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Infrastructure Cost & Trends (LICB, Asset management)
Teodor GradinariuSenior AdvisorInfrastructure Department
Summary :
• Context • Definitions• KPI• UIC projects on cost • Trends• Conclusions
Summary :
• Context • Definitions• KPI• UIC projects on cost • Trends• Conclusions
The responsibility of IMs has broadened with Directi ve 911/440 and subsequent EU packages. (e.g. open access, acceptance of rolling stock, maximising traffic, minimisingoperational hindrance, providing quality services, maintaining safety, reducing costs etc).
Restructuring of Infrastructure Management organiz ations, has produced a number of different Asset Management Strategies in Europe, even within the same company, over the last 10-15 years. Lessons ca n be learned.
IM’s need to exercise strong control over large exp enditure areas and justify their costs to stakeholders ( State, Regulators, Ra ilway Undertakings, public)
Making correct investment decisions, which can have a long –term impact , necessitate best use of data, tools and instruments .
The railway infrastructure assets need an innovative ,integratedand proactive solution for its interoperability requirements for the improvements in safety, reliability and maintainability .Solution for finding improved efficiency trough optimizing the infrastructure cost ,of investment and maintenance are becoming importantIn the same time IM need to meet the market demand of freight and passenger operators and provide a safe and secure infrastructureat a price that will make the rail sector attractive and competitive .In Europe ,the railway system is government owned and operated in order to provide the society and industry with a reliable mode of transportOften the railway system is based on political decisions .
In spite of those facts ,railway system need to :
� Answer to the increasing pressure on railways to demonstrate their costs and performance, in relation to other railway networks achievements and other modes.
� Assure a transparency of access charging and accounting � Justify state aid and state multi-annual contracts � Justify high level cost on investments
Summary :
• Context • Definitions• KPI• UIC projects on cost • Trends• Conclusions
� Infrastructure :
Railway infrastructure consists of the following items, provided they form part of the permanent way, including sidings, but excluding lines situated within railway repair workshops, depots or locomotive sheds, and private branch lines or sidings:- Grounds area- Track and track bed etc.- Engineering structures: bridges, culverts and other overpasses, tunnels etc.- Level crossings, including appliances to ensure the safety of road traffic;- Superstructure, in particular: rails, grooved rails; sleepers, small fittings for the permanent way, ballast; points, crossings, etc.- Access way for passengers and goods, including access by road;- Safety, signalling and telecommunications installations on the open track, in stations and in marshalling yards etc.- Lighting installations for traffic and safety purposes- Plant for transforming and carrying electric power for train haulage: sub-stations, supply cables between sub-stations and contact wires, catenaries etc.Buildings used by the infrastructure department
� Infrastructure Manager (IM)
Any public body or undertaking responsible in particular for establishing and maintaining railway infrastructure, as well as for operating the control and safety systems. The functions of the infrastructure manager on a network or a part of a network may be allocated to different bodies or undertakings.
� MaintenanceThe process to keep a system in a desired operation state or bring it back into that state. The existing asset is refurbished, but not replaced. The works consist of e.g. inspection, measurement, servicing or repair. It forms part of annual operating costs.
� RenewalAll activities involved in replacing a rail infrastructure part or object by a same or similar type
of rail infrastructure part or object. It is capitalized at the time it is carried out, and then depreciated.
� Maintenance costsTotal costs for the IM on maintenance of assets described in “infrastructure”. Includes costs
of outsourced maintenance activities. Maintenance forms part of annual operating costs.
� Renewal expenditureMean annual capital investment for renewal and investment in the existing network, paid by
the IM, government or other source. Includes investment subsidies. Must include costs of any outsourced activities.
� OverheadTotal cost of corporate and engineering management and overhead departments, including
project costs for existing network charged to current year profit and loss account. Must include cost of any outsourced activity.
