The European Court of Auditors published in October a report on ERTMS deployment (A single European rail traffic management system: will this political choice ever become reality?) according to which the system deployment is at a low level and lacks uniformity despite the fact that the system is not questioned by the rail sector. The Court specifies that many infrastructure managers and rail operators are reluctant to invest in this system because of costs and the lack of an individual business case for many of them.
The report examined whether ERTMS had been timely and effectively deployed based on proper planning and cost estimates and whether there have been economic reasons for it, performing an audit in 6 Member States (Poland, Italy, Spain, Germany, Denmark and the Netherlands), as they cover partly all nine core network corridors where ERTMS has to be fully deployed by 2030.
The first official deadlines for ERTMS deployment were set out in 2009, indicating that 10,000 km of trackside should be equipped with ERTMS by 2015 and 25 000 km by 2020. But, as of late 2016, only around 4,100 km were equipped with ERTMS. In early 2017, the Commission revised these targets in the new European Deployment Plan (EDP) and postponed the deadlines beyond 2015, up to 2023, whereas the remaining sections will only be deployed after 2023, without any fixed and coordinated deadlines (with the exception of the overall deadline of 2030). In addition, the TEN-T regulation established a deadline for 2030 to equip the entire core network of 66,700 km with ERTMS (including nine core network corridors accounting for approximately 51,000 km) and 2050 for all 123,000 km of the comprehensive network.
“From past experiences we have learned that we can only focus on realistic and feasible short-term priorities when defining the ERTMS implementation target dates as legally binding. The recently adopted European Deployment Plan (EDP) followed this approach and set out dates to 2023. When defining the network-wide implementation, Member States have to align their National Implementation Plans with the EDP. We can only tackle the long-term challenges, once we have made significant progress on the short-term ones,” Karel Vinck, European ERTMS Coordinator said.
As compared with the targets set, out of 51,000 km of core network corridors to be equipped by 2030, only 4,121 km of ERTMS were in operation as of the end of 2016. This only represents around 8 % of the core network corridors. Out of nine core network corridors the most advanced is the Rhine-Alpine corridor with 13 % of lines already equipped. ERTMS deployment in other corridors ranges from between 5 % and 12 %.
“The current situation puts at risk not only the achievement of the deployment targets set for 2030 and investments made so far, but also the realisation of a single railway area as one of the European Commission’s major policy objectives. In addition, it may adversely affect the competitiveness of rail transport as compared with road haulage,” said Ladislav Balko, the Member of the European Court of Auditors responsible for the report.
According to the report, the ERTMS deployment is low and may mainly be explained by the reluctance of many infrastructure managers and railway undertakings to invest in ERTMS equipment due to the expense entailed and the lack of an individual business case for many of them. EU funding, even if better managed and targeted, can only cover a limited amount of the overall cost of deployment.
A costs assessment is needed
Also, costs with ERTMS deployment don’t involve just the infrastructure, but also the installation of equipment on locomotives. Thus, costs of vehicle retechnologisation vary depending on the number of locomotives and the countries where they perform services. The mandatory ERTMS modernisation, generated by the constant evolution of the system and the necessity of adjusting software errors, generates significant costs. In some cases, the Court specifies, total costs amount to EUR 1 million per unit for the on-board equipment, a sum which excludes the costs generated by the unavailability of the vehicle.
New vehicles should be equipped with ERTMS irrespective of the routes on which they would operate and the average cost of an on-board unit is of around EUR 300,000, or 15% of the total cost of a locomotive.
Thus, the global cost of ERTMS implementation, for both the infrastructure and on-board equipment, would reach EUR 80 billion for core network corridors and to EUR 190 billion for the comprehensive network. Considering that infrastructure managers plan their investments for 3-5 decades, “it is very important that they had a reliable estimation and planning as it cannot be estimated that the EU financing would cover implementation costs and other financing sources must be identified”, the report informs.
Approximately EUR 1.2 billion was allocated from the EU budget for ERTMS trackside and on-board investments between 2007 and 2013 from two main sources: TEN-T Programme, which amounted to EUR 645 million and the Structural Funds (the ERDF and the Cohesion Fund), estimated at EUR 574 million (the ERTMS component is estimated at 10 % of major rail investments). In this period, there were five dedicated ERTMS calls, with an overall budget of around EUR 770 million. However, only EUR 645 million was allocated as some actions were terminated by the beneficiaries even before the Commission decision had been adopted.
