Railway construction sector in Poland 2014

Development forecasts for 2014-2019

This document identifies the leading rail works contractors operating in the current Polish market and provides an inside look at their finances and plans for future expansion.

 

It studies the overall railway construction sector as well as key segments, such as railway stations, routes, metro, tramlines and other prevalent infrastructure elements in Poland. 

 

Macroeconomic data, projected levels of investment and funding options for new projects are all taken into consideration in the formulation of new forecasts for sector activity during the period 2014-2019.

 

Vital elements of this publication include…

  • SWOT analysis of railway construction in Poland, along with in-depth examination of the most influential developments in the marketplace
  • Predicted changes in market value for construction and assembly in Poland’s railway sector
  • Summaries of the value and market share of Poland’s leading construction companies engaged in the railway sector
  • Evaluation of upcoming railway investments during the forecast period, with extended coverage to 2020.

 

Benefit from thorough examination of complex industry issues…

  • Current and future effects of macroeconomic conditions and additional aspects and dynamics on the Polish railway sector, including PKP PLK (Polish Railway Lines) expenditures, National Railway Fund and EU 2014-2020 subsidy levels and more
  • In depth examination of overall market conditions and key railway segments – investment in stations and track, ERTMS and others
  • Poland’s public-private investment system as it applies to railways
  • Upcoming changes and current regulatory issues related to the investment process
  • Analysis of the similarities, differences and unique attributes of large railway projects slated for upcoming construction
  • Investigation of mid  (to 2016) and long term (to 2025) investment in railways in Poland
  • Detailed discussion of ten of the most visibly active railway construction contractors in Poland – earnings, contracts and consortium connections.

 

Get answers to these key questions…

  • How much 2014-2020 EU funding is available to PKP PLK? Will it be utilised on railway construction projects by 2020?
  • How much is Poland’s railway construction sector worth now? What will be its value in 2019?
  • How much of Poland’s current railway infrastructure will be upgraded during 2014-2019?
  • How will materials prices evolve during the forecast period (2014-2019)?
  • Which of Poland’s main railway stations are slated for remodeling projects by 2019?
  • Which conditions and issues will influence the development of railway construction most profoundly over the next six years?
  • Which railway construction firms are among the top ten in Poland? How are they faring financially and what are their largest recent contracts?

 

Did you know...

  • In order to use up the maximum amount of EU funding, Polish authorities have negotiated a higher subsidy threshold for individual projects and the possibility to reassign funds between projects.
  • The upcoming programme Infrastructure and Environment presupposes the construction of six brand new sections of rails.
  • The construction costs for new sections differ significantly, depending on their total length (fixed construction costs are distributed differently) and environmental conditions in which they are created. According to the plan, the most expensive enterprise is the further expansion of the railway interchange in Lodz. 1 km of the route, including also an underground tunnel, will cost over PLN 400m.
  • Further expansion of the II line of the Warsaw underground is in progress. The line under construction is to be extended by 3 new stops towards Wola, and 3 in the direction of Targowek.
  • There are currently 14 tram networks in Poland, provided by 16 enterprises. The fifteenth (in Olsztyn) is under construction.

 

Selected companies analysed in this report include...

Trakcja SA ,Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych SA we Wrocławiu, Feroco SA , PNI Sp. z o.o. – w upadłości układowej, Torpol Sp. z o.o., Grupa ZUE, Przedsiębiorstwo Robót Komunikacyjnych w Krakowie SA, PKP Energetyka SA , Pomorskie Przedsiębiorstwo Mechaniczno-Torowe Sp. z o.o.,
Zakład Robót Komunikacyjnych DOM  w Poznaniu Sp. z o.o., Przedsiębiorstwo Usług Technicznych Intercor Sp. z o.o., Astaldi, Gulermak , Przedsiębiorstwo Budowy Dróg i Mostów z Mińska Mazowieckiego, Przedsiębiorstwo Budowy Dróg i Mostów ze Świecia i TOR-KAR-SSON.