Summary :
• Context • Definitions• KPI• UIC projects on cost • Trends• Conclusions
Examples of Key Performance Indicators
[€ per 1.000 TU]Expenditure for maintenance and renewal per output of passenger and freight transport and per year.
life cycle costs per transport unit
[€ per train km]Expenditure for maintenance and renewal per kilometer of passenger and freight trains and per year.
life cycle costs per train kilometer
[1.000 € per main track km]
Expresses how much money has been spent for maintenance and renewal per kilometer of main track and year.
life cycle costs per main track kilometer
[1.000 train km per main track km]
Describes how intensively the IM’s principal asset, its track, is used by passenger or freight trains. This KPI is important from a capacity (new investment) point of view. The development over time is shown based on the year 1996.
traffic development
[mio TU per main track km]
Tons of freight weight and passengers together with the transport distance on the main track network gives a commercial indicator for network utilisation.
network utilisation
[TU per train km]The output of passenger and freight transport per train kilometer indicates the commercial train utilisation of an infrastructure manager.
train utilisation
[net ton km per inhabitant]
Freight tons carried by railways related to the population of a country.freight output
[journeys per inhabitant]
The indicator shows how frequently the railways are used by passengers in the different countries.
mobility
Summary :
• Context • Definitions• KPI• UIC projects on cost • Trends• Conclusions
Lasting Infrastructure Costing Benchmark (LICB)
• project of the UIC (International Union of Railways) start 1996• analysis of total infrastructure cost
– investment– maintenance– renewal
aimshelp for infrastructure managers
improve the performance of infrastructure
enable them to define their individual cost-position
develop methods for cost comparison
identify cost drivers
"toolboxes" for strategies towards cost reduction
LICB /INFRACOST
LICB Key Performance IndicatorsLICB Key Performance Indicators
ASSETUTILISATION
MOBILITY &ACCESSIBILITY
FINANCIALEFFECTIVNESS
Passenger journeysOffer in passenger rail trafficFreight outputOffer in freight rail trafficCommercial train utilisation
Life-cycle costsMaintenance and renewal expenditures
[1.000 € / main track km][€ / train km] [€ / 1.000 TU][€ / gross tone km]Cost development over time
Train frequency[train km / main track km]Development for passenger and freight traffic since 1996
• Network utilisation[transport units / main track km][gross ton km / main track km]
LICB/LICB/ InfracostInfracost
1996
Phase 1Pilot-Project
First Benchmark
Cost Models
Costharmonisation
1997/1998
Phase 2Broad database
First cost-driveranalysis
4-years costhistories
Enlarged sample
More investmentprojects
Improved statisticalevidence
1999/2000
Phase 3Cost-driver/toolbox
Best-practiceevaluation
In-depth cost-driver analysis
Extendeddatabase
Toolbox for cost-reductionstrategies
2000
Phase 4Dissemination
Bilateralpresentation ofresults anddiscussions
UIC Seminar
2001/2002
Phase 5Quality
OMC
2003-2007
LastingInfrastructureBenchmarking
Annual updateof database
Production ofdefinedbenchmarks
Evaluation oftrends
The harmonization method used for financial data cons ists of fivThe harmonization method used for financial data cons ists of fiv e e different stepsdifferent steps
Maintenance expendituresincl. organisation costs (2003)
Average renewal expendituresincl. organisation costs (1996-2003 where available)
Infrastructure details
maintrack
electrified main track
single track
multiple track
switches in main track
train kilometer
gross tonne kilometer
Input data Harmonisation steps
1 Purchasing Power Parities
3 Single vs. multiple track
4 Switch densities
5 Track utilisation
Maintenanceexpenditures incl.organisation costs
+Renewalexpenditures incl.organisation costs
Cost per
main track km or
unit of transport
Calculated results for comparison
2 Degree of electrification
5,40LCC (EUR per train-km inflation adjusted - price bas is 2006)
2,94Renewal (EUR per train-km inflation adjusted - price basis 2006)
2,46Maintenance (EUR per train-km inflation adjusted - p rice basis 2006)
82136,21LCC (EUR per main-track-km inflation adjusted - pric e basis 2006)
44849,74Renewal (EUR per main-track-km inflation adjusted - price basis
2006)
37286,47Maintenance (EUR per main-track-km inflation adjust ed –price basis 2006)
13909897864Cost total LICB 14 (Euro)
7599809175Renewal total LICB 14 (Euro)
6310088689Maintenance total LICB 14 (Euro)
169068,5686Total Main track-km
2566074506Total Train-km
515421047Freight train-kilometers
2050653459Passenger train-kilometers
ValueIndicator
LICB
Deliverables :
- Each year a full report – for the LICB Members - Each year a summary report for – all UIC Members
Now – 10 years report
Asset management working groupAsset management working groupAsset management working groupAsset management working group
� first task : to identify in 2008 all areas of interest where the UIC can contribute to the development of professional Asset Management, applied to Rail infrastructure management.
