Article about Siemen's Rail Proposals

[Dixie]

Part of an article from the Telegraph https://www.telegraph.co.uk/busines...-siemens-pitch-make-britains-trains-run-time/

German industrial giant Siemens is urging Labour to let it upgrade underperforming rail routes, as the Chancellor explores cheap ways of modernising the network.

Under its proposals, Siemens would overhaul signalling systems and electrify diesel-only lines, while guaranteeing the number of trains on revamped routes.

Its lobbying effort includes asking Rachel Reeves to allow it to fund projects through public-private partnerships (PPPs), utilising the Munich-based firm’s financial arm.

Such arrangements would see Siemens fund work upfront and recoup costs through contract fees or charges levied from taxpayers.

The suggestion comes as Ms Reeves prepares for a spending review in the spring that the Treasury has warned will require 5pc efficiency savings across government departments while favouring projects that advance Sir Keir Starmer’s “plan for change.”

Siemens said its proposals, to be submitted by a deadline early next month, would boost capacity and help trains run on time.

Rob Morris, chief executive of Siemens Mobility UK, said: “We have the capability to bring finance together and allow clients to overcome the initial cost of investment. Everything comes down to the risk profile and we have confidence in our technology and taking on

However, a PPP deal might prove controversial within Labour ranks given the series of scandals that arose from the private finance initiative (PFI) model embraced by Tony Blair and Gordon Brown for schools, hospitals and prisons.

While pitched as a quick way of providing vital infrastructure, the approach is generally viewed as hugely expensive and delivering a poor standard of public services.

Still, Siemens has long bankrolled overseas contracts in areas such as power turbines and rail signalling, the crucial system of traffic lights that ensures trains run safely and swiftly.

The German company said that since it would be building and financing projects rather than involving third parties, there would be less risk than with the PFI experiment, in which companies managed operations where they had next to no expertise.

Siemens Financial Services, formed in 1997, held €33bn (£27bn) in total assets as of September.

Siemens will pitch the use of battery-powered trains as a quick fix for cutting carbon emissions on branch lines and other routes unlikely to be earmarked for full electrification.

The mobility division, which employs about 5,000 people in Britain, said the trains would provide further work at its new plant in Goole, East Yorkshire, which is assembling more than 800 Piccadilly Line carriages under a contract worth £2bn.

The trains would require limited electrification of stations in order to recharge, which Siemens said it could undertake via a PPP agreement.

It said that with installation times as short as 18 months, battery power could quickly eliminate diesel trains on important corridors such as the Chiltern Line between London Marylebone and Birmingham, West Midlands, and the Transpennine network in northern England.

The company is eager to explore options for re-signalling and has identified up to 40 rural routes where the introduction of modern digital technology could help slash operating costs.

 

[zwk500]

'Big contractor asks for lots of work' is perhaps an unsurprising development? It's essentially a DBFO contract that they're proposing from the looks of it. The battery proposals are interesting though.

 

[LNW-GW Joint]

If this gives us a rolling programme of electrification and resignalling, then it's a good thing for the railway.
Network Rail would probably want other suppliers (eg Alstom and Hitachi) involved to provide competition.
ETCS would provide a common standard for the signalling.

 

[dgl]

Naturally you'd want to make sure the contracts are worded properly so that Siemens is properly held to account of anything they do/ are responsible for causes delays/cancellations and that other manufacturers are given a look in just to stop the potential for Siemens to start charging what they feel like and the government just having to accept it. But aside from that it could be a good thing for the rail network, more electrification is always a good thing and with Siemens I suppose you know somewhat what you are getting.

 

[Bletchleyite]

With regard to branch lines, the likes of RETB* and treadle/traincrew operated level crossings brought big cost savings without affecting the service - are they proposing to look at similar things for branch lines? There are rather a lot of signalboxes doing not very much on lines like Ormskirk-Preston and the Conwy Valley. This would seem a good proposal, though I guess it would depend on value for money of the actual offering.

* Radio Electronic Token Block (I think)

 

[zwk500]

* Radio Electronic Token Block (I think)

Correct

With regard to branch lines, the likes of RETB* and treadle/traincrew operated level crossings brought big cost savings without affecting the service - are they proposing to look at similar things for branch lines? There are rather a lot of signalboxes doing not very much on lines like Ormskirk-Preston and the Conwy Valley. This would seem a good proposal, though I guess it would depend on value for money of the actual offering.

