Transcript Slide 1

A FEASIBILITY STUDY FOR A STANDARD
GAUGE SEPARATE RAILWAY LINE
IN ESTONIA, LATVIA AND LITHUANIA
28 June 2011
Objective of the Feasibility Study
• The main objective of this feasibility study is to
identify the most desirable feasible
development option for a 1435 mm gauge
line in the Rail Baltica corridor evolving from a
“top-down” transport strategy covering all the
three Baltic States and an EU-wide rail network
rationale, and
• to give a complete and substantiated picture for
the authorities of the 3 Baltic countries and the
EU if the project seems viable enough to
justify a more detailed analysis on the
respective national levels and to propose a
possible period for implementation of further
studies at the national levels.
Sustainable Mobility
• The overall objective of the Core Network is to enhance the
“European added value” of the Trans-European
Transportation Network (TEN-T). This is defined as a benefit
that goes beyond those achieved at national level and
includes not only economic benefits, but also those derived in
the cohesion, environmental and safety and security areas.
• Principles of the TEN-T core network:
– integration,
– sustainability,
– territorial cohesion and
– openness to third countries
Macro – Economic Context in the Baltics
POPULATION
Population in the Baltic region is
shrinking
GDP
Average long term growth in GDP is
2.3% in the Baltic States
GVA
Growth in GVA is stronger in the urban
areas than in the rural areas
URBAN
RURAL
GOODS
N/S freight market is containerised
E/W freight market is bulk
Analysis of the Supply of Transport Services
RAIL
Int’l passenger rail service is poor.
Regional rail is infrequent, yet cheap.
N/S rail freight service is poor.
E/W rail freight service is good.
AIR
Reasonable network of routes for
international air movements.
Air service is less attractive for shorter
distances.
ROAD
Road network quality is poor, yet
permits reliable journey times.
Good regional and int’l coach network.
SEA
E/W freight from ports to inland CIS.
N/S freight is regional to Baltic ports.
Sea cargo is mainly bulk cargo.
Existing Demand
PASSENGER
Passenger demand is generally low
for cross border movements.
Road is the preferred mode for shorter
distances but changes to air for longer
journeys
FREIGHT
There is a reasonable N/S freight
demand which is currently carried by
road and sea
Global recession has had a negative
effect on demand
Constraints
ECONOMIC
Funding
Government
EU
Other sources
ENVIRONMENTAL
Noise
Emissions
Protected Territories
Sustainability
REGULATORY
Planning
Land expropriation
Setting of Tarrifs
Infrastructure Access
Passenger Tariffs
Freight Tariffs
TECHNICAL (TSI)
New core TEN-T mixed traffic line:
Line Category IV-M
Structure Gauge GC (1435 mm)
Maximum axle load 25 tonne
Maximum design line speed 240kph
FAST CONVENTIONAL RAIL
Three Track Layouts Under Consideration
New Dual Track
New Dual Track
Adjacent to
Existing Track
Dual Guage/
Dual Track
Option Identification
Options Identification
Distance/Passenger Journey Time Comparison
Technical Analysis
Passenger Results – Flow Summary
2-way Daily Flow
Red
2020
Orange
2030
2040
2020
2030
Yellow
2040
2020
2030
Green
2040
2020
2030
2040
Tallinn to Parnu
3,015 3,361 3,721 2,261 2,485 2,755
-
-
-
-
-
-
Parnu to Riga
2,168 2,432 2,695 1,510 1,672 1,867
-
-
-
-
-
-
Tallinn to Tartu
-
-
-
-
-
- 3,068 3,378 3,716 2,144 2,305 2,545
Tartu to Valmiera
-
-
-
-
-
- 1,819 2,088 2,276 1,043 1,150 1,272
Valmiera to Riga
-
-
-
-
-
- 2,735 3,062 3,314 1,805 1,926 2,083
Riga to Jelgava
-
-
- 3,067 3,324 3,625
-
-
- 3,325 3,581 3,867
Jelgava to Kaunas
-
-
- 2,034 2,211 2,402
-
-
- 2,157 2,343 2,530
Riga to Panevezys
2,566 2,837 2,945
-
-
- 2,603 2,883 2,989
-
-
-
Panevezys to
Kaunas
4,611 4,972 5,120
-
-
- 4,649 5,018 5,165
-
-
-
Kaunas to Poland
1,114 1,038
857
768
844
751
694
856
Based on Optimized Fares
