Polish railway sector receives major investments

Despite having the fourth largest railway network in Europe, Poland is undergoing significant investments in its railway sector through investment programs.

Recently, the economic importance of Poland’s railways has rapidly increased. In 2017, the Polish railway company PKP transported around 304 million passengers on its trains, an increase of 4 percent from 2016. Rail freight transport has also been growing – in 2017 it experienced an 8 percent increase to reach 240 million tonnes. There is also a huge growth potential to be observed in intermodal transport, which at 6 percent has a relatively low share of rail transport compared to Western European countries. In 2017, around 15 million tonnes of intermodal freight were transported by rail, an increase of 15 percent compared to the previous year.

The state-owned company PKP Polskie Linie Kolejowe (PKP PLK) currently manages about 27 thousand km of track. The increase in both passengers and freight transportation, combined with under-financing and infrastructure neglect have generated a huge backlog in demand. For this reason, large investments are now occurring in the railway sector through investment programs. These programs will be the largest investments ever made to be in the country’s railway industry.

Investments in the railway sector have several financing sources. The primary source is the Polish Railway Program, which plans to allocate over 66 billion zlotys (around 19 billion Swiss francs) by 2023. EU funding accounts for 60 percent of the total sum.

Projects with a total volume of 31 billion zlotys (8.6 billion Swiss francs) are presently underway. Projects worth 6 billion zlotys (1.7 billion Swiss francs) have been completed already, and projects worth a total of 8 billion zlotys (2.2 billion Swiss francs) are currently in the tendering phase (status: May 2018)

The investment programs include plans to modernise 9,000 km of tracks, 8,500 km of which are to be designed for high-speed trains. The expenditures also include new construction and modernisation of existing infrastructural facilities: bridges, overpasses, tunnels and switches. Local control centres with modern IT systems and equipment are intended to enable faster and safer transport. Investment in railway infrastructure is expected to contribute to the development of intermodal transport in Poland. This would improve the rail accessibility from the ports in Gdansk, Gdynia, Szczecin and Swinoujscie.

The biggest challenge for suppliers in the award procedure is the issue of price. In the past, price was the only thing that played a role in public tenders. The law has since been amended, and now allows for the inclusion of other criteria.

Price remains an key factor in current public tenders in the railway sector, with a weighting of around 60 percent; however, other criteria including delivery reliability and experience are also evaluated.

By the end of 2023, PKP plans to modernise or build around 200 train stations for a total of 1.5 billion zlotys (420 million Swiss francs). The stations are located not only in main cities, but in smaller rural areas as well. The work includes both the station interiors and their surroundings.

Currently, there are 160 projects underway, the majority of which are in the preparatory phase, i.e. before the tender procedures for project work and construction begin. Measures to increase passenger comfort include a modern information and security system as well as integration with urban public transport. Accessibility for people with disabilities is another factor – special elevators, ramps and signs are intended to significantly improve ease of travel.

The modernized rail networks are to feature modern trains as well. For this reason, PKP Intercity’s largest investment program is in the area of rail vehicles, the value of which is estimated at approximately 7 billion zlotys (2 billion Swiss francs). The program comprises the procurement of 185 new wagons and the modernization of 700 existing ones, the procurement of 19 new trainsets and the modernization of 14 existing ones, as well as the procurement of 118 new electric and diesel locomotives and the modernization of around 200 existing ones.

Regional railway companies are also investing in rail vehicles. In 2017, Koleje Mazowieckie (Masovian Railways) published tenders for 71 trains in the Warsaw region. The contract, worth 2.2 billion zlotys (610 million Swiss francs), is the largest contract in the history of regional railways. The tender was awarded to Stadler Rail, which has been operating a production plant in eastern Poland for a decade with over 700 employees. The contract was signed in January 2018. It is worth noting that Stadler Rail’s price was slightly higher than that of the other suppliers, but a total of 15 criteria were evaluated in the tender procedure, and price had a weighting of 50 percent.

Additionally, Stadler Rail, Alstom and Bombardier also have manufacturing operations in Poland. The Polish rail vehicle manufacturers are Cegielski, Newag and PESA.

During the Katowice Economic Summit in May 2018, PKP President Krzysztof Maminski announced that 2023 was not an end to investment, but rather the beginning of a new stage. PKP is already working on preparations for the new wave of investment after 2023.

Source: https://industryeurope.com/polish-railway-sector-receives-major-investments/

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