Europe View

High-speed trains: Pendolino driving vehicle No 390056 for the UK (right) and AGV for Italian operator NTV at Alstom’s Savigliano plant in Italy on 30 November 2011. Keith Fender.

Siemens and Alstom announced late on 26 September 2017 that they had agreed a merger of the Siemens rail engineering businesses with Alstom. The announcement was something of a surprise, as all the talk up till then had been of a Bombardier merger with Siemens. Siemens and Alstom say they are joining forces to create a ‘European Champion in Mobility’, in particular to take on CRRC.

This competitor from China is already more than twice as big a company as the merged European entity, which will be called ‘Siemens Alstom’.

Locomotive manufacture in the USA: Charger diesel loco for new south-east Florida operator Brightline at Siemens’ Sacramento factory in California on 14 March 2017. Keith Fender


Siemens Chief Executive Joe Kaeser described the deal as a ‘Franco-German merger of equals’. The new combined company will have 62,300 employees in more than 60 countries, revenue of €15.3 billion and profits of €1.2 billion in 2018. There will be an order backlog of €61.2 billion. Mr Kaeser stated that profit margins were expected to rise from the current 8% to ‘double digit’ figures within two years.

With elimination of supply chain, administrative and management duplication targeted to achieve €470 million of ongoing ‘synergy’ savings by 2022, it seems likely around 3,000 to 4,000 jobs will be lost across the merged company.

Redundancies will be shared on an equal basis between French and German staff, although how this might work in other countries where both companies have businesses was not mentioned.

Despite being billed as a ‘merger of equals’, Siemens will be in control with a stake in the new company of 50.67%. Mr Kaeser made it clear in his presentation to investment analysts that ‘Siemens will control and fully consolidate (the results of) the business’. The remaining shares – effectively those now held by Alstom’s existing shareholders – will represent the other 49.33% and will continue to be listed on the Euronext stock exchange. As part of the deal, Siemens receives warrants enabling the German group to increase its shareholding in the new company by 2% four years after the merger.

The new Siemens Alstom headquarters will be in Paris, as will its rolling stock business; its signalling and digital services division will be based in Berlin. Six of the 11 company directors will be appointed by Siemens, including a new chairman for the company. Four independent directors will be appointed and the existing Alstom CEO, Henri Poupart-Lafarge, will run the new merged company.

Mr Poupart-Lafarge made it clear that some rationalisation of the two companies’ product offering is likely, although not immediately.

In response to questions from concerned French journalists, he said that both the Alstom TGV and Siemens Velaro high-speed trains would remain, although whether or not the Alstom distributed power and articulated AGV train, sold only in small numbers to Italian operator NTV, will have a long-term future in the new company’s product range is less clear.


The proposed merger is subject to a wide range of regulatory approvals with formal consultation amongst Alstom’s employees in France being the first major step. Anti-trust approval will also be needed from European Union competition authorities and potentially in multiple non-EU countries. The German and French governments have both given the deal their support, suggesting that approval in the EU will be relatively simple.

The companies expect all regulatory clearances within around a year, enabling the new company to be fully set up by December 2018 at the latest.

Both companies have signed a Memorandum of Understanding concerning the proposed deal and given each other exclusive rights to deal only with each other. Until the deal is finalised there remains a possibility it could not happen – and both companies continue to compete as normal for new business in this interim period. If Alstom were to decide now not to pursue the transaction, it would have to pay a €140 million break-fee to Siemens.


Headquartered in France, Alstom is present in over 60 countries and employs 32,800 people. Siemens, based in Munich, has 29,500 people in its Mobility and associated businesses who will transfer to the new company.

The two companies have largely complementary manufacturing capacity with the only real overlap being in Germany, where both build and repair regional trains. In terms of market presence there are few markets in which both manufacturers have been historically significant: the UK, Germany and Russia (and to a lesser extent the USA) are the only major exceptions.

Alstom’s success, especially in the last decade or so, in winning contracts in South Africa, Francophone North Africa, Kazakhstan and India, means it has a different geographic focus compared to Siemens’ more Europe-focused business. Both companies have major ongoing metro contracts in the Middle East, especially Saudi Arabia and the Gulf States.


Both companies have expanded in recent years through acquisition; as examples in the UK Siemens bought the Chippenham signalling business from Invensys in 2013, whilst in December 2016 Alstom bought Newcastle-based rail digital services company Nomad Digital

Both Alstom and Siemens have extensive maintenance businesses – and this is a growing part of both companies in many countries.