710 1,104 1,021
836
Technical Analysis
Freight
Total tonnages over all flows for each of these scenarios are:
Route
2020
2030
2040
Red Route
9.8 m
12.9 m
15.8 m
Orange Route
7.6 m
10.1 m
12.6 m
Yellow Route
8.1 m
10.6 m
13.2 m
Green Route
6.6 m
8.7 m
10.9 m
Technical Analysis
Sensitivity Analyses
Various Sensitivity Analyses were run for both Passenger and Freight:
Passenger:
1. Train Frequency – changed to a one hour service
2. Increase in train speed – a 15% and 30% reduction in journey time
was considered
Freight:
1. Price – various scenarios (low/medium/high)
2. Increase in speed – from 70 kph to 90 kph
3. Variation in induced demand – change from 15% to either 0% or 30%
4. The green agenda – a change to a strong green agenda
Technical Analysis
Revenues
Revenues in year 2040 in millions of euro
Route Option Option 1 Red
Option 2 Orange
Option 3 Yellow
Option 4 Green
Passenger
97
66
108
70
Freight
222
188
187
160
Total
319
254
295
230
•Freight calculated using medium scenario and average distance
•Passenger revenue based on optimised fares
Technical Analysis
Initial Option Comparison
Destination and Connectivity
Primary Cities
RED
Option 1
ORANGE
Option 2
YELLOW
Option 3
GREEN
Option 4
X
X
X
X
X
Secondary Cities
Airports
Journey Times
X
X
X
X
Passenger
X
Freight
X
X
X
X
X
X
Capacity
Passenger
Freight
Capability
Compliant with TSI
Gauge Transfer Facilities
X
X
X
(initial targets overestimated)
X
X
X
X
X
X
X
X
X
X
Noise/Emissions
X
X
X
X
Protected Territories
X
FRS Compliancy
10
8
9
7
Min Operating Costs
X
Min Capital Costs
X
Estonia/Latvia/Lithuania
Terminal Facilities
Tallinn/Riga/Kaunas
Environmental
X
Max Journey Time Savings
Max Revenue Generation
X
X
Max Passenger Trips
Max Freight Volumes
X
Min Technical Constraints
X
X
Min Expropiation
X
Min Spatial Planning Approvals
Max International Movements
Comments
X
X
Max inner-country Movements
Analysis Indicators
6
1
3
1
Total
16
9
12
8
Preferred Option – Red Route
It was agreed at the Steering Committee meeting on 17th March 2011 that Option
1, the Red Route should be the subject of the full Cost Benefit Analysis. The key
features of the red route are:
• Overall length of new track 728km
• The route is a mixed traffic conventional route, with a maximum design
speed of 240 kph
• Journey times between Tallinn and the Lithuanian/Polish Border
» Passenger 4.13 hrs (4hrs:8mins)
» Freight 10.38 hrs (10hrs:23mins)
• Average speeds
» Passenger 170 kph
» Freight 68 kph
• New/Upgraded passenger stations at Palemonas (serving both Kaunas
Centre and the Airport), Panevežys, Riga Central Station, Parnu, Tallinn
Airport and Tallinn Central Station.
• The route is twin track for its entire length on mainly new alignment
• Some dual gauge (1520/1435) sections are required mainly in congested
areas adjacent to existing major stations.
Preferred Option
Preferred Option – Latvia/Riga
Preferred Option
Proposed Service Provision
A draft timetable has been produced based on the following
assumptions:
–
–
–
–
–
Full operations will take place over a 24 hour period, 6 days per week
Track inspections will take place approximately once per week
A limited service will operate on Sunday to enable planned/reactive maintenance
Periodic Blocks of 18-27 hours will be available but not on a planned weekly basis
A two hourly passenger service will be provided starting at 05.30 or 06.00 from the
key cities on the route with the last trains arriving between 23.00 and 24.00 hrs
– The freight service will operate predominately during the night to minimise interference
with the passenger service.
Preferred Option
Infrastructure Requirements – Latvia
Passenger
– Riga Central Station
• 2 European gauge tracks and platforms (dual track if required)
• Additional crossover/passing opportunities will be provided off of the mainline on the
Riga spur between Upeslejas and Riga Central Station.