During the 2014-2020 programme period the EU budget continues to support ERTMS deployment with an estimated total budget of EUR 2.7 billion. Regarding the CEF, there have been three dedicated calls for project applications, for an overall amount of EUR 850 million until 2020. ERTMS projects can also benefit from the European Structural and Investments Funds (ESIF) support, in the eligible regions, up to EUR 1.9 billion. For this period, the ESIF support to rail amounts to 18.7 billion euro, out of which roughly 10 % or 1.9 billion euro would benefit ERTMS deployment.
We recall that the cost of ERTMS deployment on the core network corridors is EUR 90 billion and that the EU financial support for 2007-2020 is EUR 4 billion, which is less than 5% of total necessary costs for ERTMS deployment on the core network corridors.
At the time of the audit, in the last two CEF calls for project applications, the value of submitted project proposals exceeded the available funding by 5.6 and four times respectively at the third call for applications. Thus, “even if 100% of the EU funding is successfully taken up, the infrastructure managers and railway undertakings will still need to cover the outmost majority from other financing sources in order to deploy ERTMS across the EU”, the report informs.
The report of the Court of Auditors says the EU financing has not always focused on core network corridors, a frequent situation when it comes for support from the cohesion policy, because ERTMS deployment is mandatory for all works of rehabilitation or construction (of a new railway) irrespective of the project location. This is not in conformity with the principle of granting priority to corridors promoted by the Directorate General for Mobility and Transport.
At the time of the audit, 14 out of 31 trackside projects selected had been completed, although five were late and one had been completed with a reduced scope. 13 projects were on-going, including three that were subject to delays. Four projects were cancelled and the EU funding was consequently decommitted. Six out of 31 trackside projects were not or only partially implemented on TEN-T corridors. “This was particularly the case for Cohesion policy projects (four out of 11 projects)”.
As regards on-board equipment, 16 out of 20 projects had been completed, including nine with delays and three with a reduced scope. Two projects were on-going, but in one case the delay resulted in EU funding being decommitted and in another case the project was both delayed and had had its scope reduced. Two projects were cancelled and the EU funding was fully decommitted.
The problem with the financing and deployment of ERTMS projects compromises not just the objectives set for 2030 and the investments allocated so far, but also the development of the single European railway area, one of the main policy objectives of the UE. Apart from these aspects, problems could affect the competitiveness of rail freight transport competitiveness as compared to road transport.
Harmonised version to eliminate the incompatibilities
Compatibility problems are determined by the ERTMS integration with the existing national signalling system (in each member state) and by delaying the system deployment at cross-border level. In the EU, ERTMS is embedded in the national rail networks and their signalling systems. Due to tailor-made ERTMS solutions in the national rail networks, there is currently no ERTMS on-board unit in the EU able to run on all rail sections equipped with different versions of ERTMS. Interoperability issues occur not only in the cross-border sections between Member States, but even within one country (for example, the Netherlands). In addition, the Court noted that, so far, ERTMS deployment has been limited to lines whereas train stations and hubs have not yet been equipped with ERTMS.
As regards border crossing, only limited EU support was allocated for cross-border trackside sections despite EU policy and the Court’s recommendations in 2005 and 2010: in six visited Member States out of 31 trackside projects selected for the review only six concerned cross-border sections, however, two of these projects were cancelled (Germany).
Also, in Germany, ERTMS has not been put into commercial operation on any cross-border section, whereas Austria, Belgium and the Netherlands have already equipped some sections at their borders with Germany. The Netherlands have also equipped the cross-border section with Belgium and Spain has one operational cross-border section with France whereas at the time of the audit, Denmark, Italy and Poland had not yet equipped any of their cross-border sections on core network corridors.
The Member States opted for the deployment of the ERTMS system at different stages of its development and on various railway lines within their national networks. The technical specifications for interoperability have evolved at a very rapid pace hampering the overall stability of the system (on average they have been changed every two years) and resulting in the need for subsequent upgrades. For example, although baseline 2.3.0d was issued in 2008, and is still valid today, baseline 3 was being developed and prioritised for deployment in the meantime. Locomotives equipped with ERTMS baseline 2 will not be able to run on tracks equipped with baseline 3. The stakeholders expect that this problem will be mitigated in the future as baseline 3 on-board units should be able to run on baseline 2 trackside.
