Reductions in track access charges, easing of mark-up regulations, amendments to reservation charges and safeguards for infrastructure managers are among proposals set out by the European Commission (EC) to ease the financial burden on the rail sector caused by the coronavirus pandemic.
In a proposal to the European Parliament and the European Council, the EC calls for the bodies to adopt the regulation to complement the existing allocation and charging framework Directive 2012/34/EU to allow national authorities and rail stakeholders – both public and private – to deal with the negative consequences of the Covid-19 pandemic.
The EC reports that demand for passenger services has fallen by up to 90% compared with 2019 with many new entrants ceasing operation. Both passenger demand and rail freight volumes are expected to be below last year’s levels for the remainder of 2020.
“The effective functioning of the Single European Rail Area (Sera) depends on the economic performance of the market players and of safeguarding the achievements already made regarding management independence of infrastructure managers and train operators, transparency of provisions for charging and network access, non-discrimination and equal treatment in path allocation and charging schemes as well as market opening,” the EC says.
The EC says waiving and relaxing these charges cover a reference period from March 1 to December 31 2020. Specifically, for track access charges the EC proposes derogation from Article 31 (3) of the Directive, which requires that charges for the minimum access package are set at the level of cost directly incurred as a result of operating the train service. The EC argues that the provision prevents the setting of charges at a lower level, a necessary tool in light of the current crisis, for infrastructure managers and member states.
For mark-ups – the amount added to the value of goods to cover overheads and profit – the EC says there is currently an inability to amend these within the current period. It proposes to offer member states greater flexibility to allow immediate downward adjustments.
Reservation charges are intended to discourage railways from cancelling train paths at short notice to promote the best and full use of capacity with the level of charge increasing the closer the cancellation is to the time of operation. However, with the pandemic resulting in severe disruptions to rail traffic and widespread train path cancellations, the EC argues that the directive is no longer relevant and proposes that member states lift the obligation.
Relaxing these rules will inevitably result in reduced income for infrastructure managers (IMs). Under Article 8(4) of the directive, member states are obliged to ensure that the accounts of IMs facing losses due to unexpected lower demand are balanced within five years. The regulation proposes refunding of the infrastructure managers takes place by December 31 in the year after the loss incurred.
Finally, the proposal states that network statements should be kept up-to-date and amended without delay.
The EC says that a formal stakeholder consultation has not taken place due to the urgency of the matter. However, both member states and authorities and stakeholders called on the EC to adopt a proposal for appropriate measures. A survey in March, April and May showed that some member states were showing an apparent readiness to take relief measures along the lines proposed.
“In particular, rail industry associations representing railway undertakings repeatedly approached the commission asking for urgent measures,” the EC says. “These measures would aim to ensure that the sector could cope with lost income and reduce the risk of bankruptcies, especially for private operators. One of the most advanced proposals is the suspension of charges for track infrastructure, stations, services facilities and use of stabling facilities.”
The European Rail Freight Association (ERFA) said it “strongly supports” the measures and says it believes the proposal will provide member states with the necessary flexibility to take concrete actions to assist the rail freight sector during the ongoing Covid-19 crisis.
The proposals to reduce or waive access charges as well as reservation charges are “appropriate and necessary measures” that will provide support to the rail freight industry in an open, non-discriminatory and transparent manner.
“With access charges accounting for 20%-35% of total operational costs borne by rail freight operators, the sharp reduction in volumes is impacting on the viability of running services,” ERFA says. “Without support, there is a risk that some private and independent railway operators will not survive the crisis. This would lead to a less competitive and customer orientated rail freight market and undermine Europe’s modal shift objectives.”
“What is now important is that the proposal for a Regulation is adopted by the European Parliament and European Council,” says Mr Conor Feighan, ERFA secretary general. “ERFA therefore calls for member states and MEPs to support the proposal in the upcoming legislative process.”
ERGOSE: Railway projects worth 693m euros, funded by NSRF 2014-2020
ERGOSE’s current project pipeline is quite interesting since it is spread almost all over the network. According to the planning of company and the Ministry of Infrastructure and Transport, a total of 693m euros will be spent on 11 railway projects which are funded by the NSRF 2014-2020.
Most of these projects concern upgrades of the existing network as well as the installation of electrification, signaling & telecommunications systems. In fact, ERGOSE notes that these projects are mature in terms of design and one after the other will proceed to their implementation.
In Athens, the most important project is the construction of the Athens Central Railway Station (Phase B’), which also includes the underground connection with the Metro, with a cost of 40m euros. With this project, upgrade works of the Central Railway Station will be completed.
Heading north, we find the project for the construction of the new Kryoneri Railway Station with 6.5m euros. One of the biggest projects of this “package” is the upgrade of the double-track line on SKA-Inoi section that will allow higher speeds for the trains, costing 100m euros.
In Thessaly, the contract for the electrification, signaling and telecommunications on Larissa-Volos section is being prepared. The project, with a cost of 71m euros, includes the upgrade of Latomio-VIPE-Volos Railway Station.
In the region of Macedonia, we have a total of 4 projects.These are a signaling and ETCS project on Thessaloniki-Idomeni single-track railway line, with a total cost of 65m euros, a double project for the electrification on Thessaloniki-Promachonas (Thessaloniki-Mouries and Mouries-Promachonas) single-track line with a combined cost of 150m euros (65m and 85m euros respectively). In this geographical area there is also a project for the construction of anew railway station at Neos Panteleimonas in Pieria prefecture.
