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Switzerland : losses jobs and cost reductions for SBB

SBB will not receive more money from the FIF (Fond d'Infrastructure Ferroviaire) and the Swiss Federal Council therefore intimate its railroads that only solve the equation of a sharp increase in infrastructure costs. A plan has just been introduced in early November, with a reduction of jobs. Read more....


Mobility : what are the things not to do?

The COP21 will soon open in Paris. Probably a new session for nothing and just to hear it said that we are heading to a wall with the automobile age and that we must to change the world to go to a post-petrol era. Since about 30 years we talk about the same thema without notorious changes. Why? Because this is inconsistent with the on-the-ground reality. Let us look at that in greater detail.


Presentation of the suburban network of Brussels (RER)


In september, was presented to the press the Brussels RER network. Recall that we no longer speak of "RER" (in french Réseau Express Régional) but  "S" trains , with a new logo in support, which will be displayed on the screens of Desiros trainsets. The new logo will also display on the subway, in the stations connected with the train "S".

The stop "Germoir" installed between Etterbeek and Brussels-Luxembourg train station, not far from Place Flagey, will finally see its usefulness full. This new station will be served by two lines: S5 (Geraardsbergen-Halle-Schuman-Mechelen) and S9 (Dendermonde-Brussels-Aalst), in other words 4 trains per hour. The stop "Tour & Taxis" on the western line L28, is also in the program and is not far from most of the 4,000 jobs in the Flemish administration and the IBGE. The "Arcades" station, which is next to that of Watermael-Boitsfort (L26, east) will be open in December 2016. Centerpiece of the Brussels network, the Schuman-Josaphat tunnel will open for the new schedule in next December, in order to repackage trafficking toward the airport or toward Schaerbeek depot. Schuman station, which is served by the main east-west metro line, (re) become a multimodal hub of primary importance.

The pricing is meanwhile not yet decided because it is the subject of fierce negotiations between SNCB and the Federal Government regarding the freedom to choose pricing which must be written officially in the next management contract, expected current 2016. Only after these clarifications, it will be examined the pricing integration with other transport companies STIB, TEC and De Lijn. Meanwhile, we can already savor the map below (enlargement at this link). Each line "S" is a two hourly train line and we get 12 trains per hour on the North-South junction and 10 by the Schuman line.

On the merits, it is primarily for SNCB to demonstrate concrete action regarding the achievement of "RER" that political events classified as regularly delayed from year to year. The media do not dissociate the progress of the train service from the infrastructure works. In 2017, a rate of 90% of trains "S" will be reached. In reality, the trains "S" presented in this map already circulating largely but the 4 tracks provided on L161 (Ottignies) and L124 (Nivelles) are unlikely to be ready soon, caused by the political rules of the distribution of public founds in Belgium (60% for Flanders, 40% for Wallonia). This limits future developments in hourly intervals. Last year, ecologists had provided a light version of the RER folder, only for the area of Brussels and not in Brabant, but this option was not retained.

Does it will decrease automobile congestion in the capital, one of the hardest in Europe? Nothing can to suggest. Beyond stations and train services, it still takes it suits for the daily commuters. The locations of homes, schools and, above all, of jobs, are crucial. On this subject, not sure that the RER called "S" is the solution to avoid the urban sprawl, which is very important in Belgium....


Two ways to diversify activities of railway companies

«In Japan, from the early 60s, and the emergence of the car-oriented society, it was understood that, in order to enhance the competitiveness of railways, there were only two ways: high speed trains, and the diversification activities.» These are words of Mr.Yamanouchi, former president of the JR EAST company. One of reasons that encourage railways to diversify their activities is that the core business - rail transport - is not the activity that brings the most income, at least in its current configuration. 
Read more....


Reforms for Deutsche Bahn ?

Deutsche Bahn will reform its organization to face the stagnation of its turnover and poor results due to bad weather but especially the strikes of recent months. The German company does not seem have taken full measure of societal changes, while the low-cost aviation has become widely imposed on the market and more recently, the long distances buses were liberalized, robbing the company nearly € 200 million. The freight sector is not at its best stage and the offensive to retake many liberalized regional markets did not give the best results. It is clear that mobility is changing from year to year and that the German rail production remains expensive in the public eye. In 2014, long distance trains have reaped 323 million € of turnover, but with a loss of € 111 million compared to 2013. Recently, the regional traffic NRW Rhein-Ruhr-Express (RRX) has changed of owner for benefit of two foreign company, while the share of regional trafic of DB fell below 50 percent in the state the most populous of Germany. 

