RAILWAY INTEGRATION IN THE GATEWAYS OF EUROPE VIENNA, AUSTRIA. NOVEMBER 18-20, 2019 The World Bank, together with the Austrian Federal Ministry of Finance, the Austrian Society for Traffic and Transport Science (OeVG) and the Austrian Chamber of Commerce organized the 5th Annual Railway Workshop: “Railway Integration in the Gateways of Europe” in Vienna, Austria on November 18-20, 2019. The purpose of this workshop was to bring together representatives of the regional railway community “at the gateway of Europe” to discuss opportunities and bottlenecks to integration with the railways of Europe. The conference was attended by client delegations from Albania, Azerbaijan, Georgia, Moldova, Montenegro, Serbia, Turkey and Ukraine, as well as representatives from EIB, EBRD and industry partners. The three-day program was opened by Ms. Elisabeth Gruber, head of international finance institutions at the Austrian Ministry of Finance and Mr. Lucio Monari, World Bank director for infrastructure in Europe and Central Asia. The keynote address by Mr. Alain Barron from the European Commission kicked-off the event. As key interlocutor for the recently endorsed Western Balkans Transport Community Treaty, he emphasized the importance to develop a common legal framework to enable “the transport of tomorrow, not the solutions of the past”. Focus on innovation, resilience and especially administrative capacity-building within the institutions shall pave the way to more connected and competitive railway systems across borders. The European Commission will soon issue its “green new deal” which will encompass transport, as one important tool enabling the European integration process among EU- and neighboring countries. He highlighted key challenges in railways for Western Balkan countries: (i) decrease in freight and passenger traffic due to poor quality of network (ii) small networks and many borders to overcome with too little cooperation among railway operators, (iv) incomplete market opening and little competition, and (v) a lack of maintenance of existing lines. The subsequent panels, and workshops focused on these challenges, highlighted good practices in the region and offered participants formal and informal occasions to exchange ideas and discuss about their steps towards strengthening railways to be the backbone of national and international transport. The following three days offered a diverse program with several plenary sessions, group workshops, as well as field visits in and around Vienna. On Monday evening the Austrian Ministry of Finance hosted the official dinner with a welcome speech by the Austrian Minister of Finance, Mr. Eduard Müller and Ms. Karla Gonzalez, World Bank Practice Manager for Transport in Europe. The Minister underlined Austria’s long history in railway construction 1 and its focal point as connectivity-node in the heart of Europe as well as the relevance railways have today, regarding climate change and ambitions for green growth. Ms. Gonzalez underlined the need to further enhance gender-equality also in the transport sector, as transport can be a catalyst for equal opportunities for all. The networking lunch on Tuesday, organized and moderated by Mr. Markus Haas from the Austrian Chamber of Commerce, gave participants the opportunity to connect with representatives of the Austrian railway industry. DAY 1, NOVEMBER 18, 2019 TECHNICAL ISSUES FACED BY RAILWAYS IN INTEGRATION The first panel of the conference started with Mr. Carlo Borghini, executive director of Shift-2-Rail. He specifically focused on the role of innovation in the effort for a better, more integrated European rail- network, beyond national borders. Shift-2- Rail is a European institution formed as JV between the EU and 27 entities representing the rail sector. With the clear standpoint that “railway innovation can overcome barriers on the way to connecting the continent”, Mr. Borghini advocated for a stronger role for technology in the rail sector to facilitate the shift from road to rail. Recognizing the “overregulation” within the EU, his organization tries to change the system and lobbies for common global standards, specifically looking towards new technologies such as artificial intelligence, robotic, and on demand services. Mr. Bashkim Kasoruho, head of the project implementation unit of Albanian Railways, discussed the real-life challenges of a railway operator and introduced the audience to proposed new railway investments in Albania. The projects include rehabilitation of the existing line from Durres to Tirana and a new link to the Tirana International Airport. The 40 km Durres – Tirana line is part of the TEN – Indicative Network Extension for the Western Balkans, Corridor VIII, connecting the two biggest cities of Albania. The 4km extension of the railway line from the Tirana Multimodal Public Transport Terminal (PTT) to Tirana New Boulevard, which is a recently developed urban space on the grounds of the former Tirana railway station, represents the final link from Tirana Airport to the city center. One technical challenge faced here is managing and integrating locomotives for the services, on a mix of electrified and diesel lines. Key issues for Albanian railways are cross boarder linkage points alignments and optimized design, the use of common standards, regional logistics and integration, scheduled design and construction, and implementation including interface management. In procurement, key obstacles outlined were the realm of design, construction, operation and maintenance, as well as finding balance between large and small contracts and following clear procurement guidelines. 