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Strategic Session 1
“One Belt, One Road. Improving international connectivity and coorporation”
A panel discussion between Gilbert Trattner (Chairman of the Supervisory Board of ÖBB) Oleg Belozerov (CEO RZD (Russian Railways), Bashar al Malik (CEO Saudi Arabian Railways), Hee-Seung Na (President Korea Railroad Research Institute), Vladimir Morozov (CEO Belarusian Railway), Rolf Jansson (CEO VR Group (Finnish Railway), Yuan Li (Chairman CCEEC (Chinese Civil Engineering Construction), and Michele Molinari (CEO Molinari Rail Group)
Two-thirds of global regions can be reached by land. Austria, the host country of the first International Railway Congress has a rich geo-strategic history in the context of international trade routes. Transportation projects, like the Chinese Belt and Road initiative as well as the Russian 1520 initiative fueled the incentive to gather and discuss the future of the railway sector on a global level. Therefore, the general objective of the sector is to provide strong cross-border relations and increasing the interoperability between relevant actors in the field.
Geopolitical, economic and environmental transformation have had global implications. Political, economic and digital advancements related to the globalization process shapes several industrial sectors that are of crucial importance in the pursuance of global economic growth.
Transportation and railways, in particular, is a significant player in the future of mobility and thus business.
All panel participants did indeed agree on the necessity of strengthening multilateral trade and business relationships to master the various challenges that globalization entails.
From the discussion among the speakers, it emerged clearly that the One Belt-One Road initiative that the people’s republic of China brought into being, offers excellent opportunities for all parties involved. There was an agreement between the speakers that the International Railway Congress is not only beneficial but almost necessary to discuss the future of the railway sector.
Technical advancements and digitalization play a vital role in the future of the industry.
The kickoff panel of the conference was successfully used to present the common issues that unite the participants of different national and professional heritage. The common aim is to establish a global economic area that provides equal and prosperous opportunities for all parties involved in the railway sector. As the General Director of the UIC, Jean-Pierre Loubinoux pointed out earlier it is of importance to remember to provide an excellent service for customers by simultaneously facing the challenges of modernization in the times of the fourth industrial revolution.
“The ÖBB’s investment focus lies on the effective upkeep of the current rail operations, modernization, and digitalization.”
“We are in a phase of transition, in which we are forced to operate in a climate-friendly and sustainable manner.”
“We, the ÖBB invest largely in the education and training of the future generation since we are facing a generational shift and to master this phase successfully.”
“Saudia Arabia’s prime strategic aim is to increase the connectivity between the East and the West”
“The GCC project, which includes transnational customs clearance should enable the states of the Gulf region to prosper from economic opportunities.”
“In the course of the inter-Korean summit, a groundbreaking ceremony was conducted to connect the Northern and Southern Korean railway networks.”
“The Korean peninsula strives to merge the Russian Trans-Siberian project in 7 days and the Trans-Korean project in 1 day.”
“In order to guide growth and transition in the Korean peninsula, the connection of the Northern and Southern Korean railways is of high importance.”
“The successful realization of one single project will not be sufficient to cope with global challenges.”
“Important steps have already be taken to strengthen Eurasian railway networks and to establish an economically effective field.”
“The railway industry has the opportunity to provide a space for international dialogue.”
“40% of Finland’s GDP is based on export, the majority of the exports being heavy products, such as metals and chemicals. The importance of heavy products is constantly increasing.”
“Rail has a 30% market share in Finland, which is double the European average. Therefore, cargo rail has great opportunity.”
“In the course of the Belt-Road initiative put in place by president Xi Jinping the CRCC increased its activity.”
“Through the successful Ankara-Istanbul high-speed railway project the CRCC showed its technological capacities.”
“Railway has a great role in driving urban development.”
“The construction and development of high-speed railway has greatly improved and promoted economic advancement.”
“the acceleration of high-speed railway construction has reduced the transit time between cities and thus the flexibility of China’s industries has been increased.”
“One can see similar initiatives and integration processes, like the one taking place between Asia and Europe, in other parts of the world, like Latin America and Africa.”
“The Corredor Ferroviario Bioceánico de Integración, a project iniated by Bolivia should improve the competitiveness of the countries involved, like Brasil, Bolivia, and Peru.”
“I see these projects being rather complimentary than competitive due to their geographical distance.”
