Interview: Railways to be the essential element of Poland’s transport system

”PKP Polskie Linie Kolejowe S.A. is the manager of the national railway network. We manage a network of more than 19,000 km of railway lines in Poland. Our main task is to organize railway traffic, including railway maintenance ensuring safe train traffic management, prepare train timetable and manage the traffic of approximately 6,500 passenger and freight trains, as well as technical maintenance trains every day, plan and execute investments”.

Pamela Luica is talking with…

Ireneusz Merchel,  CEO of PKP Polskie Linie Kolejowe

The company’s priorities focus on the construction and modernisation of railway infrastructure for which massive investments will be granted over the next years from both PKP PLK’s own resources and European funds.
The National Railway Programme (KPK) 2023 includes investments of over EUR 15 billion in infrastructure projects aimed to increase the railway freight and passenger transport share in the country and the consolidation of the network at European and international level.
In 2015-2016, PKP PLK announced a series of investment projects whose estimated cost exceeded the initially estimated value by PLN 2 billion (EUR 474 million). From 2017 to 2019, the company will launch projects with a total cost of over PLN 35 billion (more than EUR 8 billion). For the modernisation and integration of the network, the company’s plans include the installation of 3,400 km of ERTMS railway by 2025. At the end of 2016, PKP PLK announced two tenders worth EUR 237 million for the installation of ERTMS on 1,000 km of railways.
Regarding the allocation of investments, European funds play a significant role, especially for the modernisation of railway infrastructure. Poland is one of the most efficient countries in the absorption of EU funds within the multiannual budget programming period 2020. In 2014-2020, Poland, as main beneficiary of the cohesion policy,
will receive a EUR 82.5 billion financing for the implementation of projects in different areas, from infra-structure and environment, to culture and social inclusion.
Financing, structured on domestic, regional and operational programmes, including CEF, support railway projects for which the company obtained a total financing of over EUR 9 billion.

In the interview below, Ireneusz Merchel, CEO of PKP Polskie Linie Kolejowe, had the kindness to explain for our readers the ongoing and future investment projects of the company he leads, why it is important to meet the criteria to obtain European funds, as well as the challenges an infrastructure company is facing when accessing European funds.

KPK is the most ambitious infrastructure investment programme. What are its basics and expected results? What financial contributions does the programme envisage and what is its current state of implementation? What challenges lie ahead of PLK in relation to the investment programme? Many tenders were announced in 2016. What tenders does the company plan to announce now and in the future, what will be their value and reference to KPK?

Ireneusz Merchel: We are dynamising railway invest-ments. Over PLN 66 billion (EUR 15.6 billion) are envisaged for them in the National Railway Program up to 2023. The value of new tenders for railway line modernisation in Poland, which were announced in the first two years of the investment program (2015-2016), has increased to PLN 27 billion (EUR 6.4 billion), from previously planned PLN 25 billion (EUR 5.9 billion), which constitutes 40% of National Railway Programme’s realisation. The estimated value of tenders planned for announcement in 2017 is PLN 6.8 billion (EUR 1.6 billion), in 2018, PLN 11.7 billion (EUR 2.77 billion) and in 2019, PLN 16.8 billion (almost EUR 4 billion).

The value of the planned contribution of PKP Polskie Linie Kolejowe S.A. in 2017 is PLN 5.5 billion (EUR 1.3 billion), in 2018 it will be PLN 11 billion (EUR 2.6 billion) and in 2019, PLN 13.4 billion (EUR 3.17 billion).
Among the biggest investments planned by PLK are: construction of a cross tunnel in Łódź, modernisation of the diameter route line in Warsaw, works on line 7 of Warsaw – Lublin section, modernization of Kraków Główny Towarowy – Kraków Rudzice route, as well as Sochaczew – Swarzędz section of E-20 line. We also improve the conditions of transport of goods. On 20 January 2017 we signed the contract for works in the Rybnik Industrial District: Chybie – Żory – Rybnik – Nędza/Turze. The investments within Rail Baltica line on Sadowne – Czyżew – Białystok – Ełk section as well as on C-E 65 Coal Main Railway Line are equally important.
The projects from the Operational Programme Eastern Poland, implemented under the so called Eastern Line, also play an important role.

The condition of the railway infrastructure significantly impacts the quality of transport services. What can you say about the current condition of railway lines in Poland and what is the perspective of rail’s competitiveness in comparison with other means of transport?

