Investments of EUR 94 billion and a turnover expected to double in 10 years, as well as a deep transformation that will make Ferrovie dello Stato Italiane (FS) an international company in the field of global integrated mobility. These are the targets of the 2017-2026 FS’ Industrial Plan, relying on five strategic pillars: integrated mobility with the involvement of all operators in the industry; integrated logistics, with a deep reorganisation of the freight business; integration between railway and road infrastructures; international development and digitalisation as the enabler of the entire Plan.
An extended time horizon, is needed for the large infrastructure projects planned but also for the deep transformation of FS, that is projected to become a global integrated mobility company. Investments are split into EUR 73 billion for infrastructures, EUR 14 billion for rolling stock and EUR 7 billion for technological development. More than half of these funds – EUR 58 billion – is already available, of which EUR 23 billion self-financed and EUR 35 billion already funded by Contratti di Programma. The new Industrial Plan forecasts an increase in revenues from EUR 9 billion – expected at the end of 2016 – to EUR 17.6 billion in 2026 and an EBITDA that aims at grow from 2.3 (last 2016 year-end forecast) to EUR 4.6 billion in 10 years.
Integrated mobility for passengers
Ferrovie dello Stato aims at giving a concrete and simple answer to the different mobility needs, by presenting itself as a point of access to the collective mobility, an operator capable of accompanying travelers from their house to their destination.
The current scenario is a mobility market where 80% of people move with private vehicles, 15% by using other shared and public ways, in particular with the large cities LPT companies (Local Public Transport companies), and only 5.2% with the railway transport. For the modal shift towards public transport solutions, the road LPT companies will play a key role and FS wants to be the leading player in this modal shift, by rising from 6% market share in 2015 to 25% in 2026.
With respect to medium and long-haul transport, the aim is at maintaining the high quality achieved, by extending these standards to the entire fleet thanks also to the delivery completion of Frecciarossa 1000. Today, there are 34 circulating trains of the 50 planned: any additional new ETR 1000 delivered will allow to use the ETR 500 and ETR 480 on other lines and, in this way, to increase the quality of all types of products, including Intercity.
In terms of regional transport, the real change is around the corner, thanks to the four-billion framework agreement already signed for the supply of 450 new regional trains (300 with high capacity, 150 with medium capacity), in addition to 50 diesel trains.
The forecasts provide an overall increase, by 2026, in the ratio seats/km between 8% and 10%. Today, however, already 20% of the circulating fleet is renewed, thanks to the deployment of new trains delivered from 2014.
The FrecciaLink will extend the High-Speed experience with both national (Gorizia-Udine, Bergamo-Milan) and international (Turin-Geneva, Milan-Monaco) connections that will be added to the existing ones (Siena-Florence, L’Aquila-Rome Tiburtina, Perugia-Florence, Matera-Potenza-Salerno). To facilitate the use of public transport and make the modal integration easier, in 2026 there will be 30,000 new hub-parking lots.
EUR 62 billion for the rail infrastructure
EUR 62 billion in railway investments, of which EUR 33 billion for the conventional network, EUR 24 billion for the HS/HC network and the European TEN-T corridors and EUR 5 billion in technologies for infrastructure, enabling a modern and systemic mobility for people and freight: Terzo Valico, Galleria di base del Brennero and Turin-Lyon to complete the Italian part of the four TEN-T corridors that cross our country and link the European regions with the most dense population and the most industrial and productive vocation; Milan-Venice HS/HC which in December will step forward with the commercial activation of the Treviglio-Brescia line; infrastructure and technology upgrades in urban hubs of large cities (Milan, Genoa, Florence, Rome) to increase the traffic capacity and thus the number of trains during peak hours; in the South, the opening of the sites of Naples-Bari HC/HS line, over 6 billion to connect two areas reaching a share of more than 40% of market production in the Southern Italy; in Sicily, the Palermo-Catania-Messina corridor. The acceleration of the Adriatic corridor, between Bologna, Bari and Lecce (completion expected in 2018), is also fundamental with an overall time saving of about one hour. The Salerno-Reggio Calabria rail corridor is also important, thanks to the technological upgrade and the improvement of the train path. Finally, the connections with the main Italian ports and logistics centers will be made, thus strengthening the connections between the national rail network and the railway sidings of the main industrial plants in the area.
Mercitalia, the single hub of logistics
The freight business will play a strategic role in the use of infrastructure: there are planned investments of EUR 1.5 billion (of which EUR 1.1 billion for rolling stock, EUR 300 million for terminal and logistics and EUR 100 million for ICT) and revenues at EUR 2.1 billion in 2026 (vs. EUR 1 billion in 2016, as last forecast).
The turnaround in the freight business has the objective to develop a single pole of logistics – the new Mercitalia, with the aim of restructuring the cargo business and rationalize the various freight operators active in the Group, in order to avoid overlapping and maximize efficiency.
Mercitalia will operate through three companies – Mercitalia Rail, Mercitalia Logistica and Mercitalia Terminal – and will have 4,000 employees, all united by the same mission and the same company, also to recreate a suitable sense of belonging and the essential motivation.
The targets are the strengthening of the intermodality, the expansion into business with high added value, such as freight forwarding. Finally, thanks to the creation of a single center, customers will face a single partner, with saving of time and resources.
In the 2017-2026 Industrial Plan the development of international activities is extremely important. Currently, this business represents 13% of total revenues, the goal is to reach 23% in 2026, that – along with the doubling of total revenue – will quadruple the current foreign sales of the Group, positioning FS to the level of the European competitors, with 4.2 billion in revenues in 2026.
This growth will be realised by pursuing three main lines. The first is to act as General Contractor, with the ability to build railways, especially in countries with strong infrastructural gap. Worldwide, there are 200 railway companies but there are only seven countries with High-Speed lines.
FS has the real opportunity to export its know-how, as will happen in Iran, where it is in charge for the construction of two new HS lines.
The priority areas for international expansion are the Middle East (Iran, Saudi Arabia, Oman), India and Southeast Asia (Malaysia, Thailand, Singapore, Vietnam), the Americas (Brazil, Argentina, Colombia, Peru, US and Canada) and Africa (Ivory Coast, Congo and South Africa).
The second step aims at the growth of rail market services abroad. Trenitalia can export the high quality travel in other countries which now offers the high speed rail system.
In addition to strengthening existing cross-border relations (for example the Thello services with France, the Venice-Ljubljana-Belgrade line or the new traffic with Switzerland thanks to the Gottardo and Ceneri openings) will target the most attractive European lines: Paris-Brussels, Paris-Bordeaux, Hamburg-Cologne, Milan-Zurich-Frankfurt (a link that will start at the end of 2017 crossing three countries), Athens-Thessaloniki (thanks to the acquisition of Trainose) and the London-Edinburgh line. All these international activities are possible thanks to the liberalisation of the European railway area planned by the Fourth Railway Package, starting in 2020.
The third and last segment of this chapter concerns the LPT’ international development, that will be mainly implemented by leveraging the Group’s presence abroad.
By comparison, in this respect, the railway Italian company has the same goals as France’s RATP Dev or Germany’s Arriva, which operates local public transport or reginal rail services in many countries abroad.
by Elena Ilie
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