CEE countries committed to railway investments

Central and East-European Countries (CEE) are making all efforts possible to upgrade their railway system. New projects are announced for the upcoming programmes, studies are being elaborated, works are being launched and projects are being completed.

European financing plays a crucial part in the implementation of projects included in the 2014-2020 programming period, the main financing sources for transport projects being the Connecting Europe Facility (CEF) – Transport and the Cohesion Fund. Over EUR 24 billion are alocated to transport projects through CEF Transport of which EUR 19.3 billion have so far been legally committed.
A stimulus for the development of projects is the Cohesion Fund dedicated to countries with a national income per capita under 90% compared to the EU average. By 2020, there are 15 countries that will benefit from these funds, most of which in the CEE: Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Lithuania, Latvia, Malta, Poland, Portugal, Romania, Slovakia and Slovenia.
A total amount of EUR 63.4 billion is allocated through the Cohesion Fund to environment and transport projects of European interests identified by the EU. Thus, cohesion countries will receive a higher financing compared to those outside the instrument precisely for overcoming disparities and promoting a sustainable development. Here, rail transport projects have a major role in establishing a sustainable transport system that will meet the mobility needs of freight and passengers. The Fund will support CEF infrastructure projects. The importance of developing transport projects is motivated by EU figures. For example, within CEF 2016 (with deadline in February 2017), although the total budget available to transport was of EUR 1.94 billion, member states submitted 349 project proposals with a EUR 7.5 billion demand for financing. The evaluation of projects was initiated in March.
The CEF Transport Call 2017 was also announced in February with grants worth EUR 1 billion and two deadlines: July and November 2017. For the first time, this call for proposals will require the combination of grants from the European Fund for Strategic Investments (EFSI), the European Investment Bank, National Promotional Banks and the private sector. To receive the CEF support, applicants will be required to come up with evidence on the financing of projects in order to get complementary financing from private or public institutions.

Bulgaria to launch tenders

The main problems of Bulgaria’s railway system include the poor condition of infrastructure and rolling stock, problems reflected in the country’s freight and passenger transport activity, the lack of efficient rail connections to maritime and river ports, the insufficient integration of the national network in the European network which hinders the implementation of interoperability systems.

