Guidelines for Sustainable Partnerships in Railway Maintenance

Guidelines for Sustainable Partnerships in Railway Maintenance


B P Scholten, ECORYS Transport, NL


An analysis of practices with multi-annual contracts between infrastructure managers and States for railway maintenance financing in the EU including Switzerland and Norway. Guidelines and a road map for implementation have been developed.


Problem Analysis
The problem relates to the existence of yearly fluctuations in the income and expenditures of the infrastructure manager (IM). The influence of the IM on its income from rail access charges and State contribution is limited. In case a financial gap occurs, the IM is forced to delay planned maintenance actions, in particular renewals.

Concept of Partnering
Partnerships for railway maintenance should focus on developing a maintenance strategy and a maintenance planning. These should be based on:
 þ State or regional policy regarding passenger transport and Public Service Obligations (PSOs).
 þ A shared view on the freight transport market and the function of the rail network on this market.
 þ Access charging policy.

Government Policy
Governments develop long term transport infrastructure plans (5-10 years). These policy plans include strategic choices of the Government with regards to financial support. These choices are also reflected in the (acceptable) level of access charges. The Government¡¦s policy is an essential reference for the IMs business planning.

Business Planning
In order to make the partnership successful, it is essential to understand the IM¡¦s multi-annual business planning process. The ¡§building blocks¡¨ of a multi-annual business planning are:
 þ Market forecast (10 year period).
 þ Tariff and revenue plan (5 year).
 þ Plan for changes in network (5 year): network size, lines, stations and yards.
 þ Long term global renewal and modernisation plan (>10 year).
 þ Renewal and modernisation plan (5 year).

Finance Plan
One of the key barriers to MACs for railway maintenance contracts is the apparent inability of the Government to commit budget resources for more than one year as has been stated by most of the interviewees. Several solutions are possible for this problem: e.g. definition of separate investment programmes, renewal programmes and operational maintenance funding.

Monitoring the Partnership
The contract needs to operate with mechanisms to make sure all parties shall meet their contractual obligations. Contracts can be enforced by using incentive mechanisms and/or penalty mechanisms based on quality criteria.

No uniform quality criteria are used in the EU at this stage. Lessons learned in the UK, Holland and Switzerland show that for a start only a few indicators, preferably also used in the old integrated railway, should be used: e.g. punctuality, a cost indicator like maintenance cost per train km, safety and presence of temporary speed restrictions and their duration.

Evaluation and Termination
A multi-annual partnership should be evaluated and subsequently strategic plans for the future shall be decided upon. In case the IM owns the rail infrastructure, the possibilities of the State to terminate the partnership as a consequence of under performance are limited. One of the possibilities, in case only one IM is managing the rail infrastructure, is to re-assign part of the network to another IM.

Road map for Implementation
Not every EU Member State is in the same position when it comes to the possibilities for implementing MACs on railway maintenance. Three main groups have been identified:
 þ A: Principles acknowledged
 þ B: Transition phase
 þ C: No multi-annual focus

For group A, the development of a network plan and its financing arrangements, output requirements regarding passenger and freight services and adjustment mechanisms that will be used from year on year for the funding compartments are needed to take the next step in the process.

Countries in group B should provide necessary changes in order to enable translation of any State rail policy into a business plan and maintenance plan before a MAC can be achieved.

The first step for countries in group C is to start the multi-annual business planning process from the IM perspective and to start policy development from the perspective of the MoT. The target for this first stage can not be a fully fledged MAC but probably to arrive in group B.

Concluding remarks
The road map for implementation shows that no one size fits all recipe for multi-annual agreements between the State and the IM exists. However, one has to conclude that in a lot of cases the planning mechanisms and contract agreements can substantially be improved.

Nevertheless, one needs to acknowledge that in the end the level of investments in the rail network on capital work and maintenance remains a political choice. It would already be a step ahead if improved planning mechanisms could be reached, in order to make clear what the consequences are of different maintenance budgets on the quality and size of the rail network.


Association for European Transport