Strategic Session 2
“How to attract private investment? Transformative examples of different financing solutions for railway infrastructure”
A panel discussion between Dieter Hengl (Board Member UNI Credit), Vadim Mikhaylov (CFO RZD (Russian Railways)), Karl Blaim (CFO Division Mobility Siemens AG) , Gerhard Lahner (Board Member VIG), Andrew Meaney (Partner OXERA Consulting) , and Stefan Buske (Financing Expert & Owner BUSKE LAW)
The infrastructure market strongly relies on Public-Private partnerships to provide a market based on strong economic stimulus. Moreover, both parties can focus on their particular field of expertise and thus being able to give a better service to the customer. In contrast to projects being wholly funded by one entity PPPs generally, lead to more efficient completion of infrastructural projects.
A significant advantage on the governmental side is the fact that risks can be moved to the private party. Infrastructural projects are long-term projects that depend on private and public institutions that can bear the risk that a long-term project holds.
Since PPPs tend to involve higher risk for the private party, compensatory costs in that context can occur on the governmental side.
The One Belt-One Road initiative, a global development project of unprecedented size gives rise to the question if and how transnational PPPs and foreign investment could look like in the future.
The participants agree that there is no reason for a negative outlook for the railway industry. Regardless, it is clear that countries like Russia, for instance, are keen to attract foreign investors to fund infrastructural projects. Through the Belt-Road initiative, Russia became a country of high geo-strategic and thus, economic importance. Due to the world order shift that is currently taking place, the importance of foreign investment and the balance of the public and private sector within the global economic sphere is continuously increasing. Therefore, it is of significance to pursue to modify the public and private sector accordingly to cater to the needs of the infrastructural challenges of the future.
“It is obvious that government funds are not sufficient and that private money is important.”
“It makes our offer to investors more attractive if we present it in the context of international development projects.”
“It is clear to me that private finance is willing to perform alongside the state.”
“There is a lot of enthusiasm for railway among private and institutional investors .”
“Institutional investors, like insurance companies have the appetite to invest in long-term projects.”
“A big advantage for public institutions to go for PPPs, is to share the risks”
“Pulling off private-public financing is a difficult undertaking where oftentimes the supplier, like Siemens plays a vital role.”
“There might be the golden age railway coming up.”
“The risk should be allocated there, where risks can be influenced.”
“Infrastructure investment would fit perfectly on our balance sheet as an insurance group and institutional as well as long-term investor.”
“Predictability most important to institutional investors on the basis of trust and regulations.”
“There are a lot of regulations. The problem with regulations is that it is as hydrogenic as the market itself.”
“We’re looking at high investments in the future, and we’re looking at an investment gap that can only be filled by investments in infrastructure”
“Globally the railway market is expanding.”
“The investment gap has to be closed in order to avoid an economic downturn.”
“It should be noted that private-public partnership in itself is not a miracle or cure for a project.”
Strategic Session 3
Digital transport and intelligent infrastructure: digitalization, standardization & scaling
A panel discussion between Kari Kapsch (CEO Kapsch Carrier Com), Francis Bedel (Chief Digital Officer UIC), Ralf-Charley Schultze (Chairman UIRR), Evgeny Charkin (Director of Information Technologies, JSC “Russian Railways”), and Harald Jony (Managing Director, Wiencont)
The most efficient reduction of carbon emissions can be made by adapting the infrastructure. The railway is and should be the backbone of the transport system due to its benefits in regards to the climate challenges that the global community is facing in the twenty-first century.
Nevertheless, the railway industry requires substantial investments to be able to fulfill its role in being the leading player in the transportation sector.
The income of railway businesses strongly varies in different parts of the world. However, it is of utmost importance to mobilize the necessary funds to provide equally distributed investments for the integration process of digitalization. Digitalization as such incorporates ample opportunities for the transportation sector that are subject of discussion within the framework of the International Railway Congress.
In the course of the panel, it became clear that the sections that should be targeted by decision-makers to provide a smooth transition to a digitally fit entity are the ones of finding a way to successfully communicate on an intercultural basis as well as to arrange a solid financial foundation that can be utilized for digitalization purposes.
In connection with an ever-digitalizing infrastructure market, cybersecurity issues might bound to arise. Here, it is of crucial interest to invest in preventative cybersecurity measures. Threats are evolving simultaneously to the digital advancements that are taking place within the industry. Therefore, it is preferable to be aware of cybersecurity-related issues while implementing new technologies. Nevertheless, there is a general understanding among the panel participants that railway is vital for global economic progress and that digital innovation is a key element in that process.
