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Proposal to establish a
Shift2Rail Joint Undertaking
European Commission - DG MOVE
Council Land Transport Working Party - Brussels 22 January 2014
AGENDA
• Background and EU Policy context
• Objectives and key elements of the Regulation
AGENDA
• Background and EU Policy context
• Objectives and key elements of the Regulation
Key challenges of the rail sector
•
Insufficient growth of rail markets
•
Poor consumer satisfaction
•
Fragmentation of rail markets and diversity of national standards
•
Low profitability due to product customisation, capital-intensity of
investments, long product lifecycles, and long and costly authorisation
procedures
•
Reliance on public subsidies
•
Increasing global competition in the rail industry
•
Technical know-how in decline with 30% of sector workforce retiring
within next 10 years
 What are we doing about it?
White Paper – a vision for rail transport 2050
Freight
Passenger
Shift 50% of road freight over 300
km to other modes
Triple length of high-speed rail
network
Double rail freight volumes
Majority of medium-distance
passenger transport by rail
Connect all seaports to the rail
freight system
Connect all core network airports
to the rail network
Rail Freight Corridors
Deploy ERTMS
EU Policy context
Fourth Railway Package
Improve competitiveness of rail
Spend public money more efficiently
Remove
administrative
and technical
barriers to
improve
interoperability
and safety
Open domestic
rail passenger
transport to
competition
Better
governance of
rail
infrastructure
Innovation
pillar of the
Single
European
Railway Area
Why an Innovation pillar?
•
Measures contained in the Fourth Railway Package will be important
but not sufficient.
•
The rail sector needs major and coordinated investments in R&I
that respond to market needs and contribute to completing EU
transport policy objectives:
•
To reduce the costs of public service obligations
•
To optimise traffic management
•
To reduce the costs of infrastructure maintenance & renewal
•
To increase demand for rail passenger services
•
To increase demand for rail freight services
•
To ensure provision of adequate competence and skilled
human resources
Why Technology Demonstrators?
•
Close the gap in the innovation chain (from ideas to market)
•
Support market uptake and impact by enabling the testing of
innovative solutions under real-world conditions
•
Ensure strong involvement of all stakeholders thanks to
collaborative nature of demonstrators
•
Strengthen the European dimension with cross-border
demonstrators
•
Quantify the impact of the introduction of each new technology and
of different combinations of technologies
•
Provide increased visibility and generate interest in the rail industry
to attract top graduates from across Europe
Key priority areas for rail R&I
Activities to focus around five areas or "Innovation Programmes":
•
New generation of high-quality, reliable rolling stock
that substantially reduces the cost of rail services,
drastically improves the quality of rail services and
facilitates the use of trains throughout various Member
States;
•
Intelligent traffic management and control
systems, beyond signalling, building on current
ERTMS, to optimise capacity, reliability and minimise
life-cycle cost;
•
New railway infrastructure system that will radically
improve capacity and performance and reduce costs
related to development, maintenance and renewals;
Key priority areas for rail R&I
•
Innovative IT solutions and services to make railway
services more attractive;
•
Sustainable and attractive freight solutions, helping
rail to enter into new market segments and become
an integrated part of advanced logistic solutions.
Estimated needs to cover all 5 IPs = 1.2 to 1.4 billion €
Based on draft industry technical proposals
What's already been done?
FP7 rail research (2007 to 2013):
•
155 M€ for rail research = 3.7% of total Transport Research budget
•
Around 50 rail projects (excluding cross-cutting projects)
•
Insufficient project coordination  risk of overlaps and/or of
generating uncoordinated or redundant technologies
•
Lack of system-wide approach with limited or uncoordinated
participation of actors from the full rail value chain
•
Limited market uptake of innovations with EU funding focused on
pre-competitive innovation at low Technology Readiness Levels and
"estranged" from market needs
•
Limited leverage effect (30% of private funding on average)
•
SMEs = 16% of funding
What needs to be improved?
 Focus and coordination of research efforts: Reduce
fragmentation of R&I efforts and focus them on areas with high EU
added value (SERA and competitiveness)
 Leverage of EU rail R&I funding: Ensure long-term commitment
from all partners and to leverage additional resources for R&I
 Broad stakeholder participation and sustained networks:
Gather all the key players across Europe in partnerships to ensure a
system-wide approach to innovation in rail and eventually better
integrate infrastructure, rolling stock, signalling and other
subsystems of the rail system
What needs to be improved?
