REFER EP : The Portuguese IM

1. REFER EP: The Portuguese IM New Model for Infrastructure maintenance M. Lopes Marques, Junho, 2005

2. The State of the Art in the Railway Sector in Portugal: the model The Regulator Directive 440/91 EEC, June, 1991 for the Development of Communitarian Railways A new model for the railway sector The Railway Undertakers The Infrastructure Manager REFER EP

3. The Regulator • Rules for Access • Licensing of Operators • Regulation of railway activity • Development • Safety • Quality • Environment • The Infrastructure Manager REFER EP • Infrastructure Management • Maintenance • Capacity management and path allocation • Traffic control • Construction / Renewal of Infrastructures and Interfaces • Tariffs infrastructure access, additional service and prices for ancillary and additional services The Railway Undertakers Railway transports: Passengers + Freight Passengers The State of the Art in the Railway Sector in Portugal: the model

4. The State of the Art in the Railway Sector in Portugal: milestones FOUNDATION 1st January, 1998 1st July, 1997 Maintenance of Infrastruture from Project and Engineering activities from 29th April, 1997 Integration of Offices AML and AMP 29th September, 1998 1st June, 1998 1st October, 1998 Management of Infrastruture Capacity from Creation of the Regulator 1st private Operator 28th October, 2003 1st January, 1999 December, 2004 1st Package transposed to Portuguese Law Published the NETWORK STATEMENT Traffic comand & control from

5. REFER EP A Mission and a Vision VISION Be an European REFERence to railway infrastructure management MISSION Delivering to the market acompetitive railwayinfrastructure, through themanagement and developmentof an efficient and saferailways network ,always respectingthe environment.

6. Organization of REFER Board Strategic Strategic General Secretary General Secretary Planning Planning Image Image & & Planning & Control Planning & Control Communication Communication Staff : Board staff and strategic scope activities Audit & Audit & Law Law Systems of Quality Systems of Quality International Affairs Safety Safety Environment Environment Economics & Economics & Directorate Directorate - - General General Directorate Directorate - - General General Finance Finance Operation & Operation & North Delegation North Project Engineering Engineering Maintenance Maintenance Human Resources Human Resources Core business: Operational Activities that belong to the value-chain of the company directly related with the customers ( Operators and final users) - Maintenance - Operation Logistics & Supply Purchasing Information Systems Information Systems & IT & IT Property Property Network Modernization - Innovation and standardization - Engineering studies and projects - Constructions / Renewal of Infrastructures and Interfaces Corporate: Functional activities, rending services to all departments REFER will be an European reference to the management of the railway infrastructure

7. Level Crossings Authomatics 347 Other 1084 Total 1431 Safety Systems / Command & Control CONVEL Ericab 700 1202 Km RadioGround-train 1326 Km Narrow gauge REFER – Conventional network Electrified Total Track (km) Not Electrified 25000 V 1500 V Sub-total Wide Gauge 1326 25 1439 2790 1351 2030 (1668 mm) Single track 779 0 779 1251 542 Double track 517 25 542 0 30 Or more 30 0 30 0 Narrow gauge 0 0 188 188 0 (1000 mm) Single track 0 0 0 188 188 Total 1326 25 1351 1439 2790 After 1997 the number of crossings was 50% reduced

8. REFER - Personnel 33 %

9. Main investments and Financial coverage STATE COMMUNITARIAN FUNDS OTHER

10. 100% 98,43% 99,30% 33,00% 40% 80,00% GIL - Gare Intermodal de Lisboa, SA 10 % 2,5% (Management of the intermodal complex for transports in Orient Station) Enterprises shared by REFER Empreendimentos Industriais SA Promotion & Commerce of Real Estate SA (Projects & Consultancy) Serviços de Telecomunicações, SA (Telecomunication Operator mainly for transports area) CP com Management of commercial contracts in stations SA (Studies & implementation of the high speed network) A light train in the town of Coimbra & surroundings (Consulting for technical training, recruitment & phsicology) REFER will be an European reference to the management of the railway infrastructure