Ireneusz Merchel: PKP Polskie Linie Kolejowe S.A. focuses on the development of important railway routes. Thanks to the investments included in the National Railway Programme, the mobility and comfort of travelling will improve, the availability of regional transport connections will increase and the railway will become an essential element of the whole transport system.
The works on the peripheral line in Warsaw (Warszawa Zachodnia / Gołąbki – Warszawa Gdańska) will provide the passengers of the capital agglomeration with comfortable travel: new train stops will be created and the remaining stops will be modernized. While works on regional lines such as: Lublin – Stalowa Wola Rozwadów or Łódź – Zduńska Wola will reduce the time of travel as well as allow to integrate regional and interregional transports.
As I have mentioned, thanks to the investment of PKP Polskie Linie Kolejowe S.A., the rail freight operators will also gain advantage. Our goal is the improvement of the transport of goods on the North-South axis, that is why the investments in all ports are so important (nearly 6 billion zlotys – EUR 1.4 billion are envisaged for works within Port Programme which includes ports in Gdańsk, Gdynia, Szczecin and Świnoujście), as well as the improvement of main freight lines such as Main Coal Line (works on Zduńska Wola – Karsznice – Bydgoszcz – Tczew section of C-E 65 railway line), Nadodrzanka (line 273), Rail Baltica (E75 line), E20 Warszawa – Poznań or the intensification of works in industrial districts.

European instruments of financing infrastructure transport projects are very important for every European country, and Poland is one of the biggest beneficiaries of those funds. What are the programmes’ qualification criteria to receive European funds?

Ireneusz Merchel: The Ministry of Development is responsible for negotiations of programs allowing to receive funds from the European Commission. The Implementation Document of Transport Development Strategy is an important part of the qualification process of railway projects in order to receive Union funds. The document sets forth predefined list of priority investments planned for implementation until 2023. Railway projects from the list are presented to specific Management Institutions as identified, then applications for funding are submitted to Implementing Authorities (CUPT or INEA or CEF and Implementing Authority for RPO). In case the qualified value of the project is bigger than EUR 75 million, the project is submitted for assessment by the European Commission.

What challenges are ahead of the infrastructure operator who wants to receive the highest funding from the European Union and how PLK wants to undertake those challenges?

Ireneusz Merchel: The management of PKP Polskie Linie Kolejowe S.A. has decided to undertake intensive actions in order to receive the highest EU funding for the implementation of railway infrastructure investments. We try to undertake projects which include strategic lines, functioning within international connections, while we also want to revive the railway transport particularly in regions where it has been neglected and forgotten. And that is a great challenge for us, but we are on the right path to realize them fully, so they can satisfy both us and the passengers. The proof of implementation of this goal is the set of investments within the Eastern Poland Operational Programme. The programme includes 8 projects with overall value of PLN 2.1 billion (EUR 497.7 million) which will increase access to the railway in eastern voivodeships, ensure the easiest transport of goods and enable the creation of the Eastern Main Railway Line. The last point is extremely important, as we are talking about the concept of modernisation of existing railway lines which connect voivodeship cities of Easter Poland, i.e. Olsztyn, Białystok, Lublin, Rzeszów, Stalowa Wola and Kielce. Each of those investments is a direct profit for passengers of trains, e.g. shorter time of travel, up to 1 hour and 10 minutes between Szczytno and Ełk or 11 minutes shorter travel of passenger trains between Działdowo and Olsztyn.

Poland receives European funds within multiple railway programmes (POIŚ, PO PW, RPO). What is the overall value of funds by 2020? Is there any other area which has received more funds?

Ireneusz Merchel: In financial perspective for years 2014 – 2020, Poland receives funds within domestic (POIŚ, PO PW) and regional operational programmes (RPO) as well as within the CEF “Connecting Europe” fund. Those programs support different sectors, including railway.
The overall value of funds which are to be obtained by PKP Polskie Linie Kolejowe S.A. within those programmes is around PLN 38.4 billion (EUR 9.1 billion) of EU funding.
The main goal of the railway projects implemented within those programmes is to enhance the role of railway transport in the country’s integrated transport system through creation of consistent and modern railway network.

PLK submitted multiple applications for EU funding within CEF and received those funds. What is the current value of obtained funds and what other financing the company expects to receive?

