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Cost Benefit Analysis for 1st priority TSIs

Cost Benefit Analysis for 1st priority TSIs. Ad hoc subgroup of Article 21 Committee on CBA 25 November 2003. Version 4 - 17/11/03. AEIF Report. Methodology Basic Parameter cost impact per TSI (based on reports sent to EC)

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Cost Benefit Analysis for 1st priority TSIs

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  1. Cost Benefit Analysis for 1st priority TSIs Ad hoc subgroup of Article 21 Committee on CBA 25 November 2003 Version 4 - 17/11/03

  2. AEIF Report • Methodology • Basic Parameter cost impact per TSI (based on reports sent to EC) • see CCS presentation report § 4: 01/16 RP01EN01 uploaded on Circa 12/09/03 • TAF presentation report § 3 : 01/16 RP02EN01 15/09/03 • Freight Wagons RST costs report : 01/16 EE13 EN01 03/10/03 • Noise costs report : 01/16 EE14 EN01 03/10/03 • Statistics • Forecast assumptions • Global costs per TSI In addition on the 25/11/2003 : - Draft update of cost reports sent to the EC - Benefits AEIF study on internal TAF Cost Benefit Analysis ECORYS study

  3. AEIF/ Economic Evaluation Group Methodology (2001/16-EE04/EN02/11.06.2002) * Directive 2001/16/EC * EEG Tasks diagrams * EEG Tasks detailed * Basic elements (discount rate, length of period, …)

  4. Directive 2001/16/EC Article 6: • 4 . Each draft TSI shall be drawn up in two stages. • First of all, the joint representative body shall identify the basic parameters for this TSI as well as the interfaces with the other subsystems and any other specific cases that may be necessary. The most viable alternative solutions accompanied by technical and economic justification shall be put forward for each of the parameters and interfaces. A decision shall be taken in accordance with the procedure set out in Article 21(2); if necessary, specific cases shall be cited. • The joint representative body shall then draw up the draft TSI on the basis of these basic parameters. Where appropriate, the joint representative body shall take account of technical progress, of standardisation work already carried out, of working parties already in place and of acknowledged research work. An overall assessment shall indicate the likely impact for all the operators and economic agents involved.

  5. 5 . The drafting, adoption and review of each TSI (including the basic parameters) shall take account of the estimated costs and benefits of all the technical solutions considered together with the interfaces between them, so as to establish and implement the most viable solutions. The Member States shall participate in this assessment by providing the requisite data. 6 . The Committee referred to in Article 21 shall be kept regularly informed of the preparatory work on the TSIs. During this work, the Committee may formulate any terms of reference or useful recommendations concerning the design and the cost-benefit analysis. In particular, the Committee may, at the request of a Member State, require that alternative solutions be examined and that the assessment of the cost and benefits of these alternative solutions be set out in the report annexed to the draft TSI.

  6. The mandate granted by EC to AEIF requests the following working phases: a) Cost Analysis related to the specifications of Basic Parameters, b) Cost-Benefit Analysis on the basis of TSI implementation scenarios. The method for the cost-benefit analysis proposed by AEIF was adopted by the Committee 21 as requested by the Directive and is applied. Other Directives, in particular 2001/12, 13 and 14 impose to railways actors several dispositions the cost of which are not to be taken in account in the costs or cost-benefit analysis related to the 2001/16 Directive. In particular, the opening of the market needs investments and costs that are to be excluded from this study.

  7. EEG methodology (2001/16-EE04/EN02/11.06.2002) Task 3. Enquiry on railway line & rolling stock data Task 1. Collection of the cost elements necessary for the economic assessment Task 2. Identification and quantification of benefit elements related to Interoperability Task 5. Further iterations of alternative technical solutions Task 4. Assessment of the economic impact of TSI applying the Net Present Value method (NPV) together with the Internal Rate of Return method (IRR) Task 6. Elaboration of economic annexes to the reports accompanying draft TSIs Stage 1 : Intermediate reports dealing withdifferential cost analysis (Net Present Cost) based on the basic parameters and interfaces Task 6, Stage 2 : Final reports accompanying draft TSIs containing full cost and benefit analysis (Net Present Value)