Within the Operational Programme “Transport and Transport Infrastructure” 2014-2020, Bulgaria will carry out a series of rail projects on European corridors to increase the integration and development of the railway transport system.
At the end of 2016, the TEN-T railway infrastructure development project received a grant of EUR 19.3 million (2.9%) of the total value of EUR 673 million; EUR 361 million (85.1%) of the total budget of EUR 425 million was granted for the optimisation of freight and passenger rail transport and development of a sustainable urban transport; 40% (EUR 19 million) of the total budget of EUR 47.6 million was granted for technical assistance.
EUR 348.8 million was granted to the development of Sofia metro system within the operational programme transport. In February, the authorities announced that all contracts for the implementation of Phase I of Line 3 were signed and tunnelling works were launched. The project stipulates the construction of an 8 km railway with 8 stations to be operated by 20 trains.
On the “PA1-Development of railway infrastructure along the “main” Trans-European Transport Network” axis, NRIC rail infrastructure manager has projects worth EUR 673 million and include the modernisation of substations on Plovdiv – Burgas railway (EUR 10.9 million, of which a EUR 9 million grant was approved) – the project would be completed this year, but also the modernisation of Sofia –Pernik – Radomir railway – at the border with Macedonia.
Within the modernisation project of Plovdiv – Bourgas railway, the contract for the rehabilitation of Skutare – Orizovo (26 km) section was signed at the end of 2016. The “European Railways” Association will have to complete works in 3 years. The project is financed through the operational programme transport with a grant of over 32 million.
The contract for the design and construction of Sofia – Elin Pelin section was signed at the end of 2016, this being the first railway project financed through CEF from the four projects approved in 2015. The funds allocated to the project are worth EUR 61.3 million and include 23 km of double railway. The contract was signed with Kelet AB DZZD, that will have to complete the project in 4 years. The design will be carried out in the first year and works in the next three years.
Plovdiv – Burgas, Phase II. The design of the 296 km line project should be completed by 2020 with costs exceeding EUR 345 million. The project includes the rehabilitation of Orizovo-Mihaylovo section (the tender for the feasibility study worth EUR 2.5 million has already been launched), of Straldzha-Tserkovski section, the modernisation of Yambol-Zimnitsa section and of Zavoy Station, the reconstruction of railways in Zimnitsa Station, the rehabilitation of the catenary, as well as the design and installation of ERTMS/ETCS and GSM-R. The contract for the modernisation of Skutare-Orizovo section was signed, followed by the contract for Straldzha – Tserkovski section. In February, the authorities announced the implementation of two projects for the reconstruction of railways including the rail link between Plovdiv and Krumovo and Skutare cities (in the south of the country). Projects are estimated at EUR 115 million of which 85% will be a CEF financing announced at the middle of 2017.
With a cost of EUR 10.6 million, the project on the modernisation of Burgas, Karnobat and Qmbol substations should be completed by August 2017. In December 2016, the project’s actual progress was of 10%, with a financial implementation of over 21%.
The modernisation of Elin Pelin – Ihtiman – Kostenets railway, 51 km, is worth EUR 529.86 million and is expected to be completed in 2021. The project was sent to Jaspers for checking and has been upgraded before being tendered. For the 19.2 km section, Elin Pelin – Verinsko, costs amount to EUR 284 million and include  >
> 4 rail tunnels with simple line, bridges, catenary, signalling and communications equipment. Works on Verinsko-Nemirovo section (over 20.4 km) are worth EUR 64.5 million and include the rail infrastructure, bridges, catenary, signaling and communications equipment. An investment of EUR 354 million is necessary for Nemirovo – Kostenets section. Construction works include the infrastructure, 8 double-line tunnels (total km: 5.48 km), bridges, catenary, signalling and communications systems.
For technical assistance in the preparation of Sofia-Pernik-Radomir-Gyueshevo-Macedonian border railway modernisation, worth EUR 9.76 million, the financing form has been applied according to the specifications in the Operational Programme 2014-2020. Another work in progress is the technical design and the preparation of site development for the modernisation of Sofia – Pernik – Radomir section. The project for Radomir – Gyushevo-border section was initiated in 2016 and should be completed by the end of 2019.
The infrastructure manager is also undergoing projects of traffic management, optimisation of transport safety and security worth EUR 34.7 million of which EUR 11 million are dedicated to ETCS implementation on Sofia-Septemvri section and EUR 9 million to the design and implementation of the Train Operation Control System.
There is also the project on the feasibility studies for the development of the North-South alternative railways with funds amounting to EUR 1.28 million. There is the version for development of North-South median rail directions, from the Danube to the Turkish/Greek border connected to Ruse intermodal terminal. The main directions are Ruse – Gorna Orqhovitsa – Dubovo/Tulovo – Stara Zagora – Mihailovo – Dimitrovgrad, Podkova to the Greek border (extension to Komotini) and Ruse – Kaspichan – Sindel – Karnobat – Qmbol – Elhovo – Turkish border (extension to Odrin or Kirklareli).
Recently, the Bulgarian ministers of Transport and Economy have discussed the opportunity of building railways to connect industrial facilities, especially in the new industrial areas. The project is included in the NRIC programme according to which EUR 20.4 million would be necessary to build such sections. The infrastructure manager will elaborate analyses on the return of investment, as well as on the estimated freight volume before implementing the projects.

EU funds are essential for Croatia’s railways

Crossed by three European corridors, Croatia tries to upgrade its railway infrastructure, using European funds to launch projects. The Competitiveness and Cohesion OP allocated around EUR 6.9 billion to economic competitiveness and transport projects. EUR 2.56 billion of the amount were granted through the Cohesion Fund and EUR 4.3 billion through ERDF. In the railway transport sector, projects include the modernisation or reconstruction of 78 km of railways on the TEN-T Corridor.
By 2020, EUR 1.3 billion European funds have been endorsed for the transport sector, EUR 400 million through the FC and EUR 900 million through ERDF. Croatia will also benefit from EUR 456 million available through CEF.