 

Business operations expedited by this report…

  • Beginning a railway construction business in Poland
  • Devising a successful business strategy in this market
  • Locating targets for potential mergers/acquisitions
  • Evaluating potential investments in Polish railway construction
  • Assessing competitor activity in the market
  • Estimating demand for construction materials used in this sector
  • Market share calculation
  • Formulating reports for executive and shareholder use.

 

This publication is required reading for…

 

Management and marketing teams and executive level professionals engaged in:

  • Contracting for railway construction projects in the Polish sector
  • Production and/or distribution of equipment and materials used in railway construction
  • Creating and managing investment plans for this sector
  • Beginning a new business in Polish railway construction
  • Providing consulting services, research and analysis concerning this market
  • Academic, government and research activities
  • PR, media, industry promotion and commerce activity
  • Financial activities such as banking, brokerage and investment related to railway construction in Poland.

 

Extract from this report

  • Although railway is considered one of the most lacking branches of construction, the next two years should improve the results of construction and assembly production. According to the forecasts, the financial advancement of just the largest projects (over PLN 1bn) did not exceed 40% at the start of 2014. It means that the next two years, the last possible period in which EU funded projects can be implemented and settled, will need to bring considerable increase in production on construction sites, while new projects, funded from the new budget, will already be waiting their turn – consequently, the total of yearly production should reach a fairly high level.
  • Plans relating to the next financial perspective ambitiously assume a high number of projects. Approximately 60% will be concerned with revitalising certain lines, which requires fewer formalities, but also appropriately lower outlays. The estimated value of such works for 1km of rails is PLN 4m – ten times less than the construction of a brand new section.

Market commentary by expert

 

The railway industry has been on the cusp of growth for a few years, but so far has not been able to put the plan into practice. Constant delays and practical problems have meant that the production on building sites remains far from expected. The industry has its back to the wall, which in this case is the date of 31 December 2015 – the deadline by which the investment within the EU financial perspective for 2007-2013 should be completed and settled. PKP is therefore going to implement this plan, and at the same time efficiently start projects from the new budget. A few dozen projects which are now in the preliminary preparation stage will have a positive impact on both the construction and assembly production charts, and most of all on the condition of railway infrastructure.

 

Bartłomiej Sosna, Head Construction Market Analyst

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Table of contents

  1. Methodology      9
  2. Executive summary      11
  3. Railway construction market in Poland      15
    1. Size of the railway market in Poland      15
    2. Condition of railway infrastructure in Poland      17
    3. Environmental considerations regarding the development of the railway sector in Poland      22
    4. Closures of railway lines      23
    5. Tender systems in Poland      26
    6. Design and build system      29
    7. Cost structure in railway construction      31
  4. Ongoing and planned railway construction projects      35
    1. European traffic management systems      35
    2. High-Speed Rail      39
    3. Construction of the Warsaw metro      41
    4. Construction of tram lines in Poland      43
    5. Major ongoing railway projects      50
    6. Financial progress of projects funded in the 2007-2013 financial perspective      55
    7. Investments of the 2014-2020 budget      59
    8. Investment projects implemented without the EU financial support      66
    9. Investments in railway station buildings      68
  5. Development forecasts for 2014-2019      71
    1. Macroeconomic outlook      71
    2. Long-Term Investment Scheme for the Railway Sector       72
      1. Discrepancies between 2011-2013 WPIK and 2013-2015 WPIK      75
      2. Capital outlays under 2013-2015 WPIK      77
    3. Allocation of funds from the 2014-2020 EU financial perspective      78
    4. Funding of railway projects in Poland      80
      1. Funding from the Railway Fund      80
      2. Funding from the state budget      82
    5. Projections for construction and assembly output       82
    6. SWOT analysis for the railway industry in Poland      85
  6. Competitive environment of the railway construction market in Poland      87
    1. Main contractors      87
      1. Trakcja SA      87
      2. Przedsiebiorstwo Robot Kolejowych i Inzynieryjnych SA from Wroclaw      88
      3. Feroco SA      89
      4. PNI Sp. z o.o. – bankruptcy with the option of entering into composition      90
      5. Torpol SA       92
      6. Grupa ZUE, Przedsiebiorstwo Robot Komunikacyjnych w Krakowie SA      93
      7. PKP Energetyka SA      95
      8. Pomorskie Przedsiebiorstwo Mechaniczno-Torowe Sp. z o.o.      96
      9. Zaklad Robot Komunikacyjnych DOM w Poznaniu Sp. z o.o.      97
      10. Przedsiebiorstwo Uslug Technicznych Intercor Sp. z o.o.      98
    2. Competition on the railway infrastructure market      99
    3. Main plan and design companies      101
  7. List of graphs      105
  8. List of tables      107
  9. About PMR      109

