As a result of lower tender prices, more railway lines in the Czech Republic will be repaired, with savings exceeding EUR 64 million (CZK 1.6 billion).
The Czech Railway Administration, Správa železnic, will save nearly a third of the costs for repairing and maintaining railway lines. Through procurement reform, Správa železnic has succeeded in reducing the prices offered by bidders in public procurement, and an increasing number of companies are participating in these procedures. Instead of the initially estimated EUR 230.4 million (CZK 5.76 billion), the work will cost a total of EUR 164 million (CZK 4.1 billion). Správa železnic notes that the savings achieved will also allow for the accelerated start of other repair works.
“The changes we’ve implemented in recent months have resonated in the market, and companies’ interest in our tenders has increased significantly. We see a direct correlation between the number of bidders and the final price. In some cases, we even had nine or ten bids, and prices dropped by tens of percent, sometimes even to half of the estimated costs. At the same time, we must be mindful of any potential additional work so that costs do not rise during execution,” said Správa železnic CEO Tomáš Tóth.
The Impact of Optimizing Public Procurement
The savings target 80 projects focused on the maintenance of tracks, switches, the catenary system, or safety systems. The work also includes repairs to level crossings or platform extensions.
Správa železnic recorded a 31% reduction in costs for routine line maintenance work. On average, four bidders participated in these tenders. And the periodic renewal of main lines will also cost significantly less, with a total of four tenders worth EUR 13.72 million (CZK 343 million). For example, the modernization of the section between Vsetín and Horní Lideč yielded savings of nearly EUR 8 million (CZK 200 million), and seven bidders participated in this project.
Thanks to total savings of over EUR 64 million (CZK 1.6 billion), the railway infrastructure administrator can begin major rehabilitation of the line between Beroun and Kařízek as early as this year, a project originally planned for next year. The repair of the Bakov nad Jizerou – Mnichovo Hradiště – Příšovice section will also be brought forward.
The reduction in costs and increased interest from companies are the result of recent changes to public procurement procedures. Specifically, administrative barriers have been reduced, qualification requirements have been adjusted, and preliminary market consultations are being used more frequently. For large projects, construction work and technological components are separated, allowing more companies to participate without the need for consortia. Thus, the higher number of bids directly leads to more favorable final prices.
In addition, Správa železnic optimizes costs through the centralized procurement of materials, such as rails or sleepers, which are purchased in larger volumes to secure better prices.
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