Overview
Traditionally, the railway industry has been characterised by an economic structure of strong natural monopoly, being this structure the justification for regulatory actions by the Governments. The vertical integration was the traditional configuration of the industry and proposals for changing it were born out of the concern for transparency of accountability.
A more ambitious aim was to make evolve the industry towards a more agile and less dependent on the Government business, and the key revolution was proposed with the support of market contestability theories: the vertical separation of the industry would provide two separate business sectors, infrastructure and operation. Operation side of the industry would be the contestable market and infrastructure would still remain as a strong natural monopoly, although the reduction of the size of the industry and the separation of businesses were expected to foster efficiency gains.
Keeping the characteristics and structure of a strong natural monopoly, the evolution of the railway infrastructure business was forced by upper political goals of European cohesion.
This process required focusing on several targets, among which:
- Meet the requirements of the mobility system regarding progressive integration of railway networks and modes, and the evolution to a European trans-national mobility system according to the European policy guidelines for the overall transport sector.
- Fulfil the needs of the railway operation companies. This is the main change faced by infrastructure managers, as they have to face a totally new demand that they have to satisfy properly. This means that infrastructure provision must be optimised as well as new tools for traffic management, both in the technological (improved traffic systems) and in the managerial sides (slot allocation systems, charges for use, etc.) should be developed.
- Adapt the industry to the increasingly complex environment, with a number of interacting agents that was completely unknown for the managers in the former structure of the industry, besides the need for new contractual tools and adjustments of national regulations. In the financial aspect, we can also point at the general modernisation that is being undertaken. The industry is moving from a system of ex-post financing of deficits by governments, to a new one where ex-ante contract agreements with infrastructure users and other potential
Considerable progress has been made over the last years in deepening the Internal Market for transport services. In this domain particular relevance is given to the effort applied in the development and modernisation of the railway sector in both managerial and technical vectors. In particular to the later we have observed a strong focus on interoperability issues aiming a more integrated transport system, an in-depth approach to promote the use of less environmental damaging technologies accompanied of the treatment of environmental protection as an integral part of the transport policy.
In addition, the promotion of intermodality involving railway and of best practice in local and regional passenger transport has been a constant in the European Union political message. All these developments confirm the importance of keeping high standards of efficiency, both in production and in consumption, in all the different units currently forming the railway system after the regulatory reform of the sector, in order to achieve the global aim of improving European competitiveness, sustainable growth and employment as well as to contribute to economic and social cohesion for which railway transport services play a determinant role by being easily available, affordable, safe and delivering a level of quality that fulfils citizens and enterprises needs. The configuration of the transport systems is a determinant factor in the prosecution of those European aims.
To completely achieve the referred efficiency, focus has to be put in the interaction between the different agents (the parts or components of the system) acting within and across the different levels of planning and control in order to achieve a system configuration (considering all modes) able to address concerns at the following dimensions:
- Transport dimension – adequate balance between modes and means of transport, so that all those that give up the use of private car have available alternatives of good quality, without any sort of social, geographical or sectorial discrimination;
- Environmental dimension – the configuration of the urban mobility system should result in a total sum of pollution below the endurance level;
- Economic dimension – the system should offer good ‘value for money’, induce an adaptive behaviour from the users, and be able to create new financial resources to support investment;
- Social dimension
IMPROVERAIL aims to develop management tools for railways infrastructure managers covering the different managerial aspects at stake, from the organisational structure and functional procedures to the operational performance.
