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The Swiss Railway System An overview
Reto Bleisch, Director of Regulatory & International Affairs, Swiss Federal Railways
17 March 2015, Jernbaneforum, Oslo
Agenda
The Swiss Railway Market
• Geographical situation & traffic distribution
• Market structure
• Institutional framework
Swiss Federal Railways
• Overview
Switzerland and the EU
2
Success factors
Customer punctuality
Integrated clock-face timetable
Through ticketing
Vertically integrated service provision
Long-term view on public transport
Stable financing scheme
3
220 km
• Switzerland has boarders with Italy, France,
Germany, Austria & Lichtenstein.
• Roughly 60% of the Swiss area is not not inhabitable
due to the alpine topography and its conditions
!
• Cross-boarder services are key to the respective
regions (i.e. Ticino, Geneva, Basle)
350 km
Geography of Switzerland & traffic distribution
Peak hour: 7-8am / 5-7pm
• CH is factor 9-10 smaller than the
larger EU member states in terms of
population
!
• CH is factor 7-12 smaller than larger
EU member states in terms of size
!
• Majority of passenger traffic
volume on the Swiss railway network
on the west-east axis between
Geneva-St.Gallen (“Green Banana”)
!
• Population density in central
Switzerland (Zurich, Argovia) high:
600-800 inh./km2
Population
(m)
Size
(km
Main metropolitan
area
Population
MMA
(m)
Switzerland
8,1
41,285
Zürich
1,8 (23%)
France
65
668,763
Paris
10,3
UK
62
244,820
London
13,9
Italy
60
301,338
Milano
7,5
!
• 1 out of 4 inhabitants live in the
Zurich metropolitan area ! vital
node for the Swiss public transport
system
!
5
Norway & Switzerland. A comparison of key economic KPIs
* nominal
** PPP
Switzerland
Norway
Population
8.1 m (x 1.1)
5.03 m
Size
42,000 km
Population density
196 inh. / km
15.5 inh. / km
Major metropolitan area
Zürich: 1.83 m
Oslo: 1.442 m
Urban population
73.7%
77.6%
GDP per population 2011
$81,161* (4.)
$43,370** (9.)
$97,255* (3.)
$53,471** (4.)
385,252 km
6
8,000 trains run on the Swiss network each day:
150 trains per line per day on average (EU 27: 45 trains)
Passenger km in 2013 at 17.5 billion:
Increase of 50% since 2000 (EU 27: +10%)
347 million people travel with SBB every year; Every Swiss uses rail 50 times a year (EU 27: 15 times)
The railway sector in Switzerland Network providers & railway operators
Infrastructure providers
81%
SBB:
3 045 km*
11%
BLS:
434 km
3%
SOB:
123 km
3 ISP:
21 – 50 km each
4 ISP:
10 – 20 km each
5 ISP:
< 10 km each
34 ISP (narrow gauge)
Path allocation
Railway operators
Passenger operators
9
Freight operators
11
Charter & historical
rolling stock operators
11
Each railway
company with
separate inhouse path
allocation
1765km
• Approximately 3800 km standard gauge network
• Several vertically integrated railway undertakings (infrastructure & transport services)
• Companies competing with each other on the basis of reciprocal access conditions
• 9 passenger service operators and 11 freight traffic operators
• >100 bus companies
8
Market structure Regulatory regime
Market
International
passenger services
Legal basis
Joint-Ventures
Business model
•
•
•
Connected to EU-wide HS railway networks
Strategic partnerships with SNCF, DB, ÖBB & FS
for cross-boarder passenger services
New development: Cross-boarder bus services
•
•
•
Directly awarded concession regime until 2017
Concessions contain strict quality guidelines
Cross-subsidies between lines caps profitability
•
•
•
•
Service contracts are directly awarded
Financed by regions and federal government
Service provision cost based, no profit allowed
Market share SBB: ca. 65%
•
•
•
Freight market opened since 1999
Market share SBB Cargo: ca. 69%
Market share trans-alpine traffic only: ca. 48%
(Partnerships)
Long distance
passenger services
Direct Awards
(10-year concession)
Regional passenger
services
Direct Awards
(2-year concession)
Freight services
Open Access
(Competition)
9
Market structure Policy
Institution & Players
Ministries
(7)
Parliament
(200)
Admin.