The problem with RETB is that you need to stop to exchange tokens, it is not permitted to accept or release a token on the move. There are several ideas being looked at for removing this constraint. However your savings for RETB are mainly when you have very long sections of single track plain line, and level crossings will quickly increase costs. What would be very good is some form of ETCS (European Train Control System) Level 2/3 hybrid where plain line position is reported by the train and axle counters are only used around conflict points. Comparable benefits might be realisable with just really long axle counter sections. However any ETCS rollout requires a critical mass to start a network effect for efficiency.

 

[edwin_m]

Naturally you'd want to make sure the contracts are worded properly so that Siemens is properly held to account of anything they do/ are responsible for causes delays/cancellations and that other manufacturers are given a look in just to stop the potential for Siemens to start charging what they feel like and the government just having to accept it. But aside from that it could be a good thing for the rail network, more electrification is always a good thing and with Siemens I suppose you know somewhat what you are getting.

Risk transfer is absolutely critical to making this sort of arrangement work. Try to transfer as risk to a commercial company that they have no control over, and they will simply add the cost should the risk arise onto the contract fee. The other key issue is how changes are dealt with - it shouldn't be too easy to change the scope before completion, but there should be some arrangement so any subsequent changes are implemented while the supplier is responsible for the assets, without them being able to charge rip-off prices.

With regard to branch lines, the likes of RETB* and treadle/traincrew operated level crossings brought big cost savings without affecting the service - are they proposing to look at similar things for branch lines? There are rather a lot of signalboxes doing not very much on lines like Ormskirk-Preston and the Conwy Valley. This would seem a good proposal, though I guess it would depend on value for money of the actual offering.

* Radio Electronic Token Block (I think)

RETB does affect the service. All trains have to stop at token exchange points for long enough to carry out the process, and this will almost always result in a deterioration of the timetable compared to what would be possible otherwise.

 

[HSTEd]

The last thing we need is even more manufacturer lock in on the railway.

Siemens is only backing this concept because it will grant them a de-facto monopoly on all equipment on large parts of the railway system, functionally forever.

 

[Meerkat]

My immediate questions would be 'where is the risk?', and 'what would GBR be locked into?'

Are Siemens taking the construction risk, or is GBR stuck with all the construction cost rises (unforeseen ground conditions etc) with little ability to change or descope/rescope the project?
Would GBR be locked into a set capacity for the whole time period, forced to pay Siemens extortionate fees for any changes?

 

[The Planner]

My immediate questions would be 'where is the risk?', and 'what would GBR be locked into?'

Are Siemens taking the construction risk, or is GBR stuck with all the construction cost rises (unforeseen ground conditions etc) with little ability to change or descope/rescope the project?
Would GBR be locked into a set capacity for the whole time period, forced to pay Siemens extortionate fees for any changes?

Its as above, Siemens would want paying significant amounts for any slight change, or unforeseen circumstance. Pretty much as now, but the industry being locked in.

 

[185]

- Siemens kit & products are great, as built, perhaps the most well thought out and reliable in the industry.

- Siemens Mobility UK's behaviour towards warranty commitments and aftercare maintenance is, imo, why they've struggled to win contracts.

A shame. Just wish they'd pull their socks up, and the German owners have a long look at what's let them badly down in the UK.

 

[Belperpete]

The last thing we need is even more manufacturer lock in on the railway.

Siemens is only backing this concept because it will grant them a de-facto monopoly on all equipment on large parts of the railway system, functionally forever.

Is that much different to today? Once you have resignalled a line with Siemen's or Alston or Atkins kit, you are effectively locked into them for all future changes.

In BR days, BR was a member of the tripartite alliance that developed SSI. As well as ensuring that the equipment was inter compatible, so Westinghouse could do alterations on GEC built schemes and v.v., it also meant that BR could do alterations in house. Unfortunately we are still living with the consequences of Railtrack, who decided that they were going to leave it all to the contractors, and just pay for it. And we are still paying for it.

As far as the signalling goes, it seems to have the same effect as PPI - you save the large upfront cost, but incur a significant additional on-going cost. Probably attractive to politicians, who tend to have a short-term outlook, but in the long term it can badly effect the railway's ongoing viability. As happened with schools and hospitals.