Significant drop of the turnover

In the words of CEO Rudiger Grube, on July 27, losses due to drivers strikes totaled almost € 500 million. Sales in 2014 reached only € 40 billion while the profit before tax for the first half 2015 fell by over 18% to 890 million, while the executive had originally targeted a full year 2015 with € 2.2 billion profit. According to internal documents, the Chief Financial Officer Richard Lutz now waits only € 2 billion. Similarly, projections of future turnover are revised downwards: from 70 billion initially expected, the goal now would to reach only € 50 billion by 2020. The current group debt would reach nearly 17 billion €.

Current organization

Since 1999 and the "Bahn Reform", the holding DB AG is an integrated enterprise, which is characterized by a significant number of subsidiaries. There are 9 major business units or subsidiaries, where each is a public limited company with its own resources and its own accounts. In the annual report of DB AG, each business unit presents its accounts separately. At the organizational level, the holding company is organized into three divisions, each with three business units: DB Netze (in charge of infrastructure), DB Schenker (freight operations and logistics) and DB Bahn (passenger transport activities ). However, 2 of the 3 divisions - DB Schenker and DB Bahn - are headed by a subsidiary of the holding company, DB Mobility & Logistics, which is also a company. In the end, we can found a double separation: separation between the infrastructure manager (DB Netz) and the transport operator (DB Mobility & Logistics), but also separation between the field of profitable activity and field of activity not profitable. This organization, which had been the subject of objections from the European Commission in 2013, seemed to cause some duplication and create inefficiencies.

The CEO Rudiger Grübe reshape the big company
New structure
Rudiger Grube had submitted to the Monitoring Council of 27 July 2015 a six-points plan for the restructuring of the Group to meet the challenges in several sectors. The Deutsche Bahn Supervisory Board has accepted the structural and personnel changes within the Group. "We act because of increased competition, of the increasing regulation and of the rapid rise in costs, which require these changes," said Grube. The CEO will not only reshape the Executive Board, which decreased from eight to six leadership positions. It also attacks the structure of the group described above. So far coexisted two holdings to meet the IPO requirements: DB AG since 1999, and DB Mobility Logistics AG. The existence of the latter was decisive, as it includes within it two profitable divisions of the group which ensure the transport activity and which ought to have been introduced on the stock exchange. The target was to sell 24.9% of shares in DB Mobility & Logistics, allowing the holding company, and also the German state, to keep full control of the subsidiary by not allowing the creation of a minority blocking. This project is now cancelled and DB Mobility & Logistics should be reinstated within DB AG and allow, according to sources, a saving of € 710 million over five years, much of which having already been decided before. It is also talk about a partial sale of Schenker and Arriva, armed wing of the company: "With the simplified holding structure, we also increase significantly the pace of decisions and global solutions," said Grube.

A refocusing of activities
The concrete intentions will be presented to the Supervisory Board on the next 16 December. If the sale of minority shares of Arriva and Schenker is in the air - but not decided to date - Rudiger Grube announced its intention to focus on its activities in Germany. Losses on long-distance trains are similar to a previous question of a French inquiry concerning the TGV - which erodes the profitability - and the disappointments of SNCF about its long distance trains service, which made many losses. In the remaining months of the year, customers should embark on more in the new ICE 407 (Velaro). The new generation of ICx will soon begin its licensing procedures through a battery of tests for a period of twelve months. The trains are expected for early 2017. On the infrastructure side, some sources announce that € 28 billion will be needed over the next ten years for the strict maintenance of the infrastructure.

The radical restructuring proposed for Deutsche Bahn may also be accompanied by job cuts. The Group employs a total of more than 300,000 workers, including about 100,000 in foreign subsidiaries. Rudiger Grube has nevertheless stressed that the changes in the Group will be established and implemented "in collaboration with employee representatives." Savings are already planned at the main administrative office in Berlin. About 7,400 people, nearly 5,000 will be placed into a new unit called "DB Global Service Centre". Questions remain however regarding the dissolution of DB Mobility & Logistics, whose staff will disappear partly by the dissolution of a level of gestion. Rendez-vous is taken on the next December 16 with a crucial Supervisory Council for the future of the german company.


