proposal to establish a shift2rail joint undertaking council land transport working party - brussels...

Proposal to establish a Shift2Rail Joint Undertaking

Council Land Transport Working Party - Brussels 22 January 2014

European Commission - DG MOVE

AGENDA

•Background and EU Policy context

•Objectives and key elements of the Regulation

• Insufficient growth of rail markets

• Poor consumer satisfaction

• Fragmentation of rail markets and diversity of national standards

• Low profitability due to product customisation, capital-intensity of investments, long product lifecycles, and long and costly authorisation procedures

• Reliance on public subsidies

• Increasing global competition in the rail industry

• Technical know-how in decline with 30% of sector workforce retiring within next 10 years

Key challenges of the rail sector

What are we doing about it?

White Paper – a vision for rail transport 2050

EU Policy context

Fourth Railway Package

Remove administrative and technical

barriers to improve

interoperability and safety

Open domestic rail passenger transport to competition

Better governance of

rail infrastructure

Improve competitiveness of railSpend public money more efficiently

Innovation pillar of the

Single European

Railway Area

• Measures contained in the Fourth Railway Package will be important but not sufficient.

• The rail sector needs major and coordinated investments in R&I that respond to market needs and contribute to completing EU transport policy objectives:

• To reduce the costs of public service obligations

• To optimise traffic management

• To reduce the costs of infrastructure maintenance & renewal

• To increase demand for rail passenger services

• To increase demand for rail freight services

• To ensure provision of adequate competence and skilled human resources

Why an Innovation pillar?

• Close the gap in the innovation chain (from ideas to market)

• Support market uptake and impact by enabling the testing of innovative solutions under real-world conditions

• Ensure strong involvement of all stakeholders thanks to collaborative nature of demonstrators

• Strengthen the European dimension with cross-border demonstrators

• Quantify the impact of the introduction of each new technology and of different combinations of technologies

• Provide increased visibility and generate interest in the rail industry to attract top graduates from across Europe

Why Technology Demonstrators?

Key priority areas for rail R&I

Key priority areas for rail R&I

Estimated needs to cover all 5 IPs = 1.2 to 1.4 billion €

Based on draft industry technical proposals

FP7 rail research (2007 to 2013):

•155 M€ for rail research = 3.7% of total Transport Research budget

•Around 50 rail projects (excluding cross-cutting projects)

•Insufficient project coordination risk of overlaps and/or of generating uncoordinated or redundant technologies

•Lack of system-wide approach with limited or uncoordinated participation of actors from the full rail value chain

•Limited market uptake of innovations with EU funding focused on pre-competitive innovation at low Technology Readiness Levels and "estranged" from market needs

•Limited leverage effect (30% of private funding on average)

•SMEs = 16% of funding

What's already been done?

Focus and coordination of research efforts: Reduce fragmentation of R&I efforts and focus them on areas with high EU added value (SERA and competitiveness)

Leverage of EU rail R&I funding: Ensure long-term commitment from all partners and to leverage additional resources for R&I

Broad stakeholder participation and sustained networks: Gather all the key players across Europe in partnerships to ensure a system-wide approach to innovation in rail and eventually better integrate infrastructure, rolling stock, signalling and other subsystems of the rail system

What needs to be improved?

Market uptake: Close the gap in the innovation chain and support close-to-market projects that meet business and end-user needs

Mitigation of innovation risks: Implement appropriate risk-sharing mechanisms taking into account capital-intensity of investments, long product lifecycles, and long and costly authorisation procedures

Operational performance and cost-effectiveness: Provide a simple, efficient and cost-effective framework for granting R&I

What needs to be improved?

Framework for EU intervention: H2020

Horizon 2020 Funding

~7%

• Linking research to innovation by providing seamless and coherent funding from idea to market

• Simplified access for businesses, universities, institutes inall EU countries and beyond

• More support for activities close to the market, including technical demonstrators, leading to a direct economic stimulus

• Partnerships on the basis of Articles 185 and 187 of the Treaty to be continued and strengthened further

Horizon 2020 – A new approach to R&I

Article 19 of the Horizon 2020 Regulation: PPPs (institutional or contractual) may be established on the basis of strict criteria:

•added value of action at Union level;

•scale of impact on industrial competitiveness, sustainable growth and socio-economic issues;

•long-term commitment from all partners based on a shared vision and clearly defined objectives;

•scale of the resources involved and the ability to leverage additional investments in research and innovation;

•clear definition of roles for each of the partners and agreed key performance indicators over the period chosen.

Horizon 2020 Partnerships – Criteria

AGENDA

•Background and EU Policy context

•Objectives and key elements of the Regulation

• Achieve a step change in the way rail research and innovation funds are gathered and distributed…

• … with a view to stimulating the development of breakthrough innovations that…

• … contribute to a faster and cheaper transition to a more attractive, competitive, efficient, integrated and sustainable European rail system…

• … thereby supporting EU transport policy goals, such as achievement of the Single European Railway Area and the competitiveness of the rail sector.

General objectives

Develop, integrate, demonstrate and validate innovative technologies and solutions that contribute to…

reduce life-cycle costs of the railway transport system;

increase capacity of the railway transport system;

increase reliability and punctuality of rail services;

a more attractive service profile, providing users with an integrated end-to-end solution for their transport needs;

remove remaining technical obstacles to interoperability and efficiency;

reduce negative externalities such as noise, vibrations, emissions and other environmental impacts;

… While upholding the strictest safety standards!