11. INFRASTRUTURE MANAGEMENT General Data and Model for Maintenance

12. INFRASTRUCTURE MANAGEMENT COSTS AND REVENUES

13. New Model for Infrastructure Maintenance REFER has opted to gradually outcontrating specific maintenance activities, in order to improve service levels to the costumer, to gain access to top technologies and to supply the inexistence of internal resourses. Outcontracting Model – Current Situation Different Realities in Maintenance • The current situation of Maintenace is characterized by a mixing model with internal and external resources, extremely variable between geographic zones and specialties: • Geographic Zones • The Outcontracting rate in ZOC Lisboa is 54% of total costs, while in ZOC Centro and ZOC Sul it is of about 35%. • Specialties • The Outcontracting rate in Signalling is 67% of total costs, which can’t be compared with the 10% rate in Catenary. The current mixed model origins the annual signature and control of more than 1.000 contracts

14. New Model for Infrastructure Maintenance WHO REFER CONTRACTORS REFER “In situ” operations Maintenance Management Control Equipment control and measurement Mobilization of Maintenance Teams (Internal or External) Gradually “In House” to Contractors DOES Asset state knowledge Asset Management Operational Work Real Time Failure Control Measure to Manage WHAT? & Inspection, Diagnosis and Planning Outcontracting Contact Centers Key Performance Indicators HOW? WHY? TOTAL CONTROL

15. New Model for Infrastructure Maintenance The New Outcontracting Model is organized in different maintenance layers MAINTENANCE LAYERS • SYSTEMATIC PREVENTIVE MAINTENANCE: • - it is the set of routine interventions to effect on an equipment or equipment system, executed periodically in time, in order to reduce its probability of failures, as well as knowing its state of condition. • CONDITIONAL PREVENTIVE MAINTENANCE: • - it is the set of regenerative interventions to effect on an equipment or equipment system, programmed in time, in order to guarantee its functionality and aptitude, after the detection of anomalies. • CORRECTIVE MAINTENANCE: • - it is the set of interventions to effect on an equipment or equipment system, after a damage or unexpected anomaly, demanding immediate action to restore the normal conditions of operation.

16. New Model for Infrastructure Maintenance With the New Outcontracting Model REFER intends to approach the maintenance methods between different geographic zones, to accede the previously unavailable working technologies and to reduce the high number of contracts that demands a considerable internal effort in its management. Outcontracting Model – New Model • The New Outcontracting Model is based on integrated contracts for geographic zone: • Enclosing Specialties of Track, Catenary, Buildings and Special Structures (Bridges and Tunnels); • Consolidating in only one contractor for geographic zone, all the activities previously contracted “one by one”; • Becoming easier the works coordination between the maintenance specialties; • Allowing the access to technologies, methods and resources that the other way would not be applied; • Fomenting the competitiveness between different contractors, operating in the same specialties, but in different geographic zones. • Transfering risks due to the implementation of the performance regime.

17. New Model for Infrastructure Maintenance The generalized adoption of the new outcontracting model, will roll out on a progressive way geographically, making it possible to incorporate the lessons learned in ZOC Lisboa and ZOC Sul, into the others zones outcontrating processes. New Outcontracting Model – Progressive adoption Outcontracting Progressive Process ZOC Porto • Qualification of 6 consortia by internacional public contest in 2004 (valid for 3 years) • Geographical Zone Status • ZOC Lisboa Contract signed in May 16th, 2005 (valid for 2 years + 4 by option) • ZOC Sul Negotiation procedure running out • ZOC Centro • ZOC Porto • Eixo Beiras • Eixo Oeste ZOC Centro Eixo Beiras Next developments of the outcontracting process Eixo Oeste • The adoption of this new model will allow: • To incorporate in the processes carried out later on, the lessons learned in ZOC Lisboa and ZOC Sul, not only on the level of negotiation processes, but also the contractual management itself; • To create an organized market for the outcontrating activity, seducing new players to enter to this market, speeding up the competitiveness; • To organize gradually the maintenance’s organizational structure. ZOC Lisboa ZOC Sul

18. New Model for Infrastructure Maintenance The new strategy for Maintenance is not only a key factor for the accurate performance of the existing Network, as well as an achievement of relevant know-how demanded for the High Speed Network. REFER trusts on the Market, on our Contractors and looks at them more as Partners rather than suppliers.

19. REFER THANK YOU FOR YOUR ATTENTION