5 projects are considered for financing through CEF:
Križevci – Koprivnica – Ukrainian border: reconstruction of the existing railway and construction of the double railway;
Škrljevo – Rijeka – Jurdani: reconstruction of the railway and construction of the double railway;
Development of the multimodal platforms in the Port of Rijeka and connection to the Adriatic Gate container terminal, construction of Rijeka-Brajdica Station and construction of a new section;
Development of railway interconnections in Zagreb terminal;
Technical assistance for optimisation of capacity on the country’s rail network.
The latest project financed through JASPERS is the modernisation and electrification of Zapresic-Zabok railway (23.9 km) with a cofinancing of EUR 80.8 million. In October 2016, HŽ Infrastruktura infrastructure manager and EC signed the financing agreement worth EUR 241 million (of the total costs of EUR 300 million) for the reconstrution of the existing line and the construction of the double line on Krizevici – Hungarian border railway. The line section is part of the Mediterranean Corridor that links Zagreb to Hungary.
In December, Croatian company IGH, next to Granova, signed the contract to elaborate the documentation of the project on the construction of the double line and modernisation of the existing line on Skrljevo-Rijeka-Jurdani route. The cost of the project is EUR 4.5 million.
As 55% of the railway network includes international transport routes, Croatia focuses on the modernisation of the railway infrastructure on European corridors to increase integration with the European network and rail transport market share. The railway infrastructure manager has been Croatia’s biggest beneficiary of European funds since 2008. The company has been using pre-accession funds (ISPA and IPA) and the EU Structural and Investment Funds after the EU accession.

Czech OP Transport is the winner of EU funds

With a network of over 9,600 km, including two European corridors (IV and VI with link to Corridor X through Praha – Ceské Budejovice – Linz/Austria railway), the Czech Republic develops several major rail modernisation projects.
In the 2014-2020 budget, EU allocated EUR 24 billion to the Czech Republic, the largest sum being granted to the Operational Programme Transport worth EUR 4.7 billion, the programme’s total budget amounting to EUR 5.43 billion. The sums allocated through ERDF amounted to EUR 902 million, while the Cohesion Fund grant totalled EUR 3.72 billion. >
For the railway sector, the operational programme stipulates the reconstruction or modernisation of 140 km of railway, 8 km of new or upgraded metro and tram railways, 140 new (or upgraded) mobile rail assets and the increased of combined transport performance by 12%. According to the Ministry of Transport, the deadline for submitting CEF calls of February 2017 was the third and last chance for European financing through this instrument. 30 projects worth EUR 988 million were submitted. The Czech Republic prepared EUR 1.11 billion for these projects, EUR 837 million being already granted for the two previous calls.
The projects drafted by the Railway Infrastructure Administration (RIA) dominated the applications, including projects such as the reconstruction of Přerov railway hub or the modernisation of Prague Vysočany – Lysá nad Labem railway.
This year, SŽDC launched several projects. Using a European financing of EUR 54.95 million (of the total project cost of EUR 81.45 million), the company launched the reconstruction of Beroun- Králův Dvůr section, part of Corridor III, the modernisation of Beroun station, the construction of a 5.7 km railway and the modernisation of the signalling system. Eurovia-Subterra- GJW Praha-OHL ŽS consortium will have to complete the project by October 2019. Another project approved by EU is the next modernisation phase of Plzeň central station with a cost of EUR 50 million of which EU’s confinancing amounted to around EUR 30 million. The modernisation of the station (part of Corridor III) was divided in several phases and this phase consists of the complete modernisation of platforms, of a bridge (across Mikulášská Street), the reconstruction of the line sections (in the direction of Cheb) and other branches from the sought of the station network (works will be executed by Metrostav – OHL ŽS consortium). Also, communications and signalling systems will be reconstructed to also include the integration of the passenger information system, diagnosis equipment, CCTV etc.
In the first part of the year, the Ministry of Transport approved the feasibility study of Ostrava rail junction. The selected options includes the overall repair of a section between Ostrava-Syinov and Ostrava central station, including setting a new level of realignment to eliminate the risk of collison for trains travelling in individual directions. Adjustment includes tripling the railway on Ostrava-Svinov and Ostrava central station with extension to 4 lines. Total investments amount to EUR 238 million and the project is to be initiated between 2021 and 2025. Tenders on the elaboration of documents and beginning of works will be launched this year.
The Ministry of Transport approved another fesibility study, Beskydy, which proves that investment on the whole Ostrava-Kunčice – Frýdlant nad Ostravicí – Ostravice and Studénka – Štramberk is economically efficient. SŽDC plans to finalise the modernisation of electrification of railways and to increase capacity of Vratimov – Frýdek-Místek section and all stations and stops will be upgraded. The study’s objective was to assess the efficiency of investments on Ostrava-Kunčice – Valašské Meziříčí, Frýdlant nad Ostravicí – Ostravice, Frýdek-Místek – Český Těšín and Studénka – Veřovice lines. For three years, SŽDC has developed projects for the modernisation of 123 km of railways. It is important to mention that Ostrava – Frýdlant nad Ostravicírailway is the most crowded non-electrified railway in the country. Construction phases have not been identified yet, but works will take several steps to complete starting with 2020. Preparation-documentation works for the use of terrains for Ostrava-Kunčice – Frýdek-Místek – Ostravice will be elaborated this year. According to SŽDC, the above-mentioned railways will be modernized, doubled and electrified and stations will be upgraded.
Total costs for Ostrava-Kunčice – Valašské Meziříčí, including Frýdlant nad Ostravicí – Ostravice branch, amounts to EUR 388,6 million and to EUR 89 million for Sedlnice – Štramberk section.  Through the decision of the Central Committee, SŽDC will launch preparation works for Ostrava – Ostravice section, worth EUR 251.6 million.
The air-rail connection project between Prague and Václav Havel Airport Prague was presented to the public in February 2017. The project’s main elements include doubling and electrifying the existing railway between Praha-Veleslavín and Praha-Ruzyně stations and the construction of a 5.5 km section between the airport’s new underground station. The project will also include the  reopening of Praha-Liboc station, the location of Praha-Ruzyně station will be changed, Praha-Dlouhá Míle and Praha- Veleslavín new stations will be built, with the latter in the underground and connected to Metro Line A.