In the UK Alstom maintains the Virgin West Coast Class 390 Pendolino fleet and Siemens has extensive maintenance contracts for the Class 444/450 Desiros used by South Western Railway and the Thameslink Class 700 fleet, as well as the new Class 374 Eurostar Velaro trains at Temple Mills.

Siemens CEO Joe Kaeser has previously said that in the event of the company winning an order for either the Deep Tube Upgrade or HS2 rolling stock, a UK assembly plant could be built: the merged entity will have access to Alstom’s brand new Widnes rolling stock plant, erected for Pendolino refurbishment but with plenty of space to expand into new build.

Rare historic co-operation: whilst both Alstom and Siemens work with Bombardier on multiple projects, the two have historically rarely co-operated with each other. An exception was the BB75000 diesel loco for France, built by Alstom with Siemens traction equipment: this is Akiem-owned No 75024 on lease to French operator ETF at Noyelles sur Mer on 17 April 2016. Inset: makers’ plate on No 75024. Keith Fender
Made in Austria: bogie for Class 374 Eurostar Velaro at Siemens’ Graz factory on 7 March 2012. Keith Fender




Bombardier announced on 25 September that it had reached agreement with its Works Council including trade union representatives to reduce activities at some German factories, with 2,200 jobs being lost between now and 2020 either by transferring work from one site to another, not filling vacancies or by voluntary redundancies. The plan to rationalise the activities of the existing factories so that they become more specialist was first announced in June; the factories at Görlitz and Hennigsdorf are scheduled to lose most jobs, although short-term contract roles may increase at some sites in the next few months.

The rationalisation comes at a tumultuous time for Bombardier. The company’s aerospace arm has been involved in a trade dispute concerning the sale of Bombardier’s new C series airliners in the USA between the US Government (acting on a complaint from Boeing) and Bombardier (backed by the Canadian and UK governments, as the main aerospace factories are in Quebec and Northern Ireland). This came at the same time as the announcement of the Siemens Alstom merger (see p64), knocking the long-mooted alliance of Siemens and Bombardier off-track.

It had been widely reported earlier in 2017 that Siemens and Bombardier were in discussion about the merger of their rail businesses via two joint ventures, one each for rolling stock and signalling/ digital services. Whilst neither company officially confirmed the details, it appears from comments from senior French politicians that the potential deal with Bombardier foundered on Siemens’ insistence on having control of the new ventures (enabling the results to be consolidated in its overall accounts) and Bombardier’s reluctance to agree to this. The new Siemens Alstom company has, however, enabled Siemens to do just this.


Could Bombardier join the Siemens Alstom alliance to present a united European front against growing competition from CRRC of China? Siemens CEO Joe Kaeser didn’t rule out the idea completely when talking at the 27 September 2017 press conference announcing the creation of Siemens Alstom. But he wasn’t enthusiastic either, saying it would be better to learn to walk before trying running.

A week later, French Finance Minister Bruno Le Maire told the French Parliament he expected just such a merger in the future, adding that Spanish firm CAF could also be included in forming a single European conglomerate.

It is unclear if Bombardier would want to join such an arrangement, even if it were on offer.

Market rumours in the past have suggested the potential sale of Bombardier to Chinese conglomerate CRRC. Siemens took legal action in Austria earlier this year, claiming that Bombardier’s tender offer for new inter-city rolling stock for Austrian Federal Railways (ÖBB) was unfair as it would utilise components manufactured for Bombardier by CRCC in China that did not meet the standards set out in the original tender. This legal action was withdrawn by Siemens a week after the merger with Alstom was announced.

The sale of 50.1% of the C Series airliner programme to Airbus by Bombardier announced on 17 October should increase the new plane’s long-term viability and mean Bombardier no longer has to fund it alone. This deal does, however, make Bombardier more focused again on its Transportation and the smaller passenger jets businesses than it has been for many years.

Bombardier Transportation was financially ring-fenced from the company’s aerospace business in 2015 after previously being used as a source of funding for development costs in Aerospace. Since November 2015 the transport business has been owned by a separate holding company called Bombardier Transportation (Investment) UK Ltd based in London, not Berlin (as the main Bombardier Transportation business is).

The Quebec government-owned pension fund manager Caisse de dépôt et placement du Québec (CPDQ) bought a 30% stake of the new holding company for US$1.1 billion in February 2016. Bombardier Transportation had turnover of US$7.58 billion in 2016, achieving a profit of US$396 million. Bombardier Group total turnover in 2016 was US$16.4 billion; of this Transportation represented 46.2%.