Dutch Limburg : concession for Arriva and routes to Liège (BE) and Aachen (DE)

It is finally Arriva which won early June the concession for the province of Limburg, Netherlands. It will be recalled that a fraud had been suspected with Abellio, the elected winner for the new franchise, as explained in this article, but the owner of Abellio itself, Dutch railways, had discovered a major fraud and had passed the information to the Province, causing the cancelling of the concession. The Limburg's concession is ended in all cases for Veolia, the current manager of public transport.

Arriva is not unknown in the Netherlands, as shown this fact-sheet. This subsidiary of the German DB AG group already operates hundred trains and 860 buses in the country. Veolia, the candidate now ousted, announced  to take the issue before the courts. In the meantime, the NS and Abellio have not only thrown down the gauntlet but the CEO of NS, Timo Huges, was forced to resign on June 4 because of misleading statements to the Group's supervisory board, who him withdrew support.

The Chairman of the Board of Arriva, Anne Hettinga, announced from the outset the creation of a transboundary embryonic network with the routes Maastricht-Heerlen and Maastricht-Liège. New trains would be ordered for use under three current catenary systems, said a member of management. On the road side, the german's subsidiary announced commissioning 260 bus. In 2026, all of these busses would be electrical.

Emu GTW of Arriva arrives at Boven Hardinxveld station (photo Frans Berkelaar via flickr CC BY-ND 2.0)

London : Crossrail connection

It is a pharaonic, but necessary, railway project, which ending gradually. British Prime Minister David Cameron came to celebrate on June 4 the completion of the tunneling of the so-called Crossrail line, which would connect the East and West through the City of London, for 2018. The TBM "Victoria" has done the last few meters on May 26, 2015. The eight tunnel boring machines (TBM) have drilled in three years almost 41.843 km of tunnels under the British capital. This project of 20 billion euros is presented by its promoters as "the largest construction project in Europe." The full line achieves nearly 118 km ...

Crossrail will enter service in late 2018 and is expected to carry 200 million passengers a year, thanks to the traffic of 24 trains per hour between Paddington and Whitechapel, each carrying up to 1,500 travelers. This represents for example 88% of the whole of the traffic of the belgian railway company ! This 10% increase in the capacity of rail transport in the British capital, the highest since World War II, should help relieve the train system, subways and buses which suffered from a lack of investment since decades. In parallel, in fact on a perpendicular axis, another railway line is being renovated: the Thameslink, a line connecting the north to the south coast, up to Brighton, via Gatwick.

One of the major novelties of Crossrail is to connect Heathrow airport, the top 3 in the World (2014), and thereby enable businessmen to directly reach the City, and the new Docklands area, without having to take multiple public transports. The works will now focus on ways of installation of equipments, stations and security systems. The next step thus involves the completion of 10 new underground stations in central London, the Docklands and Abbey Wood in the south of the capital. At Farringdon, Crossrail crosses the Thameslink line (mentionned above), while the City will be served by a new giant station stretching between Moorgate and Liverpool Street. This project puts an end to the major railway works in London, after Overground - in service since 2007 - and the project Thameslink, already in service, but whose various projects for improvements of track layers are scheduled to be completed in 2018, including in London Bridge .

All these giant works are part of a strategic plan to maintain London as a big place of the world. Since the 80s, the City has continued to reinforce, with its futuristic skyscrapers and its 400,000 employees - bankers and business lawyers for most - which manage around 20% of global assets. A London revival that culminated with the gradual opening of the new Docklands and the Canary Wharf ambitious project which included the highest building of Britain and created from scratch the second financial district in London. This area is now connected by the Crossrail project, but beyond that, other projects are already on the drawing-board. We will come back ...