These goals will be achieved through the following topics that will be developed within the work packages of the project:
Development of tools for modelling the management of railway infrastructure, aiming to provide the sector with a complete toolbox (including performance indicators for benchmarking purposes);
Evaluation of improved methods for capacity and resources management for railway infrastructure management, leading to the development of computer tools for long term business modelling for infrastructure managers, and a fresh view on which tools are most appropriate for medium/short term capacity and resources management;
Improving the Life Cycle Costs (LCC) calculation methods, including elements related to vehicle-infrastructure interaction and external costs in order to enable optimal decision making, exchange of LCC data, and for use in contractual relationships;
Establish and improve data background in support of harmonised charging for railway infrastructure management;
Providing the railway community with a practical handbook for Railway Infrastructure Capacity and access Management
WP 1, State of the art review
Work package 1 will review current practices, processes and tools in the field of railway capacity and access management. It will mainly be based on existing, dispersed, sources of information. It will make that information available, in a concise way, to the rest of work packages of the project. This review of information will be issued in the deliverable 1, 'State of the art in railway infrastructure capacity and access management'. The organisation of work in this workpackage will be as follows:
Task 1.1, Information collection
Task 1.2, Nati
Funding
Results
Business Process Reengineering (BPR) in Railway
A methodological framework along with a self-assessment management tool was developed in IMPROVERAIL, aiming at supporting BPR way of thinking among Railway Infrastructure Manager, according to the generally accepted principles of BPR, but in attention to the specificities of BPR in Railway Infrastructure Management. This generic but innovative BPR methodology is supported by inputs accrued from the cross sectional work carried out in IMPROVERAIL. The main concern driving its development has been the easiness in use and applicability in most IM structures. It should help the infrastructure managers to evaluate performances and structuring BPR initiatives. Its frame of reference is the full range of IM structures. The fact that the Infrastructure Management has been consistently separated from operation does create a privileged ground for innovative approaches towards the improved performance of the infrastructure management activity, possibly where the need for such approach turns out to be more sensible. In any case, the objectives of BPR methodologies, applied to companies that have been traditionally dominated by the public sector (as is the case of railways), is to provide a road map rather than specific solutions for business process re-engineering. BPR should therefore be understood as an opportunity to streamline the key business processes.
The IMPROVERAIL has attempted to segment railway companies as production, commercial and market oriented organisations, which is required in order to compare the appropriateness of the technique in different circumstances. Representative processes were therefore chosen in each of the three identified areas of the organisation: operational, commercial and managerial. The BPR methodological framework consisted of five phases that are interrelated and they are somewhat the required logical steps that follow the pattern: Understand the environment; Set the Objectives; Use tools to accomplish them; Produce outputs and Recommend activities / implementation.
This methodological framework is provided in IMPROVERAIL also as a software Toolbox, featuring an interactive electronic book, complemented by a user’s manual.
During IMPROVERAIL, pilot case studies were carried out.
The following aspects were studied:
Prospective Network Capacity Management
The traffic on main European railways corridor has been constantly increasing, looking bound to maintain this trend
Policy implications
By proposing the split of the Operation of trains from the Network Possession and Management, the EU has paved the way to a deep structural change aiming to enable better economical usage of the railway assets, further creating the conditions for competitiveness in railway transports; to a large extent due to the fact that the concept of a Public Railway (for long, kept away from private sector logic), has progressively proven problematic, at the cost of growing operation deficits, which are today urgent to keep under tight control. In that sense, splitting operation from network was, naturally, a milestone. However the consequences of such can be far more important than one may expect, as it has also shaken historical relationships and ways of approaching and performing a whole business, and as it has created a cleft between old partners, namely operation and network related management areas. Undoubfully, railway lagged behind in a growing transport sector and such less than optimal behaviour can be partially explained by the inherent public sector rationale, which was hard to change. However, it is undeniable that whatever the rationale adopted, the inertial effect associated to a sector of activity heavily dependent on capital, with difficulty in adapting quickly to the pace of structural changes occurred in a fast growing transport market, did not help promoting railway to the top of the market choices. Along with this, business processes that appear today as crucial ones such as accounting became increasingly complex, as intrinsic costs of the activity seen as a whole needed now to be split. This is necessarily a crucial challenge for railway, as the infrastructure manager need now to balance the 'income from infrastructure charges', based on effective (but complex) cost analysis. This is however simply absent most of the times, as it depends on information that cannot be easily and readily obtained. This aspect in particular may be even corroborated from privileged contacts with several IM's along the development of IMPROVERAIL, as, apart from a few exceptions and initiatives being carried out by some of them, knowledge about effective cost drivers related to the provision of service are generally poor.
An additional challenge is to balance revenues from charging core activities with 'State funding', an ever more scarce resource. Also necessary will be to manage 'infrastructure expenditures' while reducing the costs of provision of infrastructure and the level of access charges 'with due regard to sa