Hungary to continue its railway projects

The operational programme “Integrated Transport” includes the continuation of rail infrastructure works on the country’s main corridors and the modernisation of the railway stations. The total budget of the operational programme transport is EUR 3.91 billion, of which the EU contribution amounts to EUR 3.33 billion. EUR 2.7 billion were allocated through the Cohesion Fund and EUR 631 million through ERDF. The implementation of railway projects will be reflected in the optimisation of travel times, the modernisation of 280 km of lines and in the public rail transport system, the authorities plan to increase attractiveness with networks of 132 km of metro, trams and upgraded or built lines of local trains.
EUR 323.7 million will be allocated to the modernisation of rail junctions, while Budapest-Százhalombatta, Budapest-Hatvan lines, as well as other lines in Lake Balaton region will be upgraded.
ERTMS deployment is one of Hungary’s rail strategy priorities. Within CEF, the project is in the second and last GSM-R implementation phase on 956 km of railways on the Mediterranean, Orient/East-Med and Rhine – Danube corridors. The project is expected to be completed in 2020.
Announced in July 2016, under the CEF 2015 Transport Calls for Hungary, 23 eligible projects were submitted with a call for financing of EUR 1.2 billion. 16 calls were selected for a fnancing of EUR 809.6 million through the financing recommended by CEF. Most projects (nine) are one the Core Network Corridors and received a EUR 775,6 million financing.
Railway projects include the modernisation of Szazhalombatta – Pusztaszabolcs (42 km) double railway and the installation of ETCS Level 2 (CEF financing recommendation: EUR 231.5 million); the implementation of GSM-R phase II with a financing recommendation of EUR 49.5 million; the modernisation of Budapest South Railway Bridge, one of the main Danube bridges with EUR 97.1 million; development of Rakos – Hatvan line section (in Budapest) with a EUR 298.47 million financing; rehabilitation of Hegyeshalom – Rajka railway (connection to the Slovakian border) with a financing of EUR 1.9 million; retrofitment of 35 locomotives with ERTMS with a financing of EUR 7.9 million (a project that involves the development of two prototypes and subsequent retrofitting with ETCS Level 2, Baseline 2 of 35 electrical locomotives types TAURUS 470 and TRAXX 480 used for passenger services); modernisation of the 1.5 km rail connection to Budapest inland free port with a financing of EUR 840.8 thousand.
Another important project is the development of Budapest-Belgrade railway. In November, the Minister of Foreign Affairs announced that Hungary and China would sign the agreement for the implementation of the 350 km railway project. The agreement could be signed by MAV and a JV of the two countries, responsible with project implementation. There are problems with the implementation of the project as the EU announced the investigation of the case on breaches concerning the procurement regulations which stipulate that a transport project of such dimensions needs to be submitted to public tendering. According to a declaration of an EC spokesperson for the Financial Times, documents show that for the construction and financing of the project, contracts could be granted to China International Railway Corporation and to Export-Import Bank of China, respectively.
Romania focuses on Corridor IV modernisation

