State of the Railway World Louis S. Thompson Railways Adviser The World Bank June 2002
Rail reform is happening everywhere (not just Bulgaria) Railway deficits unaffordable Regional pressures (especially E.U. policy) Globalization drives out inefficiency Failure and collapse are possible The experience of the former socialist countries – especially E.U. accession candidates Paradigm Change: what do we need railways for? What does Bulgaria need rail service for?
n a t s i k The transition is still underway e b z U s u r a n l e a B t s n e m k r u n T a t s z y g r y K n a t s h k a z a K a i s s u R a i n e m r A n a j i a b r e z A n a t s k i j a T e n i a r k U a v o d l o M a i g r o e G d n a l o P a i n GDP: 2000 vs. 1988 (%) a b l A a i c n i e l b v u o l p S e R k a v o l S y r a g c i n l b u u H p e R h c e z C a i n o t s E a i t a o r C a i n o d e c a M a i n a m o R a i r a g l u B a i v t a L a i n a u h t i L 140 120 100 80 60 40 20
The shift in economic structure (Industry as Percent of GNP: Change 1990 to 1998 versus percentage in 1990) Reduction in % Industry, 1990 to 1998 30 Socialist 25 Developing 20 Developed 15 10 5 0 20 30 40 50 60 -5 -10 -15 Industry as Percent of GNP in 1990 Conclusion: socialist countries had the highest percent of GNP as industry in 1990, and they showed the highest reduction in industry percentage between 1990 and 1998
Rail Share in Transition countries is still unusually high (Rail Share of Rail + Truck Traffic (%) versus Average Rail Length of Haul 1998) CEE/CIS Developing Developed 120 Best fit, CEE/CIS 100 80 60 40 Regression: Developing and Developed 20 0 0 200 400 600 800 1000 1200 1400
Ton-Km trends by CEE railways and Turkey 140 Bulgaria 120 Czech 100 Hungary Poland 80 Romania 60 Turkey 40 Croatia Macedonia 20 Slovenia 0 1988 1990 1992 1994 1996 1998 2000
Ton-Km trends by CIS railways 140 Russia 120 Ukraine 100 Kazakhstan Belarus 80 Estonia 60 Latvia 40 Lithuania Armenia 20 Georgia 0 1988 1990 1992 1994 1996 1998 2000
Ton-Km trends by Western railways 140 Austria 120 Finland 100 France 80 Sweden 60 United Kingdom 40 Germany 20 USA:Class I Rwys 0 1988 1990 1992 1994 1996 1998 2000 Note: Germany after 1993 includes DR traffic
Passenger-Km trends by CEE railways and Turkey 120 Bulgaria 100 Czech 80 Hungary Poland 60 Romania Turkey 40 Croatia 20 Macedonia Slovenia 0 1988 1990 1992 1994 1996 1998 2000
Passenger-Km trends by CIS railways 140 Russia 120 Ukraine 100 Kazakhstan 80 Belarus Estonia 60 Latvia 40 Lithuania Armenia 20 Georgia 0 1988 1990 1992 1994 1996 1998 2000
Passenger-Km trends by Western railways 180 DR added 160 Austria 140 Finland 120 France 100 Sweden 80 60 United Kingdom 40 Germany 20 USA: Amtrak 0 1988 1993 1998
The Bulgarian context Relatively low traffic density Relatively low labor productivity Serious cross subsidy between freight and passenger services – a real problem for both passenger and freight
S E BDZ ’ s average traffic density is low L N B A I D F L P K L S K D E V L S Z C O R K U P N I F S (T-km+ P-Km)/Km E Z D B U H R U T L R I Z M L E 8000 6000 4000 2000 0
As a result: 30 percent of the RI NC network ’ s lines may be uneconomic Source: “ Padeco Report ” , March 2001, page 17
Rail system shrinkage is not unusual (Km of Rail Line in the US) 400000 Class I Railroads 350000 300000 250000 200000 150000 Local Railroads 100000 50000 Regional Railroads 0 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000
In Turkey, a core network (52%) carried more than 80 percent of both freight and passenger traffic in 2000
BDZ labor productivity is low 1400 1200 1000 800 600 400 200 0 A C S L U B L K R E M H C R T P I F G F B A r r l i t e a s o k r a i u u o t u u z o u a l e t m o a t n + v l h r a a z s o l m r l r v a c n a s a l u y a n s e g S k e r m i a n t e g n t k i a a n r a i u c a a n i l e n i d a d n a a v n i e a h i r y i n s d o r a a k a e n s i i a i n y a t a y a i * a n