“Digitalization promises a decrease in the operational costs of railway services, which I regard as a valid point.”
“One thing is certain: the railway environment needs new broadband connectivity solutions to transfer data.”
“Our challenge is cybersecurity.”
“When we talk about necessary investments, it is crucial to consider the issue of cybersecurity.”
“Since the majority of the world population will live in cities by 2030, we have to ensure mobility for passengers and goods.”
“Increasing growth of demographics and megacities, and the need to move quicker for goods and passengers we need to face and challenge mobility.”
“In UIC we believe that the backbone of a chain of mobility is rail. It has to be rail.”
3. Ralf-Charley Schultze, Chairman UIRR
“At the end of the day, the customers are the ones paying the bill. They, therefore, have a high demand for reliability.”
“It’s not about digitalization; it’s about change-management and to transform companies effectively to achieve higher profitability.”
“We have to try to be more cooperative and collaborative among competitors.”
“We at the UIRR, try to put all the information into one digital platform.”
“What we need is out of the box thinking.”
“we had undergone a full digitalization process in the terminal to avoid the numerous unnecessary sheets of paper. Our truck drivers work with QR-codes.”
“We consider the digital sphere to be our competitive advantage in the long run.”
“We are heavily implementing blockchain projects, and we need good infrastructure for that.”
“The biggest challenge is the culture and the people during the digital transformation.”
Strategic Session 4
Synergy and scale in rail infrastructure development
A panel discussion between Oleg Toni (Deputy CEO, JSC “Russian Railways”), Barbara Kolm, (CEO AEC, Vice President OeNB, Supervisory Board ÖBB), Sergey Sharapov, (Deputy General Director, JSC Institute of economics and development of transport (JSC IEDT)), Hwan-Bin Jang, (Korea Railroad Research Institute KRRI), Simon Fletcher, (Coordinator Europe, UIC), Li Yanni, (General Manager – ICBC Austria), Heinz Gschnitzer (Chief Coordinator of the Project Wide Gauge, ÖBB Infrastruktur AG), and Jan Harder (Managing Director of Molinari Rail Systems)
The decision to hold a conference of such textual magnitude in the city of Vienna was not made randomly. Even though Austria is a country with close linkage to all things rail-related it should be pointed out that its relevance in the context of being an important business hub will significantly grow in respect of the Belt and Road initiative as well as the Košice–Vienna broad-gauge line.
To be able to secure a solid foundation for the future of railway, interconnectivity, and interoperability between nation-states and regions has to be addressed. There are bodily boundaries, like the difference in gauges that hinder the global harmonization of the railway market. While Russian trains are run on broad gauge tracks of 1520 mm, in Western countries standard-gauge chassis of 1435 mm is in place. The Košice–Vienna broad-gauge line seeks to enable a smooth transition of trains surpassing areas of different gauges. A transport corridor of thousands of kilometers is created as soon as this project is realized and a direct and continuous rail connection between Europe and China has come into being.
Strong multi-leveled efforts have to be made in order to secure a steady harmonzation process between nations within the railway sector. Different aspects of the potential output of the synergetic standardization have to be taken into consideration and discussed across all parties within the sector to guarantee healthy progression for all stakeholders.
Development in the infrastructural sector is closely tied to managerial as well as governmental decision-making. Whether it is the new Moscow circle project that will provide interconnective infrastructure throughout all parts and districts of the capital or the broad gauge project being pursued by the ÖBB – large-scale infrastructure projects require governmental consent.
The railway industry is often inhibited from expanding in the desired manner since it is facing a high number of regulations. Especially European suppliers face significant barriers when it comes to expansion and cross-border trade. In a time in which mobility is ever-growing worldwide, and all things connected to rolling stock are becoming more relevant, the speakers agreed that regulations should be decreased to promote the realization of the actively wanted transnational interoperability. There is also general consent among the panelists that the general public is the long-run beneficiary of the successful implementation of a railway industry that operates hand-in-hand on an international level. Therefore, reasonable and state-of-the-art policies have to be put in place to facilitate the transition process of interoperability.
“Since the year 2012, we strongly focus on expanding and upgrading the inner and outer circle of transport in Moscow.”