Technique
Economics
Assets
Stakeholder interestAsset management
approach
Traditional
technology approach
Asset Management
�Asset Management is needed to answer the questions and growing demands
• Asset management comprises all systems, methods, pr ocedures and toolsto optimize costs, performance and risks for the co mplete rail infrastructurelife cycle. The aim is to realize the best ‘value f or money’.
� Goal Asset Management :• Meet stakeholder interests by finding a balance bet ween the requirements
and the overall cost in a fully transparent way by means of an explicitly traceable analysis.
Preconditions for good Asset Management
Focus of the organizationCompany mission, its shared values, leadership and communication.
Information and knowledge managementdirect access to all relevant data, at the correct level of integration, in thecorrect format.
Risk awarenessperforming risk analyses and evaluating results shall be a standard practice as part of the decision-making process.
Long-term visiontaking long-term effects into account when making short-termdecisions (LCC Analyses).
Adequate instrumentsobject registration, risk analyses methods, maintenance concepts, work planning, control, infra condition measuring & monitoring andthe filing of asset maintenance history and asset status history.
Summary :
• Context • Definitions• KPI• UIC projects on cost • Trends• Conclusions
• Maintenance expenditure has been kept almost on the same level as in 1996 with some 6 bn EUR over the LICB 14
• Renewals increased considerably between 1996 and 2003 reaching a peak of almost 16,5 bn EUR in 2003compared to less than 12 bn EUR in 1996 (some 40 % plus)
• After 2003 renewal activities were reduced to a level of about 14,3 bn EUR in 2005
Train km development (passenger and freight) LICB 14
0,00
500 000 000,00
1 000 000 000,00
1 500 000 000,00
2 000 000 000,00
2 500 000 000,00
3 000 000 000,00
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
year
trai
n km
Freight trainkilometers
Passenger trainkilometers
Total expenditures LICB 14
0,00
2 000 000 000,00
4 000 000 000,00
6 000 000 000,00
8 000 000 000,00
10 000 000 000,00
12 000 000 000,00
14 000 000 000,00
16 000 000 000,00
18 000 000 000,00
20 000 000 000,00
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
EU
R
Maintenance total LICB 14
Renew al total LICB 14
LCC total LICB 14
14 LICB Members Average ExpendituresMaintenance and Renewal Development
(1000 EUR/main trackkm)
86
66 69 71 70 77
84
94 103
90 86
0
20
40
60
80
100
120
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
year
1 00
0 E
UR
Maintenance (EURper maintrackkminflation adjusted -price basis 2005)
Renewal (EUR permaintrackkm inflationadjusted - price basis2005)
LCC (EUR permaintrackkm inflationadjusted - price basis2005)
Expenditures per maintrackkm LICB 14
0,00
20 000,00
40 000,00
60 000,00
80 000,00
100 000,00
120 000,00
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
EU
R
Maintenance (EUR permaintrackkm inflationadjusted - price basis2005)
Renew al (EUR permaintrackkm inflationadjusted - price basis2005)
LCC (EUR permaintrackkm inflationadjusted - price basis2005)
M&R (LCC) per main track km
0
50 000
100 000
150 000
200 000
250 000
300 000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
year
C D
E F
G H
J K
M Q
N U
X Y
Acces Charge pass&freight versus cost M&R Euro/Trai nkm
0,00
2,00
4,00
6,00
8,00
10,00
12,00
14,00
16,00
C D E F G H J K M N Q U X Y
Network
EU
R/T
rain
km
M+R
access charge freight
access chargepassengers
Summary :
• Context • Definitions• KPI• UIC projects on cost • Conclusions
� Different levels of cost efficiency obviously exist and cost reductions seem possible
� cost reduction strategies need to be developed on an individual railway basis using best practice (e.g.experience in internationals projects) .
� Maintenance cost improvements in recent years havebeen moderate on a European average
� need for tools to reduce cost and for strategies for their implementation.