  8. EEG Tasks detailed • Task 1. Collection of the cost elements necessary for the economic assessment • 1.1 Definition of reference (w/o TSI) and projected (with TSI) scenario • 1.2 Investigation of the relevant costs per unit (investments and operating costs, including migration period costs) for envisaged scenarios • 1.3 Differential cost analysis (Net Present Cost), using line and rolling stock data obtained under Task 3 • Task 2. Identification and quantification of benefit elements related to Interoperability • 2.1 Catalogue of possible benefits related to Interoperability of the conventional rail system • 2.1 Quantification of benefits for Conventional Rail TSIs • 2.2 Identification of the level of aggregation (including which parties) at which the benefit accrues • 2.3 Identification of the impact of different implementation scenarios on the benefits and costs • Task 3. Enquiry on line & rolling stock data • 3.1 Enquiry of the representative data based on the geographic and traffic characteristics of existing lines. • 3.2 Enquiry of rolling stock data, especially powered rolling stock.

  9. EEG Tasks detailed (continued) • Task 4. Assessment of the economic impact of TSI applying the Net Present Value method (NPV) together with the Internal Rate of Return method (IRR) • 4.1 Hypothesis for discount rates • 4.2 Evaluation (calculation of NPV and IRR) on the basis of the subsystem data by taking into account the results of Activities 1.2, 2.2 and 3. • Task 5 Further iterations of alternative technical solutions • 5.1 Iterations of alternative technical solutions, in close dialogue with the TSI expert groups • Task 6. Elaboration of economic annexes to the report accompanying draft TSIs • 6.1 Elaboration of Annexes to draft TSIs in two stages (differential cost analysis and full cost and benefit analysis)

  10. Basic elements for CBA Discount rate = 8%, starts in 2005 Sensitivity analysis with 6% at the end of the study Length of the period : - 20 years (EEG methodology) - 40 years (Article 21 Comite, 22 oct.2003)

  11. Basic Parameter cost impact per TSI (based on cost report sent to EC) RST (freight wagons) NOISE TAF CCS Pending : OPE

  12. FREIGHT ROLLING STOCK : 24 BPs (Based on rolling Stock Cost Report sent to EC 2nd October 2003) • BPs : cost analysis complete for 18 BPs / 4 with work in progress / 2 linked to HS Revision • 11 with no cost impact • 6 with only certification cost, with work in progress for certification of maintenance establishment • 1 with work in progress about cost impact • 2 with work in progress due to interface • -> 1 with CCS (braking curve), • -> 1 with CCS and OPE (Hot Axle Bearing Detector) • 2 open points linked to HS Revision • 2 with cost impact on a voluntary basis (not mandated by the TSI) • Main comments : • new rolling stock concerned by TSI. • low cost impact due to international standards (RIV, RID, …) already existing • existing rolling stock : RIV/RID, except specific cases.

  13. No cost impact (11 BPs) RST-210-al: Safe access and egress for rolling stock RST-210-aw: Functional requirements: Strength of main vehicle structure RST-210-c: Doors closing and locking RST-210-e: Emergency Exits and Signposting RST-210-n: Securing of Freight RST-221-ab: Electrical protection of the train RST-223-g: Labelling Marking of freight wagons RST-223-i: Special vehicles for the transport of dangerous goods and pressured gases RST-310-a: Content of the Freight Wagons Register RST-210-ad: Interface (e. g. Coupling) between vehicles, between set of vehicles and between trains RST-210-s: Fire Safety

  14. Only certification cost impact (6 BPs) RST-310-b: Maintenance Plan & Maintenance workshop accreditation criteria (Freight wagons) : Maintenance plan (no impact), Maintenance workshop certification criteria (cost impact) -> Work in progress RST-299-a: Longitudinal compressive force RST-221-g: Vehicle dynamic behaviour RST- 210-ac: Kinematic behaviour RST-221-a: Axle load RST-221-ic2: Bogie and Running Gear

