challenges and vision of company future development within a competitive market Čd, a.s., jiří...
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Challenges and vision of company future development within a competitive market
ČD, a.s., Jiří Havlíček EFRTC General meeting, 22/06/2012
In 2011 ČD carried 166 mil. travellers / year, means cca 450 000 daily
In 2011 ČD carried within integrated transport systems cca 49 mil. people, means cca 135 000 daily
Increase of revenues from tickets cca 5% compared to 2010
cca 450 000
Railway transport represents one of the key and accessible mode of transport
cca 135 000
+5 %
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Passenger transport – ČD, a. s.
Regional Operated under long term
agreements with each of the 14 regions, including the city of Prague
Long-distance Consists of interregional and
international rail transportation activities
Operated under long term agreements with the state
Commercial Non-regulated passenger
transportation operations Includes „high-speed“ operations –
SuperCity Pendolino
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Renewal of rolling stock fleet is ine of the key preconditions od ČD competitiveness
2008 2009 2010 2011
0
7,254
9,906
11,249
Signed contracts (mil. CZK) New and modernized Rolling stock
Rolling stock investments
2008 2009 2010 2011 2012 -
78 144
252 279
-
53
36
68 70
Nová ŽKV Modernizovaná ŽKVNew Modernization
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Competition on Czech railway market
Freight transport
Market opened
63 licensed operators for freight transport
CD Cargo market share (86,84 % in gross tkm, 78,19 % in train km)
Passenger transport
Market opening (22 officially registered operators for passenger transport)
Tenders for operation of long-distance lines are being commenced by Ministry of Transport
First three tenders to be opened in 2012/13 - up to 8 % of market (9 interested parties for the first one)
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Fair competition is desirable, motivates to the bid of higher quality
One of the major preconditions is harmonization of conditions with road transport
6
Imbalance between railway and road infrastructure development
Each train pays for use of any type of infrastructure, in road sector only selected group of cars pay on selected network
Higher requirements set in legislation for railway business
One of the major goals is finalization of corridor lines modenization with future construction of high speed lines and convergency of infrastructure priorities
Czech railways are under-invested and overall modernization runs slowly and with delays to original timeplans and in comparison with neighbouring countries
Insufficient parameters of modernized corridors limit competitive business (maximum speed up to 160 km/h on limited part of network)
Capacity issues around municipalities
Strategy of infrastructure development must reflectmarket needs and plans of „order parties“
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Slow speed implies low interest in railways service
Examples of travel time by train, high speed line and bus on selected lines:
Line By train nowadaysHigh speed line
(estimation)By bus nowadays
Prague – Nürnberg 5 hod 46 min 3 hod 4 hod 15 min
Prague – Brno 2 hod 40 min 1 hod 2 hod 30 min
Prague – Pilsen 1 hod 35 min 30 min 1 hod
Prague - České Budějovice 2 hod 35 min 1 hod 35 min 2 hod 35 min
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Railway system is very closely linked, sensitively reacting on any failures
Inhomogeneous and potentially
conflicting strategies
Missing economic motivation for
investments in the projects of
operators´interest
Global optimum of railway
system not achieved, synergies
not used, increase of costs of
railway system
State
SŽDC, state
organization
Infrastructure operation
Infrastructure maintenance and development
Allocation of capacity for operators
ČD, a.s.
Railway transport passenger operator
Railway stations
ČD - Cargo, a.s.
RISKSCurrent state in the Czech Republic
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Organizational structure overviewThree main arguments in favor of the proposed organizational structure:
Considerable cost savings due to synergies and increased efficiency
Coordination of priorities between rail operator and infrastructure manager
Best practice option used by the most successful companies in the rail industry
Infra-structure
Freighttransport
Passenger transport
Station & Service
Reg
ula
tor
Railway holding
Share
d s
erv
ices
Potential solution might be an integrated railway holding with four subsidiaries
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„Holding model“ management (implementation of joint policies, methodologies etc.)
Shared service centres for prioriti areas within ČD Group (IT, accountance, investments, treasury, purchasing)
Preparation of Passenger transport subsidiary company
Preparation of „Stations and service“ subsidiary company
ČD has already commenced the steps towards holding structure implementation
Czech Railways put a strong emphasis on the optimization of the railway station management
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Introduction of station fee
Current projects
Optimization and standardization of services in stations along with the fee and the new categorization
Sale of non-essential railway station buildings to municipalities
Sale of other dispensable real estate property in the railway stations
Revitalisation of the Prague Main Station revitalisation in cooperation with Grandi Stazioni
Revitalisation of the station buildings through differentiated funding
• NUMBER OF PASSENGERS1
• REGIONAL VS. LONG-DISTANCE
• POSSIBILITY TO CHANGE TRAINS
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Categorization has been updated recently based on these three parameters
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Categorization reflects
the traffic importance of individual
stations
Reflects the volume of necessary services
Reflects number of passengers and the volume of necessary services
Reflects the time passengers usually spend in stationsand the volume of necessary services
2
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Elementary services will further be completed with a range of additional services. However, these will not be granted for each category of stations (e.g. Bicycle depository, lost and found etc.)
Legislation changes are expected to be necessary to start the station fee
Exact date of fee introduction has not been set yet
The station fee is in preparation, being intensively discussed with the Ministry of Transport
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ČD optimizes the property portfolio also by the sale of dispensable (non-core) real estate property
VOLUME OF non-core PROPERTY
EXPECTED EFFECTS
Process
Ca 4600 buildings
Ca 62 mil. m2 plots
Cash income Decrease of maintenance and
renovation cost Higher work efficiency
The sale process will be supported by a consorcium of companies (real estate agents, management consulting, investment banks)
Because of the enormous volume of property, ČD intends to sell it in large „packages“
Part of the property will be probably sold to the infrastructure manager (SŽDC – state organisation)
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Main features of this revitalization:
Enlargement of underpasses
New Passenger service center
New luggage depository
Rennovation of the facade
The Prague Main Station is being successfully revitalisedin cooperation with Grandi Stazioni
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ČD is trying to obtain European funding for the rennovation of railway st.
Currently a notification process is running to confirm this subsidy will not account for a inadequate state aid
The challenge is to find sufficient financing for the renovation of the core assets
• Regional operational programs
Programming period 2009-2013
600 m CZK
Renovation of station buildings