2 IMPLEMENTING INTEGRATION POLICIES – RAILWAY EXPERIENCES In the second panel, Ass. Prof. Jakub Karnowski from the Warsaw School of Economics and former Polish Railways Management Board President and Ms. Lucija Filipović, representing the railway infrastructure company of Montenegro, gave insight in successful reforms in the past and planned reforms for future. Mr. Karnowski explained how in the 1990’s Poland neglected its rail sector and focused on road transport. According to Mr. Karnowski, by 2010 railways was probably the most neglected part of the Polish economy and the debt of the Polish railway company was substantial. Mr. Karnowski was part of a large railway reform effort, whose strategy was based around the customer, investments, safety, and value creation. Currently Polish railways and especially its cargo division is a profit-making entity in a competitive market. One important aspect leading to this turnaround was a diversified hiring policy, bringing young people in the company with a broader range of professional backgrounds. Also, the focus on rehabilitation of existing lines, instead of expensive new projects safeguarded financial viability and successful operations in future. Following this successful example of Polish railways Ms. Filipović elaborated on the situation in Montenegro and ambitious plans to surge the market share of railways with the aim to increase safety, speed, interoperability and improve cross-border operations with Albania. The subsequent Q&A session gave other participants the opportunity to relate these challenges and possible solutions to their own experience. Especially Serbia explained their experience with rail market opening and the resulting strong competition through private operators, which remains a challenge. FIELD VISIT TO SWIETELSKY CONSTRUCTION COMPANY In the afternoon the group visited the Swietelsky construction company, a privately-owned enterprise engaged in all construction branches, including roads, bridges and railways. The company is the 4th biggest enterprise in the Austrian construction industry. In railways they are leading experts in the provision of track maintenance services. They employ specialized equipment for track construction, rehabilitation and maintenance. A combined machine for ballast cleaning and track renewal was developed together with the Plasser & Theurer company, which can handle up to one thousand cubic meters of ballast and work on all kinds of sleepers. 3 Mr. Bernhard Brandner, Managing Director for Swietelsky Rail International, presented views about Public-Private- Partnership (PPP) projects from the private construction sector perspective. He pointed out that transparency and predictability is the basis for their sustainable business decisions. PPPs in the rail sector are more difficult than in other sectors and guarantees from the states for private sector investment are an essential part of the PPP structure. Swietelsky is potentially interested in both the construction and maintenance parts of a rail PPP. However, Swietelsky does not want to “tie up” its capital in a long-term asset investment. It would like to finance and build, refinance to pull its capital out of the deal, but remain with a maintenance contract. So, the typical rail BOT structure is not interesting for them. The maintenance side of projects is more interesting if the project is big. Overall, Mr. Brandner concluded that rail PPPs are not very attractive for private construction companies. Currently Swietelsky has no active PPP in the railway sector, only in the road sector. Mr. Brandner and Ms. Martha Lawrence, World Bank lead of the Railways Solution Area, agreed that PPPs are more expensive than traditionally financed projects and should only be used when the private sector skills obtained offset the higher costs. To be sustainable, the PPP transaction must be a “win” situation for both sides. DAY 2, NOVEMBER 19, 2019 IMPLEMENTATION OF SMART SYSTEMS FOR RAILWAY INFRASTRUCTURE Day 2 started with Professor Peter Veit, from the Institute of Railway Engineering and Transport Economy of the Graz University of Technology. He discussed the challenges of life cycle costing and maintenance of rail infrastructure, track quality and efficient investment strategies. The sustainable success of investments in rail networks is ensured by initial high track quality and a clear maintenance action plan for the following years. Prof. Veit’s model takes “standard elements” as an initial basis to identify track behavior in typical situations. However, prediction in specific situations cannot be based on standard elements. This last step of the asset management logic requires time sequences of data. Thereby Prof. Veit stressed that data is essential, but only useful if well interpreted and checked by well trained and experienced railway staff. Prof. Veit has advised Serbian railways on applying the life cycle costing model. Mr. Branko Bajatovic, Railway Policy expert and consultant to the World Bank, and Mr. Zoran Jevtić, Manager for Railway Infrastructure Maintenance in the Serbia Railways Infrastructure Company (IZS), shared their insights on how this life cycle costing model was used successfully. After three decades of no significant investments in Serbian railway lines, the railway is trying to improve the condition of its railway infrastructure. So far, the government of Serbia transformed its vertically integrated railway into three operational railway companies, each