  15. RST : Certification cost impact (6 BPs) Difficult calculation of change certification costs : - Before TSI : ° these costs are hidden in overall costs of RUs ° only one homologation by one RU for a type of wagon, thanks to RIV - After TSI : ° awarding entities have to pay the invoices of NoBos ° only one certification by a NoBo for a type of wagon, thanks to 2001/16/EC A genuine invoice seems bigger than hidden overhead costs ! -> which true economic impact ? Some extra certification cost for UK to be compliant with TSI DRAFT

  16. Cost impact : 1 BP with work in progress RST-221-ic3: Wheelset - 127€/axle, due to more test during the manufacturing process only in some countries (UK, …). Are not concerned : DB, ÖBB?, SNCB/NMBS, SNCF - certification costs also per wheelset series (certification costs done) 2 BPs with work in progress due to interface with other Sub-Systems RST-221-e: Rolling stock parameters which influence ground based train monitoring systems (Hot Axle Bearing Detectors) RST-221-ag: Braking performance (Braking curve with ERTMS)

  17. 2 BPs To be studied with HS Revision Process : RST-221-be: Aerodynamic effects (slip stream) RST-223-d: Cross winds 2 BPs with cost only on a voluntary basis RST-221-ad: Environmental conditions for rolling stock (Range of functioning of components) : 1000 € per new wagon in average for non Nordic countries (NO, SE, FI) RST-221-bd2: Vehicle capability to transmit information between ground and vehicle -> 7 € per tag (2 per wagon), 2 500 € per tag reader (including purchasing and installation)

  18. Specific cases See RST TSI, section 7.3.3. : Table of specific cases arranged by Member State according different : - track gauges (including OSJD standards (Baltic States) - gauges - axle load allowed by tracks - climatic conditions

  19. NOISE : 3 BPs (Based on noise Cost Report sent to EC 2nd October 2003) • BPs : all BPs with work in progress for the cost analysis : initial costs estimated, maintenance cost to be estimated • BPs : all BPs with cost impact • Main comments : • new rolling stock concerned by TSI • wheel wear : maintenance issue (LCC)

  20. upgraded / renewed vehicles : • - first proposal of AEIF : not concerned by the TSI • - after 25/09/03 : study of 2 hypotheses • 1) TSI to be applied only if brake system is modified for another reason • 2) TSI to be applied for each upgrade / renewal with a new putting into service

  21. 1 UIC/CER/UNIFE study on “Noise implementation plan” 2 Estimated from the UIC Noise Report, October 2002

  22. Not possible to be obtained till today, and not easy to evaluate : Components costs for locomotives, multiple units and coaches Maintenance and operational costs

  23. Specific cases - For use on UK network only : Because of narrow gauge : DMUs (Diesel Multiple Units) : stationary noise Electric locomotives, Diesel locomotives, DMUs :starting noise - For Finland : Because of climatic conditions : wagon with a diesel aggregate for electrical power supply > 100kW

  24. TAF : 14 BPs (Based on TAF Cost Report sent to EC 1 August 2003) BPs Path request Train Details Train running Forecast Service Disruption Information Train Location Shipment ETI / ETA Wagon movement Interchange Reporting Consignment Note data Data exchange for Quality Improvement Infrastructure Register Rolling Stock Register Various Reference Files Electronic Transmission of documents Networking & Communication Not possible to define unit cost per BPs, so global cost were estimated * Not discounted ** With extended geographical scope The costs linked to others Directives implementation, or to the opening of the market will be not considered in the full cost benefit analysis

  25. Cost per stakeholders, as a “big bang”(1) (1) maximum, because big bang seems irrealistic

  26. TAF DRAFT - Maintenance costs : different definitions -> a large range of rates : from 5% to 20% - Infrastructure and rolling stock databases : ° The cost of data collection and of the entry of them in the rolling stock databases is included. ° It is not the case for infrastructure : only implementation of the software is included

  27. CCS • Scope : • Ground-to-Train radio = migration to GSM-R • Cab signalling system = migration to ETCS • Conventional Rail TSI is • quite similar to High Speed TSI (apart Chap 7) • applies to a larger, already existing set of lines and rolling stock • Conclusions might differ.