Merger candidate? Bombardier operates a major plant at Crespin in northern France building regional and metro trains, often in collaboration with Alstom. Double-deck coaches for MI09 EMUs for Regional Express (RER) Line A in Paris are seen under construction at Crespin on 25 September 2013; Bombardier will build all 420 middle vehicles for the 140x5-car trains currently ordered. Keith Fender



Following the collapse of one of two new high-speed rail tunnels under construction for DB Netze just south of the German town of Rastatt on 12 August, there was widespread disruption to both passenger and in particular freight traffic on the normally very busy

Karlsruhe to Basel main line (p76, last month). The section of new tunnel that collapsed was around 50 metres long, but only five metres below ground. The front of the part-pressurised Herrenknecht Mixed Shield tunnel boring machine (TBM) was around 50 metres beyond where the main collapse damage was above ground, so it had actually passed under the main line and was only a few hundred metres from the pre-constructed concrete cutting that forms the southern portal of the new tunnel.


DB and its contractors undertook a series of steps to stabilise the site and prepare for the restoration of the main line railway on the surface. A 160-metre section was filled with 10,500 cubic metres of concrete, entombing the TBM. This operation took 150 hours of continuous concrete pouring and was completed on 25 August.

As we reported last month, DB then built a 120-metre long, 15-metre wide, one-metre deep concrete slab on which to place the existing ground level railway and to act effectively as a bridge over the eastern tunnel bore route. Whilst this was underway, the decision was taken to build a second similar slab 150 metres north to cover the area where the western bore of the new high-speed tunnels will pass under the railway, to avoid any possibility of a repeat incident when the TBM boring that tube passes under the main line in late 2017. Tunnelling of the western bore resumed after a few days’ pause. Each of these concrete slabs required 1,100 cubic metres of concrete, delivered in 130 truckloads to the site.

From 22 September onwards, after the two slabs had cured, the reconstruction of the main line railway began. Around 2,500 tonnes of ballast and earth plus all rails, 400 sleepers and overhead line equipment had to be replaced. The reconstruction work was completed by 1 October, allowing the first trains to use the restored main line from 2 October, the reopening happening five days earlier than DB’s late August estimated date. The first train early on 2 October was the ÖBB-operated overnight train from Zürich to Hamburg, operating for the first time since 12 August as the line closure had led to its total cancellation. By 5 October, 175 freight trains a day were once more using the line.

DB has yet to announce how it plans to complete the eastern tunnel, all of which is built except the last few hundred metres – much of which is now filled with concrete and the TBM, which is itself entombed in concrete. As the TBM is not far from the surface, excavating it and removing it as scrap, plus the concrete it sits in, will be possible – although exactly how the remaining section of tunnel is to be built is unclear. The western bore is scheduled to break through into the pre-built concrete cutting by early 2018 at latest.


The response to the line closure at Rastatt has led to serious criticism of DB both in Germany and in Switzerland. The fact that no effective alternate diversionary route with sufficient capacity could be found for weeks exacerbated the criticism. The lack of effective assistance from SNCF in neighbouring France amplified this, with Swiss freight operators feeling both isolated physically and powerless to help themselves. Despite co-operative language from SNCF, the practical reality was rigid adherence to existing timetables and operating practice, when flexibility could have resulted in many hundreds more freight trains being routed via France. SNCF Réseau offered fewer than five freight paths a day on the non-electrified line between the German border at Lauterbourg and Strasbourg, despite most of the line having no more than an hourly passenger service, some of which could no doubt have been bustituted for several weeks (as SNCF Réseau does routinely elsewhere in France for even minor infrastructure maintenance work).

Swiss Federal Railways (SBB) found that in practice its plan to use French-speaking drivers from Switzerland in France did not have the impact desired as a lack of locos approved for use in France, Germany and Switzerland provided another constraint. Freight traffic volumes did increase in the weeks after the initial tunnel collapse, although most of the increase was due to DB reopening its Stuttgart to Singen main line, which had also been shut for infrastructure work. But freight traffic was effectively halved, with no more than 85 trains a day operating via various routes rather than up to 200 on a normal busy day via the Rastatt route.

SBB (Swiss Federal Railways) made sure its first train through the reopened line at Rastatt was photographed and had put special branding on the locomotive, which demands no repetition of the closure situation, saying – in English – ‘No national barrier, one language, less regulation, one highway’!