Freight
– Riga Bulk Terminal (via 1520mm gauge line)
• 2 track double ended siding and engine runround
– Riga Intermodal Terminal (Salaspils)
• 2 track double ended siding and engine runround
– Possible Riga Port Siding and engine runround (via 1520mm gauge line)
– Freight loop
– Maintenance facility for bulk trains and rail infrastructure (Krievupe/Riga)
– A domestic siding in south Latvia in the vicinity of a freight loop (Iecava)
Cost Benefit Analysis
Capital Cost Summary Per Country
CAPEX SUMMARY (M
EUR)
CONSTRUCTION
LAND
TOTAL
%
ESTONIA
€
935
€
108
€
1 043
29%
LATVIA
€ 1 196
€
26
€
1 222
35%
LITHUANIA
€ 1 259
€
15
€
1 274
36%
TOTAL
€ 3 390
€
149
€
3 539
Cost Benefit Analysis
Stages of Implementation
The economic cost benefit analysis sums costs and benefits over
a 30 year horizon period, with all data presented in years. The
stages of implementation are:
• Investment period (13 years): 2012 – 2024;
• Operational period (30 years): 2025 – 2054.
Cost Benefit Analysis
Track Access Charge Assumptions
Track Access Charge (€ per train km)
Passenger Service
3.95 € per km
Freight Service
5.92 € per km
• TAC based on Art 31 and Art 32 of EC document
2010/0253(COD)
• Mark up applied to minimise the financial losses of the rail
manager whilst still providing financial return for the
operators.
Cost Benefit Analysis
CBA – Costs and Benefits
Source of
Cost / Benefit
Rail Manager
Capital Cost
Maintenance Cost
Track Access Charges
Economic Cost Benefit Analysis
Source
Cost of all elements of infrastructure including design and
planning, land, construction, supervision and contingency
Valued net of VAT on materials, and social
cost on labour
All ongoing costs of maintaining the infrastructure during the
appraisal period
Charge paid by the passenger and freight operators to the
manager for use of infrastructure
Calculated in accordance with EU standard
and mark up applied to min. IM losses
Value of infrastructure at the end of the appraisal period.
Valued at a fraction of the construction cost
depending upon the scale of the infrastructure.
Costs of operating and maintaining the freight and passenger
services, includes an elements to pay track access charge to
manager
Revenues generated over the appraisal period from fares paid
by passengers and hauliers
Valued net of VAT on materials, and social
costs on labour.
Valued according to economic cost, by either savings to
economy for business journeys, or value assigned by
individuals for non business journeys
HEATCO values of time used for each country
HEATCO values of time used for each country
Accident Savings
Valued according to economic cost, i.e. direct cost of
emergency services, loss of the economic value of the lost
working time in the case of death or serious injury. An
allowance for pain and suffering can also be included
Benefits From Reduced
Emissions
Economic value assigned to the reduction in emissions of both IMPACT recommended value for CO2
greenhouse gases and local air pollutants..