The Operational Programme Large Infrastructure (POIM) finances projects pertaining to four sectors (transport, environment, energy, risk management and adaptation to climate change) and has a budget with a total cost of EUR 11.9 billion. EU contribution amounts to EUR 9.4 billion of which EUR 6.9 billion is the FC contribution and EUR 2.48 billion is the ERDF contribution. By 2023, projects expect to reduce travel time on the TEN-T (in Romania) to 79 min/100 km, to increase Bucharest’s underground transport share (metro system) to 23% and to increase the volume of container cargo to 70,000.
To increase mobility on TEN-T core network, the development includes railway infrastructure development, rolling stock procurement, implementation of ERMTS, development of intermodal terminals, development of studies for the high-speed railway.

The railway infrastructure projects stipulated in the POIM are:
– Phasing the rehabilitation project of Sighișoara – Coșlariu rail section (TEN-T CORE) with finalisation deadline in 2018
– Phasing the rehabilitation project of Coșlariu – Vințu de Jos – Simeria with finalisation deadline in 2018
– Rehabilitation of bridges, culverts, including bridges over the Danube
– Rehabilitation of Radna-Gurasada-Simeria railway section 1 Simeria – km 614 (TEN-T CORE) with finalisation deadline in 2021
– Rehabilitation of Focșani – Roman railway (TEN-T CORE) with finalisation deadline in 2021
– Rehabilitation of Bucharest – Henri Coandă Airport (TEN-T CORE) with finalisation deadline in 2021
– Electrification of Cluj-Napoca – Episcopia Bihor railway (TEN-T Comprehensive) with finalisation deadline in 2021
– Rehabilitation of Brașov-Sighișoara railway
– Rehabilitation of Brașov-Predeal railway
– Rehabilitation of Craiova – Calafat railway (TENT CORE)

This year, CFR SA, the Romanian railway infrastructure manager, announced the launch of the rehabilitation works on a new section of Corridor IV: km 614 – Cap Y Bârzava (2a). The project includes modernisation works on a section of 44.7 km, the construction of 13 new bridges, the modernisation of 39 culverts and 5 stations, electrification works will be implemented as well as the ERTMS on the entire length of the subsection. The project is worth EUR 371,6 million, a sum covered through non-reimbursable funds and state budget funds.
At the beginning of February, the European Commission transmitted the Decisions to continue the financing in the current programming period (phase II) for two rail infrastructure rehabilitation projects, Coşlariu – Simeria and Sighisoara – Coşlariu (Corridor IV). The project includes the rehabilitation of two sections: Coşlariu – Simeria (around 74 km) and Sighişoara – Coşlariu (99 km). Projects have been structured in two financing phases: Phase I, co-financed by the EU in 2007-2013 and phase II implemented in the programming period 2014-2020. According to estimates, works will be completed in 2018.
CEF also finances the project on the elaboration of the feasibility study for the rehabilitation of Craiova – Drobeta Turnu Severin – Caransebeş railway, contract worth EUR 9.2 million of which 8%% is EU-financed. The railway section is included in the programme for the modernisation of Arad – Timişoara – Caransebeş – Craiova – Calafat rail section, a component of the Orient-East Med Corridor (IV – southern branch). The ERTMS system will also be implemented (ETCS Level II and GSM-R).
In December 2016, CFR SA announced the tender for the rehabilitation of Braşov – Sighişoara section on Braşov – Apaţa and Caţa – Sighişoara sections (Corridor IV) at a cost of EUR 690 million. The project financing will be covered through CEF (85%), while the remaining 15% will come from the state budget. For the middle section, Apaţa – Caţa, CFR SA is to announce the tender as the financing contract was signed in November 2016.
According to CFR SA, by 2020, the railway infrastructure needs total investments of over EUR 11 billion, of which EUR 5.6 billion is needed for maintenance and replacement of the infrastructure, while EUR 5.4 billion is needed for the rehabilitation and modernisation of the infrastructure on pan-European corridors. On the long-term, over EUR billion are needed for investments in 2021-2030, of which EUR 10.8 billion for maintenance and replacement and EUR 7.5 billion for the modernisation of corridors. Overall, necessary investments for 2015-2030 amount to over EUR 29 billion.

By Pamela Luica

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