“There was a difficulty to interconnect all districts of Moscow. Through our work in correspondence with the municipal government, a highly developed and time efficient passenger transport is facilitated. However, these railways shall not intersect with the freight train traffic. ”
“In the framework of an open dialogue, like the one we are having here right now we can communicate and get projects off the ground.”
“Commonly shared issues can be discussed in the format of this Congress and together we can think of ways to avoid sharp edges.”
“If investments are placed by governments one has to keep in mind that it is the taxpayers’ money that is being invested and therefore everything has to be transparent.”
“The location increases the supply for goods which incorporates a positive effect for consumers.”
“Now it is time to look into other methods, like private-public investment to invest into infrastructure and thus, to trigger growth.”
“In a developed economy, there is no precondition that investments should only be made by the state.”
“Without cooperation and coordination we will never be able to create growth and we should take that to the next level.”
“The realization of the project Košice–Vienna broad-gauge line should create 641 770 new jobs.”
“The project will have a positive effect on the Austrian, Slovak and Ukrainian population.”
“Since 2007 we have high hopes that North and South Korean railways will be connected and would lead to Europe.”
“I am optimistic concerning the US-Korean negotiations and therefore I am looking forward to return to Vienna by train.”
“The railway system today is much different to the one a decade ago.”
“Digitalization itself provides the sector with multiple opportunities.”
“The focus has to be collaboratively harmonizing the railway sector.”
“SMEs and startups are coming up with right ideas, therefore, the time is now to encourage innovation to create railway revolution.”
“We, the ICBC can also provide loans directly to the constructor which ensures the feasibility of the project.”
“In the field of providing funds for infrastructure projects, we are fully confident.”
“With regards to infrastructure projects we see great demand in Eastern Europe.”
“In the field of railway projects, ICBC has great banking experience.”
“By connecting the railways with a gauge of 1520 mm and the ones with one of 1435mm in the twin-city region of Bratislava and Vienna, Eurasian connectivity can be increased.”
“The installment of terminals between Vienna and Bratislava means a great number of jobs that are being created in the course of the project.”
“In Europe suppliers providing integrated solutions are fading while in other countries, like Turkey they are on the rise.”
Strategic Session 5
Leveling boundaries: international cooperation, standardization and scaling up
A panel discussion between Alexander Misharin (First Deputy CEO, RZD “Russian Railways”), Alexey Grom (President, Chairman of the Board of the United Transport and Logistics Company – Eurasian Rail Alliance (UTLC ERA)), Libor Lochman (Executive Director, CER), Alexander Isurin (Chairman of the Executive Board, President, FESCO Transportation Group),
Thomas Kargl (Member of the Board, Rail Cargo Austria AG), Fyodor Pekhterev (Advisor to the First Deputy General Director JSC “Russian Railways”), Simon Fletcher (Coordinator Europe, UIC), Joan Amoros (President of FERRMED)
International cooperation plays a vital role in the global development of networks. Targeting new areas with expandable performance capabilities is crucial when intending to increase growth.
Interoperability within the public, as well as private international stakeholders, is of high importance in that very context. Standardizing the access and the operation processes in the space of a market are necessary to provide equal market conditions as well as to increase cost- and time efficiency.
All speakers concluded that a standardization process is needed to ensure that the railway sector remains competitive and that the growth of the railway branch can be easily facilitated. Reinforced transcultural dialogue and lobbying efforts from the railway supply side have to be vigorously pursued to secure a steady growth of the market. Legal boundaries, like EU regulations regarding the maximum length of freight trains, have to be loosened up to accomplish faster transit times within the EU. As in the aviation sector where English is the official language that has to be spoken throughout the working process, the rail industry has to consider implementing an official language of communication. This would lead to the acceleration of communication processes at borders and would dismantle bureaucratic misunderstandings.
“We shall not forget India and Pakistan that are countries with railways gauges of 1676 mm and that this area provides opportunities.”
“The more we collectively focus on our common goals, which is the development of new corridors in Eurasia the more we are becoming aware of our joint potential.”
“What we want to offer the European market are better prices and shorter transit time.”
“The challenge and opportunity is to harmonize the European railway system.”
“We, in the rail sector need to have a massive reduction of national rules in order to be able to compete with the land- and maritime transport sector.”
“Speed plays a crucial role in transport. In 2017, we at FESCO managed to deliver from Shanghai to Moscow within 20 days.”