In the area of Peloponnese we have the electrication project of Kiato-Aigio line with 57 m euros as well as the project that will bring the train from Aigio to Rio. This project includes the superstructure, electrification, signaling, telecommunications and new stations at a cost of 117m euros.
Finally, there is a project for the installation of GSM-R systems and the supply of portable equipment for the sections of Tithorea-Domokos, Kiato-Patra and Thessaloniki-Idomeni, with a total budget of 40m euros.
From the above projects, the tender for the electrification on Kiato-Aigio section (the contractor is Mytilineos) is at the phase of completion while the project for the railway station in Neos Panteleimonas has been also auctioned.
More “mature” than the rest of the above works are Larissa-Volos railway project and the second phase of the construction of Athens Central Railway Station.
Seven contenders for large-scale PPP building project by Thrace University
Another PPP project that is anticipated with great interest by the investment community is about to enter its tendering process. The third large building PPP project by Democritus University of Thrace attracted the interest of a total of seven companies: GEK TERNA, ELLAKTOR, AVAX,J/V MYTILINEOS-ATESE, INTRAKAT and THEMELI.
It is reminded that this building project was put up for auction by Democritus University of Thrace in the beginning of May, concerning the construction of student dormitories, educational, research and other infrastructure of the institution and was previously approved by the inter-ministerial committee a few weeks ago with the Senate consequently deciding to to publish the tender notice.
The cost of the project amounts to 107.3m euros (incl. VAT). It is a large complex of building projects that includes: dormitories, university residences, a new central library, a research center and various other buildings. The expression of interest is set for June 23, 2020.
In its announcement, Democritus University of Thrace notes that ‘as a part of DUTH’s Strategic Planning, this project will be a pillar of development, which will make high quality infrastructure, services and specialization available in the area of student welfare (i.e. student dormitories and catering spaces). Concluding, it expresses warm thanks for the support and cooperation with the political and administrative executives of the Special Secretariat for Investments and PPP projects of the Ministry of Growth and Investments.
The scope of the projects
The University of Thrace is ‘spread’ across 4 cities, which means that there are need for the creation of infrastructure in different areas, at the same time. The scope of this new large-scale PPP project is detailed by city:
Alexandroupolis: 4 student dorms (12,194,34 sq.m. for 350 people), a student dining area (3,776,75 sq.m. for 1,500 people) and university residences (12 spaces for at least 4 people, 1,440 sq.m.).
Komotini: 2 student dorms (9,667.36 sq.m. indoor spaces and 3,551,8 sq.m. of outdoor spaces for 350 people), a student dining area (6,000 sq.m. for 2,500 students), a hostel (660 sq.m. for 28 people), university residences (24 residences with blocks of 4 residences, 2,880 s.qm). The construction of a new central library, a reading room and a multi-purpose facility (i.e. one main building covering a surface of 6,000 sq.m. and 17,000 sq.m. in total).
Xanthi: Research Center of Excellence (1 main building with laboratories and research centers, covering 10,000 sq.m. of indoor spaces and 5,000 sq.m. of outdoor spaces).
A project of great added value
A project of this size in Thrace region will have a major impact on the local economy. The fact that there will be construction works in three cities at the same time is expected to revitalize the construction industry and give employment to many companies. It is worth mentioning that it will be the largest building complex, constructed as a PPP in Thrace in many years.
For the wider technical sector, this project means a big relief for the country’s major technical companies that have been experiencing a prolonged ‘drought’.
As noted by the Democritus University of Thrace, “Planning for the sustainable development of DUTH in the immediate future is expected to be a pillar of a new development model in the region and an important part of its history”.
New ambitious plan for 6 major railway projects in Greece, worth 3.3bn euros
ERGOSE plans to auction 6 very important railway projects through the process of competitive dialogue. Realizing the difficulties of financing but also the time-consuming procedures required to promote the implementation of new major projects, the Ministry of Infrastructure and Transport and ERGOSE are launching a new generation of projects with a total cost of 3.3bn euros aiming to modernize the greek railway and interconnect 6 major ports of the country with the national network.
These projects, according to what Christos Vinis, CEO of ERGOSE, announced from the podium of the 8th Regional Development Conference in Patras(organized by “Peloponnisos” newspaper) last weekend, are as follows:
1. New railway line Thessaloniki-Kavala-Toksotes (i.e. eastern “Railway Egnatia”, with 1.3bn euros
2. Upgrade of Alexandroupoli-Ormenio railway line, with 815m euros
3. Extension of Athens Suburban Railway (“El. Venizelos” Airport-Rafina section), with 300m euros
4. Extension of Athens Suburban Railway (Koropi-Lavrio section), with 380m euros
5. New double-track railway line between Rio and Patra, with 514m euros
6. Connection of Thessaloniki Port 6th Pier with the national network, with 22m euros
According to Mr. Vinis, the choice of the competitive dialogue for the promotion of major railway projects has specific advantages such as the acceleration of the projects’ maturation, the assurance that the best technical solution will be chosen, as a result of the consultation between stakeholders, the possibility of implementing innovative solutions and the compliance with implementation schedules
It is also important that the contractor, after the completion of the dialogue, becomes the master of the project study, thus assuming responsibility for any failure. Now, what remains to be decided is the process by which these projects will run and a more specific timeline for their implementation.
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