Under construction: the eastern part of the connection to the Ringbahn on 15 July 2017. Berlin Hauptbahnhof can be seen just behind the yellow crane on the right hand side of the picture. Keith Fender


An investigation into why the tunnel collapsed is underway, and in September DB and the Arbeitsgemeinschaft ARGE TunnelRastatt consortium (which comprises tunnelling specialist Ed.Züblin AG (part of Austrian civil engineering group Strabag) and overall project manager German civil engineering firm Hochtief AG) announced that they had agreed to form a joint team of technical and legal experts to come to a conclusion within the next six months as to the cause and who was responsible. Agreeing compensation once blame has been attributed is planned without using the courts, although an independant arbitration panel will be used if the parties cannot agree. The direct civil engineering related costs, whilst substantial, are likely be a tiny fraction of the final compensation bill as rail freight customers are seeking hundreds of millions of Euros in compensation.

For freight customers, legal action may be the only way to gain compensation for the economic losses and additional costs the seven-week Rastatt closure imposed. Swiss logistics company Bertschi has started legal action against DB to recover SFR50 million of lost revenue due to the line closure and lack of alternative routes.

Other rail freight customers are expected to join the legal action or start their own. The call for €250 million of immediate compensation by German multi-modal operator Kombiverkehr, made in September, has so far been ignored by both DB and the German Government, and is likely to lead to claims being made in court.

DB has already given out €4 million in travel vouchers as delay compensation for passengers, and has had to fund the provision of 450 bus trips daily between Rastatt and Baden Baden, plus the short-term employment of around 60 people to marshall the bus operation.


Go-Ahead has ordered 11 Flirt3XL EMUs from Stadler to operate the ‘Murrbahn’ contract which the company won earlier this year. Operation starts from December 2019 on the route between Stuttgart and Nuremberg via Schwäbisch Hall-Hessental / Crailsheim, replacing DB Regio trains push-pull operated by electric locos.

The 11 Murrbahn trains are 67.6-metre three-car EMUs with 202 second and eight first class seats. This new order brings the total number of Stadler Flirt EMUs that Go-Ahead has on order to 59 trains of varying lengths and configurations. The entire fleet will, once commissioned, be sold and leased back via the Baden-Württemberg state rolling stock leasing company Landesanstalt Schienenfahrzeuge Baden-Württemberg (SFBW) and will carry the new white and yellow Baden Württemberg livery.


Plans for a new North-South S-Bahn line in Berlin serving the new Hauptbahnhof and new central area around Potsdamer Platz were drawn up in the early 1990s, as the north – south area that had once been the site of the Berlin Wall dividing the city was redeveloped. The new S21 line is intended to head south from the existing Ringbahn S-Bahn route that circles around the city centre via the new Hauptbahnhof, Potsdamer Platz and then via a reinstated section of the former Potsdammer Stammbahn line from Gleisdreieck to Yorckstrasse, where it would connect with existing S-Bahn lines including the Ringbahn on the south side of the city. Originally planned to be built at the same time as the new Hauptbahnhof and its mainline north-south tunnel (which opened in 2006), the project has been postponed and split into smaller sections several times.

A roughly 4km section south from the Ringbahn to the Hauptbahnhof has been under construction since 2010 and was originally due to open during 2017. Construction has been delayed by a variety of issues, including the ever-present complexity of building anything in Berlin’s sandy but groundwater-laden soil. The underground station box for the S21 on the eastern side of the Berlin Hbf low level station was built at the same time as the main station, although as it does not meet current safety standards it will need rebuilding before it can be used as a station; initially a temporary station in the tunnel just north of the Hauptbahnhof will be used!

The second 1.9km long stage – not likely to be begun before 2019 – will see the construction of a tunnel south from the Hauptbahnhof, under the River Spree to connect with the existing north-south S-Bahn tunnel underground just in front of the new US Embassy on Pariserplatz (next to the Brandenburg Gate and just south of Unter den Linden S-Bahn station). From there the new route would use the existing four-track section to Potsdamer Platz (this part of the route was built as four tracks during the 1930s and two of the four tracks are currently used for stabling empty trains). The construction of the final section south from Potsdamer Platz is not currently envisaged before 2030.

The planning for the new line assumes around 80,000 passengers per day between the northern part of the Ringbahn line and Hauptbahnhof and an estimated 70,000 passengers per day between there and Potsdamer Platz. The new line, once finished, will relieve the existing north-south S-Bahn line (via Nordbahnhof – Potsdamer Platz) with passenger numbers on that line falling by around 35,000 passengers per day. Plans for intermediate stations north of the Hauptbahnhof and underneath the German Parliament (Reichstag) have been dropped as costs have increased.

Second-hand stock: ex Norwegian State Railways Di3 NoHAB diesel HK number No 005 is seen at Pejë on 10 October 2011 with a train of former Austrian Schindler-built coaches; most of these will be replaced by the recently-donated ex-DB vehicles. Keith Fender



Iarnród Éireann (IÉ, Irish Rail) has celebrated the 30th anniversary of its creation as a subsidiary of the CIÉ group in 1987. It claims to be the ‘safest railway in Europe’, having had the lowest number of accidents, fatalities and weighted serious injuries recorded in the most recent European Union Agency for Railways review.