with separate responsibilities for: (i) infrastructure; (ii) passenger services; (iii) freight services; and (iv) the previous company Serbian Railways. Over a two-year period (2017-2018), the World Bank directed an assignment with the railways infrastructure branch (IZS) to develop an integrated railway database and a life-cycle infrastructure cost model with a support decision making methodology to help priority lines for reconstruction are identified. The World Bank is currently in the process of launching an investment project for the rehabilitation of specific identified lines. The completion of this database is right now the most pressing issue for Serbian Railways. The database began with the collection of data for the evaluation of standard elements as introduced by Prof. Veit. 4 Following the presentations all conference participants split in three groups and had the chance to learn in detail about specific in-depth topics regarding life cycle costing: Prof. Veit elaborated closer on system behavior, Dr. Schilder, former Head of Track Superstructure Work at OeBB, discussed technical aspects on adjusting parameters for standard elements and Assoc. Prof. Dr. Marschnig also from the Graz University of Technology, explained further the economic evaluation methods in life cycle costing. The trainees actively participated in the discussions and learning tasks and discussed opportunities and bottlenecks for application in their own country contexts. FIELD TRIP TO SIEMENS MOBILITY On the Siemens field visit in Wien Simmering the group had the possibility to see sophisticated Siemens technology. The site in Wien Simmering is the headquarter for metro, passenger coaches, and light rail business of Siemens worldwide. All these vehicles are developed, manufactured and assembled on this 140,000m2 area. The latest manufacturing technologies for carbodies applied at this construction site are made of carbon, stainless steel and aluminum. The group had also the chance to observe the high-tech paint robot operating at site. After the company tour Mr. Wolfram, CEO of Siemens Mobility took time to lay out further Siemens business developments, followed by a Q&A session, touching upon topics such as driverless vehicles, railway maintenance and the global scope of Siemens Mobility involvement. DAY 3, NOVEMBER 20, 2019 RAIL MARKET OPENING AT THE REGIONAL LEVEL The first panel on the last day of the workshop involved four speakers from different contexts presenting their experience and practice in rail market opening at the regional level. Mr. Sebastian Sperker, managing director from Rail Cargo Austria provided an overview of the operations of his company, one of the biggest rail freight transportation companies in Europe, and lined out the main challenges for his business. According to Mr. Sperker border crossing remains the key challenge on the way to one European rail network. Even within the Schengen area, efficiency at borders must be increased for faster transport, better quality, competitive costs and lastly to facilitate the shift from road to rail. Ironically comparing crossing borders on the European continent with a journey to the moon – Mr. Sperker also points out that the beautiful diversity in Europe also comes along with challenges, such as the multitude of languages and difficulties to agree on one. As ways to approach those challenges he presents solutions such as interoperable locos and one common IT solution. 5 Mr. Azad Huseynov, Head of the Institutional Reforms Management Department at Azerbaijan Railways comprehensively laid out the reforms Azerbaijan Railways is currently undergoing. The effort is guided by five main goals: safety, quality & reliability, efficiency, sustainable development and market orientation. Especially the latter was much stressed by Mr. Huseynov. The institutional structure is currently undergoing major change. Infrastructure services as well as other corporate entities have already been reorganized in separate departments and are currently getting ready to become distinct legal bodies. The new company set-up was also accompanied by changes in hiring strategies to bring young talent with a variety of backgrounds on board. Azerbaijan Railways launched the corporate restructuring in 2018 and positive results could already be seen in reduction of the financial burden of the company. Currently Azerbaijan railways has several investment projects in the pipeline and as 40% of their freight revenue comes from transit, one of their goals is to establish a thriving east-west and north-south line through the country connecting to neighboring states. Their reforms aim to lead towards a more market-oriented, revenue gaining railways system, which can compete on the global market and offer a competitive alternative to road transport. Mr. Volkan Recai Çetin, head of the Transport & Logistics Department at the Turkish President’s Budget Office introduced us to the planned reforms in Turkish Railways. With the statement “better late than never” he introduced the audience to the main pillars of railways restructuring. Currently the railways performance is falling behind other peer countries, despite heavy public investment. The 11th National Development Plan of Turkey (2019 to 2033) aims to increase the share of transport by rail with a specific focus on freight, while also focusing on enabling increased competitiveness, intermodal transport and decreasing logistic costs. Ambitions also include the development of rapid and high-speed rail lines, extension of branch lines and 