''Developing transport infrastructure for your citizens and for your economy''

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1 Middle East Rail Conference Keynote Speech by Mr Henrik Holelei Director-General for Mobility and Transport, European Commission Dubai, 8 March 2016 ''Developing transport infrastructure for your citizens and for your economy'' Ladies and Gentlemen, It is my great pleasure to be here with you at the Middle East Rail conference in Dubai. It is wonderful to see so many stakeholders gathered here in order to share experiences and ideas. Dubai is really an appropriate setting to talk about developing infrastructure for the future. You have managed to focus on your strengths, and focussed on building modern infrastructure, that lays the basis for a strong and competitive transport sector and a competitive the economy. However, there are challenges in developing infrastructure. Many of these challenges are similar, both in the Middle East and in Europe. Working together would seem to be a logical step in overcoming common issues, especially, given the road Europe has travelled to become one of the world leaders in the rail sector. As regions, we have plenty to learn from each other. That's why I am so pleased to be among you today. I am very pleased to share the European experience and I am also happy to see so many European stakeholders present here today! It shows that the contacts between our businesses are well advancing and I also hope to extend this to the Government level and deepened regulatory cooperation. I am coming here from Riyadh, where we held very good talks with GCC Secretariat on cooperation in rail issues and this shows our strong commitment to the region. Let me underline that as policymakers our overarching focus must be on improving our transport networks to meet every increasing demand for transport, as well as ensuring our companies, products and services remain competitive in the global market place. Firstly, I want to look at the development of rail in the EU to date; Secondly, I will say a few words on current EU policy in developing rail; 1

2 Thirdly, although I do not have a crystal ball to predict the future, there are issues and challenges that need to be looked when developing transport for the future. 1. Development of Rail in the European Union. The European Union has a long and proud history in the rail sector dating back to the 1800s. The nations that make up Europe have traditionally built their own very successful rail networks. The downside to this early adoption of rail is that the network infrastructure, rolling stock and regulatory environment were not always so interoperable when it came to creating a truly integrated Single European Rail Area. We have managed to develop significant High Speed Rail lines across the continent, such as the Thalys, the TGV or the ICE train services. Technical aspects In the early '90s, there were twenty or so different signalling systems on European railways. These signalling systems are fundamental to safe train travel, but they were seldom interoperable. With the encouragement of the EU, major rail projects were launched to promote train travel, particularly the high speed network and transnational freight services. During the implementation of these projects it became clear that it was essential for European railways to harmonise the existing national signalling systems. So, the EU set about developing world leading technologies in terms of safety and signalling. The EU's ERTMS is the world's most efficient and advanced train signalling system and has the potential to be used worldwide. The system was developed following an intense ten year phase of research and development. Since 2005, feedback from projects prompted the need to fine tune the specifications in order to move from local to global compatibility and ensure interoperability between all projects in Europe. ERTMS is now being progressively deployed along the main European rail routes. This will reduce running costs and improve the system's efficiency on long cross-border distances. We have ambitious objectives for the deployment of ERTMS across key freight corridors and high speed lines which will greatly improve the competitiveness of European railways. Although the technology required a lot of time and money, it was necessary in order to create fully interoperable network. There is also growing international demand for the take-up of ERTMS in regions outside the EU. And we are more than happy to share our experience, knowledge and technology with you! To ease congestion, and with a view to reducing emissions, the EU has set key targets concerning shifting a substantial part of passenger and freight transport from other modes to rail. So far, we have had mixed results. 2

3 Since 2003, the modal share of passenger rail has increased from 5.8% to 6.6%. Still rail's share remains very modest. Road carries 80% of passengers, while air has a 9% share of the passenger market in the EU. On freight, the EU wants to shift medium and long distance freight from roads to rail. To date, success on freight has also been very limited. Rail freight's share has remained at around 10% for the past 15 years. Road freight holds 50% of the market, and 30% of the market is maritime. On rail freight, there is room to do more. 80% of freight transport in the EU is cross-border. Technical solutions such as the ERTMS are a very good start. But other measures, such as a good regulatory environment and new investment are equally as important as we strive to create a Single European Rail Area, to replicate the success Europe had when it created the Single European Aviation market in the 1990s. So a series of measures are still needed to improve rail's market share in both freight and passenger transport. In order to create that Single European Rail Area I just mentioned, we are trying to finalise something known as the 4th Railway Package. This plan will contain a series of measures to dismantle the remaining technical, administrative and regulatory barriers which are hampering the growth of rail, especially on cross-border routes in the EU. We expect this to become European legislation soon and we are confident of replicating the European success in aviation also in the rail sector. Sharing of Experiences. As I said at the outset, one of the reasons I am so pleased to be here today is to be able to share with you our experiences in developing a rail network that is fully interoperable. I have no doubt that as you embark in building your network you can learn from the EU experience - we are after all, the only two regions in the world building trans-national high-speed rail networks. The EU has had many successes but many failings too. If I could give one piece of advice, as you build your network - make sure you work together and build together. The experience of Europe has shown that building a rail network nationally can be easier and quicker but that retrofitting it afterwards, to make it interoperable, can be very costly and time consuming indeed. Remember that: 'Alone we move quickly, but together we move further.' Think about that very carefully in these early phases of your rail construction. 2. Programmes, Policies and Plans: What the EU is undertaking to develop transport infrastructure. 3