I am not sure that Siemen's rolling stock offer is going to fit well with the current TOC set up. Would the TOC's have to buy into this? Presumably they would be saddled with paying the PPP cost of new stock that would be used for their services? Or would they be relieved of any responsibility for those services?

 

[Skeletor]

Siemens are angling for a monopoly as others have said.

Have been on track renewal sites before in Siemens resignalled areas where replacement parts have been required and NR maintenance have none of it in stock. It’s all unique to Siemens and they’ve had to be called out.

 

[fgwrich]

- Siemens kit & products are great, as built, perhaps the most well thought out and reliable in the industry.

- Siemens Mobility UK's behaviour towards warranty commitments and aftercare maintenance is, imo, why they've struggled to win contracts.

A shame. Just wish they'd pull their socks up, and the German owners have a long look at what's let them badly down in the UK.

Sounds a little like what ultimately cost MAN the VP185 contracts. Lack of aftercare and Alsthom’s behaviour at the time left something to be desired for. A complete contrast though to their German (or perhaps now Anglo given the RR ownership) of MTU Friedrichshafen operates who couldn’t be more helpful to anyone with an MTU, or even Maybach it seems, engine.

 

[CdBrux]

It sounds a tempting idea, however as the original article mentions experience from PFI suggests a lot of caution is required. At the time I'm sure the shiny new investments looked good, however they hadn't been paid for and the bill turned out to be quite high and presumably more in the operational budget than in the capital budget

 

[Class 170101]

Correct

The problem with RETB is that you need to stop to exchange tokens, it is not permitted to accept or release a token on the move. There are several ideas being looked at for removing this constraint. However your savings for RETB are mainly when you have very long sections of single track plain line

Another planning constraint is that token exchange can only happen one at a time as there there is only one RETB console in the controlling signalbox to do the token exchanges. So trains waiting in different non conflicting, on the track, locations also have to wait.

 

[PM77]

- Siemens kit & products are great, as built, perhaps the most well thought out and reliable in the industry.

This isn't the case with the interlocking. As with all systems there are good and bad points. It has a small footprint, but their replay and monitoring facilities are not the best, compared to other systems.

 

[nwales58]

Reminds me of the joke about Siemens: the bank that does some non-financial engineering too.

About Us | Asset & Equipment Financing Company

As an asset and equipment finance company, we help our customers and partners achieve their business goals, and we've been doing it for more than 50 years. Read more.

www.siemens.com

Seriously, anything like this would have to go out to tender and Siemens would not necessarily win. Any ITT structured around what Siemens offer would have competitors shouting foul and end up in the courts.

Points above about SSI vs. vendor lock-in and appropriate transfer of risk are vital.

 

[D365]

- Siemens kit & products are great, as built, perhaps the most well thought out and reliable in the industry.

- Siemens Mobility UK's behaviour towards warranty commitments and aftercare maintenance is, imo, why they've struggled to win contracts.

A shame. Just wish they'd pull their socks up, and the German owners have a long look at what's let them badly down in the UK.

There’s a lot that can be said about Siemens Mobility, but Germany [which supplies the SIL hardware] isn’t known for being outstandingly collaborative with their UK divisions.

 

[LNW-GW Joint]

Seriously, anything like this would have to go out to tender and Siemens would not necessarily win. Any ITT structured around what Siemens offer would have competitors shouting foul and end up in the courts.
Points above about SSI vs. vendor lock-in and appropriate transfer of risk are vital.

If the contract was set up as a frame agreement with call-off for individual schemes, the competition would be at the beginning.
You only have to look at the Hitachi IEP contract to see that it started multiple procurements over more than 15 years, and set up an independent production capability in the north-east.
On the other hand, Network Rail let regional frame agreements for the "rolling electrification programme", and look where that ended - unsatisfactorily for both sides.

Siemens has a long history of UK operation, and is more deeply embedded in government schemes (many being outside rail) than the other major rail systems suppliers.
Given the economic situation the Treasury would be bound to consider any private capital funding for the railway.

 

[Class 170101]

Given the economic situation the Treasury would be bound to consider any private capital funding for the railway.

I'm not so confident, look at what happened, or rather didn't happen, with the Hull Trains proposed electrification to Hull from the ECML.

 

[Harpo]

Re-signalling capability on the UK supply side (i.e. Siemens & others) is geared up to match a reasonably constant demand.

