UNECE Working Party on Rail Transport November 7-8, 2012 Martha Lawrence, World Bank ·...

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THE WORLD BANKWorking for a World Free of Poverty

UNECE Working Party on Rail TransportNovember 7-8, 2012

Martha Lawrence, World Bank

THE WORLD BANK

THE WORLD BANKWorking for a World Free of Poverty

Role of transport in economic development Why railways?

• Cost• Environment• Land use

Why reform• Market effective• Cost efficient• Financially sustainable

THE WORLD BANKWorking for a World Free of Poverty

THE WORLD BANKWorking for a World Free of Poverty

THE WORLD BANKWorking for a World Free of Poverty

Incentives

THE WORLD BANKWorking for a World Free of Poverty

Industry Structures

Policy

Incentive Structures

Governance

Regulation

Management Practices

THE WORLD BANKWorking for a World Free of Poverty

THE WORLD BANKWorking for a World Free of Poverty

THE WORLD BANKWorking for a World Free of Poverty

THE WORLD BANKWorking for a World Free of Poverty

Outsourcing

Privately owned rolling stock

Service contract

Private operator

Franchise

Concession

Privately owned railway

THE WORLD BANKWorking for a World Free of Poverty

National Transport Strategy

Owner of Railway

Purchase Railway Services

Industry Regulation

THE WORLD BANKWorking for a World Free of Poverty

THE WORLD BANKWorking for a World Free of Poverty

• Safety regulators should establish safety standards and railway companies should establish systems for implementing the standards

Market is best economic regulator

THE WORLD BANKWorking for a World Free of Poverty

THE WORLD BANKWorking for a World Free of Poverty

THE WORLD BANKWorking for a World Free of Poverty

THE WORLD BANKWorking for a World Free of Poverty

Tram

Light Rail

Mixed Freight Train

Double-stack Container Train

High Speed Rail

THE WORLD BANKWorking for a World Free of Poverty

Railway Infrastructure

Train Control Center

EMU in Queensland

DMU in the Netherlands

Rotary Dumper for Gondola carsRussian Oil Tank Wagon

THE WORLD BANKWorking for a World Free of Poverty

Fundamentals of railway cost structure & how structure drive market power

Pricing of passenger and freight services, infrastructure

More

THE WORLD BANKWorking for a World Free of Poverty

Revenue Expenses

Operating Costs

Depreciation

Financial Costs

Operating Revenue

Operating Grants and Subsidies

Capital Grants and Borrowing

THE WORLD BANKWorking for a World Free of Poverty

-25%-20%-15%-10%-5%0%5%10%15%20%25%

- 100 200 300 400 500 600 700 800

BGN

mill

ions

Operating profit

Operating revenues Operating costs (incl. depreciation) Operating profit

FINANCIAL RESULTSWhen?

Operating profit margin

minimum ‐18% 12/31/2009maximum 22% 12/31/2017average 9%

Net profit margin minimum ‐67% 12/31/2011maximum 20% 12/31/2017average 5%

DSCR   minimum 0.0 12/31/2011maximum 1979626.2 12/31/2024average 904263.3

Working ratio minimum 66% 12/31/2017maximum 97% 12/31/2009average 78%

Current ratio minimum 0.5  12/31/2010maximum 2.5  12/31/2026average 1.8 

More

THE WORLD BANKWorking for a World Free of Poverty

More

THE WORLD BANKWorking for a World Free of Poverty

National Transport Strategy

Owner of Railway

Purchase Railway Services

Industry Regulation

Facilitate International Rail Transport

Set Rail Industry Structure

THE WORLD BANKWorking for a World Free of Poverty

Governance

Organization structure

Strategy

Service design

Investment

Human resources

THE WORLD BANKWorking for a World Free of Poverty

Outsourcing

Privately owned rolling stock

Service contract

Private operator

Franchise

Concession

Privately owned railway

THE WORLD BANKWorking for a World Free of Poverty

THE WORLD BANKWorking for a World Free of Poverty

http://www.ppiaf.org/railtoolkit

THE WORLD BANKWorking for a World Free of Poverty

Thank you for your attention!

Questions?

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