 

List of graphs

  1. Structure of railway lines in Poland by maximum train speed (%), 2011 and 2013      12
  2. Capital expenditure on railway construction work in Poland, by type of work (PLN m per km), 2014      12
  3. Construction and assembly output generated by railway construction in Poland (PLN m), 2005-2022      14
  4. Share of railway construction in the construction market in Poland (%), 2012      16
  5. Condition of railway infrastructure in Poland (%), 2011 and 2013      18
  6. Structure of railway lines in Poland by maximum train speed (%), 2011 and 2013      18
  7. Replacement of rail tracks (km) conducted by PKP PLK in 2001-2011      19
  8. Replacement of railway switches (items) conducted by PKP PLK in Poland in 2002-2011      20
  9. Age and quality structure of electrical components of rail track systems in Poland (%), 2013      20
  10. Quality structure of railway traffic control equipment in Poland (%), 2013      21
  11. Shares of individual branches of the land transport of freight in Poland (%), 2000-2012      22
  12. Length of railway lines used in Poland (‘000 km), 1990-2014      23
  13. Capital expenditure on railway construction work in Poland, by type of work (PLN m per km), 2014      31
  14. Capital expenditure on railway construction work in Poland, new rail lines (PLN m per km), 2014      32
  15. Capital expenditure on railway construction work in Poland, upgrade projects (PLN m per km), 2014      33
  16. Capital expenditure on railway construction work in Poland, renewal projects (PLN m per km), 2014      33
  17. Cost structure in companies specialising in building construction in Poland (%), 2012      34
  18. Cost structure in companies specialising in transport construction in Poland (%), 2012      34
  19. Map of the ETCS implementation in Poland, 2007-2023      38
  20. Planned route of the High-Speed Rail in Poland, 2013      39
  21. Likely schedule of the High-Speed Rail project in Poland, 2011-2028      40
  22. Plan for construction of Warsaw metro lines – line I and line II, 2013      42
  23. Financial progress of railway projects in terms of their value in Poland (%), July 2013      58
  24. Map of railway stations upgraded in Poland, 2012      69
  25. Material scope of 2013-2015 WPIK by sub-groups of railway infrastructure in Poland      74
  26. Performance of 2013-2015 WPIK regarding track infrastructure parameters in Poland      75
  27. Comparison of capital outlays in 2013-2015 WPIK and 2011-2013 WPIK, construction and assembly output in Poland (PLN bn), 2010-2015      76
  28. Structure of capital outlays in Poland (PLN ‘000, %), by type of work, 2007-2015      77
  29. Structure of rail-kilometres as part of the individual type of work in projects covered by 2013-2015 WPIK      77
  30. Capital outlays on railway infrastructure in Poland (PLN m), by type of work, 2007-2015      78
  31. Anticipated breakdown of tenders for the main railway projects in Poland, value of tenders (PLN m) and length of lines (km), 2014-2020      79
  32. Potential expenditure on railway projects in Poland (PLN m), 2014-2021      79
  33. Financing structure of railway projects in Poland (%), 2013-2015      80
  34. Budget of the Railway Fund and capital expenditure in Poland (PLN m), 2012-2019      81
  35. Structure of the Railway Fund budget in Poland (%), 2013      81
  36. State budget spending on railways in Poland (PLN m), 2002-2014      82
  37. Construction and assembly output generated by railway construction in Poland (PLN m), 2005-2022      83
  38. Average outlook for construction and assembly output generated by railway projects in Poland (PLN m) and output change (%, y-o-y), 2005-2022      84

 

List of tables

 

