Financing of Retrofitting (1)

1. Implementation of Retrofitting freight fleetAnalysis of the EU funding possibilitiesPeter Hübner, UIC Consultant (retired SBB Environmental director)

2. Financing of Retrofitting (1) • Scope: • Retrofitting of ~600’000 Wagons • Involved financial volume: 1’000 – 3000 Mio € • Timescale: ~5 – 7 years from starting retrofitting • Noise reduction to be expected: 8 – 10 dB(A) • Funding or financing? • To have in mind 2 kinds of competition : • Competition in the total freight traffic market: • Additional financial burden to Freight Operators will decline their market share and increase road traffic (and road traffic noise….) • Funding solution preferred • Competition between rail freight operators • All rail freight operator should have equal possibility to benefit

3. Country/National fund X Direct EU Funding Railway Operator A European Regional Development Fund Country/National fund Y i.E. use funds for substitution of noise screens Cohesion Fund Railway Operator B LIFE+ Program for Environment Country/National fund Z Railway Operator C Instrument for structural Policies in Pre_Accession ISPA) Phare Program Railway Operator or country asks financial means from ‘European Account’ if needed. Railway operators seek first national subsidies Financing of Retrofitting (2) • Controlling of any funding process will be demanding Specific Account ‘Railway Noise abatement’; distribution regulation. i.E. EIB

4. Financing of Retrofitting (3) Investigated principal EU funding possibilities: • European Regional Development Fund: • if retrofitting done in the New EU member states, parts of Spain, Sweden & Italy • Cohesion Fund: • For retrofitting freight fleets of new EU member states, but Distortion in competition! • Instrument for Structural Policies for Pre-Accession’ (ISPA): • Only for Bulgaria & Romania; Limited scope + Distortion in competition! • ‘Phare Program’ (ISPA): Out of scope for this project. • Direct noise reduction dedicated EU funding • No direct fund available yet ! • Implementation of noise reduction action plans (framework of END might form background. • ‘FINANCIAL INSTRUMENT FOR THE ENVIRONMENT (LIFE +) • in preparation and discussion could be addressed

5. Financing of Retrofitting (4) Financing (raw ideas) • Financing is a well-known business for the railways if business case is clear • Secondary measure, if funding fails • Financing could be of interest in case Interest < annual additional costs of retrofitting • See future results of calculation model • To be addressed and put to tender on the financing conditions (on, pay back periods and regulations, interests,..) • European Investment Bank (EIB) Loan • European Bank for Reconstruction and Development (EBRD) loan • EUROFIMA

6. Financing of Retrofitting (5) • Results of investigation: • 3 funding possibilities to be followed up: • European Regional Development Fund (ERDF) • Cohesion fund • LIFE+ environmental funding instrument. • ERDF & Cohesion fund is used for funding railway projects:(2000-2006: 2 billion € per year including TEN-T Funds) • Cohesion fund may be used for all MS after 2007. • Direct noise related EU Fund for railway retrofitting not available yet.

7. Financing of Retrofitting (6) EU support possible and needed! • Retrofitting most efficient method to be introduced in action plans for END to reduce Railway noise • To be communicated from EC to MS • Railway sector only mode of transport which can offer overarching noise reduction strategy with benefits in all countries. • Retrofitting should include all rolling stock to be used >10 years in future • To initiate, stimulate (and fund!) at least pilots or demonstrators in various countries • Support of EC needed to coordinate the various financing among all involved Parties. • i.e. Central Accounting & Controlling

8. Financing of Retrofitting (7) National support possible and needed too! • Cohesion fund & ERDF: • MS has to seek funding (together with Railway) • MS has to contribute to funding • MS could prepare and propose demonstrator or pilot projects • Action plans to implement Environmenal NoiseDirective: • Noise related retrofitting of the railways should form first priority action to reduce railway noise • LIFE+ is (October 05) still in parliament discussion, it will include all MS.

9. Financing of Retrofitting (8) Next steps • Use of Funds to be concretised • Relevant parties within EU • Details, how to proceed to get funding • Approach of the railways to be coordinated: • To limit double work and improve chances of the railways • Financing possibilities to be clarified and concretised: • Calculation model to be used to get reliable funding and financing data in varying scenarios • General clarification of financing conditions. • Information of and to all involved parties and levels important: • Retrofitting involves many parties: (EC, national authorities, environmental agencies, Railway Sector • Large communication of effectiveness of retrofitting needed • First important step: Today's Conference!

10. Conclusions Information of and to all involved parties and levels is important: • Retrofitting involves many parties: (EC, national authorities, environmental agencies, Railway Sector • Large communication of effectiveness of retrofitting needed • After today‘s conference similar annual events planned 2006, 2007 • Also need to inform on a national level! • Noise action plans are in the MS responsibility! • Which are the messages? • Railway noise reduction using retrofitting freight wagons is ~10 fold as efficient as other means, i.e. noise screens: • Railway noise is far less annoying as the noise of other modes of transport • Conclusion: Noise reduction in retrofitting the freight wagons may be for some decades the sufficient mean to maintain the railways environmental lead!

11. Conclusion After retrofitting the freight wagons, the almost only ‘noise’ will be the wind whistling in a corn field! Thanks for listening!