And labor productivity in BDZ has fallen farther than most other railways (Ratio of labor productivity in 1999 to 1988) 250 200 150 100 50 0 A K B C L L E U R S R M C P H T F G I F C B A U r e r i l a t s a k u o r i o t u z u o u e a a m l o t u S t n z h a a r a m s + l v r r l o n l v a a c a n s : l a u g s n y e r S e i k t m n a a t e i n g k i u a a a r n i a a n e c i n d l a C d h n a n d e a a r v i i s n i y d e o r a l a a s i k a n i i a a n y : t a y I C a i * F a n N r t Below red line, productivity is actually worse in 1999 than in 1988 Note: transition economies are the poorest performers
BDZ Compared with the Freight Concessions TU/ Year Km of Ton-Km Pass-Km TU/Km (000,000) Employees Employee line (000,000) (000) (000) Argentina Ferroespresso Pampeano 2000 5,094 877 810 1.08 172 Nuevo Central Argentino 2000 4,512 2,490 1,311 1.90 552 2000 3,342 1,263 772 1.64 378 Ferrosur Roca 2000 5,252 2,268 914 2.48 432 Buenos Aires al Pacifico 2000 2,739 495 339 1.46 181 Ferrocarril Mesopotamico -- FMGU Bolivia Empresa Ferroviaria Oriental 2000 1,244 626 192 461 1.77 658 Empresa Ferroviaria Andina 2000 1,499 557 72 324 1.94 420 Brazil 2000 7,263 7,268 2,596 2.80 1,001 Ferrovia Centro-Atlântica S.A. 2000 1,621 1,588 639 2.49 980 Ferrovia Novoeste S.A. Companhia Ferroviária do Nordeste 2000 4,381 709 694 1.02 162 MRS Logística S.A. 2000 1,675 26,837 2,988 8.98 16,022 2000 6,355 10,285 2,018 5.10 1,618 América Latina Logística 2000 174 259 142 1.82 1,489 Ferrovia Tereza Cristina S.A. 2000 4,236 5,984 3,174 1.89 1,413 Ferrovias Bandeirantes S.A. Chile FEPASA 2000 2,379 1,189 521 2.28 500 Ferronor 2000 2,229 743 360 2.06 333 Ferrocarril Arica-La Paz 2000 206 59 95 0.62 286 Mexico TFM 1999 5,176 17,256 3,694 4.67 3,334 Ferromex 1999 10,724 20,638 80 8,666 2.39 1,932 Sureste 1999 1,479 4,734 2,097 2.26 3,201 FCCM 2000 1,869 1,017 352 2.89 544 2000 639 523 126 1,673 0.39 1,016 Cote d'Ivoire/Burkina Faso -- SITARAIL 2000 3,904 4,078 4,064 1.12 1,165 New Zealand -- Tranzrail 470 2000 4,290 5,538 3,472 40,000 0.23 2,100 Bulgaria
BDZ Compared with the Passenger Concessions/Franchises TU/ Year Km of Ton-Km Pass-Km TU/Km (000,000) Employees Employee line (000,000) (000) (000) Argentina Ferrovias 2000 54 617 615 1.00 11,363 Transmet -- San Martin 2000 56 1,152 656 1.76 20,571 Transmet -- Belgrano Sur 2000 66 312 657 0.47 4,727 Transmet -- Roca 2000 261 2,472 2,227 1.11 9,471 TBA -- Mitre 2000 186 1,456 1,648 0.88 7,828 TBA -- Sarmiento 2000 184 2,619 1,398 1.87 14,234 Metrovias -- Urquiza 2000 32 434 440 0.99 13,563 Metrovias -- Subte (Metro) 2000 47 1,124 2,056 0.55 23,915 Brazil Supervia 2000 200 2,247 2,236 1.00 11,235 Rio Metro 2000 35 1,534 0.32 13,914 487 Bulgaria 2000 4,290 5,538 3,472 40,000 0.23 2,100 U.K. UK system 2000 26,605 19,500 39,010 52,000 1.13 2,199 UK WCML (employment est.) 2000 2,775 1,600 3,362 4,880 1.02 1,789
USA Canada Sweden Ireland Germany * (Passenger revenue/passenger-km)/(freight revenue/ton-km) Estonia (Ratio of average passenger fare to average freight tariff)* The cross-subsidy issue: BDZ EAD ’ s Italy United Kingdom Finland France Romania Netherlands passenger tariffs are too low Spain Turkey China Austria Slovakia Belgium Denmark Russia Portugal Croatia Slovenia Poland Bulgaria Hungary Czech Greece Macedonia India Armenia 10 9 8 7 6 5 4 3 2 1 0
United Kingdom passenger trains pay for access fees – hidden X sub. Ratios of passenger to total traffic: BDZ EAD ’ s France BUT , freight trains pay 20 to 40 times as much as Germany Hungary share of passenger traffic is relatively high Romania Turkey Bulgaria Macedonia Croatia Belarus Austria Sweden Poland Slovenia Czech Rep Finland (p-km/(p-km+ t-km) in %) Ukraine Russia Lithuania Kazahkstan Latvia Estonia USA 80 70 60 50 40 30 20 10 0
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