  1. Main railway projects intended for implementation in Poland, as defined in the Implementation Document, 2014-2020      13
  2. Density of the railway network in Poland (km per 100 km2), 2013      17
  3. List of lines provisionally planned to be taken out of service in Poland in 2013      24
  4. List of lines definitely planned to be taken out of service in Poland in 2013      25
  5. Strengths and weaknesses of the design and build system, 2013      30
  6. Comparison between ERTMS systems: ETCS vs GSM-R      36
  7. Schedule for the ETCS deployment in Poland, 2007-2023      37
  8. SWOT analysis for the development of the Y-Line in Poland      41
  9. Sections of line II of the Warsaw metro – project progress      42
  10. Polish cities with operating tramway lines, 2014      43
  11. Ongoing and planned tram projects in Poland, 2014      45-49
  12. List of major railway construction contracts concluded in Poland, November 2007-December 2013      51-54
  13. Financial progress status of the major railway projects in Poland with a value in excess of PLN 1bn (%), July 2013      56
  14. Financial progress of ongoing railway projects with the value of PLN 500m-PLN 1bn in Poland (%), July 2013      57
  15. Major railway projects financed from the EU budget in Poland, 2014-2020      60-62
  16. Railway projects conducted within the framework of the Operational Programme for the Development of Eastern Poland, 2014-2020      63
  17. Railway projects most likely to be implemented within the framework of the Regional Operational Programmes, 2014-2020      64-65
  18. List of railway investment projects implemented in Poland without the EU participation, 2014      66-67
  19. PPP upgrades of station buildings in Poland, 2014      70
  20. Projections for the main economic indicators in Poland, 2008-2017      72
  21. Scope of railway infrastructure elements due for construction in Poland, according to 2011-2013 WPIK and 2013-2015 WPIK      73
  22. Construction and assembly output and average output in three scenarios for railway construction in Poland in 2005-2022      83
  23. SWOT analysis for the railway industry in Poland, 2014      85-86
  24. Key financial data for Trakcja SA, 2008-2013      87
  25. Selected ongoing projects of Trakcja SA      88
  26. Key financial data for Przedsiebiorstwo Robot Kolejowych i Inzynieryjnych SA from Wroclaw, 2007-2013      88
  27. Selected ongoing projects of Przedsiebiorstwo Robot Kolejowych i Inzynieryjnych SA from Wroclaw      89
  28. Key financial data for Feroco SA, 2007-2012      89
  29. Selected ongoing projects of Feroco SA      90
  30. Key financial data for PNI Sp. z .o.o., 2007-2012      90
  31. Selected ongoing projects of PNI Sp. z .o.o.      91
  32. Key financial data for Torpol SA, 2007-2013      92
  33. Selected ongoing projects of Torpol SA      93
  34. Key financial data for Przedsiebiorstwo Robot Komunikacyjnych w Krakowie SA, 2007-2012      93
  35. Selected ongoing projects of Przedsiebiorstwo Robot Komunikacyjnych w Krakowie SA      94
  36. Key financial data for PKP Energetyka SA, 2007-2012      95
  37. Selected ongoing projects of PKP Energetyka SA      95
  38. Key financial data for Pomorskie Przedsiebiorstwo Mechaniczno-Torowe Sp. z o.o., 2007-2012      96
  39. Selected ongoing projects of Pomorskie Przedsiebiorstwo Mechaniczno-Torowe Sp. z o.o.      96
  40. Key financial data for Zaklad Robot Komunikacyjnych DOM w Poznaniu Sp. z o.o., 2007-2012      97
  41. Selected projects of Zaklad Robot Komunikacyjnych DOM w Poznaniu Sp. z o.o.      97
  42. Key financial data for Przedsiebiorstwo Uslug Technicznych Intercor Sp. z o.o., 2007-2012      98
  43. Selected projects of Przedsiebiorstwo Uslug Technicznych Intercor Sp. z o.o.      98
  44. List of major tenders won by companies other than the leading market players in Poland, 2012-2013      100
  45. Main plan and design companies operating in the railway construction industry and their major projects, 2011      102-103