In 2016 passenger numbers, freight and revenue all saw increases, some substantial. But despite this the company’s financial position remains challenging, given current levels of government support. 42.8 million passengers were carried, an increase of 8% over 2015, including an 11% growth in Dublin Area Rapid Transit passenger numbers in one year.

The 2016 Rail Review, published jointly with the National Transport Authority (NTA), confirmed that IÉ remains inadequately funded for the network and services it is contracted to provide, and as a result IÉ’s assets continue to deteriorate.

The Rail Review states that adequate funding is essential to enable continued maintenance of both rolling stock and the rail network plus provision of contracted services. Underfunding in the last decade has led to accumulated losses of €153 million, which threaten insolvency.

The current financial issues led to speculation in the Irish press during August that up to four ‘lesser used’ lines could be closed. The 2017 Government Budget announced some supplementary funding for IÉ to enable urgent fleet and infrastructure maintenance plus funds for Automatic Train Protection and train radio upgrades. Despite the financial difficulties, IÉ exceeded all the performance and punctuality targets set by the NTA in 2016.

Infrastructure works completed in the last year include the Phoenix Park Tunnel upgrade in Dublin, allowing peak hour commuter services to commence through it from Newbridge and Park West to Grand Canal Dock (for the financial district) in November 2016. Another phase of the Dublin city centre resignalling project has allowed increased frequencies. The resignalling programme in the Limerick station area was undertaken in early 2017, and further track improvement works on the Dublin/Cork line were undertaken to improve journey times.

Future developments considered in the 2016 Rail Review include DART expansion from 2020 onwards, electrification of the inter-city network, fleet expansion, linespeed enhancements to increase competitiveness and development of commuter rail in the regional cities. Tim Casterton


On 19 August 2008 Iarnród Éireann (IÉ) and International Warehousing and Transport (IWT), a Dublin-based firm, started running an intermodal service between Dublin North Wall and Ballina in County Mayo in the north west of Ireland. Initially two trains per week in each direction operated, these being loaded on the Alexandra Road tramway. Nine years on the service operates up to seven train pairs each week, with loading and unloading in Dublin taking place in the port’s purpose-built quayside rail terminal. The 2,000th intermodal service was operated for IWT by IÉ on 16 August 2017.

Celebratory livery: to commemorate the 30th anniversary of the formation of Irish Rail, locomotive No 073 has been repainted into the livery introduced in 1987. It is seen on 23 August 2017 at Portarlington, on the day after it returned to traffic following the repaint, while working the 08.15 Ballina to Dublin North Wall IWT ‘liner’ service. Tim Casterton

The trains have a Ballina-based soft drinks firm as their anchor customer. IÉ successfully completed the trial run of a 54 TEU (twenty-foot equivalent unit) intermodal freight train in 2016, the longest-ever freight train run in Ireland.

In 2016 overall rail freight revenue, including Navigator Freight Forwarding, increased from €8.8 million to €9 million, with total tonne kilometres increasing from 96.4 million to 101.4 million (up 5.2%), primarily due to an increase in mineral ore volumes.

IÉ is currently engaging with several parties regarding substantial new rail freight opportunities in the biomass market, whilst Foynes Port (SFPC) is engaged in a structural survey of the mothballed branch line from Limerick with the aim of reopening it as a freight-only connection to the port. Tim Casterton



In early August Kosovo Railways passenger operator Trainkos withdrew all domestic services, leaving only a daily service from Prishtina to Skopje in neighbouring Macedonia – which is supported by a €500,000 annual subsidy from the Kosovan government. The services were withdrawn as revenue was not even covering diesel fuel costs, let alone other operating expenses. There has been a failure on the part of the central government to provide any of the revenue support due to the operator since September 2011. Losses over the six years had amounted to over €5 million, and Trainkos was no longer able to fund this from other sources, eg profit made operating freight. Trainkos made it clear when withdrawing the services that it wanted the government to find a solution to enable services to restart.

The sudden withdrawal of services may have achieved the desired result, as politicians clearly noticed. In early October, Trainkos reinstated some services on the country’s main domestic route from Prishtina to Pejë, with the Minister for Infrastructure present at the relaunch. It also introduced the first of 10 coaches donated by German operator DB earlier this year and announced plans to fit them with Wi-Fi, with the work being funded by the Kosovan government.