Ministry of Environment, Transport, Energy &
Communication
Cantons
(46)
Sector
Market
Transport
Services
Ministry of Finance
Residential
customers
•
•
•
•
Other Transport companies
Infrastructure
Transport
Services
Corporate & large
customers
Competition
Commission
Price Surveilance
Federal Office of Transport
SBB/CFF/FFS
Regulators
Infrastructure
Vendors
Arbitration
Commission
Self-regulating
bodies
Path allocation
body (TrasseCH)
Union of public
transport
(280 transport companies)
Several fully integrated railway companies
Tight control mechanism through policy, shareholder and regulatory bodies
High level of cooperation between market players
Constant feedback loop with the intention to improve system quality
10
Long-term view on public sector & infrastructure
financing - To succeed we rely on cooperation.
Railway companies
Public sector
Customers
11
Important referenda National polls to support public transport
12
Financing & Expansion of Rail Infrastructure.
Federal Funds
VAT
Mineral oil tax
Heavy vehicle charge
Rail infrastructure
fund (RIF):
Strategic development
programme (STEP):
1st expansion
phase to 2025:
• Upgrades and maintenance
• «Step by step towards more
• 6.4 billion CHF approved
from a single source
railway»
• Maintenance prioritised to
upgrades
13
5b CHF p.a.*
Maintenance has priority.
Upgrades
ca. 1.2 Mrd. CHF *
E
E
E
E
E
E
E
E
E
Maintenance
ca. 3 Mrd. CHF *
M
M
M
M
M
M
M
M
M
2017
2018
2019
2020
2021
2022
2023
2024
2025
Repayments
ca. 0.8 Mrd. CHF *
•
•
•
•
* Rough estimate
RIF: All expenditures – approx. 5b p.a. – from one source
Maintenance prioritised to network upgrades
The higher maintenance cost, the fewer funds available for upgrades
Long term predictability of funds for expansion projects
14
Swiss Federal Railways Legal structure & governance
• SBB AG is a legal entity with special shares
owned 100% by the Swiss government.
!
• The Advisory Board of SBB AG is
appointed by the Ministers.
!
100%
• The Swiss government sets strategic and
financial objectives for the company over
a timeframe of 4 years.
!
75%
26%
!
50%
TILO
100%
PASSENGER
SERVICES
Lyria
90%
Thurbo AG
100%
REAL ESTATE
SBB GmbH
INFRASTRUCTURE
• SBB AG consists of three operationally,
financially but not legally separated
entities SBB Infrastructure, SBB
Passenger Services and SBB Real Estate.
• SBB Cargo AG is a separate legal entity
with 100% of the shares held by SBB AG.
!
• There are strict regulations in place for
business units receiving public funds (SBB
Infrastructure and SBB Regional Passenger
Services) regarding transparency and
ensure the appropriate and efficient use of
funds.
SBB Cargo
International AG
15
Swiss Federal Railways - SBB AG Organisation & business units
Finance
HR
IT
Communication
Passenger Services
Regional
Passenger
Services
Corporate
Development
Safety
Legal
Real Estate
Supply Chain
Management
Freight Services
Long
Distance
Services
Int.
Nat.
Distribution & Services
Cargo International
Combined
Single Wagon
Load Transport
Stations Rail Production
Investment properties
Traffic Management
Operating
Infrastructure
Railway
network
Asset
management
Timetable &
Network design
Projects
Maintenance
Operations
ESCP
Energy
network
Telecom
network
16
Swiss Federal Railways - SBB AG Income statement
2.7 billion CHF generated
by ticket sales (34%)
2.3 billion CHF generated
by public funding (28%)
400 million CHF generated
from real estate (5%)
3.6 billion CHF labor cost
(47%)
1.7 billion CHF asset
depreciation (22%)
17
The „Planning Pentagon“
1
Transport demand
National
Regional / Local
2
Timetable
Rolling
stock
Transport supply
Timetable
Infrastructure
Infrastructure
Iterative
process
Stations & facilitites
Rolling stock
Stations
&
rail facilities
Funding
3
Funding
Implementation timeframe (STEP)
18
Demand for rail 2013.
Demand for rail 2030.
+44%
+33%
+25%
+21%
+39%
+32%
+36%
+45%
+38%
+38%
+22%
+58%
+33%
+58%
+18%
+28%
+78%
+18%
+39%
+69%
Growth 2012-2030
< +10%
+10% – +20%
+20% – +30%
+30% – +40%
+40% – +50%
+51%
+50% – +60%
> +60%
Increasing capacity as inexpensively as possible Maximising capacity via different approaches.