Siemens presumably needs to demonstrate a big step change in its own delivery capabilities for the tail to be able to wag the dog.

 

[LNW-GW Joint]

I'm not so confident, look at what happened, or rather didn't happen, with the Hull Trains proposed electrification to Hull from the ECML.

You may be right, but the economic situation today is very different from that in 2016 when the FirstGroup proposal was canned.
Labour appears to be warming to PFI-type schemes to solve its capital spend problem.
France built its most recent LGV lines using contractor funding and a long-term usage charge.

 

[HSTEd]

Re-signalling capability on the UK supply side (i.e. Siemens & others) is geared up to match a reasonably constant demand.

Siemens presumably needs to demonstrate a big step change in its own delivery capabilities for the tail to be able to wag the dog.

The signallng capability in the UK, as far as I know, still has not reached the required level to prevent spiralling deterioration of the signalling infrastructure.

 

[The Planner]

The signallng capability in the UK, as far as I know, still has not reached the required level to prevent spiralling deterioration of the signalling infrastructure.

Its more the cost.

 

[Couru]

As others have already opined, I do worry about increased contractor/private involvement in infrastructure, and creating what is essentially a PFI runs a bit contrary to the nationalisation plans. Siemens are generally one of the more scrupulous companies, though, and this could finally lead to the investment we all agree is needed - provided Reeves and Alexander do their jobs.

 

[Belperpete]

Re-signalling capability on the UK supply side (i.e. Siemens & others) is geared up to match a reasonably constant demand.

Unfortunately there isn't reasonably constant demand. Ever since I started working for S&T, it has been a case of peaks and troughs. And privatisation only made things worse. No sooner are the signalling contractors taking on extra staff to meet a surge in demand, than they are laying them off again.

At least British Rail had an allocated scheme system, to try and ensure that each of the contractors had a reasonably steady flow of work. Unfortunately that went out the window with Railtrack

Unfortunately companies like Siemens and Alstom can't afford to pay staff that they have no work for, even for a relatively short time. But it takes a long time to train experienced signalling technicians and engineers. So once the companies have laid staff off, they are reluctant to take staff on again unless they are confident there is sufficient long term work to justify the time and expense of training the new staff. So every time there is a hiatus, the industry slims further. Back in BR days, there were six major in-house design offices, in-house project and major work construction resources, two major contractors and a number of other smaller contractors to do resignalling work. How much is left now?

The proposed merger between Siemens and Alstom should have come as a warning call. The merger got blocked, but unfortunately the underlying issues in the signalling industry that it exposed seem to have been ignored. Instead, Network Rail seem intent on spreading an ever thinner layer of jam ever wider.

 

[twpsaesneg]

The last thing we need is even more manufacturer lock in on the railway.

Siemens is only backing this concept because it will grant them a de-facto monopoly on all equipment on large parts of the railway system, functionally forever.

^^This

It's already a big problem in signalling, having more functions locked into Siemens forever would not be a good plan.

 

[nwales58]

Ever since I started working for S&T, it has been a case of peaks and troughs. ... No sooner are the signalling contractors taking on extra staff to meet a surge in demand, than they are laying them off again.

And that's not just signalling. I was in transport consultancy from the late 70s and UK public investment has been horrendously cyclical all that time. Traditionally when UK demand crashed firms agressively went for overseas contracts (good news: you still have a job, bad news: it's now in Kuala Lumpur) but the shape of global work has changed out of all recognition.

Everyone knows this increases costs, loses skills and increases project disasters. So ministers commit to a long term steady state roads building programme (1989), a rolling programme of rail electrifiction (2010?) and similar for rebuilding schools, hospitals and so on.

Every one of those lasts about 5 years before being scrapped (unaffordable, too many objections, pause to consider better options ...). 5 years of planning includes 2-3 years of scheme starts followed by 5-10 years of nothing when the skills, production lines, corporate memory evaporate.

Nationalisation is not inconsistent with PFI and similar. What matters for us all is making good decisions for the long term on spending public money where needed to achieve a better future. Many PFI flavours: DBO, DBOM, DBM etc, design, build, operate, maintain. Siemens seem to be adding F for finance which is not new. No matter what you think of the ROSCOs or the IET contracts, from decades ago Second Severn Crossing onwards down to dual carriageway roads were DBF(O)M for initial term and we still see them as national infrastructure.