This is the case of Italy, where 366 km of high-speed lines are equipped with baselines preceding baseline 2.3.0d and will have to be upgraded in the near future to enable new trains to run on them. In addition, conventional lines are supposed to operate with baseline 3. The locomotives equipped with baseline 2.3.0d will not be able to run on these lines.
Spain is confronted with a similar problem as the first lines were equipped with baseline 2.2.2+. Spain has already upgraded some but further efforts will have to be made to migrate these lines to 2.3.0d. At the time of the audit, 1,049 km out of 1 902 km of lines still needed to be upgraded (55 %). Similarly, 158 out of 362 already equipped vehicles now need to be upgraded to be kept operational.
“The lack of compatibility of the ERTMS equipment is also the result of the fact that the industry prepares tailor-made solutions adapted to the specific requirements of each Member State, which are not always compatible. Potential problems and errors are usually not publicly communicated and this affects the learning curve and makes it difficult to find common solutions”, the report informs.
Additionally, taking into account the large scale of the investments that are planned in the near future under the new EDP, there is a risk that the industry may not be ready to deliver a stable harmonised version of the equipment. “The capacity of the industry to deliver the product will depend on the customisation level of the specific tenders launched by the infrastructure managers and railway undertakings. National variations may further increase both costs and risks to interoperability”.
Effective recommendations
Within the report, the Court formulates eight recommendations for the attention of the European Commission, Member States, the European Union Agency for Railways on the evaluation of deployment costs, decommissioning of national signalling systems, the role and resources of ERA and other recommendations.
The first recommendation includes the assessment of ERTMS deployment costs which should occur by the end of 2018, taking into account the core network and comprehensive network in order to introduce a single signalling system throughout the EU. The assessment should not only include the cost of ERTMS equipment and its installation, but also all other associated costs based on the experience gained in front runner Member States deploying ERTMS on a large scale.
The second recommendation is the decommissioning of the national signalling systems, according to which the Commission should seek agreement with the Member States on realistic, coordinated and legally binding targets for decommissioning the national signalling systems. The deadline is the end of 2018.
“Decommissioning of national systems should become a key catalyst for ERTMS migration that gives a final boost for on-board deployment. Some smaller Member States have already identified dates for final removal of their national system, but big Member States with dense network will have to overcome major challenges to reach that target,” Karel Vinck commented in a statement.
By mid-2018, the Court recommends that Member States, the Commission, the parties involved and the industry that supplies ERTMS equipment should examine diverse financial mechanisms to support individual business cases for ERTMS deployment without any further excessive reliance on the EU budget. With “immediate effect”, the Commission and ERA should, with the support of the supply industry, keep the ERTMS specifications stable, correct the remaining errors, eliminate the incompatibilities between the different ERTMS trackside versions already deployed and ensure future compatibility for all ERTMS lines. In order to do so, ERA should proactively engage in cooperation with the infrastructure managers and national safety authorities prior to the legal deadline in June 2019.
Also, by mid-2018, the Commission and ERA should, in strong coordination with the supply industry, set a road map for developing a standardised on-board unit able to run on all ERTMS equipped lines.
The Court recommends the Commission to assess whether ERA has the necessary resources to act as an efficient and effective system authority and fulfil its enhanced role and responsibilities on ERTMS under the Fourth Railway Package. The Commission should complete this evaluation by mid-2018.
“ERA’s role and responsibilities will further increase as of 2019 as foreseen under the Fourth Railway Package. Therefore, necessary resources need to be ensured to ERA as of now, so that they can act as an efficient and effective system authority,” Vinck says.
Member States should align their national deployment plans, in particular, when a deadline shown in the new European Deployment Plan is beyond 2023. The Commission should closely monitor and enforce the implementation of the new plan.
The final two recommendations refer to the financial aspects regarding the absorption of EU funds. Starting with 2020, the Commission should adapt the CEF funding procedures to better reflect the life-cycle of ERTMS projects so as to significantly reduce the level of decommitments and maximise the use of EU funding available for ERTMS investments. The Court recommends an improved sharing of EU financing to cross-border projects or to core network corridors. This recommendation could be implemented with “immediate effect” and applied in case of new project applications.
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