Capacity
„Concrete“
(construction work, tracks, etc.)
1
1
1
SBB CFF FFS
Increase service
1
SBB CFF FFS
frequency
Longer trains
SBB CFF FFS
SBB CFF FFS
More seats via double-deck trains
SBB CFF FFS
and increased clearance for freight services
SBB CFF FFS
21
Regional rail passenger transport. Regions & Brands
!SBB GmbH
• SBB differentiates between 5 regions with >15 regional tariff zones
• SBBs total market share is approx. >60%
• The regional passenger transport companies are independently branded
22
Regional passenger services. Financing scheme
Central
government
National contribution:
~20%
Regional
government
Regional contribution:
~24%
Customers
Other
Ticket sales:
~48,5%
Other contributions:
~7,5%
Financing scheme for regional
passenger services (100%)
23
Zurich metropolitan area A key node for the Swiss public transport sector
“S-Bahn” Zurich as the backbone
• Operated by SBB
• Service contract contains rigid bonusmalus system
• Lines: 14
• Stops: 172
• Passengers: 400,000/day
• Rolling stock: 237 units
Zurich public transport system
• Operational: 1990
• Frequencies: 30 min (off-peak) / 15 min
(peak time)
• Importance for SBB Regional Transport
Services:
• Area/Population:
1,840km2/1.5m
• 33% of train-km
• Companies 51
• >>50% of annual revenues
• 52% of pkm
• Routes: 398
• Stops: 2,719
• Passengers: 590m
• Total expenditure: 917.6m CHF
• Cost recovery: 62%
24
Long distance passenger services. Financing scheme & business model
•
PROFITABILITY
•
•
0
Source: SBB, for illustrative purposes only
Directly attributed concession for long
distance services until 2017
Concession contains in-detail quality
requirements
Profit capped through the application of
a systemic cross-subsidy mechanism
Line
25
International passenger services Direct links with major cities within a 4-h-radius
Frankfurt
Hamburg, Berlin, Amsterdam
Stuttgart
Munich
Brussels
Paris
Innsbruck
Salzburg, Vienna
Lyon
Marseille, Barcelona
CH – F
CH – D
CH – A
CH – I
Milano
• Boarders: Germany, Italy, France, Austria and Lichtenstein
• SBB works in cooperation with DB, FS, SNCF and ÖBB for cross-boarder
passenger services and is connected to the major cities in a 4h radius
• Seamless connection of regions with national and international links
26
%
Punctuality on the SBB network.
Total
Long distance services
(% ≤ 5 min)
(% ≤ 5 min)
100,00 %
96,95 %96,37 %97,29 %96,69 %96,97 %
100,00 %
%
93,75 %
95,41 %
95,29 %94,54 %95,01 %
93,68 %
93,75 %
%
87,50 %
87,50 %
%
81,25 %
81,25 %
%
2009
2010
2011
2012
75,00 %
2013
2009
2010
2011
2012
75,00 %
2013
Regional services
(% ≤ 5 min)
98,22 %97,91 %98,45 %97,90 %97,96 %
2009
2010
2011
2012
2013
• Train punctuality (<5min standard): 97% of all SBB trains are on time
• Customer punctuality (arrival and connection time <3min): 87.7% of all
customers are on time
27
%
Punctuality in an international benchmark.
Regional passenger services
Long distance passenger services
(≤ 5min)
(≤ 15min)
100,00
98,60 % %
97,00 %
95,00 %
93,20 % 92,70 %
%
92,50 %
90,90 %
%
85,00 %
%
77,50 %
%
70,00 %
SBB
ÖBB
DB SNCF FS
NS
98,90 %
93,70 %
93,60 % 92,90 %
91,00 %
83,80 %
ÖBB
DB SNCF FS
NS
SBB
28
The integrated clock face timetable. Example
Ankunft
Zürich - Aarau S3
Abfahrt
Zürich S1
4
Zürich – Niederweningen /Rafz S5
Zürich – Affoltern am Albis S1
5
14
91 1
94 31
84 34
81 54
51 51
71
34 74
31 64
41 61
54 0
0 03
03
4 10
95 13
92
Wetzikon
Hinwil
Pfäffikon SZ
Rapperswil
" S3 Aarau
S14 ➔ Hinwil
S5 ➔ Pfäffikon SZ
Zürich " S14
Rafz/NW " S5
29
Swiss Ticketing. A single key for the entire journey
A
C
B
rail I
co. 1
rail II
co. 2
E
D
boat
co. 3
postbus
co. 4
ONE journey, ONE ticket:
▪ 140 companies, including SBB, share a common fare system
▪ 12,740 stops, including 819 SBB stops
▪ Tickets for each company can be bought at any point of sale.
