• Poland rail freight market development is
  supported by PKP PLK
• Fair and equal access to core rail infrastructure
  operated by PKP PLK
• Equal infrastructure access charges (from 2007)
• Freight model contract in place (signed by all
  operators every year)
• Reservation charge of 10 to 25 of the
  infrastructure access costs prevents path
  overbooking
• No major issues with congestion on the Polish
  network ? no major debates over path allocation
  rights

5
Challenges in Poland Access

• Access to non-PLK rail sidings and terminals
• Division of PKP sidings between PKP PLK and PKP
  Cargo carried out back in 2001-02 impedes free
  and equal competition today
• PKP Cargo holds critical elements of
  infrastructure required for some market segments
  (e.g. aggregates)
• PKP Cargo charges for access to the sidings are
  c. 50 times higher than charges for similar PLK
  facilities
• Access to Eastern border transhipment terminals
• Obsolete transit agreement dating back to USSR
  times
• PKP Cargos last mile charge of Euro 5-6 per
  tonne (plus another 5 Euro/t reloading)
  effectively eliminates competition

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Challenges in Poland Structural

• High rail infrastructure access charges compared
  to other EU states ? a policy issue (overall
  phenomenon of CEE countries)
• Poor quality of rail path
• Average train speed ranging from 20 to 30 km/h
• Under-developed systems heritage of PKP Cargo
  systems (train movement equations)

Outcome Road gains business from Rail
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Cross-border experience

• Poland - Germany ? works with the right traction
  solution (Class 66 for FPL)
• FPL moved 1 mt through the border in last 1.5
  year
• Achieving border crossing time of 15 minutes
• One-stop shop for planning would be a great help
• Poland Slovakia and Czech Republic ? capacity
  issues, throughput limitation and lack of
  multi-country traction
• Poland CIS ? access blocked

8
European rail network

• General market needs
• Rail freight needs to attract other type of goods
  than bulk and container traffic to remain
  competitive (foodstuff, high-value goods,
  express mail, etc.)
• Increasing intra- intermodal competition on
  reliability, time and price
• A single EU rail freight market requires a single
  EU rail freight network !

Otherwise Rail will not succeed in gaining
business from Road
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European rail network

• Specific expectations
• One-stop-shop approach ? integration of national
  networks
• Fast deployment of ERTMS
• Open access to infrastructure services
  facilities
• Effective cross-border access and handling rules
• Stronger commitment of National Rail to deliver
  on results (quality, speed, maintenance,
  problem-solving, pro-active business approach,
  open book approach)