4 In both the Middle East and Europe we have: Limited physical land space, Limited funds to invest, and A planet fast approaching its limits. We can, and we must, accommodate rising demand for passenger and freight transport, but we have to be clever in how we plan to develop capacity. The EU is working on a number of plans to try to: i. Maximise investment amounts by mixing public and private funds; ii. Maximise the return or benefit on that investment by having targeted and coordinated plans; iii. Ensure we continue to be at the forefront of new rail technologies by continuing our research programmes; iv. And ensure we consider the environment when increasing transport capacity. 1. Innovative investment sources: European Commission, launched 2014 a very ambitious investment plan The key idea is to match leverage private money for strategic infrastructure projects, which are needed for jobs and growth in the European Union. This is known as blending. In short, the new fund means that projects which might otherwise be too risky for private investors alone can go ahead, creating jobs in the process and meeting the demand for increased capacity in the transport network. 2. The key idea is to leverage private money for strategic infrastructure projects, which are needed for jobs and growth in the European Union. The fund has a total value of 315 billion euro. The new fund means that projects which might otherwise be too risky for private investors alone can go ahead, creating jobs and meeting the demand for increased transport capacity. 3. The EU has targeted and coordinated infrastructure cross-border planning programmes. The largest of such programmes is the TEN-T or Trans-European Network for Transport programme. This consists of nine core corridors. A great deal of planning is going into the development of these nine core corridors, to ensure the best possible return on investment. For far too long, the EU's transport infrastructure was a patchwork rather than a network. Under this programme, 70% of all EU transport financing in the current 7 year cycle will go to rail. 4. Europe is the world market leader in developing new solutions for rail. The EU has established the Shift2Rail Joint Undertaking. This is a 920 million public-private partnership to manage rail research and innovation efforts in the EU to increase the quality and reliability of rail services. We plan to remain at the forefront of rail innovation, to ensure we continue our tradition of leading the field in manufacturing, infrastructure development, traffic management and regulatory excellence. 5. We must also be conscious of climate change. The EU's Energy Union policy aims to ensure Europe has affordable and climate-friendly energy. In the EU, transport 4

5 represents 32% of CO2 emissions. The development of rail is important, as it is one of the most environmentally friendly modes. 3. Future Challenges / Trends Looking at the future, it is my firm belief that technology is the game changer in allowing us to develop a safe, secure and sustainable transport network and its role is set to increase. Already, technology is changing our transport network. Whether it is real-time information on traffic, or an app to tell us when the next train is due, change is afoot. However, this is just the beginning. In the medium to long term, technology and 'smart mobility', as well as a more connected, integrated network will be the backbone of transport. Data is what some people refer to as the new gold. To exploit its potential, an effective regulatory environment will have to be developed going forward. Using data effectively will be central the development of a smarter, more efficient, multi-modal transport network. However, as data and technology become more central to our transport networks, the need to focus on cyber-security becomes ever greater, for three main reasons: 1. To ensure our transport network remains as safe as possible; 2. To ensure privacy of individual's data, and to gain the public's confidence (they often are the ultimate source of data); 3. To ensure our transport network is not attacked by hackers interfering, with the potential to cause chaos - physical terrorism may become cyber terrorism. Cyber-security is an important issue, and one we cannot afford to side-track in transport. I am confident, that by working together, we can meet these challenges and trends head-on, and exploit the potential of technology and data for the benefit of our people and our business communities. Speaking of challenges, I cannot omit that, sadly, also terrorism and security are issues to be considered when building a transport network for the future be it here in the Middle East, the EU or any other region in the world. The attempted attacks on one of Europe's high speed rail lines last August brought this into sharp focus. Better training, intelligence and information sharing across borders and regions is crucial in tackling this global threat. At present there are no EU-wide rules on rail security, although a study is underway and due to be published in August Our response must be effective, but remain proportionate to the threat faced. We must maintain the seamless flow of passangers and at the same time increase the level of security! This is a serious challenge we face! 5

6 Conclusion Ladies and Gentlemen, I am coming to a close. The EU is a ready, willing and experienced partner for the Middle East, when it comes to building a successful transnational rail network. The European model in rail can serve as a model for other regions trying to develop cross-border rail networks. Europe is already the world's largest rail supply market. We would be happy to work with you into the future. Yes, there are challenges, but we together we are stronger, and we can tackle those issues together. The door of the EU is open to you, and I hope we can cooperate and learn from each other on many projects into the future. Let's move together and quickly if possible! I thank you for your time this morning, and I look forward to the rest of the day and to taking some questions. 6