30
Travel cards. Strong takeup
430,000 GA travel cards
1.3 million regional & point
to point travel cards
2.5 million half-fare travel cards
1/4 of the population doesn’t care about tickets for (most) of their trips.
2/3 of customers are identifiable and thus accessible for personal marketing but also committed to the system.
31
SBB Real Estate
Strategic pillars
Stations
Investment properties
Rail production
Modern, customer-friendly services and
mobility centres acting as ultra-functional
transport hubs:
High-quality, sustainable properties
around station sites in all of Switzerland's
major metropolitan centres.
Attractive office, operational and
production buildings to facilitate operating
and communication procedures and
boost productivity.
– Shopping / convenience store services
– Secure, clean access to the rail
network
– Promotion of combined mobility
!• Develop major stations into customer- •!
•
friendly service centres
• Enhance access to railway
– Office workspaces
– Service facilities
– Rolling stock works
– Engineering service stations, etc.
Generate value added for the rail
system: railways, cities and the public
Investment policy that increases the
value of SBB's real estate portfolio
• Strengthen SBB's competitive edge
and its attractiveness as an employer
!• Develop standards and thereby
optimise the usage of SBB's office and
production spaces
32
SBB Real Estate
Third-party income
4.0%
4.5%
3.3%
6.4%
39.4%
8.0%
8.6%
39.4% Retail
15.4% Offices and practices
10.3% Parking
8.6% Open spaces and warehousing
8.0% Advertising
6.4% Development rights
4.5% Catering
4.0% Residential
3.3 % Other applications
10.3%
15.4%
Source: SBB Figures 2013
33
The Swiss freight market
From national to cross-boarder
Implementation of 1st Railway Pagage:
• “Open access” for cross boarder freight
transport ! Proactive move, 4 years
1999
ahead of the EU
• Modal shift as political objective
• Establishment of new “SBB Cargo AG”
1999
DE
CH
IT
2002
2003
2004
• Swiss Rail Cargo Cologne
!
• SBB Cargo Italy AG
!
• SBB Cargo Germany AG
2002 / 2003
DE
CH
IT
34
SBB Cargo Strategic pillars
Transit
Wagonload freight
Intermodal freight
(combined transport)
Successful traction
provider on the northsouth corridor
Wagonload freight on
profitable routes
Building up a new and
promising business
35
Relevance of Europe for SBB
Freight services
Regional passenger services
DE
Transalpine
freight corridor
RotterdamGenua
CH
IT
Long distance passenger services
Railway infrastructure
36
Relationship between the EU & Switzerland. The bilateral land transport contract
•
•
•
•
The bilateral contract between the EU
and Switzerland was signed 1999 and
became effective in June 2002.
It is regulating the bilateral network
access conditions, market opening
steps for freight an the separation of
accounts between passenger/freight
services and infrastructure.
The objective of both contracting parties
is to harmonise the regulatory
framework for the land transport area.
There is no formal requirement to
adopt EU legislation automatically.
This requirement is the result of an
agreement of both parties in the so
called „mixed committee“.
37
Challenges
Reliability & safety
Regulatory (un-)certainty
Sustainability of growth
Market incentives & customer focus
International developments
…In a nutshell… What‘s to remember?
The Swiss public transport system as a «metropolitan network»
• No long-distance / high-speed network
• Specific topography (alpine regions) & population density (CH=metropolitan area)
• High network load on a mixed network with (national & internat.) freight and passenger services
• High level of customer punctuality
• High level of public transport usage
!
«Success factors» of the Swiss public transport system
• Integrated clock-face timetable
• Through-ticketing valid across all transport modes (train, bus, boat)
• Coordinated/integrated long-term infrastructure planning
• Stable funding framework
!
• Tight coordination processes between players and transport/infrastructure
A tight and well balanced regulatory framework
• System based on cooperation rather than on competition
• Modal shift as a key element
• Switzerland is affected by European legislation and forms part of the EU economic area
39
Thank you. [email protected]