emissions and HEATCO recommended value
for air pollution emissions used
Residual Value of the Project
Rail Operators
Operating and Maintenance
Costs
Revenues
Transport Users
Travellers Time Savings
External Effects
Cost Benefit Analysis – Economic Analysis - TOTAL
Un-discounted Cost or
Benefit
Discounted Cost or
Benefit
Share in Total
Costs/ Benefits
Capital / Investment Costs
Residual Value
Maintenance Costs
3,496
-1,238
1,886
-117
353
61
103%
-6%
3%
Track access charges
Passenger
Freight
2,508
744
1,764
521
170
351
16%
-1,626
-372
-12%
2,842
605
19%
Operating costs
(including track access charges)
-3,440
-685
-21%
Revenues
5,429
1,142
36%
Value of Time Savings
Passenger
Freight
1,158
340
818
36%
1,627
4,150
On Safety (Accidents)
Air Pollution
Climate Change
1,652
704
1,778
338
148
342
11%
5%
11%
Economic Impact
(€,000,000)
Cost to Infrastructure Manager/Government
Benefit to Manager
Benefit to Operator
Passenger Operator
Operating costs
(including track access charges)
Revenues
Freight Operator
Benefit to Users
External Impacts
Total Costs
1,829
Total Benefits
3,198
Net Present Value (NPV)
EIRR
Benefit/Cost Ratio
1,368
9.3%
1.75
Cost Benefit Analysis – Economic Analysis - Latvia
Cost or Benefit
Un-discounted
Cost or Benefit
Discounted
Discounted Cost or
Benefit
(per km of track)
Capital / Investment Costs
1,207
648
2.76
Residual Value
Maintenance Costs
Benefit to Manager
Track access charges
Passenger
Freight
Benefit to Operator
Passenger Operator
Operating costs
(including track access charges)
-449
114
-43
20
-0.18
0.08
535
159
377
111
36
75
0.47
0.15
0.32
Track access charge per train-km is the same for all countries
-347
-79
-0.34
Operating cost per train-km is the same for all countries
Revenues
761
160
0.68
Optimum fares are lower on Rail Baltica north of Riga
-734
-146
-0.62
Operating cost per train-km is the same for all countries
1,618
339
1.44
Revenues per km of track are lower than in Estonia due to a smaller
domestic market;
427
1,282
340
88
252
1.45
0.38
1.07
On Safety (Accidents)
514
105
0.44
Over the 30 year appraisal period in Latvia 2,028 accidents are
expected to be avoided
Air Pollution
142
29
0.13
Benefits are slightly lower than in other countries
Climate Change
565
108
0.46
Benefits are slightly higher than in Lithuania and slightly lower than in
Estonia
625
967
342
8.4%
1.55
2.66
4.11
Economic Impact
(€,000,000 discounted)
Commentary
Cost to Infrastructure
Manager/Government
Freight Operator
Operating costs
(including track access charges)
Revenues
Benefit to Users
Value of Time Savings
Passenger
Freight
External Impacts
Total Costs
Total Benefits
Net Present Value (NPV)
EIRR
Benefit/Cost Ratio
Construction cost per km: 5,700,000 Euro/km
This is highest of the three nations due to a larger number of
infrastructure elements required (e.g. the bridge over the Daugava.)
Maintenance cost per km of track is the same for all countries
Freight time savings are lower than in Estonia
Cost Benefit Analysis – Financial Analysis
Financial Analysis
The nature of the construction and operation of Rail Baltica mean that there are
two sets of stakeholders, from whose viewpoint the financial analysis needs to
be undertaken. These are:
• The Rail Manager, who constructs and maintains the rail line, these costs are
offset to some extent by the track access charges paid by the operators
• The Passenger and Freight Service Operators who operate the services
whose costs include maintenance of the train fleet and payment of access
charges to the rail manager in exchange for the opportunity to run services on
the track. These costs are offset to some extent by the revenue paid by the
passengers and hauliers who use the service.
Cost Benefit Analysis – Financial Analysis
Financial Analysis – Financial Return on Investment
Total (€ million)
Indicator
Investment Cost excluding EU Grant
Maintenance
Residual Asset Value
Operating Costs
Track Access Charges
Total Outflows
Track Access Charges
Revenues
Total Inflows
Net Cash Flows
Net Cash Flows (discounted)
Financial NPV of Investments (FNPV/C)
Financial IRR of Investments (FIRR/C)
Financial MIRR of Investments (MIRR)
To Rail
Manager
Total
To Rail Operator
Freight
Passenger
3,678
353
-1,569
2,463
2,508
1,365
45
-1,386
-1,386
0.05%
2,559
2,508
5,066
1,676
1,764
3,440
882
744
1,626
8,270
8,270
3,204
785
785
-
5,429
5,429
1,988
517
517
6.22%
2,842
2,842
1,216
268
268
6.18%
Consolidated
3,678
353
-1,569
2,559
2,508
7,529
2,508
8,270
10,778
3,249
-601
-601
3.10%
Preferred Option
Financial Analysis – Sources of Funding
As part of the financial analysis, identification of the different sources of
funding is required in order to calculate the total financial resources
available to the project. Within the framework of EU co-financed
projects, the main sources of funding are:
• Community assistance (EU Grant);
• National public contribution (capital subsidies at central government
level);
• PPP;
• EU loans; and
• Local resources – not foreseen for this project.