 Market uptake: Close the gap in the innovation chain and support
close-to-market projects that meet business and end-user needs
 Mitigation of innovation risks: Implement appropriate risksharing mechanisms taking into account capital-intensity of
investments, long product lifecycles, and long and costly
authorisation procedures
 Operational performance and cost-effectiveness: Provide a
simple, efficient and cost-effective framework for granting R&I
Framework for EU intervention: H2020
Horizon 2020 Funding
Horizon
2020
77 028 M€
Excellent
Science
Industrial
leadership
Societal
challenges
24 441 M€
17 016 M€
29 679 M€
~7%
Smart,
green and
integrated
transport
…
…
…
…
…
…
6 339 M€
Rail
450 M€
Air
Road
Waterborne
Urban
Crosscutting
Horizon 2020 – A new approach to R&I
• Linking research to innovation by providing
coherent funding from idea to market
• Simplified access for businesses,
all EU countries and beyond
seamless
universities,
and
institutes
in
• More support for activities close to the market, including technical
demonstrators, leading to a direct economic stimulus
• Partnerships on the basis of Articles 185 and 187 of the Treaty to
be continued and strengthened further
Horizon 2020 Partnerships – Criteria
Article 19 of the Horizon 2020 Regulation: PPPs (institutional or
contractual) may be established on the basis of strict criteria:
•
added value of action at Union level;
•
scale of impact on industrial competitiveness, sustainable growth and
socio-economic issues;
•
long-term commitment from all partners based on a shared vision
and clearly defined objectives;
•
scale of the resources involved and the ability to leverage
additional investments in research and innovation;
•
clear definition of roles for each of the partners and agreed key
performance indicators over the period chosen.
AGENDA
• Background and EU Policy context
• Objectives and key elements of the Regulation
General objectives
• Achieve a step change in the way rail research and innovation
funds are gathered and distributed…
• … with a view to stimulating the development of breakthrough
innovations that…
• … contribute to a faster and cheaper transition to a more
attractive, competitive, efficient, integrated and sustainable
European rail system…
• … thereby supporting EU transport policy goals, such as
achievement of the Single European Railway Area and the
competitiveness of the rail sector.
Specific objectives
Develop, integrate, demonstrate and validate innovative
technologies and solutions that contribute to…
 reduce life-cycle costs of the railway transport system;
 increase capacity of the railway transport system;
 increase reliability and punctuality of rail services;
 a more attractive service profile, providing users with an
integrated end-to-end solution for their transport needs;
 remove remaining technical obstacles to interoperability and
efficiency;
 reduce negative externalities such as noise, vibrations,
emissions and other environmental impacts;
… While upholding the strictest safety standards!
Key principles
 Joint vision and holistic approach
 Tailor-made governance model with strong leverage
 Strong role for public authorities
 Openness and broad stakeholder involvement
 Efficient implementing framework
Joint vision and holistic approach
•
Joint priority setting in a Strategic Master Plan developed jointly by
the Commission and the rail sector in the Joint Undertaking
•
Create the link between R&I activities and EU policy goals (SERA,
competitiveness)
•
Create the link between R&I activities and business needs in the
rail sector
•
Holistic view of the rail system taking into account all railway
subsystems and their interactions
•
Integration and coordination of all rail R&I activities to ensure
continuity and avoid fragmentation
Key principles
 Joint vision and holistic approach
 Tailor-made governance model with strong leverage
 Strong role for public authorities
 Openness and broad stakeholder involvement
 Efficient implementing framework
Tailor-made governance model
JOINT UNDERTAKING
GOVERNING BOARD
Contributions
to S2R work
plan
Additional
activities in
support to
S2R Master
Plan
8 FOUNDING
MEMBERS
Min. 270 M€
200M€
70 M€
ASSOCIATED
MEMBERS
Min. 200 M€
150 M€
50 M€
Commission (50% votes)
8 Founding Members
Max. 10 Associated Members
+ Observers (ERA, MS Group)
UNION
Max. 450 M€
(H2020)
Min. 920 M€
Key principles
 Joint vision and holistic approach
 Tailor-made governance model with strong leverage
 Strong role for public authorities
 Openness and broad stakeholder involvement
 Efficient implementing framework
Strong role for public authorities
•
Strong role for public authorities given the core objective of
contributing to EU transport policy objectives and the Single European
Railway Area:
•
Commission to chair the Governing Board and have final say on
membership and composition of Board
•
Master Plan to be endorsed by Council
•
European Railway Agency to have observer status on the Board
and act as advisor on interoperability, standardisation and safety
•
States Representative Group to advise on strategic orientation
and ensure link with national and regional programmes and
priorities
Key principles
 Joint vision and holistic approach
 Tailor-made governance model with strong leverage
 Strong role for public authorities
 Openness and broad stakeholder involvement
 Efficient implementing framework
Openness and stakeholder involvement
•
Balanced participation of all relevant actors thanks to a three-tier
system:
•
Identification of a core group of Founding Members, including
the largest private and public players, to secure substantial
industry co-funding from the outset
•
Selection of Associated Members in a second stage to open up
membership to a broad range of actors from the entire rail
value chain and from other innovative sectors, including SMEs,
research organisations, universities, etc.