Switzerland/SBB : a boom in passenger traffic expected for 2030

That's what is reported by the Swiss daily newspaper Schweiz am Sonntag. The Federal Railways (SBB) are planning to carry 30% more passengers by 2030. Commuters will represent the strongest growth. The Federal company also believes that the Ticino stations will welcome 90% more people. The increase would have to reach 70% in Zurich, and 50% in Bern, Basel and Lucerne. The difference comes from the fact that SBB develop stores within their stations, and offices and residential buildings will be built near stations.

SBB exemplify Zurich's main train station which welcomes every day 437,000 people (passengers and non-passengers). Over the next twenty years, the Federal Railways expect an increase in commuter traffic by 70 percent, a flow of 743,000 people per day. This demonstrates the great importance of the shops in the station, so that the stations become more than train stations, a real living place of the district.

The CEO of SBB Real Estate, Jürg Stöckli, showed the future scenario for other hot spots of the federal network (see chart). In Lucerne, Basel and Berne, transit flows could increase by 50 percent. And more in the Valais, Geneva and Lausanne in particular. The number of passengers who travel between the two cities has doubled between 2000 and 2010. In 2030, a further doubling to 100,000 passengers is expected. In Lausanne, the total cost of the work, including the station Square, reach CHF 1.2 billion, while in Geneva, the connection Cornavin-Eaux-Vives-Annemasse, which will connect the border near the town Annemasse in France for 2019, will cost 1.5 billion CHF. More recently, the Cornavin station has already been upgraded for 110 million CHF.

The strongest growth is expected in the Ticino with 90 percent, almost doubling the current figures. New Rail Link through the Alps (NEAT) with two base tunnels in the Gotthard Pass and Ceneri will shorten rail journey of one hour, for a current cost of 23.5 billion Swiss francs.

How SBB got these numbers? “By cooperation with the federal government and the cantons, with the analysis of the experience of the past (...) The Federal Office of Statistics provides in its main scenario a population growth of 8.2 to 8.7 million inhabitants by 2023” explains Jürg Stöckli. This represents for SBB a huge financial challenge for the next six years, where they will spend up to 600 million CHF per year for the modernization and construction of new buildings.


Netherlands : franchise of Limburg canceled due to fraud

It's a great crack in the spirit of the railway concession in the Netherlands: last Wednesday, a winning offer was simply removed in Limburg following a suspicion of fraud. The facts: two directors of Qbuzz / Abellio were suspended after the discovery of serious irregularities in the award of the concession for public transport in the province of Limburg. These employees have received confidential information from a former employee who was still working for Veolia Transport, a competitor. These are the NS themselves who made the discovery and informed the Province of Limburg of the irregularities. Abellio is a subsidiary of NS for public transport, which operates mainly abroad as show this fact-sheet. Q-Buzz is the Abellio bus subsidiary and therefore, by extension, of incumbent NS. "All decision taken by the province of Limburg to exclude Abellio of the tender will be fully respected by NS", reported the public group, very embarrassed.

Recall that the competition is set at the provincial level in the Netherlands, as explained in this article. Three competitors are present for the dutch market: Veolia, Arriva and Abellio. Veolia manages the public transportation in Limburg since 2006 but failed in the first round of tenders for the new concession from 2016 to 2013, because the company is too short on cash. Arriva, a subsidiary of Deutsche Bahn, also participated but finally Q-Buzz wins. The drafting of the offer would be made with the help of confidential information provided by a former employee of another competitor, Veolia. Except that the man still had one foot with his former employer, and that his help was made via an external firm. "I'm as focused as possible to start with the goal to win the tender in Limburg", he wrote.

For the Province of Limburg, this franchise represent a lot of money, since it covers all regional public transport in the province: train, bus and public adapted transport (trucks, cars). Only the Intercity trains remain in the hands of the national incumbent NS. This results in a theoretical turnover from 60 to 75 million euros per year. The whole of the 2016-2031 concession finally reached around 1.7 to 2 billion euros, representing a market rather enticing.

The Minister Jeroen Dijsselbloem has called the irregularities of Qbuzz / Abellio as "totally unacceptable (...), a disconcerting picture of the culture, of the judgment and of the integrity of the Qbuzz administrators and other employees of the subsidiary. "He requested a thorough analysis of the internal rules and measures for upgrade  their effectiveness.

Abellio operates in UK and in Germany, as shows this picture 1 november 2014 (from ChristOpheri via flickr CC BY-SA 2.0)