77% electrification rate as well as better customer-oriented service provision. One main challenge to achieve all this are the complicated structures of the Turkish railway sector. Mr. Çetin described it as “very complicated and vague” – a reorganization process shall separate the different functions and open to private operators. A railway reform council will also be established to support this process. Lastly, Mr. Eugene Seah, Chief Operations Officer at the Baku International Sea Trade Port CJSC presented his perspective on boosting international trade and transport through Azerbaijan. He started off with the China Belt and Road initiative, which he views as a big chance for Azerbaijan. The new Port of Baku is in the middle of the trade routes and over 2% of goods traded between the EU and China are now transported by rail – this is an increase of four times since 2007. Nevertheless, trade in the region faces challenges: Kazakhstan, Tajikistan and Uzbekistan are among the most difficult places in the world for cross-border trade according to recently published World Bank report. For Mr. Seah the key anchor points for improvements are the need for (i) multilateral agreements (ii) digital technologies and (iii) information exchange platforms for all stakeholders. The session concluded with a group discussion among client delegations and participants around the methods for institutional reform, the role of state subsidies and challenges when faced with private freight operators. 6 UNIVERSAL ACCESS IN TRANSPORT The final panel of this year’s Vienna Railways Conference presented participants with the topic of “universal access in transport”, discussing the measures railway companies and policy makers can take to make access to transport inclusive and equally accessible for everyone. Ms. Karla Gonzales Carvajal, Transport Practice Manager for Europe at the World Bank and lead of the Banks Gender Transport Task Force kicked off the session. In her opening statement she made clear that transport is not gender-neutral: women make more trips throughout the day, travel more often with children and strollers, and are more often victims to (sexual) harassment. Globally transport systems are often designed for the needs of men, leading to transport contributing to women’s low labor work force participation rate. Women must spend more money on transit or, and if they can afford it, tend to switch to private cars. As Ms. Gonzalez declared, “We want women to keep using transit, but they deserve a better transit system”. Accurate data collection and more women representation in the transport workforce are key steps to a more equal system for everyone. With that she closed her call for action for transport providers and policy makers to together make this change. Ms. Eva Kail, gender expert of the City of Vienna, a city internationally renowned for its gender-sensitive planning, introduced the key guidelines the city is following: (i) safety, especially in station areas and its forecourts; (ii) safe locations of bus and tram stops as well as facilities such as restrooms in the station building through ensuring social control of places; (iii) comfort through well maintained and clean areas; (iv) and safe and accessible pedestrian ways leading to stations. Also symbols play a role. In Vienna, signage in public transit reminding people to give seats to more vulnerable people show men as well as women with babies. Lastly, sensitization and training of employees, as well as women representation in all segments of staff are important. Core effort of Ms. Kail’s job is to get gender- sensitivity in the minds of people and undertake gender assessments to maintain and enhance Vienna’s high standard of living, equally for men and women. For this she conducts gender walks, focus groups, and consultations. Also, the City of Vienna conducts “Fairness Checks” and maintains a “Gendersensitive Data Network”. Finally, Mr. Kurt Bauer, head of high-speed rail and long-distance services at the Austrian Federal Railways (OeBB) shared the railway operator’s perspective. OeBB employs several campaigns to specifically attract women. Also, in their railway’s operations OeBB sees inclusivity as part of their “social responsibility as company”. Women represent the main client group of OeBB, and the system needs to serve their needs. Beyond gender inclusivity Mr. Bauer also elaborated on their disability inclusive approach. The new high-speed trains operational by 2023, will go beyond the legal standards for disability-friendly design. OeBB worked together with representatives from the community, got their feedback and collaboratively raised the building standards to serve people with special needs. As a challenge Mr. Bauer indicates not having integrated railways in the EU anymore makes it harder to push such agendas, concluding that “there needs to be a willingness in the whole industry to cooperate”. OeBB already having 7 the highest number of passengers (relative to total population) in the European Union, wants to further push the needle and welcomes any suggestions on how to make the system even more accessible, closing with “it is [after all] not about gender, it is about half the population”. FIELD TRIP TO OEBB TECHNICAL SERVICES Following the final panel, the group toured the fleet maintenance and management factory of the Austrian Federal Railways, where they could see in person OeBB trains being refurbished, maintained and repaired, as well as learn about their staff organization and management, standards and maintenance cycles. 8