•
Allocation of part of the Union contribution through fully open
calls, including funds for broader collaborative research
Implementation of Union funding
Max 30%
ASSOCIATED
MEMBERS
Max. 135 M€
Min 30%
FULLY OPEN
CALLS
Min. 135 M€
UNION
Max. 450 M€
(H2020)
SMEs = Min. 20%  90 M€
Max 40%
FOUNDING
MEMBERS
Max. 180 M€
Openness and stakeholder involvement
•
Eight Founding Members
•
Consultative process with hundreds of stakeholders from EU28,
led by UNIFE, based on Commission criteria:
•
Financially sound single legal entities with headquarter (or
HQ of rail sector division) in EU member state
•
Individual own financial contribution, reflected in a concrete
technical proposal, of at least EUR 30 million for the full
duration of Shift2Rail
•
8 entities fulfilling the criteria: 6 rail equipment manufacturers
(Alstom, Ansaldo STS, Bombardier, Siemens, Thales, CAF) and
2 infrastructure managers (Trafikverket, Network Rail)
•
Automatic representation in the Governing Board
Openness and stakeholder involvement
•
Associated Members
•
To be selected via open call
•
Can be a grouping or consortium of legal entities
•
Individual own financial contribution of at least 2.5% of the
budget of the Innovation Programme in which it participates (~ €2
to €6 million depending on the IP)
•
Maximum 70 Associated Members based on available budget,
although closer to 30 expected
•
Participation of SMEs and actors from the entire rail value chain
encouraged
•
At least one Associated Member per IP represented in the
Governing Board
Openness and stakeholder involvement
 Entities can participate via 4 different mechanisms:
•
as an associated member (individually or consortium)
•
as a subcontractor, consultant or other arrangements
•
through the fully open calls
•
through dedicated working groups
 €90 million for SMEs over 7 years
• >< In FP7, approx. €22 million for SMEs out of a total of €155
million
•
Subject to regular quantitative and qualitative assessments
Key principles
 Joint vision and holistic approach
 Tailor-made governance model with strong leverage
 Strong role for public authorities
 Openness and broad stakeholder involvement
 Efficient implementing framework
Efficient implementing framework
•
Integration of Horizon 2020 major simplifications:
•
Single set of participation rules
•
New balance between trust and control
•
Just two funding rates
•
Single flat rate for «indirect costs»
•
Shorter time-to-grant
Efficient implementing framework
•
Standard provisions shared with the five Joint Technology Initiative
(JTI) joint undertakings proposed in July 2013
•
Integration of operational improvements following evaluation of
existing Joint Undertakings:
•
•
Streamlining of reporting requirements and simplification of
budgetary procedures
•
Possibility of resource-sharing with the Commission and other
Joint Undertakings or Agencies
Running costs limited to EUR 27 million (<3% of total budget) and
shared 50-50 by the Commission and other partners
Expected timeframe
Presentation
by EC to
Council
20/01/2014
TTE Council
informal
position
14/03/2014
Draft report
in ITRE
12/02/2014
Vote in EP
02/04/2014
Vote in ITRE
18/03/2014
Formal
establishment
of S2R JU
25/06/2014
Adoption in
TTE Council
05/06/2014
Legislative adoption procedure
Launch
recruitment
procedure
for Executive
Director
01/07/2014
Appoint
Interim
Establish
Director
Governing
01/07/2014
Board
Stakeholder
seminar
End April
2014
Appoint
Executive
Director
01/01/2015
Appoint
Endorsement
Governing
of S2R Master
Board
Plan
Members
1st Qtr2015
Initiate
negotiations
with Associated
Members
4th Qtr 2014
Setting up of S2R JU
Consultative process for Strategic Master Plan
EC to
present
preliminary
draft Master
Plan
01/04/2014
Launch call
for
Associated
Members
(based on
draft Master
Plan)
Summer
2014
Adopt rules of
procedure, financial
rules, budget, staff
establishment plan,
offices, work
programme, etc.
Thank you for your attention!