  28. GSM - R • Migration already undertaken • Most European networks have targeted 2003 - 2008 for completion • For CBA, reference scenario and project scenario are broadly identical • Benefits depend on previous local situation

  29. DRAFT CCS First comparable trackside costs One has to compare what is comparable : interlocking technology and overlay are essential cost factors.  Renewal of interlocking sets the pace of Level 2.

  30. Type Equipment + Installation Unavailability Total cost El. Loc. 406 k€ 3 weeks 424 k€ Hi speed train 1 125 k€ 5 weeks 1 345 k€ DRAFT ETCS costs, board Retrofit is expensive… (here : level 2, no redundancies, acceptable only if lineside signalling is kept)

  31. DRAFT Rolling Stock = f (Trackside) The first kilometer requires many locomotives to be equipped (if any benefit is to be obtained) All points of the graphs are not economically or technically realistic

  32. ETCS : open issues • Incomplete specifications (change requests and opent points) • Rulebooks need to be rewritten • A corridor is not just a line : how far should it be equipped, so as to contribute to interoperability ? • Lack of cost from UNISIG side, but a recent hopeful declaration

  33. Statistics * Wagons * Locomotives, Multiple Units, * Coaches * Drivers’ cabs

  34. Statistics for wagons on past years Average age of manufacture of railways wagons Fleet structure in % at end of years 1990, 1995 and 2000 divided according to year of manufacture Source : UIC, table A27 Railways companies included to have consistency between 1990 and 2000 : CFL, CIE, CP, Eurotunnel, NSB, ÖBB, RENFE, SNCB/NMBS, SNCF, VR Private owners’ wagons not taken into accounts in these charts

  35. Source : UIC, Tables 23, B23 and B62

  36. Forecasts for wagons EU+Norway, fleet in 2001, annual number of new wagons (RUs + private owners’ wagons) Assumptions of a 1st scenario for 2005-2024: - fleet constant - annual renewal rate of 1% Source : years 1999, 2000, 2001 : UIC, Railisa estimate UK : source = EWS Sweden : Green Cargo data based on SJ data for 1999 and 20 Data in column for 2001 are related to year 2002 Norway : data in column for 2001 are related to year 2000

  37. Locomotives and multiple units(CR freight+CR passenger+HS fleet) Trends from 1970 to 2001

  38. (CR+HS fleet)

  39. Drivers’ cab Year 2001 AEIF questionnaire + estimates based on UIC data if no answer. In italic : data being checked to have a consistency with UIC data (CR+HS fleet)

  40. Number of traction units in 2002 and forecasts Assumption for 2005-2024 : fleet constant * AEIF questionnaire sent through the Member States + estimates based on UIC data if no answer (data being checked to have a consistency with UIC data) ** UIC Table 22, year 2001 Number of traction units per series in 2002 and forecasts

  41. Global cost impact per TSI * RST * NOISE * TAF * CCS, OPE : pending Net Present Costs based on : Discount rate = 8%, starts in 2005 Length of the period : 20 years (EEG methodology)

  42. Global cost impact of RST TSI Note: - Assumption : 1% of renewal rate of wagons (1) This cost is a maximum : it is based on all RUs for which work is in progress to determine if this cost change occurs (excepted SNCF, DB, SNCB/NMBS where these specifications are already taken into account in the reference situation). (2) Open point for technical or legal reason. Work in progress for the economic evaluation. (3) There is no extra cost if the current usage of the wagon fleet does not evolve significantly. The assumption would suppose that RUs and Private owners chose voluntarily to equip the total fleet of new wagons with the Nordic characteristics. This assumption is totally unrealistic, and it is presented only to indicate what could be the highest extreme impact.

  43. Global cost impact of RST TSI per year

  44. Noise Note: - Assumption : 2.5% of renewal rate of traction rolling stock and coaches - Expenditure in first three years only - Costs for locomotives, M.U, Coaches are only design cost, instead of Cabs (components costs included). - Maintenance and operational cost changes Table will be added once these costs will be known for composite block (including the wheel wear). Maintenance costs were not possible to obtain for other items (Noise emitted by locomotives, …) i) % of the annual total fleet ii) see previous footnote

  45. Global cost impact of NOISE TSI per year

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