Specific objectives

Joint vision and holistic approach

Tailor-made governance model with strong leverage

Strong role for public authorities

Openness and broad stakeholder involvement

Efficient implementing framework

Key principles

• Joint priority setting in a Strategic Master Plan developed jointly by the Commission and the rail sector in the Joint Undertaking

• Create the link between R&I activities and EU policy goals (SERA, competitiveness)

• Create the link between R&I activities and business needs in the rail sector

• Holistic view of the rail system taking into account all railway subsystems and their interactions

• Integration and coordination of all rail R&I activities to ensure continuity and avoid fragmentation







Key principles

JOINT UNDERTAKING

Min. 920 M€

Tailor-made governance model

ASSOCIATED MEMBERSMin. 200 M€

UNION

Max. 450 M€(H2020)

8 FOUNDING MEMBERSMin. 270 M€

GOVERNING BOARDCommission (50% votes)

8 Founding MembersMax. 10 Associated Members+ Observers (ERA, MS Group)

GOVERNING BOARDCommission (50% votes)

8 Founding MembersMax. 10 Associated Members+ Observers (ERA, MS Group)

Contributions to S2R work

plan

Additional activities in support to S2R Master

Plan

70 M€

50 M€

200M€

150 M€






Key principles

• Strong role for public authorities given the core objective of contributing to EU transport policy objectives and the Single European Railway Area:

• Commission to chair the Governing Board and have final say on membership and composition of Board

• Master Plan to be endorsed by Council

• European Railway Agency to have observer status on the Board and act as advisor on interoperability, standardisation and safety

• States Representative Group to advise on strategic orientation and ensure link with national and regional programmes and priorities







Key principles

• Balanced participation of all relevant actors thanks to a three-tier system:

• Identification of a core group of Founding Members, including the largest private and public players, to secure substantial industry co-funding from the outset

• Selection of Associated Members in a second stage to open up membership to a broad range of actors from the entire rail value chain and from other innovative sectors, including SMEs, research organisations, universities, etc.

• Allocation of part of the Union contribution through fully open calls, including funds for broader collaborative research

Openness and stakeholder involvement

SM

Es =

Min

. 20

%

90

M€

Implementation of Union funding

FULLY OPEN CALLS

Min. 135 M€

UNION

Max. 450 M€(H2020)

ASSOCIATED MEMBERS

Max. 135 M€

FOUNDING MEMBERS

Max. 180 M€Max 40%

Max 30%

Min 30%

• Eight Founding Members

• Consultative process with hundreds of stakeholders from EU28, led by UNIFE, based on Commission criteria:

• Financially sound single legal entities with headquarter (or HQ of rail sector division) in EU member state

• Individual own financial contribution, reflected in a concrete technical proposal, of at least EUR 30 million for the full duration of Shift2Rail

• 8 entities fulfilling the criteria: 6 rail equipment manufacturers (Alstom, Ansaldo STS, Bombardier, Siemens, Thales, CAF) and 2 infrastructure managers (Trafikverket, Network Rail)

• Automatic representation in the Governing Board


• Associated Members

• To be selected via open call

• Can be a grouping or consortium of legal entities

• Individual own financial contribution of at least 2.5% of the budget of the Innovation Programme in which it participates (~ €2 to €6 million depending on the IP)

• Maximum 70 Associated Members based on available budget, although closer to 30 expected

• Participation of SMEs and actors from the entire rail value chain encouraged

• At least one Associated Member per IP represented in the Governing Board


Entities can participate via 4 different mechanisms:

• as an associated member (individually or consortium)

• as a subcontractor, consultant or other arrangements

• through the fully open calls

• through dedicated working groups

€90 million for SMEs over 7 years

• >< In FP7, approx. €22 million for SMEs out of a total of €155 million

• Subject to regular quantitative and qualitative assessments







Key principles

• Integration of Horizon 2020 major simplifications:

• Single set of participation rules

• New balance between trust and control

• Just two funding rates

• Single flat rate for «indirect costs»

• Shorter time-to-grant


• Standard provisions shared with the five Joint Technology Initiative (JTI) joint undertakings proposed in July 2013

• Integration of operational improvements following evaluation of existing Joint Undertakings:

• Streamlining of reporting requirements and simplification of budgetary procedures

• Possibility of resource-sharing with the Commission and other Joint Undertakings or Agencies

• Running costs limited to EUR 27 million (<3% of total budget) and shared 50-50 by the Commission and other partners


Legislative adoption procedure

Vote in ITRE18/03/2014

Vote in EP 02/04/2014

Adoption in TTE Council05/06/2014

Formal establishmen

t of S2R JU25/06/2014

Setting up of S2R JU

Launch call for

Associated Members (based on

draft Master Plan)

Summer 2014

Establish Governing

Board

Adopt rules of procedure, financial rules, budget, staff establishment plan,

offices, work programme, etc.

Appoint Interim Director

01/07/2014

Launch recruitment

procedure for Executive Director

01/07/2014Initiate

negotiations with Associated

Members 4th Qtr 2014

Endorsement of S2R Master

Plan

Appoint Executive Director

01/01/2015

Consultative process for Strategic Master Plan

Appoint Governing

Board Members

1st Qtr2015Presentation

by EC to Council

20/01/2014

Draft report in ITRE

12/02/2014

TTE Council informal position

14/03/2014

EC to present

preliminary draft Master

Plan01/04/2014

Stakeholder seminar End April

2014

Expected timeframe

Thank you for your attention!

proposal to establish a shift2rail joint undertaking council land transport working party - brussels...

Documents

rail projects

rail sector

rail systemmarket uptake

rail freight servicesto

rail passenger servicesto

eu funding

eu policy contextobjectives

high eu