Ireneusz Merchel: PKP Polskie Linie Kolejowe S.A. is the biggest beneficiary of Union funds from the “Connecting Europe” instrument. Until now, the European Commission has positively assessed all 17 applications submitted by our company in the I and II stage of the CEF competition. The value of funds granted to Poland in both application processes is over PLN 13 billion (EUR 3 billion). We have also submitted five applications in the III stage of the CEF for an overall value of PLN 8.7 billion (EUR 2 billion).
Very important investments financed within the CEF instrument include improvement of access to ports in Gdańsk, Szczecin, Świnoujście and Gdynia. Moreover, in central Poland it is an investment on the Łódź – Zduńska Wola route. We also have projects in the south of Poland which are connected with the improvement of access in Kraków and its agglomeration, as well as electrification of Węgliniec – Zgorzelec line in Lower Silesia.
I also would like to point out that in July 2016 PKP Polskie  Linie Kolejowe S.A. has finalised the project called “Safety improvement on Main Railway Line through removal of railway level crossings on the 127 and 147 km and the construction of two-level crossings”. It is the first completed CEF project, not only in PLK but also in Europe. It is extremely important because it allowed to increase the safety and speed up to 200 km/h. Projects from next application processes within the “Connecting Europe” instrument will also be implemented efficiently and realised within the set time limit.

In January 2017, the European Commission has implemented a regulation which specifies the realisation time of the ERTMS. The plan is to equip 50% of the transport corridors by 2023. What is the current stage of the ERTMS realisation and what projects will be announced within its framework? Will Poland achieve goals, imposed by the EC, concerning the implementation of the ERTMS?

Ireneusz Merchel: Currently we have ERTMS/ETCS deployed on the distance of around 331 km. We have around 700 km in the phase of implementation and in the years 2017-2025, we will realize the system deployment projects on around 3,400 km of railway line. 2,810 km of them are level 2 of the ETCS.
PLK have deployed level 1 of the ERTMS/ETCS on 224 km of Central Railway Line – from Grodzisk Mazowiecki to Zawiercie. On the other hand, we have level 2 of the ERTMS/ETCS on 84 km section of E30 line from Legnica to Bielawa Dolna near the German border. At the end of 2025, Polish railway network will be equipped with the ERTMS/ETCS system on around 3,400 km of railway lines.
We have announced two tenders worth PLN 1 billion (EUR 237 million) in December 2016 for the construction of the ERTMS/ETCS infrastructure system on 1,000 km of railway lines. Railway investment in digital technologies will increase the level of travellers’ safety and facilitate the work of train drivers. The tenders concern the implementation of the system on sections of the TEN-T core network: Kunowice – Terespol, Łowicz – Łuków and Podłęże – Rzeszów.
I would also like to emphasize that PKP Polskie Linie Kolejowe S.A. have their representative on the management board of the Platform for ERTMS Implementation at the European Railway Agency.

At the end of 2016 PLK and EIB have signed the agreement concerning the financing of the contract for construction of 100 km railway line within Rail Baltica. What is the state of the implementation of the project in the Baltic States? What is the level of Poland’s engagement, given the fact that prime ministers of Lithuania, Latvia and Estonia have signed the international agreement constituting the basic for the implementation of Rail Baltica?

Ireneusz Merchel: E75 (Rail Baltica) railway line has priority for rail traffic, it is an element of Trans-European transport corridor and constitutes the only railway connection of the Baltic States with Poland and other countries of the European Union.
Works on the modernised section of the line were divided into several projects. One of them, implemented within the Infrastructure and Environment Operational Programme which connects Warsaw Rembertów and Sadowne, is in the final stage of implementation, and passengers can already enjoy the first effects of the works.
For the next two projects: Sadowne – Czyżew and Czyżew – Białystok we were able to receive the funds from the “Connecting Europe” CEF Instrument. The modernisation of the next section from Białystok through Ełk and Suwałki to the country’s border in Trakiszki is in planning stage.
PKP Polskie Linie Kolejowe S.A. signed a PLN 208 million (EUR 49.3 million) agreement with Track Tec consortium for the modernisation of outbound lines which the trains will take during the modernisation of Rail Baltica line sections. What is important, after the completion of the modernisation, they will not be suspended or closed, but will continue to function in the regional transport of passengers and goods.

This article was published in the June issue of the Railway PRO Magazine that analyses the latest and most important railway projects around the world.

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