“Speed is our first concern. We want to reduce transit time. Digitalization is our second concern. There has to be an electronic exchange of all legally binding documents.”
“European transit time has to be reduced to remain competitive.”
“The cost of the maritime road is unbeatable, but what we can beat is the transit time-this is our goal.”
“Within the bilateral discussions in the course of this Congress, I am sure that we will reach agreements which have to be pursued as soon as possible because time is running.”
“The issue of narrow roads, as well as the financing of doing them away, has to be considered in the context of time-efficiency.”
“With railways being a systematic network, the stakeholders have to work in seamless harmony with their neighbors and colleagues of other countries.”
“The end user becomes evermore demanding in their purchasing behavior.”
“The trains coming in from China to the European Union have a length of about 600 to 700 meters only, while the trains in the United States are up to 3 kilometers. This is a problem”
“We are not only in need of longer trains, but also trains that are more compact and efficient in terms of their inner space.”
Strategic Session 6
Industry 4.0 and the Green Revolution in the railway sector
A panel discussion between Paolo Guglielminetti (Advisory Global Rail and Road Transport Leader, PwC Italy), Sergey Kobzev (Deputy Managing Director, Chief engineer RZD “Russian Railways”), Stefan Geisperger (Senior Vice President Sales, Deutsche Bahn Fahrzeuginstandhaltung), David John (CTO, TMH International AG), Michele Molinari (CEO, Molinari Rail), Helmut Schreiner (CTO Zillertaler Verkehrsbetriebe AG), Hannes Pichler (Head of Innovation, Innofreight)
With great opportunity comes great responsibility. This is especially appropriate when considering the possibilities that the digital world holds for the railway sector.
Due to the increasing impact that climate change has on our globe, sustainability gains in significance day-by-day. The transportation sector, in particular, holds great responsibility when it comes to this topic. Therefore, it does not come to surprise that it is of significance to the industry to discuss the global outlook in this respect. Digital tools can and should be used for increasing sustainable processes within the railway sector. The so-called fourth industrial revolution and all its incorporated opportunities should serve as a driving force to rapidly increase sustainability-related progress in the industry. Visions for the future are closely tied to the megatrends that emerged in the age of globalization: digitalization and sustainability.
Industries wish to grow sustainably and continuously but acknowledging the fact that customers of services are not willing to carry forward to support undertakings that involve a high amount of climate-damaging emissions.
All discussion participants decided to enlighten the topic of sustainability from a different perspective. Mr. Kobzev of RZD chose to address the subject through the demonstration of the efforts of his company to produce climate-friendly energy through the commissioning of rolling stock that can undertake the task of sustainable energy production. Two of the panelists, David John and Michele Molinari emphasized on the fact that trains are long-term investments on the side of the industry and that digital tools can and should be used for maintenance purposes to prevent unsustainable buying behavior. There is mutual consent amongst the panelists that the life-cycle of assets in the railway sector is extensive. Therefore, the right managerial, technical, and financial decisions have to be made to guarantee a secure and reliable product on one side and an asset that remains in operation for as long as possible. Moreover, new technological advancements can be a helpful tool to guarantee sustainable progress within rail.
“We need new regulations that adapt to our modern world.”
“Any transport solution in the future should address the topic of sustainability.”
“Intermodality has to function not only physically but also digitally.”
“The Moscow Digital Circle is using a technology where the trains themselves have the ability to produce electricity.”
“We will continue our efforts to make green energies an increasing factor in our undertakings.”
“No one wants maintenance, because maintenance is taking away operational hours, therefore, the best maintenance is no maintenance at all.”
“Our program, Colibri transfers data from the train to land on a modular basis. Used for diagnosis data, passenger data, and wifi-supply on trains.”
“The usage of old vehicles in the industry is still being pursued by the larger part. Sustainability also means to keep the trains alive instead of permanently investing in new ones.”
“The investment into old vehicles has to be taken into account when making executive decisions.”
“In the rather conservative railway industry, it is more unlikely to easily apply new technologies since they have to be proven and approved first.”
“Our newly developed Hydrogen train will save up to 800 000 liters of diesel per year.”
“The Hydrogen train, which will go into business in 2020 will be charged during the nighttime and can run continuously during the daytime.”
“The asset life-cycle is a huge topic within the railway industry. “