Competition in long distance train service between East-and Westdenmark

Kontorchef Lasse Winterberg

9. februar 2011

Side 2Transportministeriet

Rail in Denmark

• Rail has 8 percent market share

• Every Dane travels about 1200 km by rail pro annum

● DSB’s present services are in principle divided in:

Lyntog (yellow)

Intercitytog (red)

Regionaltog (green)

Side 3Transportministeriet

Heavy investments in rail network up to 2020

● Extensive rail investments in the public investments plan:

● Double track on Nordvestbanen and in Sønderjylland 2015

● Metro in København 2018

● New mainline København – Ringsted 2018

● Fixed connection crossing Femern Bælt2020

● Replacement of signalsystem to ERTMS2 before 2021

Side 4Transportministeriet

Rail sector in Denmark

● 6 billion passenger km on the state network and 172 millions journeys (2009).

● DSB had a monopoly until 1999.

● Production sums to 68 mio. trainkmyearly:

55 mio. km DSB (negotiated contract)

8 mio. km Arriva (tendered contract)

5 mio. km DSBFirst (tendered contract)

+ SJ commercial traffic Øresund –København and København – Odense

Side 5Transportministeriet

Figures for long distance trains København – Aalborg

On yearly basis:

● 14-15 mill. customers

● about 2,4 bill. passengerkm

● about 2,0 bill. kr passenger revenues

Accumulated on parts of the line:

● København – Odense 57 p.c.

● København – Aarhus 90 p.c.

● København – Aalborg 100 p.c.

Side 6Transportministeriet

Long distance København - Jylland

● Long distance København – Jyllandcovers about half of the total demand measured in passenger kilometers

● Long distance København – Jylland is responsible for 30 percent of total production measured in train kilometers.

● Part of the line close to København is profitable.

● The whole line København – Aalborg is foreseen to be able to be profitable in future.

Side 7Transportministeriet

Use of network capacity to day

● The Minister of Transport can reserve capacity to specific purposes.

● Public service has priority to capacity.

● A minor increase in capacity København - Ringsted will be taken into use 2012

● A new main line København-Ringsted 2018 and fixed connection across Femernbælt 2020 expands capacity considerably

Side 8Transportministeriet

Direct competition

● Direct competition between at least two operators are intended to put the customers in focus.

Advantages for the fares?

New offers?

Product- and price differentiation?

More seats?

Side 9Transportministeriet

Models for direct mutual competition?

● Competition must be introduced in the long distance train service between east and west

● Customers satisfaction should be maximized

● Customers must therefore always have two operators to choose between

● There are several models for introducing direct mutual competition

● Dialogue with operators about which model is the best in order to maximize customers satisfaction

Side 10Transportministeriet

Rolling stock?

● It shall be possible to rent the necessary suitable number of trains from DSB.

● The trains can either be of the type IC3 or IC4

● The operator can choose to provide his own trains.

Side 11Transportministeriet

IC3 train

● Diesel train sets max speed 180 km/h

● 144 seats

● 97 tons

● 58,8 meter long

● DSB has 96 train sets, delivered in the period 1989 – 1998

Side 12Transportministeriet

IC4 train

● Diesel train set max. 200 km/h (at present only possible to run 180 km/h)

● 215 seats

● 160 tons

● 86,5 meter

● DSB will have 83 train sets when the delivery is finished in the 3. quarter of 2012.

Side 13Transportministeriet

Requirement to rolling stock

● The line between København and Fredericia is electrified. Diesel trains are necessary between Fredericia and Aarhus/Aalborg.

● Danish Automatic Train Control system is required.

● It is decided to use ERTMS2 over the whole network from 2020.

Side 14Transportministeriet

Arrangements and contracts

● The parties will enter into flexible contracts concerning rights and obligations

● Infrastructure capacity?

● Access to stations?

● Fares and ticket systems?

● Other facilities?

● Rolling stock?

● Other?

Side 15Transportministeriet

All solutions are open

● All ideas and aspects are wanted on the table, so the process can be planned in a way which maximizes the satisfaction of the customers.

● A round of Expression of Interest is planned where each operator can put their proposals forwards.

● How big advantages are possible by different arrangements of the process?

● Do the interested operators have experience with direct competition? And how big advantages can we get by arranging the process in different manners?

● The Minister will participate in the meetings which will be held in March-April 2011

● The objective shall be success for the passengers.

Side 16Transportministeriet

How?

● The round of expression of interest will be advertised in the Official Journal of the European Union

● Request for participation to

Transportministeriet Frederiksholms Kanal 271220 København KAtt: Lasse Winterberg

Email: lwi@trm.dk