Preferred Option
Financial Analysis – Financial Return on National Capital
Total (€ million)
Indicator
Investment Cost
To Rail
Manager
To Rail Operator
Total
Freight
Passenger
Consolidat
ed
3,678
3,678
353
353
EU Grant
-2,070
-2,070
Residual Asset Value
-1,569
-1,569
Maintenance
Operating Costs
Track Access Charges
Total Outflows
Track Access Charges
392
2,559
1,676
882
2,559
2,508
5,066
1,764
744
2,508
3,440
1,626
5,458
2,508
Revenues
2,508
8,270
5,429
2,842
8,270
2,508
8,270
5,429
2,842
10,778
2,115
3,204
1,988
1,216
5,319
Net Cash Flows (discounted)
-208
785
517
268
577
Financial NPV of Investments (FNPV/K)
-208
785
517
268
577
3.70%
-
6.22%
6.18%
8.17%
Total Inflows
Net Cash Flows
Financial IRR of Investments (FIRR/K)
Financial MIRR of Investments (MIRR)
Interoperability Assessment
The objectives of the Interoperability Directive 2008/57/EC should be
understood as a part of the EU approach to improve the performance
of rail transport
• Relevant TSI’s for Rail Baltica:
–
–
–
–
–
–
–
–
Infrastructure: CR INF TSI,
Infrastructure: PRM TSI (since the line includes stations)
Energy: CR ENE TSI (since the line is electrified)
Track side CCS: CR CCS TSI
RST: CR LOC&PAS TSI, RST Noise TSI
On board CCS: CR CCS
Operation and Traffic Management
Telematic Applications for both Freight and Passenger Services.
Implementation Plan
Organizational Design
Overview: Programme Steering Group (PSG)
• Strategic Delivery
• Member States and EU Representation
Facilitation : Integrated Programme Organisation (IPO)
• Technical based organisation to guide development
• Independent from national and international bodies
Assessment: Independent Review Group (IRG)
• Review/Monitor business objective (over project lifecycle
• Independent and commercial experts
Implementation Road Map
Task
Review and confirm high level
feasibility report
Establish PSG, IPO and the 2 IRGs
Duration
6 months
3
4
Strategic stakeholder consultation
Definition of programme plan,
resourcing and financing arrangements
6 months
9 months
5
Review of options assessment for
individual projects within the
programme
12 months
6
Environmental Impact Statement
24 months
7
8
9
Spatial and Regional Planning
Single option design
Scheme procurement
36 months
24 months
48 months
10
11
Construction
Testing and commissioning
60 months
6 months
1
2
6 months
Notes
Accepting strategic objectives and preferred routing will
require significant consultation
Agreeing composition, terms of reference and governance
structures will be complex but can be undertaken in parallel
with task 1.
A critical process to ensure all parties endorse strategy
Establishing at a strategic level, overall structures for
progressing with the programme including high level
procurement and financing strategies. Opportunities to
propose financing arrangements including PPP.
Process designed to allow scheme to move towards single
option design for all components of the system. Opportunity
to test proposal option]s and apply value and risk
management processes
Environmental Impact Assessment of proposed option,
including alternative solutions. Strategic environmental
assessment has to be done by municipalities in parallel.
Detail planning and reservation of territories
Activity to cover all elements
Rolling programme to procure all necessary elements
associated with scheme construction. Land acquisition will be
a significant issue and consideration will need to be given to
corridor reservation and acquisition.
Implementation Programme
Conclusions – Key Metrics
TOTAL
PROJECT
LATVIA
%
Length of Track
728 km
235 km
32%
Investment Costs
€ 3 678
€ 1 271
35%
Economic Analysis - NPV
€ 1 368
€ 342
Economic Analysis - EIRR
9.3%
8.4%
Economic Analysis - B/C Ratio
1.75
1.55
Financial Analysis (FNPV/K) - NPV
577
229
Financial Analysis (FNPV/K) - IRR
8.17%
9.22%
EU Contributions
€ 2 070
Member State Contributions
€ 1 608
€ 563
35%
Conclusions
• Social cost benefit appraisal
gives a BCR of 1.75
• EIRR is 9.3% which is just below
the 11% average for rail projects
funded by the EU during the
previous programming periods
• Only 56% of the total investment
cost can be financed by the EU.
This would mean member state
contribution of €1,608 million
Thank You