Saturday, November 22, 2008
Continuing investment demands technical expertise
Uncertainty is stalking the corridors of operators and suppliers around the world, as they try to assess the potential impact on the rail sector of the current crisis in the global financial markets. With huge sums of state funding being pledged to rescue the banks, liquidity for private-sector investment disappearing and share prices plummeting, the omens do not look good at first glance.
Perhaps the most high-profile casualty so far is the partial flotation of DB Mobility Logistics, which was postponed indefinitely on October 9. There is clearly a risk of a downturn in traffic. UK franchisee c2c, which serves London's financial districts, is reported to have seen a 7% fall in commuting during September, although SNCF President Guillaume Pepy said passenger traffic in France was holding up well. UK freight operators reported that the usual pre-Christmas surge in containers of seasonal goods from the Far East is much depressed this year.
And then there is the question of investment, with the prospect of projects being cancelled or postponed to relieve hard-pressed state budgets. Nevertheless, at the InnoTrans trade fair in September there was a widespread view that investment would continue at a high level, and this optimism has been reflected by almost everyone we have spoken to in recent weeks.
As Ireland's Transport Minister Noel Dempsey explained when confirming the retention of rail spending in the Irish budget cutbacks, railway investment today is all about 'sustainable transport for the future'.There seems to be a recognition at political level - certainly in Europe - that the current modal balance is not sustainable, and there still needs to be a substantial transfer of traffic from road and air to rail for environmental reasons. Even if the economic downturn manages to halt the seemingly-inexorable rise in demand for transport, modal shift will continue to put pressure on rail networks with limited spare capacity.
Rail investment is also seen by politicians as an economic stimulus. Arguing in favour of continued spending on modernising the London Underground and the £16bn Crossrail project, the right-wing Mayor of London Boris Johnson suggested in the Daily Telegraph on October 14 that 'we will beat this recession more speedily, and emerge in far better shape, if we make sure we put people to work in projects that boost the long-term competitiveness of the country'. He concluded 'this is one of those rare moments when the sound advice to someone in a hole - especially a hole as big as Crossrail - is that they should keep digging'.
Meanwhile, there is an emerging crisis in engineering and technical skills. Many exhibitors at InnoTrans exp-ressed concern about recruiting and training sufficient staff to meet the levels of spending projected by the UNIFE/Roland Berger market study and a similar report prepared by German consultancy SCI Verkehr.
CEO of Thales Rail Signalling Solutions Dr Alfred Veider gave one example. Advanced train control systems can boost line capacity, improve produc-tivity and eliminate unskilled tasks. But they are dependent on technical expertise. Whilst design and manufacturing can be done off-site, or subcontracted to low-cost countries, installation and maintenance requires local engineers and technicians. He pointed out that Europe's skilled workforce is ageing, and a bulge of retirements will aggravate the problem over the next few years.
Several railways have expanded their graduate recruitment and apprenticeship programmes, but operators and suppliers are competing for a declining pool of talent as young people are lured to jobs in other sectors. US railroads are working with universities to establish courses in railway-specific engineering skills, and similar programmes are emerging across Europe and Asia.
Noting that 'Crossrail plans to set up an academy for tunnelling', because it would need 28 000 workers by 2013, 'and these will be skilled, high-end, engineering jobs', Johnson claimed that 'for the first time in decades, we can tell our sons and daughters that they have a future in engineering'.
The biggest challenge, perhaps, is to overcome rail's popular image as an outdated 19th-century mode and demonstrate that it is re-inventing itself for the future. As Veider said, 'we have to tell people what we are doing, and give engineering a new image - today's railway is all about cutting-edge technology'.
